MINI PROJECT

ON
NYKAA: A COSMETIC INDUSTRY
SUBMITTED IN PARTIAL FULFILLMENT FOR
THE AWARD OF DEGREE OF MASTER OF
BUSINESS ADMINISTRATION

SUBMITTED BY: - VAISHALI JAIN

MBA 2 SEMESTED

ROLL NO. 56

SUBMITTED TO: - Mrs. PARUL BHARGAVA

S.S Jain Subodh Management Institute

MANSAROVER, JAIPUR, 302020

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 ACKNOWLEDGEMENT

I acknowledge with sincere thanks to represent Director Sir Prof. (Dr.) RAJU AGRAWAL.

I wish to express my sincere gratitude to my Mentor Mrs. PARUL BHARGAVA for guidance and

encouragement in carrying out this project work.

I sincerely thank all faculty of SUBODH MANAGEMENT INSTITUTE for supporting my project

work.

Finally, I would like to my heart full thanks to my parents, friends who helping me for completion of

this project work.

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 DECLARATION

I VAISHALI JAIN hereby declare that the project work entitled “ NYKAA : A COSMETIC

INDUSTRY“ submitted to Mrs. PARUL BHARGAVA , is a record of an original work done by me

under the guidance of Mrs. PARUL BHARGAVA, this project work is submitted in the partial

fulfillment of the requirements for the award of the degree of Master of Business Administration.

The results embodied in the thesis have not been submitted to any other University or Institute for

the award of any degree or diploma.

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TABLE OF CONTENT

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 CHAPTER – 1.

Introduction about the

organization & Industry

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1. INTRODUCTION

Introducing NYKAA

NYKAA is an Indian e-commerce

company and the largest beauty shopping
destination in India. It was founded by
Falguni Nayar, former MD of KOTAK
Mahindra Capital co., in the year
2012.Nykaa is headquartered at Mumbai
(formerly known as Bombay), the capital
city of the state of Maharashtra, It is the
only biggest multi-brand beauty retailer in
India that sells nearly 60,000 beauty and wellness products of various
national and international brands .Nykaa ships to over 1000
citiesacrossIndia.Itcurrentlyhas650+brandsamong which 25 are luxury
brands which include big names like MAC, Clinique, Estée Lauder,
NYX, Bobbi Brown, Calvin Klein, L‘Occitane, Yves Saint Laurent etc.
Approximately, around 15,000 orders fly out every day. Nykaa has 33
physical stores/outlets categorized under 2 formats namely Nykaaon
Trend and Nykaa Luxe, and also has popular in-house collection under
its private label called the Nykaa collection. Nykaa can be accessed
through its 33 outlets running successfully across the nation, mobile app
and also its webpage(www.nykaa.com). (―Nykaa,‖ 2019)

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 CHAPTER – 2.
Organizational profile

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 The Nykaa Story:
The Mumbai resident founder and the CEO of Nykaa, Falguni Nayar, is a
graduate from IIM Ahmadabad, India.

Before launching Nykaa, she served Kotak Mahindra Capital Co. for 18 years
but she quit her job as she always wanted to be an entrepreneur. She
noticed that there was a huge gap in the Indian beauty line market – the
demand was greater than the available mediums to buy beauty essentials in
the country. This led her to launch Nykaa with her husband Sanjay Nayar, a
banker by profession and daughter Adwaita Nayar. (―The Story of Nykaa-
How they have become a successful brand,‖2018)

Nykaa raised its business funding of about 40M USD in multiple rounds of
funding from various investors and generated a turnover of about 39M USD in
the very first 5 years. In the last 2 years, its revenue has raised to nearly
400%. Nykaa follows inventory-based business model and content-based
marketing strategy. All its products are sourced directly from the original
label/brand. Recently with the launch of lingerie, Nykaa attempted to enter the
apparel segment in the market.(Panthangi, 2017)

Mission and Vision

Nykaa rests on 3 paragons:

Curation

Information

Personalization

Nykaa

…your beauty, our passion.

―To bring the best of offer to help the customers make the right selection for all
their beauty needs at every step of their way‖.(―www.nykaa.com,‖2019)

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 ThefounderbelievesthatNykaashouldstandfor―WomenEmpowerment‖.Nykaaw
antsto periodically support various CSR initiatives and be a socially
responsible brand. In a long run, just like fashion and styles, Nykaa mist
incorporate beauty into current latest trends. ( ―Nykaa.com, Beauty at your
fingertips, ‖2017)

2. Value Chain Framework: Nykaa

Figure 1 Nykaa’s Value Chain Diagram

Value chain is nothing but a number of various activities a company does

and involves itself into create it s customer value.
(―Porter‘sValueChain,‖2019)It is developed by Michael. Porter and was first
introduced in 1985 in his book ―Competitive Advantage and in a Harvard
article. Porter‘s Value Chain Analysis, also known as Porter‘s value chain
framework is a management tool that Nykaa can use to separate its
strategic business activities and re-assemble them in a way that can add up
to its competitive advantage through price fluctuations in the market. This
analysis focuses on the differences in the business activities and explains
relative pricing and costing concept of Nykaa. (Vliet, 2013)

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 2.1. Competitive Advantage

Competitive advantage is all about high quality performance. Nykaa has a

distinct competitive edge when compared to its rivals. It operates at a way to
lower cost and commands a good premium price. (E. Porter, 2004)

2.2. Value Chain

The value system of Nykaa is a big part of the market that includes both
distributors and the suppliers at upstream and downstream levels. This makes
the manager‘s role very prominent as he is solely responsible to observe the
company‘s value system and all of its activities causing high impacts on Nykaa
with their new additions or reductions from the existing ones. Manager here is
entitled to make the decision about where to have a
grip in the value system.

2.3. Value Chain Activities

According to the Porter‘s model, the value chain activities are basically of 2 types:.

 Supporting

 Primary

As illustrated above in Figure1, Nykaa has 5 categories of primary value chain activities:

1. Inbound Logistics

2. Operations

3. Outbound Logistics

4. Sales and Marketing

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5. Services

Inbound Logistics: These Logistics are associated with disseminating,

storing and receiving product inputs. This includes warehousing, handling
materials and architecture to maintain consumer database for the company.
Nykaa has currently outsourced most of these activities.

Operations: Operations is the process of transforming raw materials into the

finished products. In Nykaa‘s café, the operational activities are quite broad.
It involves collected consumer data from Nykaa‘s database to build
company‘s new strategies based on consumer buying behaviour.

Outbound Logistics: These are about the distribution of final products to the
buyers and the channel partners. They include wholesalers, distribution
channels, retailers etc.

Marketing and Sales: This activity focuses on creating a sales medium

where Nykaa‘s potential customers can buy its products. Selecting channels,
pricing strategies, ad campaigns, promotional activities etc., are few of the
activities that come under this category.

Services: Like every other company, Nykaa needs an activity that can keep
track of post sale data information and maintain it for further successful usage
in terms of the progress of its products.

1. Nykaa‘s support value chain activities are those that supports its primary
activities. There are 4 such activities: Firm Infrastructure

2. HRM – Human Resource Management

3. Tech-development

4. Procurement activity

Each of these activities can be further divided into various distinct industry-
specific activities in which Nykaa operates.
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 Firm Infrastructure: This includes general management, quality management,
finance & accounting, planning and legal services. These activities support
Nykaa‘s value chain wholly. The scope of all these activities differ as Nykaa is
a diversified organization within the industry. Nykaa‘s planning and financing
strategies are made at the corporate level whereas legal services, accounting
and quality management are dealt with at the business unit level.

HRM: In any organization, Human Resource Management is the key to its

success as it supports various activities like – recruitment, selecting & hiring
employees, training, people planning, skill assessment, development,
compensation at various business levels like unit level and corporate level. In a
firm, this particular support activity either affects the competitive advantage or
defines it.

Technology development: Today technology is considered to be the most

prominent factor as it supports almost everything in an organization. Tech-
development at Nykaa consists of activities like field-testing, tech-selection,
component & feature design, and process engineering.

Procurement: Nykaa uses its procurement activities to make input purchases

like raw materials, machinery needs, lab equipment, supplies & office
essentials, buildings etc. Procurement support activities also use technology to
evaluate a company‘s on-going performance.

2.4. Metrics and Key Performance Indicators to avoid

Growth in sales

Growth in market shares

Shareholder value measured by stock price

3. VRIO/VRIN Strategic Analysis

VRIO was developed to evaluate the importance of resources to a company

in a relative manner, by Jay B Barney. Nykaa‘s VRIO consists of:

1. Value of the resources it has -Valuable

2. Their Rarity -Rare
3. How easily can these resources be imitated by its competitors – costly to Imitate
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4. How the firm is organized – Organizational competency
&capabilities

All these factors lead into building a sustainable competitive

edge for the company by making the best use of its available
resources.

Figure 2 VRIO Framework of Nykaa

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 An extension of VRIO framework is VRIN analysis where N‘ stands for Non- .
Nykaa’s considered non-substitutable as its competitors can‘t afford to take
the ways to gain advantages that Nykaa has. This is due to the costly imitation
options that include disruption risk.

4. The Stakeholder Analysis

A stakeholder is someone who has interest in an organization and both, the

firm and the stakeholder depend upon each other to fulfill their needs. The
stakeholder theory depicts the direct link between a firm‘s business and its
stakeholders. (Freeman, 2010)

Figure 3 Stakeholder Theory

This theory was framed for the firm‘s management to maintain its ethics and
addresses at a high and also for the business managers to assure that their
stakeholder share moving on the same path as the firm is to attain long-term
goals. According to this framework, the managers of the company should role
play as an agent to its stakeholders to keep them updated about the
company‘s moves to run the business successfully. Thus, by analyzing this
theory, managers in the organization along with their employees and
management should focus on their shareholders for further development of
the business.(Jensen,2005)

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 4.1. Stakeholders of NYKAA

Nykaa is purely a private family business. 95% of its stakes are with the Nayar
family. The founder rose only domestic funding for Nykaa and stayed away
from the foreign money to legitimately and legally do the inventory business
model. Nykaa has 1 investors
Apart from the Nayar family. They are: Marico Ltd (Harsh Mariwala and family), TVS Capital Funds Pvt.
Ltd, TPG Growth, Lighthouse Funds, Warburg Pincus, Max Ventures and Industries, Michael Carlos,
Dalia Pathak, Atul Nishar and Sunil Kant Munjal. All of them hold just minority. ( ―Nykaa Stakeholders,‖
2019)

Nykaa‘s stakeholders can be grouped in terms of various interest levels and power structure. Prime
stakeholders Nykaa has to focus on are its employees, investors, suppliers, directors, managers and
customers.
4.1. Mapping Nykaa’s Stakeholders in the Power/Interest Matrix

Figure 4 Stakeholder’s Power-Interest Matrix: Nykaa

After identifying Nykaa‘s key stakeholders, they can be mapped on Power-Interest Matrix in 4 different
categories as shown in Figure4.

The investors and directors expect healthy and profitable growth of Nykaa. They also expect to remold
the business model as and when needed to make it more cost-efficient and boost its profit levels whilst
enhancing the customer innovation of the company.

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On the other hand, employees and managers expect to secure their jobs, get decently paid and aid their
careers with the positive growth of business. The suppliers expect Nykaa to enhance and expand so that
it could benefit them with 16
Higher sales ratio, high returns on the product sand avail fame from brand
association with it.

The customers expect premium quality products at reasonable prices when

compared to the local retailers. Customers also seek secure mode of
payments and hassle-free purchasing process. They expect their data
collected by the company to remain confidential, and avail prompt customer
services in terms of any issues or return of products.

5. Cultural Web Analysis

Figure 5 cultural Web Framework

Nykaa‘s business elements will be analyzed using the cultural web model
(Figure 5) to check if its business practices are rightly aligned with its
strategies. According to Johnson & Scholes, Cultural web is a range of
phenomena defining the assumptions taken for granted in an organization.
This framework helps the management to stress on the cultural key factors of
the organization and also on their impact on strategic issues to overall improve
the competitive advantage and measure business performance. This model

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 consists of 7 inter- linked elements namely,

1. Paradigm

2. Stories

3. Rituals and Routines

4. Symbols

5. Control Systems

6. Organizational Structure

7. Power Structures

Nykaa credits an agile and vivid work culture with a dynamic exposure to
projects. The key factors that drive Nykaa’s Organizational culture are it‘s 100
per cent dedication to work and the intensity.

Nykaa believes in getting the work done with full-on commitment.

Punctuality and ―NO to work from home allowance make it differ from
other firms. It also has working Saturday‘policy where the employees
who disagree to work the weekends are dropped off without second
thoughts. The founder Falguni says, ―Intense work culture‖,
―Courage and ―learning agility are the 3 prominent ideals that defines
Nykaa. (―Working atNYKAA.COM: Employee Reviews | Indeed.co.in,
‖2018)

According to the cultural web model, Nykaa‘s culture can be accessed through:

Paradigm: Nykaa‘s paradigm can be defined as India‘s premier online

destination for all the beauty and wellness needs. Nykaa strives to be
the 1-stop-shop for its customers by retailing genuine products directly
sourced from the brands itself and provide hassle-free delivery
experience, reinforcing a deep commitment. ( ―NYKAA. commission,
Benefits, and Work Culture,)

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Stories: Nykaa‘s story is purely related to its founder Falguni Nayar. It
all started from her childhood dream to be an entrepreneur. Falguni
founded Nykaa, a woman-centric business with multi-brand retail format
in the beauty & wellness market sector with her husband Sanjay and her
daughter Adwaita. Today, Nykaa has historically raised $100B and is the
biggest name when it comes to beauty in India.(Gompers et al.,2018)

Rituals and Routines: Nykaa has the rarest ritual/routines .Its Omni-
channel presence and multi pronged strategies makes it unique.
(―Nykaa,‖2018)Nykaa‘s routines to maintain its product reputation
include surprise checks at the warehouse, product sampling and
controlling the value chain right from product sourcing to final sale to
ensure no product replicas are sold. (―Nykaa.com, ‖2016)

Symbols: Nykaa.com, being thee-retailer of premium products line in India

needs to maintain its brand name and logo for branding of the
company both online & offline. Falguni Nayar dreamt of developing a brand
that‘s always in the spotlight. This is how the name Nykaa was created. It is
derived from a Bengali word―Neyka ‖which means ―always in the spotlight‖.
Nykaa is like a baby to Falguni. She calls it Adwait a Nykaa relating the brand to
her daughter Adwaita. Nykaa, under its brand symbol came up with company
owned ‗Nykaa on trend‘ and ‗Nykaa Luxe‘ stores recently. The Luxe stores
deal with premium & luxury brands and ON-Trend stores with all the product
lines that trend on Nykaa online.(Bureau, 2017)

Organizational Structure: Unlike other e-commerce players opting market

place model, Nykaa chose the inventory model. Nykaa‘s organizational
structure is characterized with simple structure. Nykaa encourages
collaborations with luxury brands directly to sell their products straight to the

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 customers rather than franchising the brand. Falguni personally convinces the
global brands to make them available on Nykaa and creates an amazing
consumer experience for all its consumers who once used to struggle to get
their hands on the luxury brands. Nykaa‘s business structure made the entire
process of purchasing simple and hassle free. All the products sold on Nykaa re
directly sourced from the original brand. Nykaa also has its own private label
and recently it also went brick & mortar by launching its offline stores across the
nation to create a better customer experience.

Control System: Nykaa developed key metrics to maintain high quality and
productivity. It keeps close track of every single step involved in doing
business. The authenticity of its products is what matters the most.

Power Structure: The power here is purely with the Nayar family as Nykaa’s a
private family owned business. The Nayar‘s have 95% of the company‘s stakes
and remaining is with its employees.

5.1. Analysis Results

As a result of this cultural web analysis, we can say that Nykaa‘s culture
prioritizes its customers and their satisfaction. The major strategies of Nykaa
are all customer-centric. They all start with the needs of the customers and
work backwards. This makes the company more supple and pliable. Nykaa
today, stands at the top in the market it is operating in because it chose to lead
the market by reshaping its norms, rather than just adapting to the market
trends.

6. Future Strategy Recommendation

From the above analysis, it can be said that Nykaa should focus on utilizing its
strengths from VRIO/VRIN analysis to make the most out of the available
opportunities. It should enhance both its primary and support activities within its
value chain. Nykaa has proven to have filled the gap between supply and
demand of cosmetics in India. Nykaa has 35% market share and is leading the
market in the country. After building the reputation of being genuine and selling
100% real products of various brands (both local & global) including its own
label of production, it is time for Nykaa to launch a new line of luxury under its
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name. This initiative will help Nykaa to move to premium segment of the
market from the mass segment. This expansion will boost its business thereby
enabling it to sustain its market leader position in a long run.

After attaining the digital success, as Nykaa is looking forward to increase its
offline presence, another strategy to consider would be to focus on its
expansion in regards
with―brickandmortar‖concept.Nykaahaseventuallybeenane-
retailerbusinessthatstartedwith 100+ brands and moved into being one-stop
shop for all our premium needs by offering 600+ brands and more than 20
luxury brands on its business platform. Nykaa has been extremely successful
with its business model and its on-going strategies.

It is already doing great in India, both digitally and physically. It already has 33
shops set-upped across the nations and is planning to open more with a rapid
speed (3 in a month strategy). Nykaa has collaborated with multiple global
brands from different corners of the world to give its customers the ease to buy
their preferred brands from their comfort zones.
.

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Chapter -3
Mc kensy’s 7s
framework and

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 Porters five force model

Mckensy’s 7S framework and Porters five force

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 model with special reference to organization

under study
Strategy: this is the organization's plan for building and maintaining a
competitive advantage over its competitors.

What is our strategy?

 how do we intend to achieve our objectives?
 How do we deal with competitive pressure?
How are changes in customer demands dealt with?
How is strategy adjusted for environmental issues?

Structure: this how your company is organized (that is, how departments and
teams are structured, including who reports to whom).

How is the company/team divided?

What is the hierarchy?
How do the various departments coordinate activities?
How do the team members organize and align themselves?

Is decision making and controlling centralized or decentralized? Is this as it

should be, given what we redoing?

Where are the lines of communication?

Explicit and implicit?

Systems: the daily activities and procedures that staff use to get the job done.

What are the main systems that run the organization?

Consider financial and HR systems as well as communications and document storage

Where are the controls and how are they monitored and evaluated?
 What internal rules and processes does the team use to keep on track?

Shared values: these are the core values of the organization, as shown in its

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corporate culture and general work ethic. They were called "super ordinate
goals" when the model was first developed.
What are the core values?
What is the corporate/team culture?
How strong are the values?
What are the fundamental values that the company/team was built on?

Style: the style of leadership adopted.

How participative is the management/leadership style?

How effective is that leadership?
Do employees/team members tend to be competitive or cooperative?
Are there real teams functioning within the organization or are they just nominal
groups?

Staff: the employees and their general capabilities.

What positions or specializations are represented within the team?

What positions need to be filled?

Are there gaps in required competencies?

Skills: the actual skills and competencies of the organization's employees.

What are the strongest skills represented within the company/team?

Are there any skills gaps?
What is the company/team known for doing well?
Do the current employees/team members have the ability to do the job? How are skills
monitored and assessed?

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Porters Five Forces Model with reference to Nykaa

Porter’s Five Forces Analysis can tell you about the profitability of a given
section of the market, and the balance of power that can be found within. To
do so, all we need to consider are the following 5 factors (referred to here as
forces):

Threat of New Entrants

The economies of scales fairly difficult to achieve in the industry in which Nykaa
operates. This makes it easier for those producing large capacitates to have a cost
advantage. It also makes production costlier for new entrants. This makes the threats of
new entrants a weaker force.

The product differentiation is strong within the industry, where firms in the
industry sell differentiated products rather a standardized product.
Customers also look for differentiated products. There is a strong
emphasis on advertising and customer services as well. All of these
factors make the threat of new entrants a weak force within this industry.

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The capital requirements within the industry are high, therefore, making it
difficult for new entrants to set up businesses as high expenditures need to
be incurred.Capital expenditures also high because of high Research and
Development costs. All of these factors make the threat of new entrants a
weaker force within this industry.

The access to distribution networks is easy for new entrants, which can
easily set up their distribution channels and come into the business. With
only a few retail outlets selling the product type, it is easy for any new
entrant to get its product on the shelves. All of these factors make the threat
of new entrants a strong force within this industry.

The government policies within the industry require strict licensing and
legal requirements to be fulfilled before a company can start selling. This
makes it difficult for new entrants to join the industry, therefore, making the
threat of new entrants a weak force.

How Nykaa can tackle the Threat of New Entrants?

Nykaa can take advantage of the economies of scale it has within

the industry, fighting off new entrants through its cost advantage.

Nykaa can focus on innovation to differentiate its products from that of new
entrants. It can spend on marketing to build strong brand identification. This
will help it retain its customers rather than losing them to new entrants.

Bargaining Power of Suppliers

The number of suppliers in the industry in which Nykaa operates is a lot

compared to the buyers. This means that the suppliers have less control
over prices and this makes the bargaining power of suppliers a weak force.

26
 The product that these suppliers provide are fairly standardized, less
differentiated and have low switching costs. This makes it easier for buyers
like Nykaa to switch suppliers. This makes the bargaining power of
suppliers a weaker force.

The suppliers do not contend with other products within this industry.
This means that the rear no other substitutes for the product other than
the ones that the suppliers provide. This makes the bargaining power of
suppliers a stronger force within the industry.

The suppliers do not provide a credible threat for forward integration into the
industry in which Nykaa operates. This makes the bargaining power of
suppliers a weaker force within the industry.

The industry in which Nykaa operates is an important customer for its

suppliers. This means that the industry’s profits are closely tied to that of
the suppliers. These suppliers, therefore, have to provide reasonable
pricing. This makes the bargaining power of suppliers a weaker force within
the industry.

How Nykaa can tackle the Bargaining Power of Suppliers?

Nykaa can purchase raw materials from its suppliers at a low cost. If
the costs or products are not suitable for Nykaa, it can then switch its
suppliers because switching costs are low.

It can have multiple suppliers within its supply chain. For example, Nykaa
can have different suppliers for its different geographic locations. This way
it can ensure efficiency within its supply chain.

As the industry is an important customer for its suppliers, Nykaa can

benefit from developing close relationships with its suppliers where both
of them benefit.

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Bargaining Power of Buyers

27
 The number of suppliers in the industry in which Nykaa operates is a lot more
than the number of firms producing the products. This means that the buyers
have a few firms to choose from, and therefore, do not have much control
over prices. This makes the bargaining power of buyers a weaker force within
the industry.

The product differentiation within the industry is high, which means that the
buyers are not able to find alternative firms producing a particular product.
This difficulty in switching makes the bargaining power of buyers a weaker
force within the industry.

The income of the buyers within the industry is low. This means that
there is pressure to purchase at low prices, making the buyers more
prices sensitive. This makes the buying power of buyers a weaker
force within the industry.

The quality of the products is important to the buyers, and these

buyers make frequent purchases. This means that the buyers in the
industry are less prices sensitive. This makes the bargaining power of
buyers a weaker force within the industry.

There is no significant threat to the buyers to integrate backwards. This

makes the bargaining threat of buyers a weaker force within the industry.

How Nykaa can tackle the Bargaining Power of Buyers?

Nykaa can focus on innovation and differentiation to attract more buyers.

Product differentiation and quality of products are important to buyers within
the industry, and Nykaa can attract a large number of customers by
focusing on these.

Nykaa needs to build a large customer base, as the bargaining power

of buyers is weak. It can do this through marketing efforts aimed at

28
building brand loyalty.

Nykaa can take advantage of its economies of scale to develop a cost

advantage and sell at low prices to the low-income buyers of the industry.
This way it will be able to attract a large number of buyers

Threat of Substitute Products or Services

There are very few substitutes available for the products that are produced
in the industry in which Nykaa operates. The very few substitutes that are
available are also produced by low profit earning industries. This means
that there is no ceiling on the maximum profit that firms can earn in the
industry in which Nykaa operates. All of these factors make the threat of
substitute products a weaker force within the industry.

The very few substitutes available are of high quality but are way more
expensive. Comparatively, firms producing within the industry in which
Nykaa operates sell at a lower price than substitutes, with adequate quality.
This means that buyers are less likely to switch to substitute products. This
means that the threat of substitute products is weak within the industry.

How Nykaa can tackle the Threat of Substitute Products?

Nykaa can focus on providing greater quality in its products. As a

result, buyers would choose its products, which provide greater quality
at a lower price as compared to substitute products that provide
greater quality but at a higher price.

Nykaa can focus on differentiating its products. This will ensure that buyers
see its products as unique and do not shift easily to substitute products
that do not provide these unique benefits. It can provide such unique
benefits to its customers by better understanding their needs through
market research, and providing what the customer wants.
29
Rivalry among Existing Firms

The number of competitors in the industry in which Nykaa operates are very few. Most
of these are also large in size. This means that firms in the industry will not make moves
without being unnoticed. This makes the rivalry among existing firms a weaker force
within the industry.

The very few competitors have a large market share. This means that
these will engage in competitive actions to gain position and become
market leaders. This makes the rivalry among existing firms a stronger
force within the industry.

The industry in which Nykaa is growing every year and is expected to

continue to do this for a few years ahead. A positive Industry growth means
that competitors are less likely to engage in completive actions because they
do not need to capture market share from each other. This makes the rivalry
among existing firms a weaker force within the industry.

The fixed costs are high within the industry in which Nykaa operates. This
makes the companies within the industry to push to full capacity. This also
means these companies to reduce their prices when demand slackens. This
makes the rivalry among existing firms a stronger force within the industry.

The products produced within the industry in which Nykaa operates are
highly differentiated. As a result, it is difficult for competing firms to win the
customers of each other because of each of their products in unique. This
makes the rivalry among existing firms a weaker force within the industry.

The production of products within the industry requires an increase in capacity

by large increments. This makes the industry prone to disruptions in the
supply-demand balance, often leading to overproduction. Overproduction
means that companies have to cut down prices to ensure that its products sell.
This makes the rivalry among existing firms a stronger force within the
industry.

30
 The exit barriers within the industry are particularly high due to high
investment required in capital and assets to operate. The exit barriers are
also high due to government regulations and restrictions. This makes firms
within the industry reluctant to leave the business, and these continue to
produce even at low profits. This makes the rivalry among existing firms a
stronger force within the industry. The strategies of the firms within the
industry are diverse, which means they are unique to each other in terms of
strategy. These results in them running head-on into each other regarding
striates. This makes the rivalry among existing firms a strong force within the
industry.

How Nykaa can tackle the Rivalry Among Existing Firms?

Nykaa needs to focus on differentiating its products so that the actions of competitors will have less effect
on its customers that seek its unique products.

As the industry is growing, Nykaa can focus on new customers rather than winning the ones from existing
companies.
Nykaa can conduct market research to understand the supply-demand situation within the industry and
prevent overproduction.

Implications of Porter Five Forces on Nykaa :-

By using the information in Nykaa five forces analysis, strategic planners will be able to understand how
different factors under each of the five forces affect the profitability of the industry. A stronger force
means lower profitability, and a weaker force means greater profitability. Based on this a judgment of the
industry's profitability can be made and used in strategic planning.

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 CHAPTER :4
SWOT ANALYSIS

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STRENGTHS:

 Rising Net Cash Flow and Cash from operating activity

 MACD Crossover above Signal Line
 Company with No Debt
 Company with Zero Promoter Pledge
 Strong Momentum: Price above short, medium and long term moving averages

WEAKNESSES:

 Negative Breakdown First Support (LTP< S1)

 De growth in Revenue and Profit Decline in Net Profit (QoQ)

 Decline in Quarterly Net Profit (YoY)

 Decline in Net Profit with falling Profit Margin (QoQ)

 Decline in Quarterly Net Profit with falling Profit Margin (YoY)

 De growth in Quarterly Revenue and Profit in Recent Results

 Declining Revenue every quarter for the past 2 quarters

 Declining profits every quarter for the past 2 quarters
 Major fall in TTM Net Profit

 Recent results: Fall in Quarterly Revenue and Net Profit (YoY)

 Recent Results: Declining Operating Profit Margin and Net Profits (YoY)

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OPPORTUNITIES

 Brokers upgraded recommendation or target price in the past three months

 RSI indicating price strength

THREATS

 Profit to Loss Companies

 De growth in Revenue, Profits and Operating Profit Margin in recent results (QoQ)  Increasing Trend

in Non-Core Income

 Stocks with high PE (PE > 40)

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 Chapter 5
Financial Statements

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ANALYSIS OF FINANCIAL STATEMENT

Financial statements are a formal record of the financial activities and position of a business, person, or
other entity. Relevant financial information is presented in a structured manner and in a form easy to
understand. They typically include basic financial statements, accompanied by a management discussion
and analysis A balance sheet or statement of financial position, reports on a company assets, liabilities,
and owners’ equity at a given point in time.

An income statement or statement of comprehensive income, statement of revenue expense or profit and
loss report, reports on a company income, expenses, and profits over a period of time. A profit and loss
statement provides information on the operation of the enterprise. These include sales and the various
expenses incurred during the stated period.

A cash flow statement reports on company cash flow activities, particularly its operating, investing and
financing activities

5.1 Purpose for Business Entities

The objective of financial statements is to provide information about the financial position, performance
and changes in financial position of an enterprise that is useful to a wide range of users in making
economic decisions. Financial statements should be understandable, relevant, reliable and comparable.
Reported assets, liabilities, equity, income and expenses are directly related to an organizations financial
position.

Financial analysis is then performed on these statements to provide management with a more detailed
understanding of the figures. These statements are also used as part of management annual report to
the stockholders.

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 PROFIT AND
LOSSACCOUNT FOR YEAR 2019-20

INCOME
Revenue from Operations [Gross] 30,264.23
Less: Excise/Service Tax/Other Levies 270.30
Revenue from Operations [Net] 29,993.93

Other Operating Revenues 1,314.21

Total Operating Revenues 31,308.14
Other Income 623.15
Group Share in Joint Ventures 0.00
Total Revenue 31,931.29

EXPENSES
Cost of Materials Consumed
5,124.61
Purchase Of Stock-In Trade
3,277.76 Purchase of Crude Oil and
Others 0.00
Cost of Power Purchased 0.00
Cost of Fuel 0.00
Aircraft Fuel Expenses 0.00
Aircraft Lease Rentals 0.00
Operating and Direct Expenses 0.00
Changes In Inventories Of FG, WIP And Stock-In Trade -271.63
Employee Benefit Expenses 4,902.30
Finance Costs 399.80
Provisions and Contingencies 0.00
Depreciation And amortization Expenses 1,264.75 Miscellaneous
Expenses Written Off 0.00
Other Expenses 8,185.83
Less: Inter Unit / Segment / Division Transfer 0.00

Less: Transfer to / From Investment / Fixed Assets / Others 0.00

Less: Amounts Transfer to Capital Accounts 0.00
Less: Share of Loss from Partnership Firm 0.00
Group Share in Joint Ventures 0.00
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Total Expenses 22,883.42

Profit/Loss Before Exceptional, Extra Ordinary Items and tax 9,047.87

Exceptional Items 0.00
Profit/Loss Before Tax 9,047.87
Tax Expenses-Continued Operations Current Tax 404.64

Less: MAT Credit Entitlement 0.00 Deferred Tax

806.93 Other Direct Taxes 0.00
Tax For Earlier Years 0.00

Total Tax Expenses 1,211.57

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39
 Chapter 6
Learning Experience

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The main purpose of the organization study is to make students acquainted with the practical knowledge
about the overall functioning of the organization. It gives opportunity to study the human behavior and
also makes one ready to face different situations, which normally would come across while on work in the
office or factory environment.

The primary objective of the organization study is to make the students to know the practical applicability
with respect to the theoretical concepts in the business decisions. The understand Behavior, culture of
the organization and to know about the various policies of the organization and its performance and its
future strategies.

The first and foremost important factor, which focuses this study, is the need of the student to know about
practical aspects of the functioning of the organization. This study will help the individual when he or she
finishes the course and goes for a job. No doubt that the necessary training will be imported at the
workplace but having a brief knowledge before entering the organization will certainly help the individual
in learning about the organization quickly and improve his or her performance for his or her betterment as
well as for betterment of the organization for which heor she is working.

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The basic values of internship I have taught are:

1. I have gained experience by applying knowledge and skills in work related situations.

2. Have learnt about what kind of official works to do and also gained my level of confidence in my
own abilities.

3. Gained the practical real work experience as an employee.

4. Expanding my knowledge by seeing others mistakes and to solve them.

5. I have learnt how to identify the internal problems of the company and to be solved.

6. Multitasking in some areas and team work.

My experience at internship has taught me more than I could have imagined. I felt my duties were diverse
and ever changing. Sometimes it’s tough to recall everything I have taken in over past month, but even
though I feel that these are some of the most beneficial lessons I have learnt.

Learnt about the organization, their existence, mission, vision of the company and product profile, and
the types of product they have been offered, and the services profile we learn on organization structure,
hierarchy of the organization, decision making process. They also increase communication skill while
interacting with the staff members and they learn about management team, their responsibilities, their
point of view in future expectation of products, Learnt on company core values that is using team word
instead of I that results efficiency in work. And also understand is strength, weakness, opportunity, and
threat of the company.

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CONCLUSION

We know the market for most of the products and services switched from offline market to online market.
There are ample opportunities for many entrepreneurs to reach their customers directly and offer the
products at reasonable prices by eliminating the intermediary expenses. These opportunities are
cashed by the Nykaa and entered into the E-retail business in 2012 by offering various brands' products
on one platform. It ensures that customers always prefer a brand that ensures quality and satisfaction to
the maximum level. Due to COVID-19, many businesses ended up with huge losses but Nykaa showed
around 20%-70% growth of the business as usual. The analysis Therefore, offered in depth data on
Nykaa's business strategies and how these strategies helped them be successful. Presently, not many
companies provide multi-brand luxury products on their websites, which allow being dominant in the
market.

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BIBLOGRAPHY
The Indian Pharmaceutical Industry –Ramakrishnan Iyer
Marketing Management –Philip Kotler
Principles of Pharmaceutical Marketing – Mickey Smith

> www.nykaa.com - Google Search

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