Strategy Assignment
Strategy Assignment
Strategy Assignment
a)COMPANY OVERVIEW
Pidilite was founded in 1959, by Shri Balvantbhai Parekh with one brand Fevicol.
Pidilite has expanded from adhesives to sealants, construction and paint
chemicals, automotive chemicals, art materials, industrial adhesives, industrial and
textile resins and organic pigments and preparations.
The following are the key growth milestones of Pidilite.
1963 The first modern manufacturing plant for pigments and emulsions is set up in
Kondivita village, Mumbai
1965 Fevicol makes its mark and is established as the carpenters preferred choice
of synthetic adhesive that is reliable and durable
1983 With each passing year the company is growing from strength to strength
resulting in a turnover of 10 crores. Expansion plans are underway
1990 The name Pidilite Industries Pvt. Ltd. is incorporated. Thus, the first step
towards brand recognition is taken
2000 M-seal, leading brand of epoxy compounds acquired, thus laying the
foundation for the Maintenance Division of the company
2001 Pidilite launches the Dr. Fixit range of Construction Chemicals, thus
diversifying its product range. The extensive product range is used for
waterproofing and repair for both new & old constructions.
2004 Pidilite acquired the Roff brand of Construction Chemicals. Roff is a pioneer
in construction chemicals in India and is well known for modern tile fixing solutions
like tile-on-tile and waterproof tile joints.
2004 The company grows a 1000 times in 45 years. The annual turnover touches a
pivotal 1000 crores a proud year for the brand.
2005 To further international ventures and foreign acquisitions, Pidilite launches its
first-ever international, wholly-owned subsidiary under the banner Pidilite
International in Singapore. This is followed by acquiring Chemson Asia Pvt. Ltd, a
Singapore-based brand that manufactured waterproof coating and emulsion paints.
Pidilite takes over Jupiter Chemicals in Dubai. Furthering its international operations,
the company incorporates two more subsidiaries in Brazil and Middle East.
2006 Pidilite USA Inc. acquires businesses and assets of Sargent Art Inc., makers
of art materials which has been selling world-class art materials in USA for over 50
years.
2006 Pidilite acquires Tristar Colman brand and business, now known as Colstar.
Tristar Fine Art, is a market leader in brushes for drawing and painting while Tristar
Colman is a well-known brand of canvas and student art colours.
2002 Steelgrip, a leading brand of PVC insulation tape in India is acquired. Another
segment added to the product portfolio of the brand.
2006 The company also acquires Cyclo Industries LLC, makers of Automotive
Maintenance products. The product range includes maintenance, performance and
appearance products for DIY (Do-it-Yourself) and professional car care segment.
Cyclo products are sold in USA and over 50 other countries.
2006 Pidilite establishes its R&D centre in Singapore to attract international talent
and expand product innovation strategies.
2007 Pidilite Brazil (Pidilite Do Brasil Desenvolvimento De Negocios Ltda) acquired
Pulvitec, an Adhesives & Sealants company in Brazil
2009 Pidilite acquires Woodlok, retail wood working brand of Henkel
2012 - PIL entered into a Joint Venture Agreement with Hybrid Coatings for
manufacture of construction chemicals.
2013-PIL acquired adhesive business of Suparshva Adhesives Ltd.
2014- PIL acquired the adhesive business of Blue Coat Private Ltd.
The Company takes several initiatives to increase awareness of its products and
brands, increase consumption of its products and to strengthen relationship with
customers, influencers and end-users. The Company publishes the very popular
Fevicol Furniture Books. The Company publishes 3 editions each year covering
designs for homes and offices. The furniture books have found good acceptance in
households and among carpenters and interior decorators. The Company has till
date published over 5 million copies of furniture books. The Company is now also
publishing a CD-ROM version of the furniture book.
Fevicol Champions Club, a platform initiated by the Company for carpenters and
those associated with the furniture industry to come together, continued to expand
with over 300 clubs in 114 towns having over 45,000 members. To recognise
outstanding talent amongst interior design and architecture students, Pidilite Award
of Excellence was given to the best student from each of over 200 architecture and
interior design colleges across the country.
Dr. Fixit Institute, set up to provide training on use of waterproofing and
construction chemicals to applicators, consultants, contractors, builders, architects
and civil engineering students conducted 20 training programmes during the year.
The annual International Art & Craft Contest organised by the Company had over
4,000 schools and 1.7 million students participating from India and abroad.
Vision
To Be The Most Innovative Research and Technical Competence Center for
Sustaining Innovation-Driven Growth.
Mission
Invite, invest, and embrace talented people and scientists for great challenges ahead
Support, serve, and satisfy all valuable customers with our innovative products and
excellent technical competency
Innovate with our customers to provide total product satisfactions and business
growths
BUSINESS SEGMENTS
Pidilite operates in both Consumer and Industrial Segments and is an innovation
leader in adhesives, sealants, construction chemicals and art material.
The construction industry is becoming more organized, which is increasing the use
of construction aids like sealants in high rises, coatings in commercial buildings and
waterproofing for roofs and terraces. Pidilite is promoting the use of the products in
association with craftsmen to increase consumer awareness and acceptance. This
will boost sustained demand for the aids.
b)
SWOT
Strength
1. The advertising and marketing of Pidilite has been very strong, especially the
Fevicol
ads
have
become
a
viral
hit
among
the
masses.
2. The name Fevicol has become synonymous with adhesives and has almost
become a generic for anything that sticks. This also has helped other brands of
Pidilite
such
as
Fevistik,
Fevikwik,
etc.
in
their
sales.
3. Fevicol and M-seal alone account for more than 50% of the total revenue of
Pidilite, which eases the pressure on the sales of other brands and businesses.
4. Brand recall and value are extremely strong for Pidilite and have become the star
attraction for many television commercials.
5. Fevicol ads have also won accolades and awards at major advertising award
festivals and shows.
6. Strong R&D center to cater to the growing need for innovative products and
services.
Weakness
1.Acquisition of the Cyclo brand of car care products is a weak factor as India
exhibits a very fragmented market for the same with very little customer loyalty.
2. Revenue generation is over dependent on Fevicol and M-seal which results in
reduced investments on other brands and businesses.
1.Pidilite organizes many creative competitions for students and young scholars,
such as the 'International Creative Contest' where approx. 800,000 students from
3000 schools participate.It also helps in promoting the brand very well.
Opportunity
Threats
2. The chemical industry in the world in growing very strongly and focus on emerging
economies in other parts of the world such as Brazil, South Africa, China, Singapore,
Thailand and East Africa is a great opportunity to establish stronghold in the
international market.
1. The manufacturing cost of Pidilites products is largely dependent on crude oil and
petroleum
prices
which
are
fluctuating
by
the
minute.
2. Competitors are equally hard pressed on delivering innovative products and
services.
VRIO framework
The VRIO framework can be stated as the value, rarity, imitability, and
organization as a whole. VRIO framework is extremely important for the
internal analysis of Pidilite organization.
Valuable
Rare
Imitable
Exploit
ed
by
organi
sation
1) Cash
Neutral
2)Equity
Holders
Strength
3)Bond
Holders
Weakne
ss
4)Financing
(GMAC)
Strength
Strength
1)Supplier
Relations
Weakne
ss
2)Dealer
Relations
Weakne
ss
3)Union
workforce
Weakne
ss
Weakne
ss
Resource/ca
pability
Multiple
markets
Core
competence
Strength
/
Weakne
ss
Financial
Human
1)
Leadership
Organisati
on
4)Employee
benefits
5)Environm
ental
Strategy
Strength
Technologi
cal
1)Informatio
n
Technology
Strength
2) Logistics
Strength
1)
Brand
name
Weakne
ss
2)Corporate
Values
Strength
3)Patents
Strength
1)
Marketing
Strength
2)Product
R&D
Strength
3)Engineeri
ng
Strength
4)Manufact
uring Plants
Weakne
ss
5)Product
Reliability
Weakne
ss
6)Brand
Portfolio
Weakne
ss
Intangible
Physical
7)Domestic
market
share
Strength
Strength
Strength
10)Strategic
Alliances
Strength
11)Custome
r Service
Strength
8)Internatio
nal Market
share
9)Large
scale
operations
Value
The value of Pidilite is that there are a number of advantages, like the strong
marketing strategy that ensures high brad recall of its biggest brands like
Fevicol,Fevikwik and M-seal
Rarity
The constant innovations in the product and the packaging to ensure relevance in
the market. Pidilite has been the first mover in many categories which is one of
the many reasons that make it the market leader in many categories. This strong a
hold on the market share is a rarity in the current competitive world.
Imitability
The name Fevicol has become synonymous with adhesives and has almost
become a generic for anything that sticks. This also has helped other brands of
Pidilite such as Fevistik, Fevikwik, etc. in their sales. This Generocide is highly
unimitable.
Organization
Pidilite has maintained a strong leadership in the market it caters to. All the
strategic decisions regarding sales and marketing have displayed the desired
results. Recently, there has been changes in the top positions and that queartr has
shown a net growth in profits which indicates that the organisation itself is at a good
place with its competitive advantage being made good use of.
Inbound
Logistics
Operations
.
Cut of to
suppliers
Material
handling
Warehousing
Inventory
control
Procurem enta
l
Purchasing
raw
m aterial,
suppliers,
fixed asset
coversion
Assembly
Packaging
Maintainence
Technological
developm ent
Process
design
Product
design
R & D
Outbound
Logistics
.
Warehousing
Order
processing
Picking
Shipment
Delivery
H um an
Resources
Recruiting,
hiring,
training,
developm en
t,
com penesati
ng all
personnel
Marketing
and Sales
.
Channel to
market
Product,
pricing,
advetising,
promotion,
distribution
Customer
value, cost to
customer
Sales force
effectiveness
Service
.
Installation
Repair
Training
Infra structure
G eneral
m anagem en
t
Finance
Accounting
IT
PRIMARY ACTIVITIES
1.Inbound Logistics
Working with suppliers and business partners around the world to maintain the
supply chain.
Purchasing raw materials and equipment.
2.Operations
Manufacturing in all 4 business units
5. Service
After Sales services such as returns
BUSINESS STRATEGY
Pidilite has always used a focused strategy for each of its business segments.
The common underlying factors for each of its strategies are brand power, continuous
innovation and new launches.
Pidilite, a play on growth opportunities in the consumer and industrial segments,
created brands like Fevicol in a commoditized adhesive market.
It is consolidating in emerging segments like mechanized joinery,modular
furniture, flooring, automobile care and waterproofing.
Pidilite's elastomers project, slated for completion at the end of FY12,offers
earnings upside.
A play on both consumer and industrial segments
Pidilite is a play on the growth opportunity in the consumer and industrial segments.
The expected demand in the consumer segment (77% of sales) to grow, led by
(1) lifestyle changes,
(2) new housing and repairs and
(3) higher literacy (demand for art material).
Pidilite expects the industrial chemicals segment (22% of sales) to grow at higher than
GDP rates, led by growth in the packaging, lamination, footwear, textiles and paint
segments. Pidilite's brands (Fevicol, M-Seal, Hobby Ideas and Dr Fixit ), distribution and
consumer connect will help it to capitalize on the opportunity.
Pidilite has strong growth links to economic activity, rising affordability, lifestyle changes,
focus on interiors, education and construction. The industrial segment offers inputs to
consumer industries like packaging, labeling, paints and footwear, which have direct links
with consumer sentiment and buying power.
rising importance of art in urban classes, especially the youth and middle-aged
people; we expect the number of amateur artists to increase, leading to higher
demand for art and hobby products.
organized players like Pidilite and Camlin being instrumental in launching products
catering to specific needs (silk, fabric, glass colors), which attract new users to these
segments. Pidilite started Hobby Ideas stores, which showcase its art and hobby
material under one roof and increase consumer pull.
Pidilite launched in India Cyclo car care products, which cover aspects of car care such
as engine and glass cleaning and injector cleaning material. Pidilite acquired Cyclo in
2006. However the Indian market is nascent and will develop over a few years.
In the art material segment, Pidilite faces competition from organized and unorganized
players. Pricing power in art material is limited, more so at the low-end of water colors
and crayons, which even compete with cheap Chinese imports
1. INNOVATIONS AN INTEGRAL PART OF PIDILITES STRATEGY
Pidilite is highly innovative in terms of new launches, advertising, marketing and retailing. It
transformed Fevicol into an iconic adhesive brand in the commodity segment through product
innovation and clutter breaking advertising. Pidilite's marketing innovations include making
carpenters its brand ambassadors and it ventured into the retailing art material through Hobby Ideas
stores, which aim at brand building in a high potential segment. Innovation across functional areas
enabled Pidilite to forge strong trust with the consumer.
art materials division launched brands like Fevistick, Feviquik, Hobby Ideas,
Fevicryl Silk, Glue Drops, Acron Kids' Art and Fine Arts.
Pidilite
launched Dr Fixit construction chemicals in 2001. The brand has been extended
to requirements across waterproofing, repair material, tile fixing and coatings. Dr
Fixit has emerged as a INR2b brand over the past nine years. The brand extensions
include Crack X, Gap Fill, Newcoat, Raincoat, Rooftcoat, Roofseal, Torch Shield
and Dampguard.
M-Seal
variants include M-Seal Plumber, Wet Set and application-based variants for
export. M-Seal has sales of nearly INR1b.
In
2004, Pidilite acquired Roff, a pioneer in waterproofing, tile fixing solutions and
waterproofing of joints.
Pidilite
USA acquired Sargent Art brand in the US in 2006. The brand has been selling
products like crayons, tempera colors, acrylic colors and modeling clay, over the past
50 years.
In
2006, Pidilite acquired Cyclo brand, which has sales in 50 countries for maintenance,
acquired Woodblock adhesive from Henkel in FY10. This will enable Pidilite
to expand its offerings.
2 . BRANDING STRATEGY
Clutter-cutting advertising gives Pidilite products strong brand recall
Pidilite is one of India's most innovative advertisers, having built a brand like Fevicol in a
category that is globally considered a commodity. Some of Pidilite's advertised brands are
Fevicol, M-Seal, Fevistick, Fevicryl and Feviquik. The key differentiating factor of its
advertising has been its unconventional, subtle themes, simply displayed.
Pidilite's Fevicol campaign focuses on "Fevicol aise jode lagaiye, ache se acha na tod
paye". Feviquik has been positioned as an adhesive that sticks fast ("chutkiyon mein
chipkaye").
Pidilite's ad spends (three-year average of 4.4% of consumer business sales) have been
steady. Some other FMCG companies with such ad spends are Nestle and ITC, partially
because of an ad ban on infant nutrition for Nestle and cigarettes for ITC. This makes
Pidilite a unique case among consumer companies, which shows the impact of its ad
campaigns and brand equity.
Pidilite has one of the lowest ad spends in the FMCG industry and the trend is
likely to continue
used Fevicol as an umbrella brand with the launch of adhesives and sealants
like Fevistick, Fevikwik, and small packs for home and office use. These have helped
to maintain a connect with consumers as the frequency of furniture purchase is once
in 5-10 years while brands like Feviquick and Fevistick are used frequently.
Pidilite is taking the tradition forward with regard to its new sealants, Dr Fixit
waterproofing compounds and Roff tile fixing solutions. Pidilite introduces the products
to builders and craftsmen and trains them in uses of the product, resulting in rising
product awareness and repeat purchases. Dr Fixit is a INR2b brand since its launch
in 2001.
3. RETAILING INNOVATION TO INCREASE FRANCHISE OF ART MATERIAL
Pidilite opened India's first chain of hobby and craft retail stores under the Hobby Ideas
stores brand, which offers over 2,500 products from different countries. The products,
such as molding craft products, DIY kits and puzzles, are complemented with books,
videos, finished articles, projects and workshops.
Pidilite has 17 Hobby Ideas stores, in Mumbai, Ahmedabad, Nagpur, Pune, Kolkata, Noida
and Surat. Ten of the stores are shop-in-shops at Staples, Shoppers Stop, Starmark and
Crossword Bookstores. The stores aim to popularize the art and craft habit among children
and strengthen the consumer connect. Standalone stores organize birthday parties and
children's workshops on art work such as lantern making, ceramic pot making, candle
making and contests. They also offer children memberships of groups such as Kids Club
and Creative Art Club. The concept can go a long way in increasing the awareness of the
products and their use.