CAVINKARE AND COTY: A STRATEGIC ALLIANCE

Submitted By:

MBA (SS)Bharathi PriyadarshiniGeetha.HKeerthapriya.MAnandha PrakashParthibanRaj VigneshRamdassTamil Arasan

ABSTRACT:

In January, 2009, Indian FMCG major, CavinKare Pvt. Limited

(CavinKare) entered into a strategic alliance with Coty Inc (Coty), the

world’s leading fragrance marketer. With this alliance, Coty would

expand its operations in the Asian market while CavinKare would

gain a presence in the premium segment of men’s personal care

segment in India. Under their partnership, CavinKare was to market

and distribute the Adidas range of fragrances while Coty was to help

CavinKare in building the market. Analysts opined that that the deal

was positive considering the potential of the Indian fragrance market.

PREAMBLE

Cavinkare:

An Indian based FMCG (Fast Moving Consumer Goods)

company which was founded by C.K.Ranganathan in 1983.

Coty Incorporation:

A Paris based company which specialises in fragrances, color

cosmetics, skin & body care products, was founded in 1904.

ADIDAS AND JOVAN

Adidas is a sports brand. “Impossible is nothing” is the current main

stream marketing slogan for Adidas. Adidas divided the brands in to

three main groups with each a separate focus: Adidas performance,

Adidas Originals, Style essentials. Adidas personal care products

under sports sensation is one of the top selling product. Jovan is also a

famous premium brand.

PRODUCT CATEGORY

STRATEGIC ALLIANCE

A Strategic Alliance is a relationship between two or more parties to pursue a

set of agreed upon goals or to meet a critical business need while remaining

independent organizations. This form of cooperation lies between M&A and

organic growth.

TYPES OF STRATEGIC ALLIANCE

•joint venture

•equity strategic alliance

•non-equity strategic alliance and

• global strategic alliances.

CAVINKARE AND COTY INC.

•WHY STRATEGIC ALLIANCE?

•CavinKare can have a much higher market penetration

than before.

•It can give high returns.

•It gives an edge over rivalry competitors Hindustan

Unilever Limited and Henkel India.

•Adidas personal care products can make a mark in the

south Asia.

TIE - UP•Cavinkare Pvt.Ltd., entered into a strategic alliance with Coty Inc. to

market the entire Adidas and Jovan range personal care portfolio in

the Indian market, on a revenue-sharing basis.

•Cavinkare, is set to bring in the Adidas range of personal care

products – Deo spray, body spray, shower gel, aftershave and eau de

toilette and Jovan range include fragrance and personal care products

– from the Coty’s stable.

•Jointly invest in building the brand in the Indian market.

•Coty Inc and Cavinkare foresee a long term marketing alliance to

successfully establish the business in India.

•This alliance will strengthen Adida’s position as a major player in the

male personal care segment.

BENEFITS OF STRATEGIC ALLIANCE

•Coty has built a unique portfolio of brands that have produced some

of the strongest consumer franchises in history.

•Expertise Cavinkare in developing brands in the personal care space

and in extensive distribution network will come in handy.

•Cavinkare has plans to cut prices of its personal care products at

around 5% anticipating acute competition in the market. “Competition

will drive prices down. By the end of the year, prices could be lower

by as much as 15%. This will help people to consume the products in

Indian economically.

•This will build Cavinkare to introduce customized fragrances by

setting up a manufacturing facility.

CAVINKARE STRATEGIES:SWOT ANALYSIS

•Sharing the financial risks

•Easier access to target markets

•Adidas has a brand image for shoes and sports accessories for the years.

•idea can be copied by the competitors

•To tap the large potential target market

•Paves way for future alliances

•llegal foreign imports of different PERSONAL CARE brands.

•New entrants.

BCG MATRIX

Sunsilk, Panteen, Head and Shoulder, Garnier Frutices,Clinic Plus

Vivel, Dove, Vatika

Clinic all clear, Ayur, Chik Lux,

Lifebuoy

PORTER’S GENERIC STRATEGIES

CONCLUSION

 

On the whole, this type of alliance is used by the international and local companies for the entry of their

markets in the vice versa location and also as it is the first time the Indian company is distributing other

brands, this will show the way to other companies. To conclude, this type of alliance will be beneficial

to both the companies if it is properly coordinated, communicated with full commitment and efforts

THANK YOU

Questions are welcome!!!!