Tuesday, April 14, 2009

Does Dabur''s growth story have the makings of another HUL?

ZEE BUSINESS BEST B SCHOOL SURVEY

The imperative now is to take this growth story further through carefully planned out expansions, organic or inorganic, in new and interesting areas. Duggal, who particularly admires Lakshmi Mittal for the way he spots opportunities, is a firm believer in what management guru C. K. Prahlad does not stand for, i.e. core competency. Duggal is of the opinion that if he had not moved from the ayurvedic medicine portfolio, Dabur would not have crossed Rs.20 billion in turnover the way it has crossed today. And consumer health, the division for ayurvedic medicines accounts for just about 5-10% of that portfolio, which shows how much the company has reinvented itself.

Dabur''s ''Vision 2010'', which it had unveiled way back in 2006, was to double its turnover by FY 2009-10. The company is clearly targetting growth at a breakneck pace. But as we have seen in the case of HUL in the 1990s, breakneck growth comes at a price. HUL had become quite large and unwieldy, and saw some very difficult times in the early part of this century when its growth stagnated and it had to cut down on its brands phenomenally. Does Dabur''s growth story have the makings of another HUL? Or would Dabur''s new war, led by Duggal''s firm belief in expanding horizons (although he does say that Dabur does not want to be reckless) have dramatically different consequences, and lead to Dabur India actually creating history in the Indian FMCG space? For that, we have to go deeper to understand the dynamics of Dabur''s new war.


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Source :
IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and
Arindam Chaudhuri (Renowned Management Guru and Economist).


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