MAGGI  NOODLES

Presented  By:  
Aamer  Yehia  
Amr  Soliman  
Medhat  Saudi  
Yassin  Bahaa  El  Din  
Agenda

•  Execu;ve  Summary  
•  Background  
•  Proposed  Alterna;ves  
•  Recommenda;on  
•  Implementa;on  
•  Risk  
•  Financials  
•  Conclusion  

Execu;ve  Summary   Background   Problem   Alterna;ves   Recommenda;on   Implementa;on   Risk   Financials   Conclusion  
Execu5ve  Summary
MAGGI  NOODLES  

•  With  90%  market  share,  MAGGI  has  been  always  considered  as  an  Indian  Icon  for  decades    
•  Weak  quality  control,  poor  communica;on  and  late  responsiveness  cause  brand  damage  

Recommenda;on  

•  Follow  the  Four  Pillar  (Communica;on,  quality,  society  &  compe;;on)  to  control  both,  
Quality  &  Crisis  

Financials  and  Benefits  

•  Recover  the  MAGGI’s  brand  and  end  the  controversy  once  and  for  all  
•  Dominate  the  market  and  create  high  entry  barriers  for  future  compe;tors  
•  Net  Present  Value  5.1  BR  

Execu;ve  Summary   Background   Problem   Alterna;ves   Recommenda;on   Implementa;on   Risk   Financials   Conclusion  
MAGGI  noodles  has  always  been  an  Indian  Icon  
Dominate  
Close  to  
the  
customers  
Market  Share  before  Crises   market  
Maggi   Others  
10%  

Indian   Financially  
90%   Icon   stable  
MAGGI  

Execu;ve  Summary   Background   Problem   Alterna;ves   Recommenda;on   Implementa;on   Risk   Financials   Conclusion  
Compe5tor  Analysis,  three  compe5tors  already  out
Undertook  an  adver;sing  campaign  and  doubled  
Sunfeast  Yippee  Noodles   produc;on    

Smith  and  Jones   Recalled  Products  and  exited  the  noodle  category  

Top  Ramen   Pulled  products  off  shelves  due  to  high  lead  content  

Knorr  Soupy  Noodles   Recalled  its  product  due  to  pending  FSSAI  approval  

To  be  launched  in  November,  product  is  adver;sed  

Patanjali  A<a  (Wheat)  Noodles   with  “No  MSG”  and  “No  Lead”  labels  

Others   Interna;onal  compe;;on  poten;al  (China…)  

Execu;ve  Summary   Background   Problem   Alterna;ves   Recommenda;on   Implementa;on   Risk   Financials   Conclusion  
Problem  Defini5on

The  Maggi  Noodles  brand  has  been  highly  damaged  

due  to  Poor  communica7on  and  weak  quality  control,  
and  has  to  regain  its  market  share.    

Execu;ve  Summary   Background   Problem   Alterna;ves   Recommenda;on   Implementa;on   Risk   Financials   Conclusion  
3  Alterna5ves  analyzed,  Four  Pillars  chosen
Brand   Market  
AlternaAve  /  Criteria   Revenue   Cost  
Equity   Share  
Final  

Kill  the  brand  and  introduce  a  new  one   û   û   û   û   û  

Re-­‐launch  MAGGI  and  operate  normally  depending  
on  customers  loyalty  and  marke;ng  campaigns   ü   û   û   û   û  
Apply    the  Four  Pillars  to:  
•  Recover  Maggi’s  brand  
•  Sustain  the  market  share  
•  Kill  poten;al  for  local  or  interna;onal  
compe;tors  to  enter  the  market  and  threaten  
üü   û   ü   üü   ü  
Maggi’s  market  share  

Execu;ve  Summary   Background   Problem   Alterna;ves   Recommenda;on   Implementa;on   Risk   Financials   Conclusion  
How  the  Four  Pillars  work
Communica;on   Quality  
•  Enhance  message  delivery  to   •  Ensure  that  quality  is  up  to  
customers  and  ensure   interna;onal  standards  and  
transparency   make  sure  its  perceived  by  
customers  

Four  Pillars  

Society   Compe;;on  
•  Engage  with  society  to  keep  up   •  Acquire  Sunfiest  to  dominate  the  
the  level  of  brand  loyalty   market  

Execu;ve  Summary   Background   Problem   Alterna;ves   Recommenda;on   Implementa;on   Risk   Financials   Conclusion  
Here  we  go…  MAGGI  has  to  say  sorry!
Charity  contribu;ons  
Society  
Social  responsibility  (Support  hospitals,  schools,  sports…)  
Awareness  campaigns  

Internal  &  External  quality  audits  

Quality  
Invite  Interna;onal  health  organiza;ons  to  confirm  quality  of  products,  train  employees  
Invite  FSSAI  to  take  frequent  samples,  analyze,  and  release  results  to  media  

Communica;on   Apologize  to  customers  

Use  (Back  to  Origins)  as  a  new  slogan,  leveraging  on  customer  loyalty  

Analyze  the  poten;al  of  Sunfeast  and  due  diligence  (6  Months)  
Compe;;on   Acquire  Sunfeast    
Keep  the  brand  (Sunfeast)  for  one  year  and  kill  it  gradually  to  ensure  market  domina;on  and  create  
high  barriers  to  entry  

Execu;ve  Summary   Background   Problem   Alterna;ves   Recommenda;on   Implementa;on   Risk   Financials   Conclusion  
Risks  are  high,  but  can  be  mi5gated
Risk   Impact   Probability   MiAgaAon  

Acquire  poten;al  
Can  not  retain  market  share   High   Low  
compe;tor  

Analyze  Patanjali  Aha  at  the  

Sunfiest  rejects  the  offer   Medium   Medium   same  ;me  of  analyzing  
sunfiest  

Nestle  to  support  with  a  

Strong  interna;onal  
High   Medium   strong  marke;ng  campaign  
compe;tor  enters  India  
for  Maggi  and  Sunfiest  

Execu;ve  Summary   Background   Problem   Alterna;ves   Recommenda;on   Implementa;on   Risk   Financials   Conclusion  
Money  Talks…  Assump5ons
24%  of  NIL  revenues  comes  from  Maggie  Noodles  

Market  Size  26  B  Rs  

Sunfeast  acquired  20%  Market  Share  during  the  crisis  

Sunfeast  can  be  bought  at  a  value  of  8x  its  sales  –  40  B  Rs  

Noodles  Net  Margin  is  30%  

Discount  Rate  10%  

Execu;ve  Summary   Background   Problem   Alterna;ves   Recommenda;on   Implementa;on   Risk   Financials   Conclusion  
Noodles  is  a  profitable  product  that  needs  to  be  restored
Quareterly  Revenues  and  Profits  
 30.0    
 25.0    
 20.0    
Rs  Billion  

 15.0    
 10.0    
 5.0    
 -­‐        
Mar  2014   Jun  2014   Dec  2014   Mar  2015   Jun  2015  
 (5.0)  
Revenues   Profit  

Execu;ve  Summary   Background   Problem   Alterna;ves   Recommenda;on   Implementa;on   Risk   Financials   Conclusion  
Posi5ve  NPV…  Revenues  con5nue  to  grow
Revenues  
 180.00    

 160.00    

 140.00    

 120.00    

 100.00    

 80.00    

 60.00    

 40.00    

 20.00    

 -­‐        
2011-­‐2012   2012-­‐2013   2013-­‐2014   2014-­‐2015   2015-­‐2016   2016-­‐2017   2017-­‐2018   2018-­‐2019   2019-­‐2020  

NPV  =  5.1  Billion  Rs.  

Execu;ve  Summary   Background   Problem   Alterna;ves   Recommenda;on   Implementa;on   Risk   Financials   Conclusion  
Dominate  the  Future

Compe;tors  
Society  

Quality  

Future  Steps:  
Communica;on  
Export  to  Asia  to  dominate  the  Asian  Market  
Export  to  Middle  East  and  Africa  

Execu;ve  Summary   Background   Problem   Alterna;ves   Recommenda;on   Implementa;on   Risk   Financials   Conclusion  
Thank  You,  Back  To  Origins

Presented  By:  
Aamer  Yehia  
Amr  Soliman  
Medhat  Saudi  
Yassin  Bahaa  El  Din