Dabur India Ltd is known as one of the leading companies that have established a strong presence in the domain of natural solutions to healthcare. Since the past 131 years, the company has fulfilled the demand of its target market for naturally based Ayurvedic products. The company has a wide range of products that offer the consumers with different healthcare options. Another important point that shows the financial stability of Dabur is the revenue of Rs 8400 Crore. Its more than 250 products are available in India, with a strong market presence in the international healthcare industry as evident from the supply of its items in more than 120 regions (Dabur India Ltd, n.d). The product portfolio includes items related to personal care, home care and food products. An analysis of these products in terms of BCG Matrix has been provided as follows:
Cash Cows
The cash cows are those products that are seen as a highly productive item for a company as it generates a high revenue. Since the product has a high demand, the high number of sales enables the company to gain significant financial benefit from the cash cows. These items have established a strong hold in the market therefore do not need a great deal of resource investment apart from the usual marketing and promotional activities. Some of the leading products of Dabur India include hair related herbal solutions. For instance, Dabur hair oil has been faring well in the Indian and international market, making strong financial performance. Agarwal (2016) has indicated that Dabur holds a prominent position in the hair oil segment in India. It has been further noted that in 2016, more than 60% of the market share in India in the hair oil segment belonged to Dabur hair oil categories. Another product that has performed well in the domestic and international market is Dabur Hajmola, a renowned remedy for indigestion in the domestic market specifically. In India alone, the consumers are purchasing 2.6 crore tablets on a daily basis, which indicates a large sales volume (Dabur Hajmola, n.d). Moreover, the herbal remedy industry in India is dominated by Dabur Hajmola, as evident from the 50% share owned by the product.
Stars
The star product is an item that is making important contribution to the financial strength of an organization. At the same time, the product has opportunity for further growth as the demand for the item is on a rise. This could help the company to increase its market share which would make the star a cash cow in the subsequent years. Growth potential in market share is one of the key identifying factors of a star product, along with the high sales it generates for an organization. The stars for Dabur India belong to oral healthcare and beverage industry. Dabur toothpaste has been able to create a significant niche in the market while the Dabur juice has attained similar success. Bhushan (2016) has shared insight into the Indian toothpaste market, highlighting that the red toothpaste by Dabur has been able to secure a position among the top 3 leading brands in the country. The significant market share shows that the company has been able to compete with the foreign MNCs, such as Colgate-Palmolive Company. In the beverage segment, Dabur juice has targeted the needs of the customers who want fizzy drinks, yet want to consume healthy beverages. The option of fruit juice with the fizzy combination has appealed the target market, increasing the demand of the product within a short span of time, making it a star for Dabur.
Question Marks
The question mark as the name suggests includes those products that are not financially contributing at the moment. They do have some potential to grow and create an increased demand in the market. However the present status of the products denotes an uncertain future performance. The question marks, if able to gain significant market share could be classified as stars, but continuation with the same level of financial input, these products can’t be identified as the leading source of financial strength of a firm. Despite the high sales of toothpaste, juice and digestive tablet, there are some products that have not been able to gain a positive response from the market. The acquisition of NewU has been speculated as a risky decision as the company was renowned for its focus on herbal products. The management has decided to invest 100 crore Indian Rs in the venture, which is a huge amount in terms of investing while diversifying the business (Batra, 2015). NewU was a question mark for Dabur as it carried a great deal of risk and could be failure for the company. On the other hand, there was also a possibility of success which could help the company in diversifying its market presence. Another motivator for this decision was the expectation of earning 150 crore revenue through NewU investment.
Dogs
The products that are placed in the dog category of BCG Matrix are poorly performing items being manufactured by an organization. Due to the poor financial gains originating from the sale of these items, the firm considers them as a liability, rather than a source of growth. The poor financial performance necessitates the decision to stop production of these items and save the resources to be invested in production of some other profitable ventures. Some business decisions by Dabur have resulted in the development of products that have not gained a significant market share. Furthermore, these items do not have a profitable outlook in the future. Rath (2011) has provided the example of Dabur’s Lal Dant Manjan toothpowder, indicating the low potential of growth for this product. The consumers have a higher demand for toothpaste and toothpowder continues to have a much lower demand among the consumers. Therefore, the investment in toothpowder suggests low profitability and revenue generation. Rath (2011) has further observed that the main demand of toothpowder originates from the older consumers, however, the demand is not significant to categorize toothpowder as a cash cow or star.
References
Agarwal, S. (2016, May 18). Dabur takes on Marico in coconut hair oil segment. Livemint. Retrieved from http://www.livemint.com/Companies/Nh9pZN3ikwgfmmtQGd4edO/Dabur-takes-on-Marico-in-coconut-hair-oil-segment.html
Batra, A. (2015). Dabur to invest Rs 100 crore in beauty retail chain NewU. The Economic Times. Retrieved from http://economictimes.indiatimes.com/industry/cons-products/fmcg/dabur-red-toothpaste-rides-herbal-wave-moves-to-3rd-slot/articleshow/53607997.cms
Bhushan, R. (2016, August 9). Dabur red toothpaste rides the herbal wave, moves to 3rd slot. The Economic Times. Retrieved from http://economictimes.indiatimes.com/industry/cons-products/fmcg/dabur-red-toothpaste-rides-herbal-wave-moves-to-3rd-slot/articleshow/53607997.cms
Dabur Hajmola. (n.d). Hajmola. Dabur India Ltd. Retrieved from http://www.dabur.com/in/en-us/products/dabur-hajmola
Dabur India Ltd. (n.d). Dabur Corporate Profile. Retrieved from http://www.dabur.com/in/en-us/about/aboutus/dabur-corporate-profile
Rath, N. (2011, July 13). Toothpowder makers target the unbrushed. Business Today. Retrieved from http://www.businesstoday.in/current/corporate/tooth-powder-makers-target-the-unbrushed/story/16950.html