“Kaya requires a completely different mindset to grow. So taking off the

Marico hat off Kaya and unshackling it from the Marico is the right thing to

do”

INDUSTRY ANALYSIS

KAYA SKIN CLINIC• Service sector • People – oriented• Skin Care industry• Indian skin care industry is

expected to grow 18% CAGR

MARICO LIMITED• Capital intensive sector• Product-oriented• FMCG products• Recent budget’s hike in

NREGS and relief to tax payers is expected to give a boost to the FMCG sector.

Porter’s Five Force Model SUPPLIER POWER

LowPORTER’S FIVE FORCE

MODEL

BARRIERSTO ENTRY

High

THREAT OFSUBSTITUTES

High

BUYER POWERHigh

DEGREE OF RIVALRY -Entry and Exit barriers- High -Industry growth - high -Switching costs - high-Brand identity - high-Diversity of rivals- High

Porter’s Five Force Model for Marico Limited

Porter’s Five Force Model SUPPLIER POWER

LowPORTER’S FIVE

FORCE MODEL 

BARRIERSTO ENTRYModerate

Budding Dermatologists

THREAT OFSUBSTITUTES

ModerateHerbal and ayurvedic products

Eg. Himalaya’s products

 

BUYER POWERHigh

People prefer unorganised players- skin spencialists

Unwilling to pay premium prices

DEGREE OF RIVALRY -Entry and Exit barriers- High

-Industry growth -Product differences- Low-Switching costs - Low-Brand identity - Moderate-Diversity of rivals- High

Organised CompetitorsUnorganised competotors

Porter’s Five Force Model for Kaya Clinic

Generic Business Model

SWOT ANALYSIS

•Large number of services under one roof•Well trained staff•Good ambience (physical evidence)•Wide Geographical reach•Skin bars are expected to boost revenue by 30%

• Unorganised sector• Organised players like

VLCC, Dr. Batra’s

• Untapped middle class segment

• Introducing products and services for males as well

•Overpriced products•Marketing strategies only limited to social media.

STRENGTHS

THREATSOPPORTUNITY

WEAKNESS

Impact of Demerger on Marico and Kaya Skin Clinic

Impact on Marico’s valuations.

Focus on core activities.

Kaya Skin Clinic will have independent decision making. (There were strong cultural differences between Marico and Kaya that limited the growth prospects for Kaya.)

Business model will be focused industry wise. “The demerger will facilitate the consolidation of Marico’s FMCG business in India and overseas.

Financials

Revenue Growth

Revenue0

500

1000

1500

2000

2500

3000

3500

4000

4500

20082009201020112012

Returns

2008 2009 2010 2011 20120

10

20

30

40

50

60

70

80

ROCERONW

Segment AnalysisParticulars FMCG Kaya Total

Segment Revenue 3730.01 278.27 4008.28

Segment Results 443.82 (29.07) 414.75

Segment Assets 1751.89 354.28 2107.17

Segment Liabilities 496.06 161.25 657.31

Capital Expenditure 48.69 43.22 91.91

The Value of Kaya UNLOCKED

FMCG Kaya&

Make

Total Group Value

100 * 10 = 1000 -360 80 * 8 = 640

100 * 10 = 1000 X 1000 + X

Suggestions for Kaya Skin ClinicRework on the 4Ps

Product-Introducing newer products.-Cross-Selling and Up selling of products.-Introduce products and packages for middle class consumers

Price-Price Bundling can increase the average bill per customer-lower priced packages to cater to the middle class

Place-Expand your distribution base, through Organised retail shelves-Introduce skin bars, in tier 2 cities in a greater number

Promotion-Traditional marketing-Free samples-New brand ambassador (youth icon for e.g. Sonam Kapoor, Anushka Sharma)-A name like Kaya, rather than Kaya Skin Clinic--communication of schemes and packages using various media channels.

People-To deal with attrition rate, signing bonds with employees.-Have performance based rewards to motivate your sales force-Feedback from customers about the staff.-Delegation of authority, providing an intrapreneurial environment