Return to Previous Page

Baba Ramdev’s Patanjali Ayurvedic Products: Serving, Profitably?

CASE STUDY, STRATEGIC MANAGEMENT
ET Cases, 28 Pages
AUTHOR(S) : Syed Abdul Samad and Dr. Nagendra V. Chowdary

Case Preview

Baba Ramdev’s Patanjali Ayurvedic Products: Serving, Profitably?

“This is just the beginning. Nestlé, Hindustan Unilever and Colgate-Palmolive will be left clueless eventually.”1

Modern trade changed the way Indians shopped in the 1990s, then e-commerce and online shopping made way during the 2000s. This time around, it was Patanjali Ayurved Limited (PAL) – the latest disruptive force in the Indian FMCG sector – started in 2006 and grown exponentially since then. After clocking a sale of 5,000 crore  ($744 million) in 2015–2016 with a growth of 150% over previous year, Baba Ramdev’s (Ramdev) PAL was targeting 10,000 crore revenue in 2016–2017.2 PAL, that  started only a decade back, became a FMCG giant and grew ten times in size in the last 5 years – an unprecedented feat in India’s FMCG sector. Relying on ‘Brand  Ramdev’, pitching its products as swadeshi (indigenous), using technology for mass quality production and adhering to traditional ayurvedic ingredients, PAL’s products  overshadowed the offerings of all other FMCG companies in the Indian market.

The set revenue target of 2016–2017, if achieved, would put the company ahead of multinational giants like Nestlé, Colgate-Palmolive and Procter & Gamble. In addition, Ramdev has set a very ambitious sales target of reaching of 1 trillion ($14.9 billion)3 by 2025–2026, a 20-fold increase from the current numbers. The target represented a third the size of the current Indian packaged consumer products market (3.2 trillion4). Even HUL, present in India since 1888, could not reach one-third of PAL’s set target for 2025–2026. While the industry experts agree to the fact that PAL would be a major threat to domestic and global FMCG rivals alike, the company was facing numerous controversies and concerns that seemed to hamper its growth.............





1 Arnab Dutta, “Baba Ramdev’s Patanjali aims to double its revenue to Rs 10,000 cr in 2016-17”, http://www.business-standard.com/article/companies/baba-ramdev-s-patanjali-aims-to-double-its-revenue-to-rs-10-000-cr-in-2016-17-116042700061_1.html, April 27th 2016 (accessed date: June 3rd 2016)

2 Ibid.

3 Sounak Mitra, “Inside Baba Ramdev’s Patanjali Empire”, http://www.livemint.com/Companies/hLEBBx17cFY5rPjTjmIP9O/The-Patanjali-story.html, June 3rd 2016 (accessed date: June 3rd 2016)

4 Ibid.

Teaching Note Preview

Baba Ramdev’s Patanjali Ayurvedic Products: Serving, Profitably?

Synopsis

Patanjali Ayurved Limited (PAL), which started in 2006, had become the latest disruptive force in the Indian FMCG sector. With a growth of 150% over the previous  year, the company, started by Baba Ramdev (Ramdev), clocked a sale of 5,000 crore ($744 million) in 2015–2016. Having initiated scores of Indians into yoga  Ramdev had become an Indian icon for yoga and an anathema to sedentary living. The company had grown by banking on Ramdev’s personal brand image, and its  products were made using traditional natural/herbal/ayurvedic ingredients and pitched as ‘swadeshi’ (indigenous). PAL’s products had overshadowed the  offerings of all other FMCG companies in the Indian market and PAL was targeting revenue of 10,000 crore in 2016–2017. While it is considered a threat to competitors, industry experts looked at its distribution network and product shortages as hindrances in its growth. This case study is meant to understand how a  homegrown, personal-brand-equitybased initiative can be catapulted into a thriving business.

Prerequisite Conceptual Understanding (PCU)/Before the Classroom Discussion

The students/participants should be asked to read the following article:

  • *Michael E. Porter, “What is Strategy?”, http://cfe.unc.edu/pdfs/what_is_strategy.pdf, November-December 1996 – To understand that a company needs to have a differentiating strategy to outperform its rivals


Case Positioning and Setting

This case study can be used in the MBA Program for either of the following courses/modules:

  • *Corporate Strategy/Competitive Strategy – How a disruptive/challenger FMCG player’s competitive strategy can be designed and executed?
  • *Brand Management – How a personal brand equity can be reshaped into a challenger brand?


Assignment Questions

  • I. Discuss the reasons for the success of Patanjali Ayurved Limited in the light of the business dynamics of the Indian FMCG market.
  • II. Discuss the Critical Success Factors of Patanjali Ayurved Limited and analyze how it had affected the Indian FMCG Market.
  • III. What would it take for Patanjali Ayurved Limited to stay ahead of competition and deeper penetration into the Indian FMCG market?


Preamble to the Case Study Analysis and Suggested Orchestration

This case study helps understand the reasons behind PAL’s rapid growth. It helps to analyse the Critical Success Factors (CSFs) of the Indian FMCG industry and how the CSFs contributed for PAL’s success. It also analyses the reasons responsible for PAL’s success and how Ramdev’s personal brand equity became an influencing factor for PAL’s success. Further, it allows the participants to debate about the possible ways in which PAL could become more profitable in future and continue to be successful.......

$4.57
Rs 0
Product code: STG-1-0036, STG-1-0036A

Abstract

This case study is meant to understand how a home-grown, personal-brand-equity-based initiative can be catapulted into a thriving business. Having initiated scores of  Indians into yoga and the art of ideal living through his well-orchestrated yoga sessions for many years, Baba Ramdev (Ramdev) became the Indian icon for yoga and an anathema to sedentary living. Having been buoyed by stupendous success with a powerful brand recall, it was time in 2006 for Ramdev to tread the path of building  business architecture. Over the next few years, with prudent business sense and ardent aggression, Patanjali Ayurved Limited (PAL) became an Indian FMCG juggernaut with sales of ₹5,000 crore by March 2016. With an aggressive target of ₹1 trillion ($14.9 billion) of net sales by 2025, PAL is steadily eating into the market  shares of entrenched and long-playing FMCG players including HUL, P&G, ITC, Godrej, L’Oréal, etc. Will PAL be able to take the sheen off FMCG behemoths or would it  succumb to inertia soon?



Pedagogical Objectives

  • To understand how the personal brand equity can be morphed into a successful business venture, i.e., how Baba Ramdev’s brand equity (an outcome of his years of Yoga association with Indians) became a bedrock and a strong building block for PAL’s commercial success
  • To analyze the critical success factors behind PAL’s meteoric penetration into Indian FMCG market with its aggressive promotion and assertive production
  • To discuss and debate on the ways and means for PAL to stay ahead of the competition and continue to set the Indian FMCG agenda

Case Positioning and Setting
This case study can be used in MBA Program for either of the following courses/modules:

  • Corporate Strategy/Competitive Strategy – How a disruptive/challenger FMCG player’s competitive strategy can be designed and executed?
  • Brand Management – How a personal brand equity can be reshaped into a challenger brand?



This Case Pack Includes:
- Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)
$4.57
Rs 0

Related products




Request for an Inspection Copy

(Strictly for Review Purpose, Not to be Used for Classroom Discussion/Trainings)