Patanjali SWOT 2024 | SWOT Analysis of Patanjali

Company: Patanjali Ayurved Ltd
CEO: Acharya Balkrishna
Year founded: 2006
Headquarter: Haridwar, Uttarakhand, India
Number of Employees (2018): 2, 00,000
Public or Private: Private
Annual Revenue (FY 2018): Rs 8,148 Crore
Profit before Tax (FY2018): Rs 528.9 Crore

Products & Services: Skin Care | Hair Care | Toiletries | Herbal Home Products | Health Care | Dental Care | Food Products
Competitors: Dabur | Himalaya Herbal| Procter and Gamble | Nestle | Marico | HUL

Fun Fact:

Did you know that Patanjali is the fastest growing FMCG (CPG) company in India?

An Overview of Patanjali

Patanjali has been widely considered as a game changer in the Indian market. What started as Patanjali Ayurveda Ltd. (PAL), a small pharmacy, underwent an evolutionary transformation and accelerated its growth. The company became a dominating name in the Indian FMCG (Fast Moving Consumer Goods) sector, also known as CPG (Consumer Packaged Goods).  The company has revolutionized the Indian market by creating a society that focuses on Yoga and Ayurveda as a form of natural living.

The company has a diversified product range. These include biscuits, noodles, ghee, footwear, apparel, and more. It operational capacity consists of 15,000 stores, 100 mega-marts, and 5000 distributors.

Baba Ramdev and Acharya Balkrishna founded Patanjali. Baba Ramdev was ranked as the 27^th “Most Creative Business People of 2016” by the Fast Company Business Magazine.

Acharya Balkrishna serves as its current CEO. According to Forbes, he ranks at 25^th position in India’s 100 richest people list in 2019 with the net worth of $5.1 Billion.

SWOT Analysis of Patanjali

The following is the SWOT analysis of Patanjali:

Patanjali’s Strengths

1. Founding Father – Baba Ramdev, a Hindu spiritual guru is the founding father of Patanjali. Baba Ramdev is the reason behind Patanjali’s exponential growth. The spiritual guru serves as the brand ambassador and has used his popularity and fame to persuade consumers to buy his products. Through his influence and power, Baba Ramdev has managed to boost the growth of the company. Using the religious, moral, ethical, and spiritual aspects of the society, the guru has strengthened his customer base. Patanjali wouldn’t be such a big brand if Baba Ramdev wasn’t its brand ambassador.
2. Pricing Strategy – The pricing structure of Patanjali’s products gives it leverage over its competitors. The brand has successfully managed to capture the interest and loyalty of the Indian lower- and middle-class demographic. The products are priced at least 20-30% lower than that of its competing rivals. The budget-friendly products are easily accessible and are preferred by the less affording consumers. Competitors and rivals simply can’t compete with Patanjali on such an advantageous pricing strategy.
3. Launch of New Products – Patanjali has recently launched a number of new products. The company has ventured into the dairy sector and now offers cow milk, flavored milk, curd, buttermilk, and cheese. In an official press statement, the brand commented that it produced 4 lakh liters of milk on the first day of the launch. Additionally, Patanjali now also offers frozen vegetables like peas, sweet corn, and mixed vegetables. This puts Patanjali in direct competition with McCain. Patanjali also plans to launch its own packaged drinking water, named as Divya Jal. Furthermore, the company plans to offer urea free cattle feed and solar production.
4. Ayurveda and Herbal – Patanjali has intelligently utilized Ayurveda and herbal products. Its marketing strategy specifically promotes its herbal products highlighting the benefits of natural and organic materials. The Swadeshi products that are marketed by Patanjali are both loved and widely consumed by the Indian masses. The natural element that the brand has incorporated in its product line has given it a competitive advantage over its rivals.
5. Strong Distribution Channels – Over 15,000 Patanjali outlets are operating across India, which gives the brand strong distribution channels. The brand sells its products through medical centers Patanjali Arogya Kendras and Patanjali Chikitsalayas and also through Swadeshi Kendras (non-medical centers). This has helped the brand to easily reach the masses and build trust and customer loyalty.
6. Word of Mouth Marketing – Patanjali has been utilizing word of mouth publicity. Patanjali was one of the very first brands to use this strategy. Initially, the company didn’t rely on any other form of marketing. Word of mouth publicity proved to be beneficial for Patanjali with Baba Ramdev’s yoga camp followers promoting and endorsing the brand. In recent years, the company has been pushing its products through all promotional campaigns. Furthermore, through the launch of the medical and non-medical centers, Patanjali has solidified its market position.
7. E-commerce – Patanjali has an E-commerce advantage over its competitors. A lot of its products are sold through E-commerce platforms. Due to this, consumers can easily find Patanjali’s products online.

Patanjali’s Weaknesses

1. Reliance on Baba Ramdev – The company relies heavily On Baba Ramdev himself. The man is not only a business magnate but also a public figure. The spiritual guru has been in and out of a lot of controversies. Recently, Baba Ramdev had to apologize to the people of Assam for the harsh and insensitive comments made by a Patanjali official. Satinath Barale, a yoga instructor and Patanjali employee made outrageous comments about Vaishnava saint Srimanta Shankardev at a yoga camp. The aftermath of the event saw massive public outcry. The backlash became so severe that Baba Ramdev himself had to issue an apology. Incidents like this can tarnish the image of the brand.
2. Current Pricing Strategy – Patanjali needs to revise its current pricing strategy or else the company will fail to sustain itself. The current pricing strategy gives low-profit margins which are necessary for Patanjali’s survival. The company will have to deal with high labor, and raw materials cost if it doesn’t change its pricing strategy.
3. Excessive Product Offerings – Patanjali has way too many products in its portfolio. Some of these are profitable while others fail to generate any profit. Despite having such a diverse product portfolio only 5 or 6 products like shampoo and toothpaste generate high revenues. The company needs to discontinue low profit products or solidify them so they can generate substantial profits.
4. Lower Margins for Distributors – Patanjali’s core focus is on volume and not on margins. It offers lower margins to distributors as opposed to other companies that deal in consumer goods. For this reason, the company is a demand run company.
5. Limited presence in International Market – Patanjali is a brand that has an International appeal thanks to its exotic outlook. However, it has mainly restricted itself in the Indian market. Baba Ramdev has an international audience, and he can provide an incentive in regions where his strongest demographic base is located like Nepal. Additionally, the company needs to target the younger Indian demographic that is internet savvy and technologically advanced.

Patanjali’s Opportunities

1. Natural & herbal products – A number of people are now switching to organic and natural products. This is the perfect time for Patanjali to invest more in its organic farming sector, particularly in terms of raising awareness about its product’s health benefits and health risk preventions. The company should continue to promote its natural and herbal goods.
2. Global Markets – The global markets provide a fertile ground for a company like Patanjali. Spirituality or anything related to mysticism is popular among the inhabitants of Africa, Asia, and the Middle East. The company needs to learn from Haldiram, Amul and Dabur, etc. and proceed with a similar plan of action. Thanks to Baba Ramdev, the company has a direct association with Yoga. The company can expand in regions where Yoga is a common practice like Far East Asia.
3. Food Business – The brand can open quick restaurants like Haldiram and offer edibles that use natural and organic ingredients. This can complement the company’s offerings and help to generate bigger revenues. By offering food items, the company can establish a stronger image in the Indian market.
4. Rural Expansion – Currently, the company is not running extensive operations in the Indian rural areas, which are critical for every company. Patanjali must expand rurally and cater to the rural regions accordingly. It would be easier for the Patanjali to expand rurally as rural consumers prefer natural products that are affordable.

Patanjali’s Threats

1. Controversies – Patanjali has seen its fair share of controversies. Most recently was its promotion of the “Putrajeevak Beej” that promised the birth of a male child to any family that purchases it. The severe backlash resulted in a government inquiry. Many politicians and activists recommended banning the sale of the product. It has tarnished the image of the brand and has affected its revenue.
2. Negative publicity – The company faced a major crisis when the Nepal Department of Drug Administration issued a public notice to Patanjali stating that they had found some of its medical products to be of “sub-standard quality.” The products had failed their microbial tests which were used to detect mold, bacteria, and other toxins. This crisis resulted in negative word of mouth that damaged the company’s reputation.
3. Increase in Competition – Big companies like Marco, HUL, and Dabur already give Patanjali tough competition. Newer entrants in the market like Sri Ayurveda are also increasing the competition for Patanjali.
4. Poor Harvest – The Indian farming community depends on the weather and the monsoon season to grow their crops and ingredients. Climate changes can severely affect the production of major crops. This can endanger Patanjali that needs to create a backup plan if the country ever faces a natural disaster or bad climate.

Conclusion

The SWOT analysis of Patanjali shows that the company is well on its way to greater success. The company simply has to manage its communications and abstain from anything that directly impacts Baba Ramdev. It needs to place more confidence in itself to pursue the markets worldwide and connect with more consumers that would be interested in its brand and offerings.

Tell us what you think? Did you find this article interesting?                                                   
Share your thoughts and experiences in the comments section below.