Dabur Business Model and SWOT Analysis: How Does Dabur Make Money?

Overview

When it comes to the ayurvedic and organic food industries, Dabur India is one of the most recognizable names.

This entity running on natural health care and pursuing an ayurvedic system has over 250+ product lines in ayurvedic and herbal items.

The company has built on a foundation of roughly 138 years in their occupied expertise and excellent quality.

India is the fourth-largest FMCG company, headquartered in Ghaziabad, and Mr. Mohit Malhotra served as the current CEO.

To get started, let’s take a closer look at Dabur.

 

Company Profile

Company Name Dabur India Limited
Website https://www.dabur.com/
Founded 1884
Founders S.K. Burman
Key People Amit Burman – Chairman, Mohit Burman – Vice Chairman, Mohit Malhotra – WholeTime Director & CEO, Ankush Jain – Chief Financial Officer, A K Jain – Executive Vice President & Co. Secretary, P N Vijay – Director
Headquarter Ghaziabad, India
Company Revenue 7461.38 Rs (in Crores)
Key Competitors Colgate-Palmolive, Marico, ITC, and Tropical Smoothie Cafe.

What is Dabur? A Brief History

Dabur is one of India’s biggest FMCG firms with a long history of success.

In 1884, Dr. S.K. Burman established this organization. Small business has developed enormously during the previous century.

Currently, the company has a yearly profit of Rs 8,700 billion and a market share of more than Rs 80,000 crore.  Oral care, hair care, health care, home care, skincare, and processed food are among the company’s most popular offerings.

Within four years of being a public business from 1996, Dabur had a revenue of Rs 1,000 Crore, making it one of India’s most profitable companies.

The company developed three different divisions to improve its management and operation, including Family products, the company’s ayurvedic specialties, and goods for health care.

Dabur’s products are accessible in over 100 countries throughout the world. It is estimated that the company’s overseas income now represents over 27% of its total sales.

How Does Dabur Work and What Does it Offer?

So how exactly does Dabur work?

Dabur is an Indian FMCG giant that develops Ayurvedic medicines and natural personal care items, and other things.

As a preventative measure, the business has set up a lab facility to test important food commodities, for example, honey.  In addition, the corporate is generally held accountable for delivering real Ayurvedic medications and FMCG items to people.

The company’s motto, “celebrate life,” serves as a reminder of its commitment to the well-being of its customers. It also seeks to give its consumers entirely natural items since it holds the view that good health equals wealth.

What does Dabur offer to its consumers?

Essentially, Dabur’s operation may be divided into two main groups: consumer goods production and retailing of beauty items.

Oral care, Haircare, Healthcare, Skincare, Household items, and Foods are some categories in which the company now specializes.

There are 6.7 retail establishments covered by its proprietary supply chain (including urban and rural regions).

With more than 250 herbal and ayurvedic remedies, Dabur is one of the top manufacturers of Ayurveda.

Dabur Business Model

Regarding marketing, Dabur implemented Umbrella Branding Strategy that sets them apart from the competition. It implies that all items are marketed underneath a single brand name.

In the shape of an ancient banyan tree, the company’s logo emphasizes the company’s legacy, long-term commitment, and stability.

Moreover, it distributes its products via a three-tiered structure, including stockists, wholesalers, retailers, and end-users.

 Thanks to this method, the items may be found at department stores, supermarkets, and other retail establishments around the country.

Dabur’s goods are accessible to everyone in all classes of backgrounds. Every product produced is manufactured using natural components, working on the corporate’s stated mission of “back to nature.”

According to the company website, the brand-loyal customers believe all of the business’s goods are fundamentally organic.

As a result, the pharmaceutical and FMCG industries were divided in 2003 to define their goods properly. So then, the previously used umbrella method was abandoned.

When it comes to a firm’s efficient marketing, its most crucial element is sales promotion. The company has used various marketing tools to promote its numerous products to date.

These include gift bundles, coupons, money-back refunds, and seasonal deals. Merchandise, prizes, and exchange offers are also presented to clients to increase the number of customers.

The corporate is also concerned about its environmental strategy and its focus on sales.

Along with providing items that benefit their customers’ health and well-being, they also work to reduce our company’s negative influence, go back to going green for environmental friendliness and even contribute to its replenishment and give back to the community.

Dabur Unique Selling Propositions

Dabur’s outstanding performance and steady growth may be attributed in part to:

  • Dominant brand equity;
  • The company’s ability to recognize consumer demands;
  • Introduce goods that meet those demands;
  • The company’s discovery of emerging growth areas;
  • Extension of its distribution network.

As a case in point, the company capitalizes on its market dominance to launch new goods.

As a matter of fact, the company has begun to concentrate on strengthening and specifying its branding front-end staff to enhance their exposure to doctors.

The use of cutting-edge technology like hand-held gadgets, allowing them to interact effortlessly, increased the workforce and broadened the scope of its healthcare offerings.

How Does Dabur Make Money?

The company primarily generates its revenues by following divisions:

  • Healthcare accounted for 39% including health supplements (23.4%), Digestive (5.6%) and OTC & Ethics (10%).
  • Home & Personal Care accounted for 47.9% including hair care (18.7%), oral care (18.3%), skincare (5.2%), and homecare (5.6%).
  • Food & Beverages accounted for 13.1% including foods (0.9%) and beverages (12.2%).

The above percentage is worked on revenues contribution to domestic FMCG sales (FY21).

Compared to all of Dabur’s goods in 2021, health supplements accounted for the largest proportion of the total.

Natural ayurvedic-based items are made by this Indian FMCG firm, which has about 6.7 million retail locations in the country’s urban and rural areas.

There has been an unusual increase in hygiene and health goods requirements, notably Covid-related items such as sanitizers, immune boosters, and disinfectants, since the Covid-19 pandemic.

While there is no better moment than now to capitalize on this unprecedented potential, the company has initiated a massive number of new products to meet this expanding customer demand.

Branding strategies were redesigned to emphasize the beneficial health effects of applicable brands and products throughout the range.

Dabur SWOT Analysis

The corporate use the SWOT analysis to identify its competitive advantages, formulate plans and strategies, and attain its goals and objectives.

There are external and internal aspects to consider while doing a SWOT analysis. Not only that, but it also considers existing and future possibilities.

Strengths

  • The company provides a wide range of products regardless of their age.
  • Customers have a positive perception of the company because of its long history.
  • A herbal product industry leader uses locally sourced raw components, such as Nepalese natural resources.
  • Monopoly in Chyawanprash
  • Better Strategy for the latest product design, including improved packaging and an emphasis on health solutions in their respective niches.
  • The company presently operates in more than 60 nations and contains 5000 dealers and 3 million retail locations.
  • Establishing effective waste treatment systems and going green are just a few ways that companies can demonstrate their commitment to environmental responsibility while also leading the industry in terms of sustainable development.
  • Being successful while also doing as little damage to the environment as possible.
  • Medicinal and Nature Plants initiatives have had a positive influence on the environment.
  • Aaj Tak Care Award was given to Dabur for its environmental activities, and the company has been regarded as one of the industry’s top three sustainable corporate leaders.

Weaknesses

  • There are plenty of Dabur-branded counterfeits on the market.
  • The company is up against domestic and global rivals such as Colgate.
  • The rising expense of manufacturing processes
  • In general, customers believe that the brand is intended for those over the age of 35, limiting the market’s ability to grow.

Opportunities

  • Hajmola and Chyawanprash are some of the ayurvedic remedies and supplements that people have to take because they don’t have time to make healthy foods.
  • The goods are also in considerable demand outside of India.
  • Expanding the product range and adding ayurvedic drinks may enhance their revenue.
  • Cultivating actual juices is a step toward becoming more organic and natural.
  • To penetrate rural markets, banks and IOCs’ partnerships make better collaboration.

Threats

  • Strong rivalry from large multinational corporations (MNCs) such as HUL, ITC, and Patanjali.
  • As ayurvedic supplements and medications become more popular, numerous local companies have also jumped into the market.
  • There is a depletion of herbal raw materials.
  • Dabur is a worldwide leader, and it has a long history and expertise in Ayurved; however, it also encountered intense rivalries from huge MNCs. The company offers a wide range of items to draw in consumers, which is both an opportunity and a danger to the brand since numerous counterfeits and unbranded items are offered under the roof of the identical name. The company’s market share will grow as it adds new items and expands its manufacturing capacity.