Submitted by:

A028: Ankit Jalan A031: Mayank Kumar A035: Aashna Manaktala A038: Kshitij Mundhada
A029: Harsimrat Kaur A032: Sahib Lamba A036: Hari Manwani A039:
A030: Govind Krishnan A033: Ashar A Latheef A037: Omkar Marballi A040: Prerita Nigam
 AGENDA
• Overview
• M&A Strategy, Core Competencies,
Competitive Advantage
• Strategies for Remote Markets
• PESTLE Analysis
• SWOT Analysis
• Porter’s Five Forces
• Value Chain
• Mckinsey’s 7s Framework
• 5 Ps of Strategy
• Ansoff Growth Strategy
• BCG Market Share Analysis
• Blue Ocean Strategy
 Overview
“Our Vision is to earn the love and respect of India by making a real difference to every India”
-Nitin Paranjpe,CEO and Managing Director

• Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company with a heritage of
over 80 years in India.
• On any given day, two billion people use Unilever products to look good, feel good and get more out of
life.(26% of the World Population)
• 9 out of 10 Indians use an HUL product on a daily basis
• Ranked No 1 in India on the Forbes list of The World’s Most Innovative Companies 2017.
• In India 18,000 people work for Unilever out of which 30% are women
• Identified their purpose as making sustainable living a commonplace.
• In 2009, HUL launched The Compass – our strategy for sustainable growth.

1931 :
Unilever sets up Hindustan 1935: 1982: Government allows 2008:
Vanpasti Manafacturing United Traders Limited 51 per cent Unilever Market Leader with sales
Company enter India shareholding in HLL of $2.8 Billion

1933: 1956: 2007: Company name 2017:

Lever Brothers set up Hindustan Lever Ltd(HLL) changed to Hindustan Maintains Market Leader
Indian Subsidiary is formed following the Unilever Ltd (HUL) position with 34.7% share
merger of the three
companies
 Overview
• Identified their purpose as making sustainable living a commonplace.
• In 2009, HUL launched The Compass – our strategy for sustainable growth.
• Principles followed by HUL :
1. A better future for children
2. A healthier future
3. A more confident future
4. A better future for the planet
5. A better future for farming and farmers

What does the Logo Stand for?

 Product Mix

Consistency Mix

• Product Mix Width : 11

• Product Mix Length : 52
• Unilever has more than 400 brands, 14 of which generate sales in
excess of €1 billion a year.
• 17 Brands of HUL feature in the top 100 ‘Most Trusted Brands’ list for
2016 published by The Economic Times, 4 of which are in the Top 10
 M&A STRATEGY, CORE COMPETENCIES
COMPETITIVE ADVANTAGE
CORE COMPETANCY? HUL’s Wide & Versatile Distribution Network
Network of about 7000 •2000+ suppliers Point of purchase method •Customer management
redistribution stockists •7500 distributors • Higher level of direct •Supply chain capabilities
covering about 1 Million contact through in-store for partnering emerging
direct retail outlets Serving HUL’s 100 facilitators , sampling, self service stores &
Total coverage :~ 7 Million decentralized education and experience supermarkets,
factories

Unify IT solution allowing Separate channels

real time tracking of identified on the basis of
secondary sales and stocks consumer behavior and
at the retail outlets buying pattern
 RURAL INDIA’S COMPETITIVE ADVANTAGE
Project Shakti is HUL’s initiative to financially This model has been the growth driver for HUL
empower rural women and create livelihood and presently about 50% of HUL's FMCG sales
opportunities for them come from rural markets

In 2010, HUL extended Project Shakti to include

‘Shaktimaans’. Shaktimaans are typically the
husbands or brothers of Shakti Ammas

Shakti Programme empowered 72,000 Shakti

Entrepreneurs across 16 states by December 2016
supported by 48000 Shaktimaans
Business strategy: M & A Strategy
• Volume led growth and improvement in operating
margin. •Considers takeovers as a preferred mode of
•FY 17 saw an Ebitda margin growth of just 90 basis strategy for rapid expansion
points
•Lakme :used its already
established distribution network
Cosmetics &
•Ponds (India) Limited : started a
Personal care significant economic base in
specialty products and personal
products

•UB group’s Kissan

•Market slowdown and channel correction were the reasons Products: entered food
Food & business
for lower than expected volumes in the last quarter Beverages •Brook Bond Lipton India
Ltd
Strategies for success in Remote markets

Consistently ensuring top leadership participation in the project

• Monthly report to Board and Chairman during the 15 month pilot project
• Venture Leaders to oversee projects which are potentially viable, scalable & worthy of • 70% of the Indian
future investment population lives in
rural market

Designing unique metrics and making adjustments to organizational structure • 65% of HUL’s sales
is from rural
• To ensure initiative is continually aligned , design of metrics was the key market only
• Initially focus was on scalability & sustainability later focus shifted to financial targets
and organizational structure
• HUL grew over 6%
in rural market
where as its
Using technology to design a flexible rural supply chain and sales network
competitors grew
• Difficult to predict customer data for rural Indian population at 1-3% only
• Used ‘Density Mapping Technology’ to determine population density and distance
between villages
 PESTLE ANALYSIS
Political
• Deregulatory environment in 1991
• Market regulations, Eg. GST
• Rin bar- 17% slashed price
• Trade agreements
Social
• Avenues for women to earn livelihood
• Project Shakti a big success
• Lifebuoy hand washing program
• Pureit provides clean water and reduces
CO2 emission
Environmental
• Monsoon 2017; 4% revenue growth
• Global Warming
• Solid waste mangement
• Water conservation
Economical
• Raw material price fluctuation
• Price sensitivity of FMCG products
• Stiff competition from local players
Eg. Wheel vs Ghadi
Technological
• Digitization to engage customers
• CRM in modern trade
• Predictive analytics and big data
• E-com is key driver for industry growth
Legal
• Health and safety; Factories Act 1948
• Equal opportunities, Eg. MNREGA
• Advertising standards
• Consumer rights and laws
 SWOT ANALYSIS

STRENGTHS WEAKNESS
• Strong brand equity- Unilever group • Market share is limited due to presence of other strong
• 18000 employees FMCG brands
• Extensive distribution system- reach to 6.4 million retail • High advertising and promotion spend- 12-14% of its
outlets sales
• Innovative FMCG company- Two R&D centres in India in • Low growth in food business- Knorr soups, Annapurna
Mumbai and Bangalore atta etc.
• Products with presence in over 20 consumer categories
• 700 million Indian consumers using its products

OPPORTUNITIES THREATS
• Increase its ‘naturals’ (Ayurvedic / herbal) portfolio • Low global growth and geopolitical uncertainties in India
through M&A • Increasing no. of local and national players e.g. Patanjali,
• Using big data and analytics for effectively meeting the Ghari etc.
objectives of campaigns • Emerging e-commerce channels
• Increasing purchasing power of people in India-demand • Sluggish rural demand – due to poor monsoons and
for premium products demonetization (2016-17)
• GST impact-Increased tax for detergent, shampoo and
skin care products
 PORTER’S 5 FORCES
BARGAINING
POWER
OF
BUYERS

THREAT COMPETITION BARGAINING

OF OR POWER
NEW COMPETITIVE OF
ENTRANTS RIVALRY SUPPLIERS

THREAT
OF
SUBSTITUTES
 PORTER’S 5 FORCES
Competitive Rivalry
FACTORS DETERMIING INTENSITY `
RIVALRY

HIGH NUMBER OF FIRMS STRONG FORCE ITC , P&G

AGGRESSIVENESS OF STRONG FORCE Marketing expense of HUL is

FIRMS 9.9% of revenues, ITC-2.25%,
P&G- 7.1%
LOW SWITCHING COSTS STRONG FORCE Sunsilk (80ml)- 48 Rs
L'Oreal (75 ml) – 51 Rs
Pantene (80 ml) – 50 Rs
Bargaining Power of Customers
FACTORS DETERMIING INTENSITY
BARGAINING POWER

LOW SWITCHING STRONG FORCE

COSTS

HIGH QUALITY OF STRONG FORCE Access to online information

INFORMATION through customer reviews and
other insights
 PORTER’S 5 FORCES
Bargaining Power of Suppliers
FACTORS DETERMIING
RIVALRY INTENSITY

SIZE OF INDIVIDUAL MODERATE FORCE PAT for Galaxy Surfactants -106

SUPPLIERS crores. PAT for HUL- 4082
crores
POPULATION OF SUPPLIERS MODERATE FORCE Backward Integration – HUL
owns 19 tea estates. Investment
of 40 crores in skin care factory
at Silvasa
OVERALL SUPPLY MODERATE FORCE Any change in supplier’s
production levels affects overall
industry Threat of Substitutes
FACTORS DETERMIING
RIVALRY INTENSITY

LOW SWITCHING COSTS STRONG FORCE

LOW SUBSTITUTE WEAK FORCE Substitutes needed by

AVAILABILITY consumers not readily available.
Close Up of HUL is readily
available at grocery stores
LOW PERFORMANCE TO WEAK FORCE Vicco Toothpaste (100gm)- 74
PRICE RATIO OF Close Up (80 gm) - 45
SUBSTITUTES
 PORTER’S 5 FORCES
Threat of New Entrants
FACTORS DETERMIING RIVALRY INTENSITY

HIGH COST OF BRAND WEAK FORCE Himalaya started as a FMCG company in

DEVELOPMENT 2009 has a target of 12% market share.
Exception- Patanjali

HIGH ECONOMIES OF SCALE WEAK FORCE Competitive pricing

To achieve better economies of scale,
focus on better structure & Organization
Ex: Axe deodorant launched together in
52 countries
 VALUE CHAIN
Primary Activities

Inbound Logistics:
• Tie up with Mahindra logistics with farmers and owns
19 tea estates

Operations:
• Implements kaizen, TQM and cost optimization
• Sumerpur factory won ‘National Energy Conservation
Award’ for saving 567 MWh

Outbound Logistics
• Total 35 C&F agents . Partnered with Future Group
logistics
• Hindustan Lever Network-Direct selling channel
• Covers 50,000 villages. Shakti amma provides
penetration in villages with no roads for trucks
• Full-scale sales organisation for supermarkets
• RS Net for monitoring
Marketing and Sales
• Celebrity endorsement
• Kaan Khajura Tesan-50 lakh subscribers

Services
• Lakme salons, Dove litmus test and in store sampling.

Support Activities

Firm Infrastructure
• 5 whole time Directors and 5 independent non-executive Directors.
• Two self-sufficient divisions - Home & Personal Care & Foods - supported by certain central functions

Human Resources Managements

• Future Leaders Program
• 50 % of management committee and 500+CEOs in India and abroad

Technology Development
• HURC in Mumbai and Bangalore
• 20,000 registered patents.$5.3 million R&D expense in 2016

Procurement
• Follows sustainable sourcing code of conduct
 McKinsey’s 7S Framework
STRUCTURE
STRATEGY
'Connected 4 Growth’: Pruned reporting
Compass: 2x growth in market cap by
layers: Agility, Quick decision, Innovations
2017, while reducing environmental
footprint
Winning in Many Indias(WiMi)
₹30 Crore investment in R&D

SKILLS SYSTEMS
Stepping into One programme among In house monitoring of database, reduces
shop floor employees for leadership & costs, dependency and time
technical skills On-the-fly demand projections and helps
In house manufacturing avoid stock-out losses
R&D support from Unilever Zero-based budgeting

STAFF STYLES
Attrition rate – 5% Unilever Sustainable Living Plan (USLP) Nitin Paranjpe –Youngest CEO,
FMCG average – 15% Prabhat: promotes health and hygiene Lever Lifters promote young talent
36% women managers for employees Business Leadership Trainee (BLT)
Graduate Employer of Choice by 51% of raw material sustainably sourced programme
Nielson
5 P’S OF STRATEGY
 ANSOFF’S GROWTH STRATEGY
Market penetration Product development
Market: India New Product: Various new products of Dove
Existing

Product: Lifebuoy • Shift from soap brand to a beauty brand

• Re-launched as sales plummeted in 2001 by 15% • The ads made used real women as opposed to models
M • Swasthya Chetna Campaign and a new shape of the soap • High priced and good quality
A • In 2009, introduced the Lifebuoy Way to reach rural • Needed to be differentiated to remain competitive
markets
R • Brand extension- Deodorant, Facewash, Lotions etc

K
E Market development Diversification
T Market: India New Product: Ayurvedic products under brand Ayush
• Existing product- Citra, skin care brand which is available Market: India
New

in Middle east and South East Asia • Why- Behemoth vs Baba

• Competition to Patanjali, Dabur and Himalaya • Launch 20 products of toothpaste, skin creams and other
• Targets women between the age 15-35 yrs beauty products with mass market positioning
• Why-further strengthen HUL’s dominance in skin care • Price range between Rs. 30 and Rs. 130

Existing New
PRODUCTS
 BCG
Market Share Analysis
 BCG
Market Share Analysis
 BCG
MARIX OF HUL

HUL
BLUE OCEAN STRATEGY
Creation by the company of a new, uncontested market space that makes competitors
irrelevant and that creates new customer value while decreasing costs

• Launched in 1997 in the Indian market; launched almost at the same time as
that of Maggi Soups (Nestle).

• Only competitor at the time of launch – Maggi Soups.

• Market leader ever since its launch in the Indian Market.

• Market share as of 2016 – 60% (Source – Euromonitor International), 0.5%

rise compared to the previous year
BLUE OCEAN STRATEGY
Creation by the company of a new, uncontested market space that makes competitors
irrelevant and that creates new customer value while decreasing costs

•Launched in 1975 as a safe and effective skin lightening cream; Created a new
segment for skin care and fairness.

• Targeted at Asian women who considered fairness as a status symbol.

• Market leader ever since its launch.

• Market share as of 2016 – 53%.

• Closest competitor – Emami’s Fairever – Approx. 23%.
BLUE OCEAN STRATEGY
Creation by the company of a new, uncontested market space that makes competitors
irrelevant and that creates new customer value while decreasing costs

• Launched worldwide in 1969, in India in 2008.

• First product in the Fabric conditioner space in the Indian market.

• Used to make the garments gentle and perfumed and also preserves the color
of the clothing even after a number of washes.

• Posted global sales of more than Rs. 4500 crores, and is the market leader in
the fabric conditioner space.
THANKS!
• Any questions?

27