Value-Based Management and Strategy Implementation at Marico Ltd

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Value-Based Management and Strategy: The Perfect Synergy

Marico's success highlights the powerful interplay between value-based management and strategic decision-making. By aligning its corporate purpose with stakeholder needs and ESG principles, the company creates a shared value proposition that benefits all. Value-based management guides strategic decisions toward initiatives that benefit not just financial returns but also social and environmental well-being. This long-term perspective ensures sustainability and builds resilience against short-term pressures.

For instance, Marico's investment in water harvesting aligns with its environmental goals and also reduces dependence on external water sources, mitigating risks and ensuring long-term operational efficiency. Similarly, its focus on responsible sourcing not only benefits communities but also secures a reliable supply chain, enhancing business continuity.

 Innovation with Purpose:




 Sustainability Driving Efficiency:


Marico's EV/EBITDA of 31.0x means that investors are willing to pay 31 times Marico's annual EBITDA for each share of its stock. The company average of 21.3x suggests that the industrial average is valued at 21.3 times its annual EBITDA. (Source: Bloomberg) Marico's EV/Revenue ratio of 6.4x is higher than the FMCG company average of 4.5x. This highlights the investor confidence in Marico's ability to expand its revenue base and generate future sales growth.

Investors expect Marico to have higher future profitability than its peers in the FMCG industry. This could be due to factors like:

·        Strong brand recognition and market share in growing segments.

·        Consistent track record of financial performance and innovation.

 ·        Potential for expansion into new markets or product categories.

Stakeholder Engagement for Shared Success:

  • 2015: Implementation of the "Marico Shram Sahay Yojana" to provide social security benefits to factory workers, demonstrating employee welfare commitment and enhancing worker satisfaction (Marico Ltd., 2015 Integrated Annual Report).
  • 2019: Launch of the "Women in Leadership" program: This initiative aimed to increase female representation in leadership positions, promoting diversity and inclusion within the company and inspiring future generations (Marico Ltd., 2019 Integrated Annual Report).
  • 2022: Partnering with Akshaya Patra Foundation to provide meals to underprivileged children, illustrating Marico's commitment to social responsibility and contributing to community well-being (Marico Ltd., 2022 Integrated Annual Report).
  • "Parachute Kalpavriksha" program: This initiative supports coconut farmers through training, technology adoption, and fair pricing, improving their livelihoods and securing a sustainable supply chain for Marico. This value-based strategy fosters long-term partnerships with farmers, ensuring quality raw materials and building trust within the community (Marico Ltd., 2023).
  • Employee engagement initiatives: Investing in employee well-being, training, and career development not only attracts and retains talent but also boosts productivity and innovation. This demonstrates Marico's commitment to human capital and creates shared value by enhancing employee satisfaction and contributing to the company's success (Marico Ltd., 2023).



References

  • Marico Ltd. (2023). Integrated Annual Report 2022-23.

 https://marico.com/page/DigitalReport2022-2023/


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