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Story of Nirma-III

BY: Raja Vikram | Category: Sales-Marketing | Submitted: 2010-07-25 08:11:39
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Article Summary: "This is about the third part of Nirma's success story..."

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The CSR and the way of Mr. Patel have made Nirma a brand name in every home of India. People recognized it as a needy for cloths. Hence here it makes sense that how a small company has fought to big MNC's so as to stand tall. The strategies that they have applied were wonderful.

In 1980's they picked up basic strategies to be in the market. The basic strategy of Nirma was "quality at reasonable price". Hence to give a lower price in the market Nirma has maintained and managed an overall low cost structure like low overheads, indigenous machinery, a lean top management and cost control through personal efforts in every state. To maintain a lower cost for a detergent company it is important to maintain a perfect distribution network with lowest logistics cost. Nirma has done a careful monitoring of fixed and variable costs so as to reduce distribution and logistics cost.

To decrease the logistics cost they have serviced their distribution through own vehicles. As these are controlled they have maintained lower cost overall and delivered the products at lower price. They had fought with HUL and P&G to survive in the market. HUL has launched Wheel green and blue to fight Nirma in the lower cost segment. Nirma has captured such a large market of detergent that HUL has launched wheel to fight it. Wheel and surf excel has given a tough competition to Nirma. The advertisement in TV has made them to rethink on their strategies. But Nirma with its brand name and lower price has helped them to be in the market.

Nirma came up with soaps as Nirma soaps, Shiva soaps, Nirma chemicals, companies under the flagship of Nirma ltd. It has given tax benefits, low cost sourcing to small scale industries so as to help them out in production. The strategy behind this was economy of scale, business synergy and reduction in overheads. Because of this merger it has great capital to manage internal and external resources.

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Reference: Crafting and Executing strategy

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