Patanjali SWOT analysis
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Patanjali SWOT analysis 2019 | SWOT analysis of Patanjali
Haridwar, Uttarakhand, India
Number of Employees
Products & Services
Skin Care | Hair Care | Toiletries | Herbal Home Products | Health Care | Dental Care | Food Products
Dabur | Himalaya Herbal| Procter and Gamble | Nestle | Marico | HUL
Did you know that Patanjali is the fastest growing FMCG (CPG) company in India?
Strengths – Internal Strategic Factors
Baba Ramdev, a Hindu spiritual guru is the founding father of Patanjali. Baba Ramdev is the reason behind Patanjali’s exponential growth. The spiritual guru serves as the brand ambassador and has used his popularity and fame to persuade consumers to buy his products. Through his influence and power, Baba Ramdev has managed to boost the growth of the company. Using the religious, moral, ethical, and spiritual aspects of the society, the guru has strengthened his customer base. Patanjali wouldn’t be such a big brand if Baba Ramdev wasn’t its brand ambassador.
The pricing structure of Patanjali’s products gives it leverage over its competitors. The brand has successfully managed to capture the interest and loyalty of the Indian lower- and middle-class demographic. The products are priced at least 20-30% lower than that of its competing rivals. The budget-friendly products are easily accessible and are preferred by the less affording consumers. Competitors and rivals simply can’t compete with Patanjali on such an advantageous pricing strategy.
Launch of New Products
Patanjali has recently launched a number of new products. The company has ventured into the dairy sector and now offers cow milk, flavored milk, curd, buttermilk, and cheese. In an official press statement, the brand commented that it produced 4 lakh liters of milk on the first day of the launch. Additionally, Patanjali now also offers frozen vegetables like peas, sweet corn, and mixed vegetables. This puts Patanjali in direct competition with McCain. Patanjali also plans to launch its own packaged drinking water, named as Divya Jal. Furthermore, the company plans to offer urea free cattle feed and solar production.
Ayurveda and Herbal
Patanjali has intelligently utilized Ayurveda and herbal products. Its marketing strategy specifically promotes its herbal products highlighting the benefits of natural and organic materials. The Swadeshi products that are marketed by Patanjali are both loved and widely consumed by the Indian masses. The natural element that the brand has incorporated in its product line has given it a competitive advantage over its rivals.
Strong Distribution Channels
Over 15,000 Patanjali outlets are operating across India, which gives the brand strong distribution channels. The brand sells its products through medical centers Patanjali Arogya Kendras and Patanjali Chikitsalayas and also through Swadeshi Kendras (non-medical centers). This has helped the brand to easily reach the masses and build trust and customer loyalty.
Word of Mouth Marketing
Patanjali has been utilizing word of mouth publicity. Patanjali was one of the very first brands to use this strategy. Initially, the company didn’t rely on any other form of marketing. Word of mouth publicity proved to be beneficial for Patanjali with Baba Ramdev’s yoga camp followers promoting and endorsing the brand. In recent years, the company has been pushing its products through all promotional campaigns. Furthermore, through the launch of the medical and non-medical centers, Patanjali has solidified its market position.
Patanjali has an E-commerce advantage over its competitors. A lot of its products are sold through E-commerce platforms. Due to this, consumers can easily find Patanjali’s products online.
Weaknesses – Internal Strategic Factors
Reliance on Baba Ramdev
The company relies heavily On Baba Ramdev himself. The man is not only a business magnate but also a public figure. The spiritual guru has been in and out of a lot of controversies. Recently, Baba Ramdev had to apologize to the people of Assam for the harsh and insensitive comments made by a Patanjali official. Satinath Barale, a yoga instructor and Patanjali employee made outrageous comments about Vaishnava saint Srimanta Shankardev at a yoga camp. The aftermath of the event saw massive public outcry. The backlash became so severe that Baba Ramdev himself had to issue an apology. Incidents like this can tarnish the image of the brand.
Current Pricing Strategy
Patanjali needs to revise its current pricing strategy or else the company will fail to sustain itself. The current pricing strategy gives low-profit margins which are necessary for Patanjali’s survival. The company will have to deal with high labor, and raw materials cost if it doesn’t change its pricing strategy.
Excessive Product Offerings
Patanjali has way too many products in its portfolio. Some of these are profitable while others fail to generate any profit. Despite having such a diverse product portfolio only 5 or 6 products like shampoo and toothpaste generate high revenues. The company needs to discontinue low profit products or solidify them so they can generate substantial profits.
Lower Margins for Distributors
Patanjali’s core focus is on volume and not on margins. It offers lower margins to distributors as opposed to other companies that deal in consumer goods. For this reason, the company is a demand run company.
Limited presence in International Market
Patanjali is a brand that has an International appeal thanks to its exotic outlook. However, it has mainly restricted itself in the Indian market. Baba Ramdev has an international audience, and he can provide an incentive in regions where his strongest demographic base is located like Nepal. Additionally, the company needs to target the younger Indian demographic that is internet savvy and technologically advanced.
Opportunities – External Strategic Factors
Natural & herbal products
A number of people are now switching to organic and natural products. This is the perfect time for Patanjali to invest more in its organic farming sector, particularly in terms of raising awareness about its product’s health benefits and health risk preventions. The company should continue to promote its natural and herbal goods.
The global markets provide a fertile ground for a company like Patanjali. Spirituality or anything related to mysticism is popular among the inhabitants of Africa, Asia, and the Middle East. The company needs to learn from Haldiram, Amul and Dabur, etc. and proceed with a similar plan of action. Thanks to Baba Ramdev, the company has a direct association with Yoga. The company can expand in regions where Yoga is a common practice like Far East Asia.
The brand can open quick restaurants like Haldiram and offer edibles that use natural and organic ingredients. This can complement the company’s offerings and help to generate bigger revenues. By offering food items, the company can establish a stronger image in the Indian market.
Currently, the company is not running extensive operations in the Indian rural areas, which are critical for every company. Patanjali must expand rurally and cater to the rural regions accordingly. It would be easier for the Patanjali to expand rurally as rural consumers prefer natural products that are affordable.
Threats – External Strategic Factors
Patanjali has seen its fair share of controversies. Most recently was its promotion of the “Putrajeevak Beej” that promised the birth of a male child to any family that purchases it. The severe backlash resulted in a government inquiry. Many politicians and activists recommended banning the sale of the product. It has tarnished the image of the brand and has affected its revenue.
The company faced a major crisis when the Nepal Department of Drug Administration issued a public notice to Patanjali stating that they had found some of its medical products to be of “sub-standard quality.” The products had failed their microbial tests which were used to detect mold, bacteria, and other toxins. This crisis resulted in negative word of mouth that damaged the company’s reputation.
Increase in Competition
Big companies like Marco, HUL, and Dabur already give Patanjali tough competition. Newer entrants in the market like Sri Ayurveda are also increasing the competition for Patanjali.
Strong dependence on climate, may face natural disasters or severe weather