INDUSTRY ANALYSIS

(FMCG and PHARMA INDUSTRY)

PRESENTERS (TEAM B)
KARUPPASAMY
JOYS
JEFFERSON
SUMATHI
GNANASINGH
INDUSTRY ANALYSIS
 Industry analysis refers to the analysis of industry’s environment that

guides the industry to grow and survive in a competitive environment

 It is an evaluation of the relative strengths and weakness of particular

industry

 It includes analysis on market, political and economic factors that have

a direct impact on the development of an industry

METHODS OF INDUSTRY ANALYSIS

PORTER’S 5 FORCES SWOT ANALYSIS

SWOT ANALYSIS ON HUL

STRENGTH ON HUL WEAKNESS

 Decreasing market share
 Brand visibility
 large number of brands in different
 Market leader in consumer goods product categories
 Innovative FMCG company

 High brand awareness

 Financial position

 Market share
OPPORTUNITIES
 Expanding market
 Awareness in usage rate of
consumer goods
 Increasing income level
THREATS
 competition in the market
 price of the commodities
 Buyers power
SWOT ANALYSIS ON SUN PHARMA

Strength
 Pricing line
 Effectively using shareholder fund
 Efficient in managing assets to generate profit
 Company with low debt
weakness
 MFs decreased Their shareholding last quarter
 Decline in net profit with Falling profit margin
 Declining in quarterly net profit with falling profit margin
 Degrowth in quarterly revenue and profit in recent results
Opportunities
 Brokers upgraded recommendation or target price in the past three months
Threats
 Red flags: Firms linked to ongoing regulatory Investigation/ legal Cases
 Profit to loss company
 Increasing trend in Non-core income
 Stock with high PE (PE>40)
FIVE FORCE MODEL ON HINDUSTAN UNILEVER LIMITED

1.COMPETITIVE RIVALRY
 Competition is a major force and there are many firms operating in the
consumer goods industry
 Competitive rivalry against Unilever is based on external factors lie high
number of firms, high aggressiveness of firms, low switching cost
 Competitors of HUL – Dabur India, Marico, Colgate-Palmolive, P&G, Emami
and ITC
2.BARGAINING POWER OF UNILEVER’S CUSTOMERS
 The influence of customers on business performance is considered here
 External factors operating here are low switching costs, high quality of
information
 HUL need to satisfy customers in accordance with price and quality
3.BARGAINING POWER OF UNILEVER’S SUPPLIERS
 Suppliers impact Unilever’s industry by affecting the level of supply available
to firm
 Unilever has a policy of local buying and local manufacturing which breaks
the power of its suppliers and so bargaining power of suppliers is moderate
in HUL
 External factors- Size of individual suppliers
4.THREAT OF SUBSTITUTES
 Substitutes can reduce Unilever’s revenues and strength of firs in the industry
 Customer loyalty reduced
 Competitors spending huge sum on R&D and new product development
 Unilever has to be very adoptive and closer to customer
5.THREATS OF NEW ENTRY

 Unilever is diverse in nature

 It have strong brand image and economies of scale

 The risk of new entrants do not create much impact and threat
is very low

SUGGESTIONS

Best strategy is to keep customers satisfied and loyal,

continuous R&D , cost control and be responsive to competitors
FIVE FORCE MODEL ON SUN PHARMACEUTICAL
INDUSTRIES
1. THREAT OF NEW ENTRANTS
 High entry barriers due to costs associated with research & development of
new drugs (i.e.years of investment in R&D for a drug that may/may not
work)
 Government regulation (i.e. FDA)
 The threat of entry posed by new or potential competitor is a LOW
competitive force due tothe above entry barriers & regulatory constraints.
Bargaining power of suppliers (LOW)
2. THE BARGAINING POWER OF SUPPLIERS IS A LOW COMPETITIVE FORCE
 Sales for the pharmaceutical industry concentrate in a handful of large players
and that hasdecreased the bargaining power of suppliers.
 The bargaining power of suppliers is a LOW competitive force
3. BARGAINING POWER OF BUYERS (MEDIUM)
 Hospitals & other health care organizations buy in bulk quantities and exert
pressure onpharmaceutical companies to keep prices in check
 Regular patients have lost bargaining power due to price increases in generic
drugs
 The bargaining power of buyers is a MEDIUM competitive force.
4. CLOSENESS OF SUBSTITUTE PRODUCTS (HIGH)
 Demand for generic versus brand name drugs has increased because of the costs
 Generic drug companies do nothave the high costs associated with the research
&development of new drugs and that allows them to sell at cheaper prices
 The closeness of substitute products is a HIGH competitive force

5. COMPETITIVE RIVALRY
 With more than $1 trillion in global sales, the pharmaceutical business can be cutthroat.
 The huge importance of intellectual property results in strong competition for high-level
workers and leading researchers.
 any potential new drug has its public information analyzed for the possibility of creating a
similar drug to market as a substitute.
 The industry exhibits a
pattern of firms merging and larger firms buying smaller firms that
have promising research or new drugs.