International Business Project

Group No. 7
Kumar Atulya Mitali Parekh Neha Pareek Ponappa SM Siddhant Masson PGP-12-118 PGP-12-124 PGP-12-129 PGP-12-133 PGP-12-149

Going international is critical not only in order to create multiple growth engines but also to create reverse learning for the home market. Some nations offer inorganic entry possibilities that can create access to mainstream distribution, manufacturing and talent. This can speed up one's learning curve as long as there is a strategic fit with the target. ~Mr. Vijay Subramanian CEO, Marico IBG

Marico Ltd. 1 International Business Project

Contents
EXECUTIVE SUMMARY ............................................................................................................................................ 2 INTRODUCTION ....................................................................................................................................................... 3 SWOT ANALYSIS .................................................................................................................................................. 6 PORTERS 5 FORCES FRAMEWORK ................................................................................................................... 7 YIPS FRAMEWORK FOR DEGREE OF GLOBALIZATION ................................................................................... 8 CURRENTLY IMPLEMENTED AND PLANNED GLOBAL INITIATIVES ................................................................. 9 RECENT CHALLENGES AND REMEDIAL MEASURES .......................................................................................... 12 THE WAY FORWARD ............................................................................................................................................. 14 REFERENCES .......................................................................................................................................................... 15

Marico Ltd. 2 International Business Project

EXECUTIVE SUMMARY
This report assesses the global business initiatives and expansion of Marico Ltd. in the last decade. It includes analysis of the global business activity and its contribution to the firm, with a detailed look at its portfolio in each international market. The report also evaluates the globalization initiatives through established frameworks like PESTLE, Porters forces to analyze country attractiveness, Yips framework for measuring degree of globalization among several others to understand the rationale and their implication on the firm. Marico over the years has managed to segment its business across 3 SBUs namely; Consumer Products Business (CPB), International FMCG Business Group (IBG) and Kaya Skincare Solutions. It is under the International FMCG Business Group (IBG) that the entire global business is managed. Marico started its first global initiative in middle-east by exporting Parachute oil. Over the years, it has managed to have a good presence in more than 7 countries through its own subsidiaries. It also exports its products to countries outside these 7 nations, particularly in West Asia. IBG contributes to more than 23% to Maricos revenues. Marico started with a gradual transition towards its globalization. It began with exports to middle east and neighbouring nations, and then moved on to have a deeper footprint through forming subsidiaries. Its global expansion has been a mix of both organic and inorganic growth with a number of products added to its portfolio through acquisitions. Based on a SWOT analysis, it emerged that the biggest threats faced by Marico throughout its global operations has been high inflation and currency fluctuations. However, it has managed well to have a steady growth owing to its differentiation and innovation. It also has a comprehensive Risk Management Process, through an internal audit system depending on the size of the SBU or subsidiary, tied into its Corporate Governance Practices. Based on Porters 5 Forces, it emerges that Marico faces the biggest threat in the form of competition from global FMCG giants like HUL, P&G, and Colgate Palmolive. Marico has in the past tackled this by diversifying into edible oil, healthcare and skin care in global markets. Its globalization strategy has been to look for newer markets (through geographical expansion) yet at the same time a horizontal expansion with diversification. For instance, Kaya recently acquired the aesthetics business of the Singapore based Derma Rx Asia Pacific Pvt. Ltd. One of the significant attributes about Maricos success in the global markets has been its global mindset. It has believed in cross pollinating in different geographies. Making products compatible in different environments such as the reformulation of parachute hair products to work effectively even under chlorine rich circumstances in Middle East, and similar innovations have been differentiating them. The recent use of Information Technology, with its internet enabled platform called MI-NET to establish a connect among all its businesses, have been instrumental in increasing penetration, reducing working capital and reduced communication costs in a global landscape. Based on the Yips framework, it clearly stands out that the low cost of manufacturing was one of the primary reasons to open production facilities in Bangladesh. Among global operations, its major share (nearly 50%) comes from Bangladesh and another 20% from South East Asia, and hence there has been a heavy dependence on few countries which poses a risk. As a result of the recent financial meltdown and political instabilities in some countries the IBG has been prone to risk, and has also suffered losses particularly in Bangladesh (due to high material sourcing as a result depreciated currency) and Egypt and other parts of MENA (as a result of political instability and unrest). Based on this reports analysis it is recommended to concentrate on local sourcing which contributes a mere 1% currently, posing very high sourcing costs as a result of exchange rates and transportation. Also, in the MENA region, it is suggested to have additional hub locations apart from Egypt in other parts of Middle East and North Africa. Marico has experienced an overall healthy growth at its global markets. Despite the financial meltdown and the political instabilities in certain parts, it has good prospects in the intermediate term owing to its differentiation policy. It can further expand in emerging countries and diversify its portfolio to mitigate long term risks.

Marico Ltd. 3 International Business Project

INTRODUCTION
MARICO INDIA Founded in 1987, Marico is a renowned Indian consumer goods company providing products & services in the Healthcare and Beauty industry. One out of every three Indian has a Marico Product in his household. Maricos diverse product portfolio covers industries such as food, skin-care and hair-care. Marico India Ltd. enjoys a market capitalization of 0.14 billion USD and a turnover of 0.72 million USD for the financial year ended 31st March 2012. Every month, over 70 million packs from Marico reach approximately 130 million consumers in about 23 million households through a widespread distribution network of more than 2.5 Million outlets. PRODUCT PORTFOLIO The business structure of Marico is segmented into three Strategic Business Units viz; I) Consumer Products Business in India (CPB): This arm of Marico includes fabric care products, Hair oil, coconut oil, processed foods and hair care products. II) International FMCG Business Group (IBG): This branch of Marico spreads out in over 20 countries worldwide including Middle East, Asian Sub-continent and Australia. III) Kaya Skincare Solutions: Under the aegis of this division, the company offers skin care and dermatology solutions under the brand name Kaya and DermaEX in Singapore. Each of these SBUs contributes to the overall growth of Marico. CPB contributes almost 69.6% of the net sales with coconut oil accounting for ~32% of the share. IGB and Kaya account for the balance 23.8% and 6.6% respectively. The flagship brand of Marico, Parachute, contributes almost 30% to the companys top line. The domestic product portfolio along with market standings of Maricos various brands is given below: Categories Coconut Oil Hair Oil Brand Parachute, Oil Of Malabar, Nihar Hair & Care, Parachute Jasmine, ParachuteAdvansed, Nihar Naturals, Nihar Shanti Amla,Parachute Advansed Ayurvedic hair oil, Parachute Advansed Cooling oil Saffola Saffola Market 51-53% ~23% Share Rank 1 2

Super Premium Refined Edible Oils Functional Foods like Oats & low Glycomic-Index (GI) Rice Anti Lice Treatment Mediker Fabric Starch Revive The categories and brands present in international markets are: Market Bangladesh South Egypt Middle East Malaysia Vietnam Category Coconut Oil, Edible Oil, Hair Care Hair Care and Health Care Hair Care Skin Care Hair Care Personal, Home Care and Foods

~55% ~90% ~80%

1 1 1

Product/ Brand Parachute Oil, Haircode, Saffola Caivil, Balack Chic, Herculer, Ingwa Fiancee and Hair Code Parachute cream and Gels Code 10 (cream and Gels) X-Men, L'Ovita, Thuan Phat Foods

Marico Ltd. 4 International Business Project Evolution and Growth of the International FMCG Business Group Marico made its first global foray by launching the Parachute brand in the Middle-East in 1990s. Consumer research had shown that Parachute Hair Oil was popular amongst Indians living in the Middle-East. Marico saw this as an opportunity to expand their footprint outside India, and officially launched Parachute. Apart from the UAE and Saudi Arabia, Parachute has presence in countries like Yemen, Iraq, Levant and Bahrain. With a steady increase in its product range and an ever widening distribution system, Maricos progress in the Middle East is heading for rapid growth.
Contribution of key geographies to IBG

25% 10% 25%

Bangladesh

40%

MENA South Africa South East Asia

Following successes in Middle-East, Marico set up the International Business Group (IBG) which made inroads in Bangladesh in 2002 by setting up a factory. Marico became the first Indian company to have manufacturing capabilities in Bangladesh. Currently, in Bangladesh, Marico operates through Marico Bangladesh Limited (MBL), a wholly owned subsidiary with its manufacturing facility at Mouchak, near Gazipur. Marico entered Egypt in 2006-07 with the acquisition of brands - Fiancee and HairCode, along with setting up a factory in 2008. In 2010, Marico launched the Parachute range of hair creams and hair oils in the local Egyptian market. Marico is the leader in the Hair Styling market in Egypt and hopes to make the country their sourcing hub for MENA. In 2007, Marico acquired the consumer division of South Africa's Enaleni Pharmaceuticals for SA Rand (ZAR) 92.8 million (about Rs 52 cr). With this, brands such as Caivil, Black Chic and Hercules became part of the Marico umbrella. Marico further made a bolt-on acquisition with the Ingwe/Medi-Pac range of healthcare products in 2010. This has shown consistent growth in the Ethnic Hair Care and Healthcare market sector. 2010 and 2011 saw Maricos entry into South-East Asia with forays into Malaysia and Vietnam. In February 2011, Marico entered the Vietnam market by acquiring an 85% equity stake in International Consumer Products Corporation (ICP)-one of the most successful Vietnamese FMCG companies. Marico entered Malaysias hair styling market in January 2010, with the acquisition of the Code 10 brand from Colgate-Palmolive. Marico is betting big on South-East Asia and hopes to replicate their MENA successes in this sector too. Marico has also taken advantage of the fast-growing professional beauty industry by expanding Kaya Skin Care Clinics to Middle East, with over 17 clinics, as well as 2 clinics in Bangladesh. In May 2010, Kaya acquired the aesthetics business of the Singapore based Derma Rx Asia Pacific Pvt. Ltd.

Increasing Geographic

Diversification

UPPSALA MODEL

Marico Ltd. 5 International Business Project

GLOBAL EXPANSION ROAD-MAP

Marico Ltd. 6 International Business Project

SWOT ANALYSIS

STRENGTHS

INTERNAL

Parachute Hair Oil, Saffola, Mediker are market leaders Robust distribution network Local &global acquisitions Stress on innovation & differentiation Rural market leader Incorporation of local tastes & preferences

Easy availability of credit& increased consumerism Recent waiver of farm loans makes rural India a promising market for FMCG &durables Increased health consciousness Better standard of living and increased brand consciousness

OPPORTUNITIES EXTERNAL

A substantial decline in EPS over the years indicating improper shares distributions Probable inappropriate funds distributions due to high current ratio Wide difference in terms of market share Major revenue generation from few brands

Rising inflation levels can slim down margins since operating costs contribute to 60% of total cost Product innovation & advertising expenses are risky Internationalization exposes them to financial currency fluctuations risk

WEAKNESSES

Maricos strength lies in its vast Product Line, and the acquisitions it has made over the last 5 years, giving it a global presence in 7 developing regions of the world. Being a leader in the Indian Rural Market ensures that it grows manifolds in both volume and value. Further, it has widened its successful product lines, such as Parachute and Saffola, in the International Market, based on the regional preferences and demands. The only threats that we could foresee was the rising inflation in most of the markets that Marico is competing in, which could lead to a reduction in its margins, especially taking into consideration the stiff competition that any FMCG company is subjected to. However, Maricos continued focus on Product Differentiation and Innovation can reap rewards for its brands, and a diverse geographic footprint, not to mention the varied brands under Marico, provides it a sustainable safety margin.

THREATS

Marico Ltd. 7 International Business Project

PORTERS 5 FORCES FRAMEWORK

The Threat of Competitors: HIGH FMCG Conglomerates such as HUL, P&G, Colgate & Palmolive, Dabur etc., pose great threat to Marico Ltd. Brand building, product innovation and product differentiation are necessary to survive in the FMCG Sector Volumes and not margins can be leveraged to maximize earnings Threat from Suppliers: MEDIUM Industry is dependent on local players for supply of raw materials Cost control and adherence to quality standards becomes crucial

THREAT OF NEW PRODUCTS (CLONES)

Threat from Clones (New Entrants) : LOW The FMCG industry is dominated by established players such as HUL, P&G, Colgate & Palmolive, and Marico etc. Each of these players has developed strong brand equity over the years and has a set of loyal customers In case of potential threat, large companies like Marico can buy out the threat company THREAT OF SUBSTITION: HIGH There is a threat internally itself with preferences ranging from Parachute Oil to Nihar Amla Oil Marico products can be easily replaced by regionally/locally made products in rural areas

THREAT OF SUPPLIERS

Threat of Competition
THREAT OF CUSTOMERS (BUYERS)

THREAT OF SUBSTITU TION

Threat from Customers: (Buyers) HIGH Highly substitutable market with price sensitivity Few established players in the market Low switching costs for customers Hence, customer is king

Being a part of a highly competitive and cost sensitive industry, the FMCG industry, is highly evident in the results of Porters Five Forces analysis. Marico can counter these threats by building on its Product Differentiation. Already recognized as a premium Product manufacturer, the diversity of products in its portfolio, along with a knack to deliver on the requirements of the consumer has so far kept Marico way ahead of competition. An early mover advantage in Bangladesh, from where Marico gets 50% of its International Revenues, has been sustained with strategic alliances and acquisitions, and the trend has been emulated in other regions by the other Marico subsidiaries.

Marico Ltd. 8 International Business Project

YIPS FRAMEWORK FOR DEGREE OF GLOBALIZATION

Market Drivers

Cost Drivers

Potential for Globalization

Government Drivers

Competitive Drivers

Market Drivers 1. Ever growing demand for diverse FMCG products across the globe 2. Option of growth through acquisition, as there is a huge scope for Consolidation, seeing that there are very few global players, but many strong regional players in different regions. Competitive Drivers 1. It is a highly price-sensitive industry, and the only way to increase volume and value profit is by expanding into new markets and/or expanding product line. 2. Marico is already a market leader, and has an extensive product line. Also, can cater to regional preferences by customizing its current products, and expanding its offering. 3. Maricos emphasis on Product Innovation and Differentiation sets it apart from competition, and gives it a huge Competitive advantage in both Indian and Global markets. Cost Drivers 1. Advantage of difference in labor and manufacturing costs in different countries, especially Bangladesh. 2. Relocation of Production Facility to other countries, such as the existing 14 Production Units, and another plant planned in Bangladesh, has considerably brought down the production costs. Government Drivers 1. Favourable growth conditions in these countries, for eg. Export Processing Zones in Bangladesh 2. Foreign Government Regulations that favour Foreign Investments in these countries

Marico Ltd. 9 International Business Project

CURRENTLY IMPLEMENTED AND PLANNED GLOBAL INITIATIVES

Transparency and openess to help stakeholders take informed decisions Timely announcing of Financial Reports Email updation, Finacial summaries and Investor conference results uploaded on Website

Maximize effectiveness of both by separating accountability No representatives of vreditors or banks in the Board Strict compliance with Marico's Unified Code of Conduct

Generative Transparency and Openness in Information sharing

Constructive Separation of Ownership and Management Accountability, Responsibility, Fairness, Social Awareness

Value Adding Checks and Balances

Prevent authority misuse In-time response to change facilitate management of risks, especially statutory compliances

Constrictive critique of strategic business plans Focus on core business of beauty and wellness Conservative debt policy, stay away from exotic derivative projects Swift measures in case of transgression by menbers

Maricos Internal Corporate Governance Framework

Maricos International Business captures several key geographies like Bangladesh, Middle East and North Africa, South Africa and South East Asia. Bangladesh contributes over 40% to the total international business revenues and forms Maricos major overseas market. MENA, South Africa and South East Asia contribute the remaining 25%, 10% and 20% respectively. The division as a whole in itself contributes almost a quarter of Maricos total revenues. By a mix of Organic and Inorganic growth, the SBU has sustained its growth trajectory over double digits in the last few years. The company has been following the strategy to gain access in fast growing economies with under penetrated markets. This is led to more and more company/brand acquisitions in emerging economies. Marico is a professionally managed company that has built for itself a simulating work culture that empowers people, promotes team building and encourages new ides For Marico, which started off as a small player in the traditional commodity driven business, globalization offers opportunities beyond the realm of just opening up new growth opportunities. It fosters an option of leveraging on cross-border learning. While this certainly explains Maricos aggressive foray in the international markets, the organisational model has entailed a detailed plan to continue their movement up the growth trajectory. Some of the current and in-process initiatives planned by Marico are:

Marico Ltd. 10 International Business Project 1. Risk Assessment and Risk Mitigation Framework
(Ref: Corporate Governance Framework 2012)

Marico believe that: Risks are an integral part of any business environment and it is essential that we create structures that are capable of identifying and mitigating them in a continuous and vibrant manner. Risks are multi-dimensional and therefore have to be looked at in a holistic manner, straddling both, the external environment and the internal processes. The risks involved in all global initiatives and expansions are analysed across its value chain keeping in mind the three set Business Risks of risks. The Risk Management Process envisages the relevant functions by prioritizing risks based on their expected impact followed by tracking and mitigating them periodically. This also ensures that significant checks are in place with reference to all the potential pitfalls. An Internal Audit System depending on the size of the SBU or subsidiary is put into Governance Control place. The Audit System, independent of the executive Risks Risks directors and promoters of the company selects, evaluates and where appropriate introduces changes and ensures a unified and comprehensive perspective. Marico has incorporated an internal framework along the following philosophical cornerstones to ensure strict Corporate Governance Practices.

2. Cross Pollinating Across Geographies

A major part of Maricos success in the FMCG domain can be attributed to its Global Mindset. As a major change in its traditional approach, the company has transitioned from an India-forward mindset to playing by the rules of the market. The key criteria is the policy to participate in formats that are relevant and important to the segment and market that is being catered to as opposed to transporting the India portfolio on an As Is basis. For instance: Reformulation of Parachute hair products to work effectively even under chlorine rich circumstances present in the Middle East Advertising leverages the local flavor capitalizing on the interests and requirements of the respective market. For example, soccer forms and integral part of several campaigns held in Egypt The current focus is on expansion in emerging economies in Asia and Africa like Bangladesh, Middle East, Egypt and South Africa. To ensure significant headroom for growth, the focus is on categories with low to medium penetration levels. Markets with favourable macros, progressive government policies and rising consumer power are primary destinations for expansion. In these new markets, efforts are made to streamline the functioning of the company to make the success accountable and measurable. For instance, the wholly owned subsidiary MBL in Bangladesh was listed on the Dhaka and Chittagong Stock Exchanges. Similarly, though the acquired company in Egypt was a family owned business, professional managers were sent to overlook the functioning of the branch. The five Ps viz; Pace, Philosophy, People, Physical Execution and

Providence

Philosophy

Pace

People

Physical Execution

Marico Ltd. 11 International Business Project Providence were critical success factors in the integration and post-acquisition growth in these markets. Also, to reduce the gestation period associated with the learning curve in new markets, Marico has focussed on interacting with non-competing Indian companies who have been successful in similar markets and learnt from their experiences. 3. Use of Information Technology in Sales To ensure supply chain efficiencies along with the availability of SKUs at the ditributor point to avoid the deadly sin of Out of Stock, Marico has been constantly investing in its IT systems. A MIS system has been put into place for real time tracking of data. Keeping in mind the the territorial expansions, Marico has recently invested in an internet enabled platform called as MI-Net to establish a connect amongst all its businesses. The project is expected to reap benefits in the form of increased penetration, reduced working capital and reduced communication costs. 4. The Art of Speciality and Focus on Margins The ability to quickly pick its spot in a crowded segement has pushed Marico to be amongst one of Indias largest success stories in the FMCG sector. In Bangladesh, where edible oil is a huge category with many players, Marico occupies a small but substantial high end segment focusing on healthy and good for heart oils. In India, it has an exclusive presence in the Anti-Lice segement in the form of its Medikar shampoo. This segment is currently untapped and un catered by any other player in the industry. Similarly, the focus in South Africa is on the niche Ethnic Hair category. This is also the reason why Marico recently let go of its Baby Oil segment which has strong competitive presence. In a market filled with large scale competition with volume players focusing on low margins and price wars, Marico is planning to focus on deviating from the Commodity tag. Instead of participating in the market dynamics, Marico insists on conveying its brand and value proposition to its customers. In brands like Sweekar, despite the fall in volumes, this strategy has ensured solid top line results. In almost all markets, the focus has shifted to low price packs along with packaging innovations to help it retain its market leadership status. 5. Specific Focus on Value Added Hair Products and Super-Premium Edible Oil segments

Volume Growth of Value Added Hair Products in the last 10 quarters

Saffolas Volume growth over the last 11 quarters

A basket of value added hair products including segments like pre-wash and post-wash and male grroming has resulted in almost 13% of the total revenues of Marico and around 18% of the reveues of its SBU in India i.e. CPB. With the category expading Maricos market share in every market, the focus is now on providing consumers with more specific solutions, packagong restating and penetrative pricing. This segment has manintained high growth trajectory over the last 10 years with an average CAGR in double digits. This is despite the price hikes that have been incorporated as a result of the rise in input costs. The focus is evenmore on participating in the sub-segments with a wider portfolio in the form of Ayurvedic and Cooling oils to drive growth

Marico Ltd. 12 International Business Project

With a contribution of about 16% to the total revenues of Marico, Saffola, the 41 year old brand of Marico is poised to create a strong franchise for itself in the super-premium refined edible oil market. Leveraging on its good for heart platform, in lines with the globally rising concern for better health, Marico aims to create a disctinct niche for itself. In a bid to promote healthier lifestyle, the plan is to provide Saffola in four different blends, The flagship brand Saffola, Saffola Gold, Saffola Tasty and Saffola Active. The aim is to provide pricepoints even in the super premium segment.

RECENT CHALLENGES AND REMEDIAL MEASURES

This section lists down the various challenges faced by Marico in each of their international markets as a result of the recent financial meltdown or other forms of instabilities. The table below mentions only the most important or impacts factors. This section also provides the remedial measures or plan which can be undertaken to tackle these vulnerabilities. Country Bangladesh Brands Parachute, Camelia and Aromatic, Hair Code, Saffola Gold Vulnerability due to Financial Meltdown or Other instabilities Even during the global recession in 2008, there was little impact on the GDP growth of Bangladesh, which grew at a rate of 5-6% However, in the recent years there has been a steep decline in the BDT:USD exchange rate. As a result Marico incurred significant higher costs for importing raw materials and substantial loss in gross margin throughout last year Further down political unrest and military rule in the past have resulted in loss of business days in the form of strikes The unrest in Egypt had resulted in the production being shut at its two manufacturing and distribution units. As a result there was 60-70% production loss. The hair care business in Egypt accounts for nearly 7% of the companys business and impacted the overall results for more than a quarter Also, since Egypt was being used as the hub for the entire supply chain in MENA (North Africa and also some parts of middle-east), this resulted in Remedial Measure/ Plans Currently only a mere 1% of the sourcing is done from within Bangladesh. There is an important need to look for a greater share of sourcing from local sources to save raw material costs as a result of weak currency, but to also save on transport costs involved

Egypt

Fiancee, Hair Code, Parachute

Additional locations for setting up hubs in relatively stable countries for the supply chain to minimize risk in West Asian and North African markets which are politically instable

Marico Ltd. 13 International Business Project disruption of production and sales across the two continents Egypt factory closure disrupted companys entire business operations Though the overall FMCG growth is robust and resulted in 14% growth in the Marico sales. However, the business environment is challenging. The inflation has been riding to as high as 18%, which could be a negative factor for consumer care products Also, the weak Dong currency has led to rise in the cost of imported materials. Though the market has been fairly conducive for FMCGs despite the recent meltdown, the sector faces very high competition from other global companies (MNCs)

Vietnam

X-Men, LOvite, Thuan Phat

Localized sourcing of raw materials will help saving considerable costs of imported materials

Malaysia

Code 10, Parachute

As Marico has only recently entered Malaysia by acquiring Code 10 from ColgatePalmolive, it would have spend considerable efforts building its brand

Singapore South Africa

It will have to leverage the already established Parachute brand in Malaysia Derma RX (Marico only very recently entered Singapore and has minimal presence there currently) Caivil, Chic and Post the economic downturn, the Diversification into other Hercules, South African market has remained segments for having a Ingwe stagnant, and the overall FMCG sustaining growth is an segment remained flattish option. To invest in products which are necessities like cooking oil etc. can be Maricos business recorded only a 7% explored in South Africa growth in the top line. Hence, where the emphasis has been suggesting that the demand has come majorly on consumer care down in South Africa as opposed to products other countries where FMCG demand remain normal, yet raw materials sourcing, exchange rates etc. were the trouble makers Further there have been inflationary pressures and hence the market has been experiencing down-trading Apart from Dubai, there have been disruptions in the other markets like Bahrain etc. as a result of the unrest and the political climate

West Asia

Parachute, Hair Code

Additional locations for setting up hubs for the supply chain to minimize risk in stable countries of MENA

Marico Ltd. 14 International Business Project

THE WAY FORWARD

RECENT DEVELOPMENTS In early January 2013, it was announced that Marico's consumer products business in India (CPB) and international business group (IBG) would form a unified FMCG business, and Kaya will be re-defined as a separate business entity, called Marico Kaya Enterprises (MaKE) The Kaya business will be formed as a 100 per cent subsidiary of Marico. One fully paid-up equity share of Rs.10 each of MaKE will be issued and allotted at a premium of Rs.200 per share for every 50 fully paid-up equity shares of Re.1 each held in Marico. All employees on the payroll of Marico and are deputed to Kaya will move to MaKE or one of its subsidiaries. Mr. Harsh Mariwala will continue to be the Chairman and Managing Director of Marico and Marico Kaya Enterprises Ltd. The Finance function would continue to act as a Shared Service Group for both Marico and Kaya

WAY FORWARD A cross-pollination of products can be done across geographies that Marico is present in. For instance, brand building of Parachute cream in Egypt and launching Haircode Styling products in West Asian regions Implement local adaptations in product range such as improved dry skin care in body oils by Marico launched in Egypt etc. Focus on growth of those categories which enjoy significant market share. For example, Coconut oil in Bangladesh and male grooming products like Zatak in MENA and Vietnam Build brand equity in Bangladesh through Parachute Coconut Oil and leverage it to establish other products in the market Increase share in key categories in South Africa and expand footprint in other part of Sub-Saharan Africa over the medium term Carry out feasibility analysis and industry attractiveness studies in emerging markets such as Asia and Africa in the long term

Marico Ltd. 15 International Business Project

REFERENCES
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. www.marico.com/html/about/overview.php www.marico.com/html/our-presence/overview.php www.marico.com/html/brands/overview.php www.marico.com/html/investor/pdf/annual_reports/ann_report_view_2008_09/Management%20Disc ussion%20&%20Analysis.pdf www.marico.com/html/investor/pdf/annual_reports/ann_report_view_2011_12/Subsidiary_20112012.pdf Having a glocal mindset is crucial: Vijay Subramaniam, CEO, Marico IBG The Economic Times Article dated April 20,2010 http://articles.economictimes.indiatimes.com/2010-04-20/news/27606988_1_mindset-internationalbusiness-group-hair-code http://www.euromonitor.com/beauty-and-personal-care-in-malaysia/report http://online.wsj.com/article/SB10001424127887323482504578227322620802056.html http://online.wsj.com/article/SB10001424052748704065404574637392363677738.html http://www.business-standard.com/article/companies/marico-s-kaya-turns-to-smaller-outlets-to-drivepenetration-cut-losses-112120400043_1.html http://www.valuenotes.com/uploads/article_pdf/hdfc_MArico_28Mar12.pdf http://news.indiamart.com/story/marico-witnesses-60-70-production-loss-egypt-plants-135452.html http://www.thehindubusinessline.com/companies/maricos-egypt-production-hit-byunrest/article1509965.ece?textsize=small&test=2