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SANJANA GUPTA
CALCUTTA BUSINESS SCHOOL
PGDM 2014-16
Report On
CRITICAL ANALYSIS
On
GODREJ consumer products LIMITED
Submitted By:SANJANA GUPTA
Term-2nd
Roll No. 43
Calcutta Business School (Batch 2014-2016)
ACKNOWLEDGEMENT
I would like to express my special
thanks of gratitude to my teacher
Dr. Dr. Bidisha Mukhopadhyay who
gave me the golden opportunity to
do this wonderful project, which
also helped me in doing a lot of
Research and I came to know about
so many new things. I am really
thankful to him.
Secondly I would also like to thank
my parents and friends who helped
me a lot in finalizing this project
within the limited time frame.
CONTENTS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Introduction
Products & services
Company Profile
Vision & Mission
Major Competitors
Companys Performance
SWOT Analysis
BCG Matrix
Core competence
Porters 5 forces Analysis
Ratio Analysis
Conclusion
INTRODUCTION
Godrej Consumer Products (GCPL) is a leader
among India's Fast Moving Consumer Goods
Largest Grade 1 quality soap in India (simply put: more soap in each
soap)
Godrej No. 1 offers you Natures way to beauty with carefully chosen
ingredients to make your skin naturally beautiful
Increased innovations and strong brand presence in both urban and
rural markets
Launched Godrej No. 1 Lavender & Milk Cream this year, adding to an
existing portfolio of 8 variants.
HAIR CARE
HOME CARE
Household insecticides are the no.1 player across all formats in India.
Clear leader in the aerosols market, focused on killing pests and
offering great efficacy
HIT Anti Roach Gel, an innovative non-messy gel-based product that
attracts and kills cockroaches and is effective for up to 45 days, is a big
success
Air freshener is the No. 2 player in the car category within 20 months
of launch
First branded player to introduce gel technology in the AC vent and non
AC formats for cars.
Major Competitors
Hindustan Unilever
ITC
Emami
Procter & Gamble
Loreal
Marico
COMPANYS PERFORMANCE
SWOT ANALYSIS
STRENGTH
WEAKNESS
OPPORTUNITIES
THREATS
1. Question Mark- They are the products that grow rapidly and
as a result consume large amounts of cash, but because
they have low market shares they dont generate much
cash. A question mark has the potential to gain market share
and become a star, and eventually a cash cow when the
market slows down.
2. Dogs- They have a low market share and a low growth rate
and neither generate nor consumes a large amount of cash.
Dogs are a cash trap because the money is being is tied-up
in a business that has little potential.
3. Star- A star is being able to generate huge sum of cash
because of their strong relative market share, but
simultaneously it also consumes a large amount of cash
because of their high growth rate. If a star can maintain its
large market share it will become a cash cow when the
market growth rate declines.
4. Cash cow- It demonstrates a return on assets that is greater
than the market growth rate, so they generate more cash
than they consume.
CORE COMPETENCE
Companys Core Competence lie in toilet soap, godrej expert,
ezee and godrej goodnight.
INDUSTRY COMPETITION
There is high competition in the FMCG sector with HUL, Marico, Emami.
Competitiveness among the Indian FMCG players is high. With more MNCs
entering the country, the industry is highly fragmented. Advertising spends
continue to grow and marketing budgets as well as strategies are becoming
more aggressive. Private labels offered by retailers at a discount to
mainframe brands act as competition to undifferentiated and weak brands.
THREAT OF SUBSTITUTES
Being an essential commodity the demand for consumer products is elastic.
Multiple brands positioned with narrow product differentiation. Companies
entering a category /trying to gain market share compete on pricing which
increases products substitution. Hence, threat of substitute is high in the
industry
Ratio Analysis
PROFITABILITY RATIOS
A class of financial metrics that are used to assess a business's
ability to generate earnings as compared to its expenses and
other relevant costs incurred during a specific period of time. For
most of these ratios, having a higher value relative to a
competitor's ratio or the same ratio from a previous period is
indicative that the company is doing well. Some examples of
profitability ratios are profit margin, return on assets and return
on equity.
GROSS PROFIT RATIO- It is a profitability ratio that shows
the relationship between gross profit and total net sales
revenue. It is a popular tool to evaluate the operational
performance of the business. The ratio is computed by
dividing the gross profit figure by net sales.
Formula:
The following formula/equation is used to compute gross profit
ratio:
The Gross Profit Ratio of Godrej Consumer Products Ltd. for the
year March 2013 is 16.69% and March 2014 is 17.43%.This
indicates that the company may reduce the selling price of its
The relationship between net profit and net sales may also be
expressed in percentage form. When it is shown in percentage
form, it is known as net profit margin. The formula of net profit
margin is written as follows:
The Net Profit Ratio of Godrej Consumer Products Ltd. for the year
March 2013 is 14.06% and March 2014 is 13.71%.A high ratio
indicates the efficient management of the affairs of business.
There is no norm to interpret this ratio. To see whether the
business is constantly improving its profitability or not, the
analyst should compare the ratio with the previous years ratio,
the industrys average and the budgeted net profit ratio.
ACTIVITY RATIOS
Accounting ratios that measure a firm's ability to convert different
accounts within its balance sheets into cash or sales. Activity
ratios are used to measure the relative efficiency of a firm based
on its use of its assets, leverage or other such balance sheet
items. These ratios are important in determining whether a
company's management is doing a good enough job of generating
revenues, cash, etc. from its resources. The total assets turnover
ratio and inventory turnover ratio are two popular examples of
activity ratios used widely across most industries.
ASSET TURNOVER RATIO- The amount of sales or revenues
generated per dollar of assets. The Asset Turnover ratio is an
indicator of the efficiency with which a company is deploying
its assets.
Asset Turnover = Sales or Revenues/Total Assets
Generally speaking, the higher the ratio, the better it is, since it
implies the company is generating more revenues per dollar of
assets. But since this ratio varies widely from one industry to the
next, comparisons are only meaningful when they are made for
different companies in the same sector.
The Asset Turnover ratio is also a key component of DuPont
Analysis, which breaks down Return on Equity into three parts, the
other two being profit margin and financial leverage.
The Asset Turnover Ratio of Godrej Consumer Products Ltd. for the
year March 2013 is 1.24 and March 2014 is 1.35. This means that
for every dollar in assets, Godrej Consumer Products Ltd only
generates 1.24 cents in March 2013 and 1.35 in March 2014.
INVENTORY TURNOVER RATIO- A ratio showing how
many times a company's inventory is sold and replaced over
a period. The days in the period can then be divided by the
LEVERAGE RATIOS
Companies rely on a mixture of owners' equity and debt to
finance their operations. A leverage ratio is any one of several
financial measurements that look at how much capital comes in
the form of debt (loans), or assesses the ability of a company to
meet financial obligations. There are several different specific
ratios that may be categorized as a leverage ratio, but the main
factors considered are including debt, equity, assets and interest
expenses.
DEBT TO EQUITY RATIO- A measure of a company's
financial leverage calculated by dividing its total liabilities by
stockholders' equity. It indicates what proportion of equity
and debt the company is using to
finance its assets.
LIQUIDITY RATIOS
A class of financial metrics that is used to determine a company's
ability to pay off its short-terms debts obligations. Generally, the
higher the value of the ratio, the larger the margin of safety that
the company possesses to cover short-term debts.
CURRENT RATIO- A liquidity ratio that measures a
company's ability to pay short-term obligations.
The Current Ratio formula is:
CONCLUSION
In a challenging macro-economic environment, the
Company continued to do well in most of its core
businesses. Godrej continues its efforts for the
betterment of the environment and conservation of
scarce natural resources. They say they touch
more consumers than any other Indian companyits not just with soaps, locks and cupboards. It
is because of their determination towards the
helping hand to society and commitment to serve
better every time through their CORPORATE
GOVERNANCE & its CORPORATE SOCIAL
RESPONSIBILITIES.