Answer to Question #197207 in Management for Ishita

Question

You are the Chairman of a French FMCG company in India by the name of “FrenchShine”. You are operating in the “Soaps & Detergents” category & are facing tough rivals like HUL, Nirma & P&G. You have been operating in India since 2016. During 2020, there has been a steady decline in your revenues & profitability. Your market share has also fallen from 6% to 2.5% during 2020. Your competitors are eating into your market share slowly & steadily during Covid-19 pandemic times.

a. What turnaround strategies can you suggest to arrest the decline of revenues & profitability of your company?

b. In your opinion, would it be considered appropriate to pursue a Strategic Alliance or a JV Strategy or should “FrenchShine” go it alone in India? State your response with appropriate justifications & reasons. What would be the advantages & disadvantages of such a strategy?

Answer 1

The turn around strategies that FMCG India can deploy is first, removing the products will little profit margins and low sales from the market, ensuring the only the selling products with wide profit margins drive the sales. Secondly, the company needs to develop a different product pricing structure as well as a different product promotion approach aimed for broadening the market share. What the company needs is awareness of their products and the advantages that they have over the competition. This argument is supported by the fact that FMCG will be taking away market representation from the competition; their offers have to be aggressively convincing to win in the end.

It will be appropriate for the company to pursue a combination of strategy because the market share marginal difference between FMCG and the competition is very wide, one strategy will not give the aggression and momentum needed to grow its market share. The company will have to focus on growing its market share while at the same time it is making profits. It is expected that the competition will have counter measures to protect their dominance. Therefore, a combination of strategies is the approach that fits best.