Professional Documents
Culture Documents
Submitted to:
Prof. Anil Kamboj
On Hindustan Unilever Limited
Submitted by:
1. Introduction ………………………………………………………..
3. Vision……………………………………………………………….
7. Conclusion …………………………………………………………
8. Recommendation …………………………………………………..
Introduction of the company
HUL works to create a better future every day and helps people feel good, look good
and get more out of life with brands and services that are good for them and good for others.
With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos,
skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and
water purifiers, the Company is a part of the everyday life of millions of consumers across
India. Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel,
Rin, Wheel, Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent,
Close up, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s and Pure it.
The Company has about 18,000 employees and has a net sales of INR 33895 crores
(financial year 2016-17). HUL is a subsidiary of Unilever, one of the world’s leading
suppliers of Food, Home Care, Personal Care and Refreshment products with sales in over
190 countries and an annual sales turnover of €52.7 billion in 2016. Unilever has over 67%
shareholding in HUL.
Vision Statements of the company
• Commonplace sustainable living
• Best long-term way
• Business growth
Political:
1) Nonconformance with legislative obligations can lead to sanctions such as fines,
adverse publicity and imprisonment.
2) Ineffective voluntary codes and practices will often lead to government introducing
legislation to regulate the activities covered by the codes and practices.
Economical:
1) Affected by national and global economic factors
2) Inflation has affected HUL such that it lead to increase in raw materials
3) National and Global interest rate and fiscal policy will be set around economic
conditions
Social:
1) Population changes
2) Changing interest among individuals
Technological:
1) Created a society which expects instant results
2) Increased the rate at which information is exchanged between stakeholders
3) A faster exchange information can benefit businesses as they are able to react
quickly to changes
4) Technology infrastructure help them manage their business transmit and record
information
Unilever’s five forces analysis
Competitive Rivalry or Competition with Unilever (Strong Force)
Competition is a major force in Unilever’s industry environment. This section of the Five
Forces analysis identifies the external factors that present the impact of firms on each other.
The strong force of competitive rivalry against Unilever is based on the following external
factors and their intensities:
There are many firms operating in the consumer goods industry. This external factor
imposes a strong force on Unilever. In addition, these firms are generally aggressive, further
adding to the intensity of competition. Unilever also experiences tough competition because
of low switching costs. For example, it is easy for consumers to switch from one firm to
another. Thus, a high level of competition is shown in this section of Unilever’s Five Forces
analysis, highlighting the need to consider competitive rivalry as a high-priority force in the
company’s industry environment.
The low switching costs enable consumers to easily use substitutes to Unilever’s
products. This external factor imposes a strong force on the company and the consumer
goods industry environment. However, the overall impact of substitution is weakened
because of the low availability of substitutes. For example, it is easier to access Unilever’s
Close-Up toothpaste from grocery stores than to obtain substitutes like homemade organic
dentifrice. In relation, most substitutes have low performance with minimal or insignificant
cost difference when compared to consumer goods readily available in the market. This
condition makes Unilever’s products more attractive than substitutes, thereby further
weakening the intensity of the threat of substitution. This section of Unilever’s Five Forces
analysis shows that the threat of substitutes is a minor issue in the business.
Threat of New Entrants or New Entry (Weak Force)
Unilever competes with established firms as well as new firms in the consumer goods
market. This section of the Five Forces analysis considers the influence of new firms on the
industry environment. The following external factors create the weak force of the threat of
new entrants against Unilever:
• Low switching costs (strong force)
• High cost of brand development (weak force)
• High economies of scale (weak force)
The low switching costs enable new entrants to impose a strong force against Unilever. For
example, consumers can easily decide to try new products from new firms. However, it is
costly to build strong brands like Unilever’s. This external factor weakens the intensity of the
threat of new entrants against the company. Also, Unilever takes advantage of high
economies of scale, which support competitive pricing and high organizational efficiencies
that new firms typically lack. As a result, the company remains strong despite new entrants.
Based on this section of the Five Forces analysis, the threat of new entry is a minor concern
in Unilever’s industry environment.
Performance Matrix – IFE of HUL
However, in my opinion the balanced scorecard also has other weaknesses, which mean that
the balanced scorecard will not always guarantee success. Many companies fail to put the
Financial
Learning &
Growth
required measurements in place to make the balanced scorecard a success. Two reasons for
this may be:
(a) Time
The balanced scorecard takes time to implement and many companies may not have the time
or the sufficient resources to properly invest in this performance measurement.
(b) Fee
It can be costly to implement the balanced scorecard. The organizational will have to ensure
that all employees are sufficiently trained and if they are not they will have to send them on
training courses which is costly. They may also have to improve their production processes
i.e. having new, up to date technology and machines that are of high quality.
Financial Perspective
The Financial Perspective covers the financial objectives of an organization and allows
managers to track the financial success of a company for example how wealth is created for
shareholders” (Advanced Performance Institute 2010). However, despite the need to provide
a balanced approach to performance measurement, companies remain focused on traditional
financial measures (gross revenue, profit before tax, and cost reduction) and often forget
about intangible assets (Chia, Goh and Hum 2009).
Customers’ Perspective
“In the customer perspective of the Balanced Scorecard, managers identify the
customer and market segments in which the business unit will compete and the measures of
the business unit’s performance in these targeted segments” (Kaplan and Nortan 1996, p26).
According to Kaplan and Norton (1996) the customer perspective, if implemented correctly,
should have successful outcomes such as customer satisfaction, customer retention, customer
profitability, new customer acquisition and market share in targeted segments.
HUL’s brands have become household names. The company’s strategy is to concentrate its
resources on 30 national power brands, and 10 other brands which are strong in certain
regions. The top five brands together account for sales of over Rs.3000 crores. Each of these
mega brands has a potential scale of Rs.1000 crores in the foreseeable future
Product Development:
HUL has concentrated in a very wide way on the product development factor. The
product has been focused on various segments from low price products to premium products.
Most of our products are developed on a global scale by following the policies and
procedures laid down by Unilever. They have entered untapped markets and tried to focus on
products which can satisfy the demands of all class of customers. Their product ranges are
health care, personal care, household care, beverages etc. They have developed products
which focus on all ranges.
Operations Process:
The key tenets of this solid tradition have been -- commitment from top leadership, a
robust and consistent process, strong linkage between individual development and level of
exposure offered, mentoring, training – all fostered in a culture of transparency and equal
opportunity. The company uses what it calls a “70-20-10” model for developing its
workforce: 70% of learning happens on the job, 20% through mentoring, and 10% through
training and coursework. Leadership development is one of the core tasks of the
Management Committee at Hindustan Unilever. “Senior management devotes enormous
time in the leadership development process,” says Leena Nair, Executive Director HR. In
every fortnightly management review meeting, talent review session is an integral part of the
overall agenda. Top management at Hindustan Unilever invests anywhere between 30 to
40% of their time in grooming and mentoring leaders for the future. They get involved at
various stages -- from redefining the talent identification process, to identifying talent, to
grooming and coaching, to creating opportunities for growth and exposure
Strategies operations
Strategy Formulation Analytical Summery
SL. External Factor Weightage Rating Score
1 Customers Preference to Physically Evaluate Products 0.15 2 0.30
2 High Brand Loyalty and Switch Over Threshold 0.20 1 0.20
3 Existing Customer Base as A Captive Market Source 0.15 1 0.15
4 Product Offerings in Popular Product/Service Categories 0.10 2 0.20
5 Customer’s Demand for Differentiation– Integrated 0.40 4 1.60
Content, Simple Design, Differentiation, Pricing
Total 1.0 2.45
SL. Internal Factor Weightage Rating Score
1 Focus on Invention With Innate Understanding Of 0.20 4 0.80
Customers Point of View
2 Possible Dilution of Corporate Culture 0.10 3 0.30
3 Resources 0.30 3 0.90
4 Distribution Network Supporting Retail Operations 0.30 4 1.20
5 Appetite For Risk Taking And Risk-Reward History 0.10 4 0.40
Total 1.0 3.60
TOWS MATRIX
TOWS Analysis
Strengths (S)
Internal
Factors
HUL has abundant resources, so backward, forward and horizontal integration may
also prove effective.
Strategic focus of HUL
At Unilever we want to grow our business in the right way so that our consumers,
employees, suppliers, shareholders and communities all benefit.
We believe this is the best way to achieve business success in the long term, and in
fact, we’re already seeing strong results. In 2015 our 12 Sustainable Living brands grew 30%
faster than the rest of the business; in 2016 they grew 40% faster and delivered nearly half
our growth. Sustainable Living brands are brands that combine a strong purpose delivering a
social or environmental benefit, with products contributing to at least one of our USLP goals.
What do we mean by sustainable living?
We want to help create a world where everyone can live well within the natural limits
of the planet. We’re putting sustainable living at the heart of everything we do including:
Our brands and products How we behave Working with others
We create brands that offer We source our products We are working with others to create
balanced nutrition, good hygiene carefully, so that we protect the transformational change beyond our
and give people confidence. We earth’s resources. We treat business while our brightFuture
are making our products accessible people fairly and respect their campaign is motivating millions of
and affordable to consumers, rights, so employees, suppliers people to take small, everyday
wherever they live and we’re and communities all benefit actions that together make a big
innovating to find new products from working with us. difference.
that make life better.
Our four-point framework shows how sustainability drives value for our business.
More growth - sustainability creates innovation opportunities, opens up new markets and
allows our brands to connect with consumers in new ways. Consumers are responding - our
Sustainable Living brands are growing faster than the rest of our business.
Lower costs - by cutting waste and using resources carefully we create efficiencies, cut costs
and improve margins, while becoming less exposed to the volatility of resource prices. Since
2008 we have avoided costs of over €700m through eco-efficiency in our factories.
Less risk - operating sustainably helps us future-proof our supply chain against the risks
associated with climate change and long-term sourcing of raw materials. By 2016, 51% of
our agricultural raw materials were sustainably sourced.
More trust - placing sustainability at the heart of our business model strengthens our
relationships. It helps us maintain our value and relevance to consumers, whilst inspiring
Unilever’s current and future employees. For example, in 2016, we maintained our status as
the Graduate Employer of Choice in the fast-moving consumer goods sector among 34 of the
60 countries we recruit from.
1 2 3
By 2020 we will help more By 2030 our goal is to halve the By 2020 we will enhance the
than a billion people take environmental footprint of the making livelihoods of millions of
action to improve their health and use of our products as we grow our people as we grow our
and well-being. business. business.
For each goal we have detailed targets and objective measurement techniques, see The
Unilever Sustainable Living Plan.
Our Sustainable Living Plan provides the blueprint for change within our organisation and
supply chain. But we want to go further and we’ve identified four key areas where we can
use our scale and influence to help bring about transformational change:
We support the UN’s Global Goals for Sustainable Development and the UN Climate
Conference’s Paris Agreement. Through our Sustainable Living Plan and transformational
change agenda, we’ll play our part in helping to achieve the ‘zero poverty and zero carbon’
goals.
We’ve also learnt a lot about what does and doesn’t work and we’ll keep making
changes to get things right. One of our biggest challenges is our ability to stimulate change
outside our business, where we don’t have direct control. For example, while we’ve made
good progress on reducing greenhouse gas emissions (GHG) from our factories and reached
our 2020 target by 2016, the GHG impact of our products per consumer use has increased by
8% since 2010. We’ve updated our GHG strategy to reflect what we’ve learnt.
We are continually looking for new ideas and ways to influence our wider value chain.
We know that collaboration with others holds the key to tackling many sustainability
challenges and we will be focusing even more on this in the years ahead. Our
transformational change initiatives will help us to bring about the systems change needed to
address some of the most complex social and environmental problems.
HUL being India’s largest FMCG Company with 35 brands and 20 distinct categories
is doing very well, company is also very focused on mission statement and vision statement
and working accordingly, the financial statement of the company is also good and there is
always increment in turnover of the company. The board of directors, the management the
core managers everybody is responsible and is loyal to the company, the main reason of
company’s success is it is maintain its quality, coming with new products, making
innovations in the product, maintaining its price and the most important thing which is taking
HUL towards continuous success is the strong distribution channel and the intensive and
extensive selling strategy. The company has more than 30000 people in distribution channel
which give the company a competitive edge , and each year in annual report the company
makes a strategy and work according to the strategic focus .