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GE McKinsey Matrix Group 4 Marketing & Finance

GE McKinsey Matrix Group 4 Marketing & Finance

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04/04/2013

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HINDUSTAN UNILEVER LIMITED

By: GROUP 4 (PRN 079 to 085)
Hitendra Kishanchandani Nivedita Kerketta Karan Singh Kumar Kamal

Kushagra Bhatnagar Manish Ahuja

General Electric GE McKinsey Matrix model is a nine-cell matrix. Used to perform detailed analysis about a particular SBU of an organization. Uses exhaustive analysis parameters like industry attractiveness and business strength, therefore better than BCG model.

The nine cells are grouped into three zones:

The Green Zone consists of the three cells in the upper left corner. If your enterprise falls in this zone you are in a favourable position with relatively attractive growth opportunities. This indicates a "green light" to invest in this product/service. The Yellow Zone consists of the three diagonal cells from the lower left to the upper right. A position in the yellow zone is viewed as having medium attractiveness. Management must therefore exercise caution when making additional investments in this product/service. The suggested strategy is to seek to maintain share rather than growing or reducing share. The Red Zone consists of the three cells in the lower right corner. A position in the red zone is not attractive. The suggested strategy is that management should begin to make plans to exit the industry.

Ref : http://www.brs-inc.com/models/model17.asp

The vertical axis of the GE / McKinsey matrix is industry attractiveness. which is determined by factors such as: Market growth rate  Market size  Industry profitability  Industry rivalry  Global opportunities  Demand variability  .

The horizontal axis of the GE / McKinsey matrix is the strength of the business unit. which is determined by factors such as:       Market share Growth in market share Brand equity Distribution channel access Production capacity Profit margins relative to competitors .

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Touching the lives of two out of three Indians. and United Traders Ltd. 13.wikipedia. Hindustan Vanaspati Mfg. Combined volumes of about 4 million tonnes and sales of over Rs. (http://en.     HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers. Largest fast moving consumer goods company.org/wiki/Hindustan_Unilever) . Co. Over 20 distinct categories in home & personal care products and food & beverages. Ltd.000 crores.

Lipton. Comfort.aspx . Annapurna. Brook Bond.  http://www. Vim.co. Lakme. Rin. Kissan. Lifebuoy.in/brands/index.hul. Sunlight. Kwality walls. Domex. Sunsilk. Pepsodent. Hamam. Breeze.Food Brands : 3 roses. Bru. Knorr.  Personal care Brands : Axe. Lux. Cif.  Home Care Brands : Wheel. Surf Excel.

Sunsilk)  Hair Care (Clinic Plus Oil)  Detergent (SurfExcel. Liril.Hair Wash (Dove. Clinic. Ponds)  . Close-up)  Personal Wash ( Lifebuoy. Lux)  Skin Care (Lakme. Rin)  Oral Care (Pepsodent.

the trio leads the market. 2.500-3.dnaindia. (http://www.000 crore.The shampoo market in India is estimated to be Rs.com/money/report_2nd-strike-p-and-g-cuts-shampooprices_1369108) . (http://www.com/money/report_2nd-strike-p-and-g-cuts-shampooprices_1369108)  With a market share of 44%.dnaindia.

15 3 0.25 Rating 4 value 1.95 .cms) COMPETITIVE INTENSITY TECHNOLOGY REQUIREMENTS TOTAL 0.CLININC. (http://www.com/money/report_2ndstrike-p-and-g-cuts-shampoo-prices_1369108) ANNUAL MARKET GROWTH RATE HISTORICAL PROFITMARGIN 0. A drop of 1.000 cr. 2.30 Rs.90 High competition from PnG Dabur L’Oreal Favorable.500-3.3% (http://www.00 2. as 4 products have been introduced in the market according to different needs. 533.45 Annual growth rate is 9.2 cr.dnaindia. 1.00 Reasons Total market size is Rs.indiatimes.15 2 0.dnaindia. SUNSILK OVERALL MARKET SIZE Weight 0.com/news/ne ws-by-company/earnings/earningsanalysis-/HUL-profit-dip-mirrors-growthconstraints-of-FMCGsector/articleshow/6225226.8 % from last year (http://economictimes.30 2 3 0.DOVE.com/money/report_2ndstrike-p-and-g-cuts-shampoo-prices_1369108) 0.30 0.15 0.

80 0.10 Rating 4 Value 0.html) Production effectiveness 0.20 0.05 4 3 0.com/2010/07/1223342 2/HUL-aims-to-react-faster-to-ma. HUL has its R&D centers all across the Globe.40 0.com/2010 /03/13/stories/2010031352130500.thehindubusinessline.10 Share on a decline 45. 6. Very good due to high capacity plants and high production capacity.05 4 0. R&D performance Material supplies 0. a reduction in defects per 1.05 2 0.20 0.3 million outlets Rs.40 0.DOVE.000 pieces by 50% and a drop in wrapper wastage by 70%.10 0.40 World class High Excellent.20 Very good.SUNSILK Market share Weight 0.htm) Product quality Brand reputation Distribution network Promotional Effectiveness Production capacity 0.10 0.livemint.633 cr.com/money/report_2n d-strike-p-and-g-cuts-shampooprices_1369108) Share growth 0.80 0.20 0.40 Reasons Market share is 44% (http://www.10 4 4 4 4 4 0.05 0.4 % to 44 % (http://www.dnaindia. very high Improved from 75% to 92% (http://www. Marketing investment. Excellent. CLININC.15 .

2% makes it a tougher path to traverse for HUL in this segment. Market share of 6.   . The market size of the segment is around Rs. Clinic All Clear Hair oil comes as light hair oil having anti – dandruff properties and also the coconut oil.3000 Cr.

25 Rating value 4 1.15 2 2 0.com/2010/04/22/ stories/2010042251110500. Highly competitive due to market sharing of branded as well as unbranded products.30 0.2930 cr (Perfumed Oil)  Value growth of 23.00 Reasons Total market size is Rs.15 4 0.htm) HISTORICAL PROFITMARGIN COMPETITIVE INTENSITY TECHNOLOGY REQUIREMENTS TOTAL 0.60 (http://www.thehindubusinessline.15 0.10 . cooling oil and light hair oil 0.00 3.thehindubusinessline.CLINIC PLUS Weight OVERALL MARKET SIZE ANNUALMARKT GROWTH RATE 0.30 Recently introduced thus profit margins not high. Favorable.com/2010/04/22/ stories/2010042251110500.8 per cent and a volume growth of 14.90 1.1 per cent in 2009. as its introduced in 3 variants of Heavy oil.30 3 0.htm) 0. (http://www.

10 0.2% (Market leader Bajaj Almond drops has a market share of 46.10 2.40 World class Medium due to the advancement of herbal care in hair oil arena and the Indianness of the product.10 0.8%) (http://www.10 0.15 0.30 .thehindubusinessline.40 0.15 Rating 2 Value 0. Large distribution network but not much effective in rural areas. Promotion is more for Clinic All Clear shampoo and not much for hair oil.40 0.30 0.30 0.05 0.00 2 2 3 2 2 0.30 Reasons Market share is 6.com/2010/ 04/22/stories/2010042251110500.20 4 2 0.htm) Product quality Brand reputation 0.05 1.20 0.CLINIC PLUS Market share Weight 0. Brand reputation is more due to Clinic shampoo. High capacity plants HUL being an MNC has got good R&D for global products like shampoos. Good due to high capacity plants Distribution network Promotional Effectiveness Production capacity R&D performance Material supplies TOTAL 0.

.

org/index. (http://www. The market size for this segment is a staggering Rs.38% makes it the leader in the market but faces a stiff competition from the players like Proctor and Gamble. Market share of 37.php?option=com_content&view=article&id=59:indian-householdcare-market-an-overview&catid=35:household-industrial-and-institutional-hiai&Itemid=55) (http://www. .stockmarketsreview.marketresearchdata.com/news/hul_3qfy2010_performance_highlights_and_results_update_2010012 8_2622/)   The market share has decreased since the last financial year.8800 Cr.

stockmarketsreview.60 0.com/news/hul_3qfy201 0_performance_highlights_and_results_update_201001 28_2622/) 0.10 Stagnant since past few years. RIN Weight Rating value Reasons OVERALL MARKET SIZE ANNUAL MARKET GROWTH RATE HISTORICAL PROFITMARGIN 0.95 .05 3 0.50 from Rs.SURF EXCEL.8800 cr.70 High competition from rivals like P&G 0. profit margins low due to competitions from TIDE and ARIEL and Competitive Pricing.05 2 0.50 Requirements are high to cater new demands. (http://www. 1.00 3. Rin prices slashed to Rs.20 3 0.15 COMPETITIVE INTENSITY TECHNOLOGY REQUIREMENTS TOTAL 0.40 4 1.60 Total market size is Rs.30 5 1.

30 3.38% (http://www.9% from last year. RIN Market share Weight 0.SURF EXCEL.15 0.40 0.80 0. Good due to high capacity plants Material supplies TOTAL 0.80 .05 Rating 4 Value 0.php? option=com_content&view=article&id=59:indian -household-care-market-anoverview&catid=35:household-industrial-andinstitutional-hiai&Itemid=55) Share growth 0.10 Decreased by 1.60 0.10 0. 6.60 World class High Excellent. (HUL Annual Report) Product quality Brand reputation Distribution network Promotional Effectiveness Production capacity R&D performance 0.org/index.05 2 0.10 1.marketresearchdata.20 0.20 Reasons Market share is 37. HUL has its R&D centers across the Globe.40 0.00 3 0.40 0.3 million outlets (HUL Annual Report) Aggressive High capacity plants Excellent.10 0.10 0.15 4 4 4 4 4 4 0.

com/articleshow/5946606. http://economictimes.cms)   Recently.indiatimes. (http://economictimes.3000 Cr. The overall market size of the oral care market is Rs.cms Market share of 22% makes it stand just next to the leader Colgate with 53% market share. .indiatimes.com/articleshow/5946606. HUL has signed up Shahrukh Khan for promotion of Pepsodent.

CLOSE Weight UP OVERALL MARKET SIZE 0.20 2 0.10 2 0.cms) ANNUAL MARKET GROWTH RATE COMPETITIVE INTENSITY TECHNOLOGY REQUIREMENTS TOTAL 0.70 .indiatimes.00 3. 0.PEPSODENT.60 Total market size is Rs.40 0. Requirements are high to cater new demands.50 1.market share 1/2 of the market leader.20 Stagnant since past few years.com/articles how/5946606.30 5 1.40 Rating value Reasons 4 1.3000 cr. High competition . (http://economictimes.

indiatimes.10 0.cms) Product quality Brand reputation Distribution network 0.60 0.com/art icleshow/5946606.60 0.30 Reputed Quality Lesser recall value.15 0.30 0.30 3.05 Depreciated from 24.PEPSODENT.05 1 0.indiatimes.10 0.40 0.cms) Share growth 0. Good due to high capacity plants Promotional Effectiveness Production capacity R&D performance Material supplies TOTAL 0.20 0.05 3 0.30 . Excellent. 6.10 1.00 3 4 4 3 0.CLOSEUP Weight Rating Value Reasons Market share 0.10 4 3 3 0.3 million outlets but low penetration in rural markets(HUL Annual report) Decent High capacity plants Strong. HUL has its R&D centers across the Globe.15 Market share is 22% (http://economictimes.com/art icleshow/5946606.60 0.5% to 22% (http://economictimes.15 0.

com/admin/file/FMCG. It has excellent presence in the rural as well as the urban market.  .36 Cr turnover.pdf) Lux is the Flagship brand of HUL.com/admin/file/FMCG.4969. (http://www. Accounted for Rs.pdf)  Market share of 53 % makes it the market leader in the segment.ghallabhansali. (http://www.ghallabhansali.

30 2 3 0.40 .90 High competition due to 50% market share with rivals.00 Total market size is Rs.com/admin/file/FM CG.25 4 1.60 Annual growth rate is 18. antiseptic LIFEBUOY.30 0.LIFEBUOY.4399 cr.hul.LUX.aspx) 0.15 0. (http://www.pdf) 0.15 4 0.00 3.in/mediacentre/pressreleas es/2010/HULDecQuarterResults2009.90 % (http://www. Many variants in the market like beauty soap LUX.60 16% (http://www.co.livemint.com/2010/05/30195815/ Price-war-affects-HUL8217s.html?d=1) 0. 1.15 4 0. etc.ghallabhansali.LIRIL Weight Rating value Reasons OVERALL MARKET SIZE ANNUAL MARKET GROWTH RATE HISTORICAL PROFITMARGIN COMPETITIVE INTENSITY TECHNOLOGY REQUIREMENTS TOTAL 0.

40 0.co.05 1.aspx) Product quality Brand reputation Distribution network 0.com/admin/file/F MCG.hul../MorganStanleyAsiaPacificC onference2006_tcm114-136572.20 World class High Excellent.80 LUX is considered to be the soap of beauty stars.10 0.hul.10 3.10 0.30 0.in/.pdf) Promotional Effectiveness Production capacity R&D performance Material supplies TOTAL 0.00 4 3 4 2 0.05 4 4 4 0.LUX.in/mediacentre/pressrele ases/2010/HULMarQuarterResults2010.20 0.40 Reasons Market share is 53% (http://www.40 Share growth of 19% (http://www.10 4 0..LIRIL Market share Weight 0.40 0.ghallabhansali.80 0.LIFEBUOY.10 0.80 0.3 million outlets (www.co. High capacity plants Excellent.pdf) Share growth 0. HUL has its R&D centers across the Globe. 6.10 Rating 4 Value 0. Good due to high capacity plants .20 0.

2100 Cr. (http://fmcgmarketers. it is the clear cut leader in the segment. With a market share of 53%. The Market size of the segment is Rs.blogspot.blogspot.html)  Lakme is the most trusted Cosmetics brand in India.html)  .com/2007/09/indian-skin-care-anti-ageingcategory.com/2007/09/indian-skin-care-anti-ageingcategory. (http://fmcgmarketers.

2100 cr. Requirements are high to cater new demands.blogspot.50 1.90 . 0.80 Low competition . (http://fmcgmarketers. (http://fmcgmarketers.com/2007/09/i ndian-skin-care-anti-ageing-category.40 3 1.market share 1/2 of the market pie.10 4 0.20 Total market size is Rs.40 Market growth rate of 16 % is highly opportunistic.html) 0.20 4 0.blogspot.30 5 1.00 3.html) COMPETITIVE INTENSITY TECHNOLOGY REQUIREMENTS TOTAL 0.com/2007/09/i ndian-skin-care-anti-ageing-category.PONDS Weight Rating value Reasons OVERALL MARKET SIZE ANNUALMARKT GROWTH RATE 0.LAKME.

com/200 7/09/indian-skin-care-anti-ageingcategory.30 3.3 million outlets Aggressive High capacity plants Strong.00 4 4 4 4 4 4 3 0.80 0.10 0.world leader Lakme is company’s flagship product Excellent.15 0.html) Product quality Brand reputation Distribution network Promotional Effectiveness Production capacity R&D performance Material supplies TOTAL 0.40 0.60 0.60 0.LAKME.15 0.20 Reasons Market share is 53% (http://fmcgmarketers.10 0.90 World class High . Good due to high capacity plants . HUL has its R&D centers across the Globe.15 0.60 0.PONDS Market share Weight 0.20 0. 6.40 0.05 Rating 4 Value 0.10 1.blogspot.

90 .SBU NAME MARKET ATTRACTIVENESS BUSINESS STRENGTHS HAIR WASH HAIR CARE DETERGENT ORAL CARE PERSONAL SKIN CARE 2.90 3.95 3.95 3.70 3.80 3.80 3.30 3.40 3.10 3.85 2.30 3.

.

00 Medium Weak High Market attractiveness Invest/grow 3.67 Medium Selective Earning 2.GE Model Business Strength Strong 5.67 2.33 1.00 .33 Harvest/Divestt 1.00 5.00 Low 3.

2. 4. (Channel) Product. 3. (Communication) Pricing. Strategy of market leaders revolves around protecting their position by stop gap arrangements to arrest the losses in market share. (Commodity)  1. . HUL is renovating its marketing strategies in all 4 basic different elements of marketing mix: Promotion. (Cost) Place.

Nyle.  Anchor Health & Beauty Care launched 100 per cent vegetarian Anchor toothpaste. came out with single serve packs to make inroads into the market   . Chennai-based CavinKare with brands like Chik. smaller regional players like Ghadi. In detergents.Regional players have hit HUL where it hurts the most – Market share. Sasa and Power have dented the volumes and market share of HUL’s Rs 2000 crore detergent brand Wheel. Meera and Karthika.

 HUL is now tweaking its go-to-market strategy by focusing on individual states and even districts. The strategy ‘glocal’ is . act local.    . The idea is winning state by state.think global. Each state presents a different nature of competition and a different growth challenge whether it is increasing penetration or driving consumption through deployment.

thereby reducing the menace of spurious products.000 Shakti Ammas (women entrepreneurs) reaching 1 lakh villages. They are also a source of inspiration for the other women in the community. The Shakti initiative also enables rural consumers to access world class products. Project Shakti is a unique win-win rural initiative that catalyses rural affluence.     . HUL invests resources in training these village women to become entrepreneurs. It covers 15 states in India and has over 37.

And Wheel saw its net content (grammage) increase. and Vaseline Healthy White body lotion. HUL and P&G are hitting each other below the belt in detergent wars. the premium skin lightening cream. Clinic All Clear was relaunched.  Relaunching of older brands Lifebuoy and Liril were re-launched. Breeze in the Hindi belt and Sunlight in Kerala and West Bengal. Pepsodent returned with its orginal proposition of fighting germs for longer hours. Rexona in Andhra Pradesh and Karnataka.  There were new brand launches – Ponds White Beauty. In shampoo. .State wise promotion – The company is now strengthening its regional brands like Hamam in Tamil Nadu.

HUL has a considerably short cycle time (1 day) for its stockists who order products online using HUL’s CRM system – UNIFY. HUL has identified “right pricing” as a primary tool to increase its price competitiveness in a market. HUL devises different price strategies for products and a key enabler to “right pricing” is reducing the cycle time substantially.    . Due to this stockists are able to supply fresh stocks which are newly priced for the customer to benefit.

 Besides relaunching the product in different forms and packages. and reduce the need for the rinsing    . HUL studied the clothes washing process followed in India and realised that it’s rinsing that often takes most time and uses most water – water that is extremely scarce. This is how new Surf Excel Quick Wash can deliver a good lather at the washing stage. HUL found just the right ingredient that doesn’t suppress lather significantly during the main wash. HUL follows the process of constant innovation for its products. especially if you live in the dry. yet aids significant foam reduction during the rinsing step. southern states of Andhra Pradesh and Tamil Nadu.

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