The restructuring of the Dabur Group is truly unique, since the core business is now being run by non-family professionals; while the Burmans have given up executive positions in the core company to take charge of the new growth businesses. While talking about such a strategic management restructuring, V. C. Burman, Chairman, Dabur India told B&E, “It was in response to the changing dynamics of business... the family has a trusteeship role to follow, both for perpetuating the family business and in preserving & growing the business.” Amit Burman, who has taken charge of Dabur Foods told B&E, “New, high growth businesses require entrepreneurial zeal and are better suited to members of the family.”
The restructuring exercise did wonders for Dabur as they ventured into new areas through acquisitions and went on a massive expansion spree. States Duggal, “Inorganic or acquisition is a key strategy for growth at Dabur India. The growth can come both from the domestic as well as international markets. But one must look at strategic fit of the target in order to add value to the company.” For instance, Dabur’s acquisition of Balsara (a homegrown herbal company) for Rs.1.43 billion in January 2005 fitted very well with Dabur’s core competency of herbal flank. Rajan Varma, CFO, Dabur India told B&E, “Balsara on a standalone basis contributed 19% of total turnover (of last year).” And in FY06 Balsara’s home products recorded revenues of Rs.1,685 million, a growth of 42% over last year.
The period 2002-06 is heralded to be the most crucial for Dabur. At a time when the FMCG sector as a whole was experiencing sluggish growth and FICCI’s FMCG survey claiming that in FY06, the sector will grow at a miniscule 2%. The survey also pointed out that only segments that will stand out are food & personal care. Realising the potential of the two segments, the FMCG players in the country started to strengthen their portfolio with these two cash cows. Dabur was not an exceptional too! So on March 29, 2006, Dabur unveiled its Vision 2010, wherein by 2010 the main focus areas will be expansion, acquisition and a product portfolio comprising of food & personal care products.
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Source : IIPM Editorial, 2007
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