Return to Previous Page

Inorganic Growth Management at Godrej Consumer Products Limited*

CASE STUDY, STRATEGIC MANAGEMENT
ET Cases - FLAME, 10 pages

Case Preview

Inorganic Growth Management at Godrej Consumer Products Limited

 

Presently headed by Adi Godrej, Godrej Group founded in 1897 is located in Mumbai, Maharashtra, India. It has since grown into the largest and the oldest  conglomerates, with its presence in different industries comprising appliances, furniture (also office equipment), precision equipment, machine tools, healthcare, interior solutions, food-processing, construction and information technology to name a few. Vikhroli in Mumbai was the conventional manufacturing base for the  company. However, due to conglomerate nature, the production units were shifted far from Mumbai. Godrej group can be termed as India’s most trusted brand. The brand commands and delights the faith and support of about 500 million Indians on a daily basis. Currently, Godrej group has a turnover above $4.1 billion. Godrej is an essential part of Indian dayto- day living. Moreover, Godrej has about 26% of its consumers overseas and existence in about 60 countries worldwide. With a high international presence, Godrej strives to make its overseas Indian customers feel at home with its products. Godrej’s guarantee to offer better experience to each of its customer has led to gain consumers’ faith in its products. Godrej realizes that valuable service level is the demand of the contemporary consumers. Godrej is currently at a stage of acquiring skills to build a young tomorrow again.......

Teaching Note Preview

Inorganic Growth Management at Godrej Consumer Products Limited

 

Synopsis

This case study deals with the revitalization of Godrej Consumer Products Ltd. (GCPL) by way of significant international acquisitions (inorganic growth). GCPL focused on 3x3 strategy, i.e., to sustain in three business categories (hair care, home care and personal wash) in three geographies (Africa, Asia and Latin America). The company decided to play only in categories where it was the market leader or had the potential to be the market leader. Unlike its rival companies like L’Oreal, which were rushing to give their brands premium status, GCPL took a calibrated approach. To achieve its goal, the company had to gain access to the latest technology in the industry via inorganic route, which required GCPL to go global. In synchronization to its 3x3 strategy GCPL acquired companies abroad, which allowed it to grow its international footprint. Godrej acquired businesses after estimating three core details i.e., firstly, strong growing opportunities, secondly, it concentrates on the bottom-of-the-pyramid products that are priced rationally and of good quality. Lastly, it focuses on the fact that some of these ideas be imported. This showed the company’s willingness and aggression to acquire companies and learn from them. GCPL’s view on inorganic growth is that it would acquire only if a right fit exists with the company’s business strategy, HR strategy and the aim to meet market expectations. For Godrej it was a demand of opportunity that matches with the company’s strategy.

Expected Learning Outcomes

• Understand the three core factors that GCPL estimates, when it acquires businesses in the developing world
• Discuss the factors that lead to success of JVs done by GCPL
• Understand if GCPL benefited by adopting the inorganic route to become number one in the hair color segment

Case Positioning and Setting

The case can be used in Strategy, International Business modules for students pursuing Masters and Executive Masters Business Administration levels for a module on scope expansion as part of corporate strategy. The conceptual framework on inorganic growth can be introduced with this case in a 70-minute session.

Issues for Class Discussion

1. What is your assessment of GCPL’s inorganic growth strategy?
2. GCPL’s 3x3 strategy is the basis for the inorganic growth route adopted by GCPL. Evaluate.
3. .............

..........................................................

$4.22
Rs 0
Product code: STG-1-0019, STG-1-0019A

Abstract


Soon after the economic liberalization, in 1992, Indian economy started witnessing competition from local as well as international markets. In 2007, Vivek Gambhir, the then Chief Strategy Officer, witnessed the talks that Godrej had nothing to appeal the youth. However, Godrej, a 115-year-old company realizing the stakes had taken prompt action before it was too late. In 2013, Vivek Gambhir took charge as the Managing Director, Godrej Consumer Products Limited (GCPL). On a market visit, in Kurukshetra, Haryana, he walked into a local shop (mom and pop store). The owner of the shop appreciated GCPL's offerings of premium products at a reasonable price of INR30 and showed him a sachet of Godrej Expert Rich Hair Crème, a hair color product, wherein the competitors were offering similar products for no less than INR60. Vivek Gambhir was surprised when the shop owner mentioned and acknowledged Godrej's launch of innovative products every quarter, where in the competitors are cutting spends. The question to ponder is what different did GCPL do to make their hair care product charm the new generation?



Pedagogical Objectives

  • To understand the three core factors that GCPL estimates, when it acquires businesses in the developing world
  • To discuss the factors that lead to success of JVs done by GCPL
  • To understand if GCPL benefited by adopting the inorganic route to become number one in the hair color segment

Case Positioning and Setting
The case can be used in Strategy, International Business modules for students at the Masters and Executive Masters Business Administration levels




* FLAME CASE CONFERENCE 2015


This Case Pack Includes:
 - Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)
$4.22
Rs 0

Related products




Request for an Inspection Copy

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