increase the loyalty of customers and to beat competitors.INTRODUCTION 0 Competitive Strategy consists of move of companies in order to attract customers. The main objective of Competitive Strategy is to generate a competitive advantage. With stand competitive pressures and strengthen an organizations market position. .

FIVE MAIN COMPETITIVE STRATEGIES ARE: · Overall low cost leadership strategy · Best cost providers strategy · Broad differentiation strategy · Focused low cost strategy · Focused differentiation strategy Here competitive strategy varies from sector to sector and company to company. Thus. cost. and quality strategies. When we come on to FMCG Sector main strategies lay behind market strategies. it is not easy to predict a single or to find a single strategy for the whole sector. .

HUL has largest no of brands in most trusted brands list. . and also food and Water Purifier available with it. According to Brand Equity. This is Indians largest FMCG sector company with all type of household products available with it.What are HUL and ITC Ltd.? HUL (Hindustan Unilever Ltd.) 0 This Company is earlier known as Hindustan Lever Ltd. It has Home & Personal Care products.

45 Crore. 20239. Dove. For the entire year ending March 2009 net turnover of company is Rs. 0 Products of HUL are: Annapurna. Liril. Clinic. Surf excel.0 16 of HULs brands featured in AC-Nielson Brand Equity list of 100 most trusted brands in 2008 in an annual survey. Axe.43 Crore driven mainly by domestic FMCGs with net profit stood at Rs. 13675. Pears. Brooke bond. Fair & Lovely.99% higher than 31st December 2007s Rs. Lux. Ponds. Breeze.33 Crore which is 47. Wheel. Bru. Rexona. Sunlight. Pureit. Ayush. Hamam. Pepsodent. 2496. . Rin. Vaseline.

Foods. 0 Company mainly operates in the industry like Tobacco. packed foods.3% higher than previous years Rs.ITC Limited 0 This Company was earlier known as Imperial Tobacco Company of India Ltd. hotels. Hotels. 0 It is Currently headed by Yogesh Chander Deveshwar. 15388 Crore which is 10. 0 For the entire year ending Mar-2009 the turnover of company is at Rs. 3324 Crore. 13947. driven mainly by robust 20% growth in non cigarette FMCG business with net profit stood at Rs. . Stationary and Greeting Cards with the major products constitutes Cigarettes.53 Crore. and apparels.

0 When we compare both companies on the basis of their strategies i. their competitive strategies in the present market. . .e. 0 When we look at the present segment breakup for both of the companies then we came to know that their different products vary too much in the market.Analysis of Both Companies 0 HUL & ITC are major companies in FMCG market in India.

HUL Segment Breakup ITC Segment Breakup .

personal care. 0 It owns and markets some of the most popular brands in the country across various categories. shampoos. hotels and agri-business to reduce its exposure to cigarettes.COMPARATIVE ANALYSIS OF BOTH THE COMPANIES UNDER SOME HEADS: HUL 0 Hindustan Unilever (HUL) is the largest pure-play FMCG company in the country and has one of the widest portfolio of products sold via a strong distribution channel. since cigarettes is its primary business. 0 It is diversifying into non-tobacco. tea and face creams. 0 FMCG segments like foods. including soaps. paper products. detergents. . ITC 0 ITC is not a pure-play FMCG company.

0 Despite diversification.PERFORMANCE 0 After stagnating between 1999 and 04. This cash-generating business has enabled it to take ambitious. In the past three years. . ITCs reliance on cigarettes is still huge. and accounts for over 80% of its profit. but expensive bets in new segments and deliver modest profit growth. the company is back on the growth track. till 2008 HULs net sales have witnessed a CAGR of 11%. while net profit has posted a CAGR of 17%. The tobacco business contributes 40% to its revenues.

Prolonged inflation may lead to margin contraction. it has started an ambitious diversification plan.Risk for both the companies HUL 0 Being an MNC operating in ITC 0 Increased regulatory clamps on India. HUL is more conservative in its strategies than its Indian counterparts. taxing its margins. This will burden its resources in terms of ad spend and brandbuilding. Moreover. since it does not give HUL the agility to address the competition it faces from national and regional players tobacco. With its foray into the conventional FMCG space. in case HUL is not able to pass on this burden to consumers. given increasing competition. . Creating brand recall and building market share in new products are ITCs key challenges. it faces the risk of being overtaken by domestic players in various categories. So. ITC has entered the high-clutter branded products market. The company's large size also poses a problem. Export ban and rising crop prices pose a threat for its agri-business. which has its own set of risks. pose a business risk for ITC. along with rising tax burden.

This kind of rural pedigree is hard to beat . the company's e-choupal model for direct procurement is well known under which ITC partners with over 100. Its tremendous reach through extensive distribution chain has been a competitive advantage. 0 They are leveraging the capabilities and scale of the parent company and focusing on the value of execution. 0 The entire product portfolio is also being tweaked to include premium offerings such as Ponds Age Miracle and dove shampoo in skin and hair care. value at competitive prices.000 farmers for spices and wheat procurement and an even larger number for oilseeds.OVERALL STRATEGY HUL 0 HUL always believes in ITC 0 ITC is focusing on delivering customer friendly products with major emphasis on low cost overall without compromising on the quality of the product. 0 Additionally.

Introduction of premium products and addition of new consumers via market expansion will be HULs growth drivers. A rich product mix. along with ramp-up of investments in its new sectors. in line with the One Unilever philosophy adopted by the Unilever group worldwide. HUL is also streamlining its various business operations.Growth Drivers HUL 0 The Company has been launching new products and brand extensions. ITC 0 ITCs backward integration to ensure that its products pass efficiently from the farms to consumers has helped it to cut down supply and procurement costs. with investments being made towards brandbuilding and increasing its market share. will be instrumental in charting ITCs growth path. . ITCs non-cigarette FMCG business leverages the large distribution network the company has developed by selling cigarettes over the years.

hotels. the companies business model will pay off in the long run. Investors who want to bank on its execution ability in FMCG can consider the stock with a long-term horizon.Conclusion 0 HULs up-and-running business model is a treat for investors seeking exposure in the FMCG segment. The company has delivered in the past and has the potential to do better in future. paper and agri-businesses. ITC has proved its expertise in the cigarettes. In the small and medium term. Though risky. 0 ITC is eyeing the pie which HUL and other FMCG players currently enjoy. ITCs growth story is still evolving. .

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