Answer to Question #194440 in Management for kus

Question

You are the Chairman of a French FMCG company in India by the name of “French Shine”. You are operating in the “Soaps & Detergents” category & are facing tough rivals like HUL, Nirma & P&G. You have been operating in India since 2016. During 2020, there has been a steady decline in your revenues & profitability. Your market share has also fallen from 6% to 2.5% during 2020. Your competitors are eating into your market share slowly & steadily during Covid-19 pandemic times.

a. What turnaround strategies can you suggest to arrest the decline of revenues & profitability of your company?

b. In your opinion, would it be considered appropriate to pursue a Strategic Alliance or a JV Strategy or should “French Shine” go it alone in India? State your response with appropriate justifications & reasons. What would be the advantages & disadvantages of such a strategy?

Answer 1

a.      What turnaround strategies can you suggest to arrest the decline of revenues & profitability of your company?

Answer Cost efficiency strategies- Cost efficiencies involve a varied range of actions aimed at fabricating quick wins for a company. The measures may advance a company’s cash flow or stabilize its finances before coming up with more complex strategies. Cost efficiency strategies are often employed first in any regaining strategy.

b. In your opinion, would it be considered appropriate to pursue a Strategic Alliance or a JV Strategy or should “French Shine” go it alone in India? State your response with appropriate justifications & reasons. What would be the advantages & disadvantages of such a strategy?

Answer-Joint venture will be the best option since it increases the capacity, sharing of risks and costs with a partner. It enables access to new knowledge and expertise, including specialized staff.

Joint venture is the best to the recovery process of French Shine but again it is accompanied by few disadvantages like poor understanding between partners and unequal level of expertise and investment.