Eureka Forbes: Responding to Changing Market Dynamics
Case Code: BSTR467
Case Length: 15 Pages
Period: 2011 - 2013
Pub Date: 2014
Teaching Note: Not Available
Organization: Eureka Forbes
Industry: Water Purifiers
Themes: Market Agility
Abstract Case Intro 1 Case Intro 2 Excerpts
The case discusses the strategies followed by consumer durable company, Eureka Forbes to defend its leadership position in the swiftly changing water purifier industry. The company was facing stiff competition in the rapidly growing Reverse Osmosis (RO) water purifier segment from Kent RO systems.
Eureka Forbes had been the market leader in the water purifier segment ever since it launched its Aquaguard range of water purifiers in 1984. Over the years, the company had launched several products in the water purifier segment. For the fiscal year ended 2012-2013, the water purifier business accounted for 50 percent of the company's revenues. For the same period, the company was a market leader in the ultraviolet (UV) purifier market with a 70 percent market share. However, competitors such as Kent RO were eating into its market share by underlining their RO water purification technology. In addition to this, Eureka Forbes was also facing competition from other emerging players such as HUL, Nasaka, and Ion Exchange.
Industry experts were of the view that Eureka Forbes was losing its market share to Kent since it was slow in responding to changing industry dynamics. On the other hand, its competitors were launching several products to cater to the different needs of consumers in the water purifier market.
Some industry analysts opined that the company's reliance on direct sales was also not working in its favor. They felt that cold calling as a marketing strategy was not effective with the emergence of gated communities. The company also did not focus much on generating sales through retailing channels, while Kent and HUL's water purification products were more visible on retail counters.
While it continued with its direct selling model, the changing industry dynamics forced Eureka Forbes to look for new ways to reach its customers. It was making its presence felt by launching more retail stores and was also digitizing its sales model in a bid to increase its sales and retain its market leadership in the water purifier market in India.
Going forward, the company had plans to launch more innovative products in the water purifier segment and enter new segments such as air purifiers and fire extinguishers. It also planned to scale up its business by entering international markets.
The case is structured to achieve the following teaching objectives:
- Understand the challenges faced by Eureka Forbes in defending its leadership position in the water purifier industry in India
- Appreciate the importance of innovation in a dynamic industry
- Analyze the effect of changing industry dynamics on companies
- Examine future challenges faced by Eureka Forbes since Kent was growing its presence in the rapidly intensifying water purifier industry
Entering the Water Purifier Segment
The Water Wars
Defending the Market Leadership Position
Eureka Forbes, Kent RO, Aquaguard, Hindustan Unilever Limited, Pureit, Water purifier segment, Market leader, Reverse Osmosis, Ultraviolet (UV) purifier market, Advertising, Market share, Direct selling model, Digital marketing, Retail stores Sales model, First mover advantage
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