SWOT Analysis of Ambuja Cements

Ambuja cement is one of the top three cement manufacturing companies in India. The trio at the top includes Ultratech cement, ACC cement and Ambuja Cement. Ambuja cement has been manufacturing and distributing cement across India since the last 3 decades and more. It is known most for it logos which has a huge guy holding a complete building. Ambuja is known to market its cement on the quality of its strength. Recently, the marketing campaign of Ambuja cements which included The Great Khali in the ads was very well received.              

Strengths in the SWOT Analysis of Ambuja Cements :

1. Leading Cement Manufacturer in India: Ambuja Cements has been one of the leading Cement manufacturers in India. Even though there have been significant capacity additions in the industry and a slow demand growth in India.
2. Strong dealer network: Ambuja Cements has a strong dealer network, which has helped the company to withstand intense competition.
3. Extremely strong in west: The company has a very strong network on the west coast which has supported sustainable strong market position in Mumbai, Surat and Cochin. There are pockets which are covered majorly by Ambuja cement only.
4. Cost advantage through infrastructure: Ambuja has made its processes more efficiently and soured low priced inputs through which it has been able to achieve a cost advantage.
5. Excellent financial backing: Ambuja cements is known to be a financially sound company. Its financial resources were further increased when HOLCIM (another major player in infrastructure) invested in Ambuja.
6. Marketing consistency: There are two ads of Ambuja which are legendary. First is the tagline “Iss cement mein jaan hai” which caught the attention of consumers all across. The second was the marketing campaign with the Great Khali which said that only Ambuja cement could make homes that dont get destroyed even for khali. The brand has picked the quality of “strength” very well and portrayed it regularly and consistently.

Weaknesses in the SWOT Analysis of Ambuja Cements :

1. Heavily dependent on Indian market: Ambuja been geographically concentrated depending heavily on the Indian market for its revenues. In FY2014, the company earned 99.5 percent from the Indian market.
2. Lack of product diversification: Unlike many competitors, Ambuja does not have diversified product range. This reduces its potential to expand its market share.
3. Known more for small works: While Ultratech focuses on large contracts and huge buildings, Ambuja is known more for repair works and hence it loses out its brand image where the builder lobby is concerned.

Opportunity in the SWOT Analysis of Ambuja Cements :

1. High growth in Cement Industry: India is the second leading cement producer in the world. The country’s cement production is expected to grow at high speed. This creates an opportunity for Ambuja to tap the demand created.
2. Investment on infrastructure to grow: The investment in infrastructure is expected and has this creates demand for cement in the country. The planning commission had predicted an investment of $1 trillion during the 12^th five-year plan.
3. Benefits due to GST: Cement Industry is going to be benefited with GST as overall taxation going to drop from current 25 per cent to about 18 per cent. Also, logistics cost is also to be decreased by GST.
4. Make in India: With the government’s initiatives to increase production in India, Ambuja, being a core India company, can see many advantages.
5. Increase production: The cement industry runs on the basis of “Who can produce the most”. As on date, Ultratech has the highest production capacity. But even Ultratech runs out of supply at times and the demand is high. Thus, an increased production can help the brand reach new heights.

Threat in the SWOT Analysis of Ambuja Cements :

Litigation for cartelization in the industry: After the complaints from Builders Association of India (BAI), the Competition Commission of India (CCI) published an order to stop cartelization in the Cement Industry.

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Intense Competition: There is a lot of competition in the cement industry for Indian as well global companies. This allows limited market share in the industry.