Home-grown FMCG major Dabur has recalibrated its long-term strategic planning approach, reducing the duration of its vision cycle from four years to three. The move aims to create a more agile organisation amid ongoing challenges in the FMCG sector and a volatile global economic landscape.
To facilitate this transition, Dabur has enlisted the services of global consultancy firm McKinsey & Co. The engagement will help refine and realign the company’s strategies to navigate industry headwinds more effectively.
Dabur’s share price was trading with a modest loss of 0.25% as of 11:44 AM on February 5, 2025.
Dabur’s CEO, Mohit Malhotra, highlighted the rationale behind this shift during an earnings call, stating: “This exercise has already begun, and we plan to conclude the same by the end of the fiscal year. This will enable us to capture emerging opportunities and navigate the future with a sharper and more focused vision.”
Dabur has historically followed a four-year vision cycle and is currently in its seventh iteration. However, Malhotra pointed out that in light of increasing macroeconomic volatility and the challenges facing the FMCG sector, a shorter planning horizon is necessary.
“Earlier, we used to have a four-year vision cycle… We feel that in this volatile and heavy-headwind macroeconomic environment and FMCG not doing so well as a sector… we require validation of our strategies through an external consultant,” he explained.
Malhotra further elaborated that shortening the vision period would enable the company to adjust strategies more efficiently.
“Four years becomes a longish period and therefore we have truncated it to three years, and it’s also in line with the best practice in the industry which is also around three years,” he stated.
McKinsey & Co’s involvement in the strategic review will extend to an in-depth assessment of the company’s key categories, including Chyawanprash and beverages.
“So, they will focus on that along with defining the numbers in the milestones for the next three years, and this vision exercise will dovetail into the next year’s budgeting cycle also for us,” Malhotra explained.
Beyond refining strategic milestones, McKinsey’s role will involve a critical assessment of Dabur’s business operations, including both high-performing and underperforming segments.
“At the moment, we have not linked them to our target achievement. But that is something that we will contemplate after this exercise is over,” Malhotra stated.
The external consultant will also challenge the validity of existing business models, ensuring that each segment contributes meaningfully to Dabur’s long-term growth.
By adopting a 3-year vision cycle, Dabur aims to remain adaptive and resilient in an industry that continues to face macroeconomic headwinds and shifting consumer dynamics.
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Published on: Feb 5, 2025, 2:43 PM IST
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