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Company Analysis of Dabur

Introduction

This report presents a critical analysis of an Indian company that has expanded its business in the global market. For this analysis, the Dabur Company has been chosen as an Indian Company. The reason behind choosing this company is that it is one of the greatest manufacturers of Ayurvedic medicine as well as herbal consumer goods in India, which has operated its business in many countries of the world (dabur.com 2017). The international competitive strategies of this company would be also provided in this study. Besides that, this paper also describes the present design structure of this organization and other management related issues. According to the discussions of Dubey (2016), it can be argued that some types of entry strategies are used by this Dabur Company in order to develop their business in the other countries. Apart from the above-mentioned issues, this paper also discusses the operational control, manufacture as well as the supply network management. Besides this, the control of the human resources across the border of nation is also explained in this paper. Moreover, the major issues for management are also identified in this report and lastly some recommendations are provided in order to improve the management of this Dabur Company.

Analysis

1. Overview of the company and current operating system

This first part of the analysis presents the overview of this selected Indian company, Dabur as well as its present operating systems. This company was set up in the year 1884 by a famous Ayurvedic doctor of West Bengal, S K Burman. In the initial stage, he manufactured some herbal medicines for diseases like malaria and cholera (dabur.com 2017). Later, in 1940, this company manufactured t ........

nufacturers of Ayurvedic medicine as well as herbal consumer goods in India, which has operated its business in many countries of the world (dabur.com 2017). The international competitive strategies of this company would be also provided in this study. Besides that, this paper also describes the present design structure of this organization and other management related issues. According to the discussions of Dubey (2016), it can be argued that some types of entry strategies are used by this Dabur Company in order to develop their business in the other countries. Apart from the above-mentioned issues, this paper also discusses the operational control, manufacture as well as the supply network management. Besides this, the control of the human resources across the border of nation is also explained in this paper. Moreover, the major issues for management are also identified in this report and lastly some recommendations are provided in order to improve the management of this Dabur Company.

Analysis

1. Overview of the company and current operating system

This first part of the analysis presents the overview of this selected Indian company, Dabur as well as its present operating systems. This company was set up in the year 1884 by a famous Ayurvedic doctor of West Bengal, S K Burman. In the initial stage, he manufactured some herbal medicines for diseases like malaria and cholera (dabur.com 2017). Later, in 1940, this company manufactured the amla hair oil that was the first product of this company. In recent days, this company produces various types of goods such as the health supplements, personal care goods, herbal medicines, digestives, oral care, home care, food and so on  (dabur.com 2017). Moreover, the healthcare department of Dabur has more than 260 products. In the current operating system of this Dabur Company, the Chairman is Anand Burman whereas the Vice Chairman of this company is Amit Burman. The Chief Executive Officer is Sunil Duggal. The headquarters of this company is situated in Ghaziabad of Uttar Pradesh in India. In the last financial year, the revenue generated in this company has been approximately 76.80 billion, which is equivalent to US$1.2 billion (dabur.com 2017).

2. Review of the international strategies of this company

This part of the discussion reviews the current global strategies of this Dabur Company. The global strategies are those policies that are used by a business organization in order to expand their business in the international market. As per the discussions of Berg (2015), it can be stated that this business organization has expanded their business in various foreign markets such as Dubai, Egypt, Bangladesh, Nigeria, London, United States and Nepal. The operational data of this Dabur Company are represented by this figure 1.

 

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Figure 1: Operational Data of Dabur Company

(Source: Mitra and Datta 2014)

The above figure represents the operational data of the Dabur Company of the financial year 2015. The international sales figure of this company are also represented by this graph which shows that it was 16% for America, 23% for Africa, 17% for Asia, 32% for Middle East and lastly 12% for Europe in 2015 (dabur.com 2017). Besides that, there has been a gradual increase from the financial year 2011 in the sales figure of this company. The figure was 40.8 bn for 2011, 52.8 bn for 2012, 61.5 bn for 2013, 70.7 bn for 2014 and finally 78.1 bn for 2015 as depicted in the above graph (dabur.com 2017).

3. Existing Organizational Design Structure and Control Issues

This section of the analysis describes the present organization design structure as well as the control issues for this company. In a literature, Kumarasamy et al. (2015) have presented the fact that this is one of the leading Fast Moving Consumers Goods (FMCG) Company in India. Apart from the international market, this Dabur Company has chosen various significant strategies for the endorsement of their products in the local market. For example, they have selected Mr. Amithabh Bachchan who is a very popular celebrity of Bollywood as the brand ambassador of this company. As per the literature of Mohapatra and Lokhande (2014), it can be mentioned that India is such a country where most of the people follow the celebrities, especially those who are related to the film industry. Therefore, in India the products of this brand are very popular among people. Besides this, the company has implemented various policies such as the cost minimization, human error reduction, innovation, financial analysis, training and development program for the employees, facilitation, setting goals and so on. The reasons for taking those strategies are managing the organization as well as fulfilling its targets (Choubey 2014).

4. Entry strategies for entering in other regions/countries

In this part of the analysis, the different strategies of the Dabur Company have been discussed which they use as their entry strategies. Apart from India, they have enlarged their area of business in various countries that have been already discussed in the previous part of this report. In a study by Son et al. (2013), they have discussed that the easiest way for making the global business is the exports of products that have been used by this Dabur Company for expanding their business in the other nations. Another way for entering in the global market used by the Dabur Company is making outlets and offices in different countries. Besides that, in the recent days, the demands for the natural as well as the herbal products are increasing all over the world because in order to protect the health, skin and hair people want to use more of the herbal products than the chemical products. Since Dabur is an ayurvedic company whose products are manufactured by herbal materials, these products are largely accepted by the foreigners (Shukla, and Nerlekar 2016). 

5. Operational Control, Production and Supply Chain management/distribution

In Dabur India, the directors are afforded with every opportunity so that this could familiarize with the company, its operations and the management area to have clear understanding of the roles and responsibilities. This is done mainly to contribute significantly towards the expansion and growth of the company (Reji, 2013). Besides, with operation control, Dabur will have the full opportunity to interact with the senior management personnel that are provided with the required documents for having good understanding on the various operations of the company. Operational Control of Dabur will also try to set up a mechanism for setting standards, measures and check on the ongoing performance.

In case of production, Dabur has intended to set up a manufacturing facility at Jammu for the manufacturing of personal care products. They also have given emphasis to the improvement of facilities with organizational effectiveness. According to Choudhary (2014), Dabur had focused mainly on enhancing the productivity of existing assets and capital that could help in improving the plant efficiencies. Dabur also had plans to implement the TQM in some functional areas in future while it initiated that TPM (Total Production Maintenance) measures aimed to improve the productive efficiency defining with the capital assets. Dabur’s Jammu plant had higher stringent quality and processes, which improved the facility for major improvements in production with quality and consistency (Bhattacharyya, 2012). Dabur’s success in efficient production lies on its ability to meet and produce requirements for the sales plan.

For Supply Chain and distribution, Dabur have decided to tackle with the extended supply chain on building about 6 warehouses, 30 factories and around 52 stocking points. As opined by (), the company also needs a system that could precisely control the sales and distribution in supply chain with the reduced inventory. Previously, Dabur also had built a system with SQL Server using ASP and Visual Basic (Sharma and Mehta, 2012). While the unique features included tight integration schemes, online cheque reconciliation, and automated banking of cheques. However, the integration showed a better control on the pipelines that brought the inventories down with production and sales. Besides, effective supply chain has always been a critical driver for Dabur and this encompasses wide functions in terms of procurement to planning.

6. Management of HR across borders

The management of HR across the borders for Dabur includes several factors. The first one is the performance appraisal, which is based on the goals that are set by Dabur. For Dabur, positive leniency errors are very common across the borders due to the overestimation of targets that are to be achieved (Daffa, 2013). Besides, the process here needs to be integrated with effective career planning so that employees could be effective with the appraisal outcomes for reward purpose. In case of reward and recognition, HR department always supports the business operations and enhances performance parameters of employees too (Behare and Wadekar, 2014). Like the rewards are been presented as Rising Star, Honors Club, Eureka and Spot Recognition.

Based on talent management, Dabur across the borders is focused in building the future leaders so that a talent pool could be created in order to ensure pipeline of high quality business leaders. However, this is an innovative process, which helps in identifying performers and rewarding them with effective promotions. While on development and training, Dabur has evolved up with special programs that are devised with sales force efficiently. According to Schmidt and Dabur (2014), the company has well-developed young masters development program that is designed to ensure regular talent flow. Lastly, the work life balance of Dabur along with its line managers proves effective and upholds dignity of employees at workplace.

7. Key issues/opportunities for management

For the last few decades, Dabur has met to finalize new product and end up with the debate to stick to Ayurvedic or non-Ayurvedic products. Although Dabur was possibly the only Indian Company, which was selling products of Ayurvedic but it was unsure about how far it could go. In terms of issues and opportunities with the management, Peer pressure underwent with huge competition in the domestic market (Agnihotri and Bhattacharya, 2015). Accordingly, this has increased with the packaged goods company that was intended as multinational and homegrown. However, the trend triggered largely with Dabur’s competitor Pantanjali whose success offered premiumization of products on a large basis.

According to Behare and Wadekar (2014), in case of distressed economy, slow growth was a serious for Dabur as well. The key challenge that the company faced was the radical downward shift in overall consumption of the goods. This was due to the tapering of stimulus where the earlier government has not taken forward steps with the current government. Unlike the rural area, about 45% of Dabur’s domestic revenue comes from the rural markets, and this has been mentioned with the consumption in the rural markets (Sharma and Mehta, 2012). Besides, the company has not only expanded its distribution in rural areas but has stepped out of the certain markets to minimize the risk factor. However, the issue that Dabur is facing is the radical downward shift in consumption of goods, and this has changed a deeper focus on individual segments.

8. Recommendations for improvement

The major recommendations for improvement in management area are listed as follows:

  • Dabur should design the economic incentives so that employees at all levels in the organization could benefit from there.
  • Dabur should also provide a positive feedback on a regular basis that will help to encourage its employees with effective communication.
  • Dabur must be sure that all levels of the organization would receive effective training
  • The company in terms of managerial area should support for its employees when needed genuinely.

Conclusion

The Project paper concludes on the company analysis of Dabur in terms of its management related issues and the interface devised for providing a competitive strategy. The analysis for this paper concludes on Dabur’s operating system given about the international strategies of the company that expands its territory in foreign markets like Dubai, Egypt, Bangladesh, Nigeria, London, United States and Nepal. However, the analysis also devises a frame to analyze the entry strategies and the Supply Chain Distribution area of Dabur that could be improved. Thus, the key issues/opportunities of Dabur is also concluded giving necessary recommendations for improvement.