Patanjali Ayurved Ltd. (Patanjali), in the course of a few years, became one of the major players in the consumer goods industry in India. The company has established its growth while considering cultural, political, and economic factors. Now, it is looking into expanding in the blue jeans segment and is challenged on how its customers would see such a move.
Rod E. White; Hari Bapuji; Marissa Sanwald
Harvard Business Review (W17305-PDF-ENG)
June 01, 2017
Case questions answered:
- In what ways is Patanjali different from a typical Western MNC?
- The company’s success is a result of the following cultural, political, and economic factors.
- Identify Patanjali’s cost advantages over its competitors and comment on whether they are sustainable.
- Identify the company’s options for growth. What option would you recommend and why?
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Patanjali: Swadeshi Jeans or Foreign Shores? Case Answers
In what ways is Patanjali different from a typical Western MNC?
Patanjali is different from a typical Western MNC in the following ways:
- Patanjali focuses only on natural herbal products and Ayurvedic formulations.
- Owners do not benefit from profits, and reportedly, the profits go entirely to charity.
- Sources products from its own manufacturing park, taking raw materials directly from farmers.
- Always markets the brand rather than specific products, thereby being able to market themselves using only 2-3% of their turnover, compared to Unilever’s 13%.
- Doesn’t face major costs or delays because of associations and following of popular politicians.
The company’s success is a result of the following cultural, political, and economic factors:
Cultural Factor
- Using the word popular from the independence movement, Patanjali branded itself as ‘Swadeshi,’ which was a reason for purchase 20% of the time.
- Since 62% of Indian consumers preferred to buy Indian products, it was a success.
- The company termed itself to be made only from natural herbal products and Ayurvedic formulations, focusing on the cultural beliefs of Indian consumers.
Political Factor
- Ramdev’s prominence in public life made him popular with politicians, thereby avoiding delays in seeking approvals.
Economic Factor
- Patanjali was able to get land and other facilities at a…
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