HindustanUnileverLimited B WinninginManyIndias

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IMB 741 HINDUSTAN UNILEVER LIMITED (B): WINNING IN MANY INDIAS
Technical Report · April 2019
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IMB 741
HINDUSTAN UNILEVER LIMITED (B):

WINNING IN MANY INDIAS
PRANAV GARG, BIDHI KASHYAP, AND J RAMACHANDRAN
Pranav Garg (Assistant Professor of Strategy), Bidhi Kashyap (Research Associate), and J Ramachandran (Professor of Strategy)
prepared this case for class discussion. It is the second of a three-part case on Hindustan Unilever Limited. It has been developed
from publicly available information and is not intended to serve as an endorsement, source of primary data, or to show effective
or inefficient handling of decision or business processes.
Copyright © 2019 by the Indian Institute of Management Bangalore. No part of the publication may be reproduced or
transmitted in any form or by any means – electronic, mechanical, photocopying, recording, or otherwise (including internet) –
without the permission of Indian Institute of Management Bangalore.
Hindustan Unilever Limited (B): Winning in Many Indias
February 2017. The American company, Kraft Heinz, offered $143 billion to acquire Unilever, the Anglo-
Dutch consumer goods company.1 Kraft Heinz was itself created in 2015 by a merger – backed by
investment firms 3G Capital and Berkshire Hathaway – between Kraft Foods and Heinz. In 2016, Kraft
Heinz had sales of $26.5 billion while Unilever’s turnover was €52.7 billion (Exhibit 1).
Unilever rejected the offer stating that it had no “strategic or financial merit.” 2 Kraft Heinz was willing to
negotiate the terms of the offer.3 However, Unilever CEO, Paul Polman, received the backing of
Unilever’s shareholders to fend off the bid. Nonetheless, the takeover proposal by Kraft Heinz jolted
Unilever.4 Based on a comprehensive review of its options, Unilever announced plans to divest its spreads
business, restructure two of its divisions (Foods and Refreshment), review its dual ownership structure,
spend €5 billion on a share buyback program, and increase dividend by 12%, all in an attempt to
accelerate cost savings and pacify investors.5 Paul Polman said:6
We need to accelerate our plans to unlock further value faster, and this was brought home
to us by the events of February. There is no doubt that however opportunistic it (the Kraft
approach) was, it did raise expectations. We are absolutely determined to use it as an
opportunity to place Unilever on an even stronger footing.
Meanwhile, at Unilever’s Indian subsidiary, Hindustan Unilever Limited (HUL), Harish Manwani (non-
executive Chairman) and Sanjiv Mehta (CEO and MD) had their task cut out. On the day Polman spoke
for Unilever, HUL echoed similar plans to divest some non-core businesses, initiate a share buyback
program, and enhance its operating margin to 18%.7 In addition to crafting a roadmap for HUL in light of
Unilever’s strategic review, Manwani and Mehta also had to devise plans to counter competition from
global giants such as Procter & Gamble and Reckitt Benckiser, and local players such as Nirma, Patanjali,
and Amul. HUL’s net revenue and profits had grown from Rs. 123 billion and Rs. 19 billion, respectively
in 2006 to about Rs. 320 billion and Rs. 41 billion, respectively in 2016 (Exhibit 2). However, the
takeover proposal by Kraft Heinz underscored the need to continuously create value.
UNILEVER
In 2005, Patrick Cescau took charge of Unilever when its turnover and operating margin were falling and
employee morale had dampened.8 To remedy the situation, he launched the “One Unilever” plan.
One Unilever
The “One Unilever” plan involved integrating disparate business units within a country under a single
operating company. The plan aimed to simplify decision-making, reduce duplication to make the
company leaner, and free up resources to make it more responsive to consumer and customer needs.9 In
2007, Unilever announced additional plans to simplify regional supply chains and create multi-country
organizations, that is, clusters of countries with a centralized management and shared functions.10 A year
later, the “One Unilever” R&D structure was announced to focus on fewer but bigger innovations while
facilitating their swift roll-out across the world.11 See Exhibit 3 for the “Dirt is Good” laundry campaign
launched globally.12
Page 2 of 25
Patrick Cescau further simplified Unilever’s structure to better align it with the growth agenda.13 Building
on the “One Unilever” plan, he combined the Home & Personal Care and Foods divisions under the
leadership of Vindi Banga. The Central and Eastern Europe regions were combined with the Asia-Africa
region under the leadership of Harish Manwani. Changes were also made to Unilever’s board. Michael
Treschow, a Unilever outsider, replaced Antony Burgmans as the first non-executive Chairman of
Unilever and three new directors were added – Narayana Murthy (Chairman and co-founder of Indian IT
company, Infosys), Hixonia Nyasulu (a banker from South Africa) and Genevieve Berger (a professor of
biophysics and medical imaging in France).14
Strengthening the Core
In 2009, Paul Polman succeeded Patrick Cescau to become the first ever outsider CEO of Unilever.
Chairman Treschow stated that Polman’s extraordinary experience and quality led Unilever to depart
from its tradition of appointing an insider to the top job.15 Polman had previously been with Nestle where
he was named Chief Financial Officer in 200516 and left as the Executive Vice President in charge of
Zone Americas.17 He was credited for Nestle’s share buybacks and speeding up changes in its product
portfolio, thereby making it one of the leading nutrition, health and wellness companies globally.18 Before
Nestle, he had worked with Procter & Gamble (P&G) for 26 years. During his last role as the President,
European Operations at P&G,19 sales of the region rose from $8 billion in 2001 to $15 billion in 2005.20
At his first Unilever Annual General Meeting, Polman said:21
The scale and extent of the changes over the last four years have been a positive surprise
to me. They have made Unilever stronger and more confident, well placed to weather the
storms currently blowing through all sectors of the economy.
A couple of years after Polman’s appointment, Vindi Banga – President, Foods and Home & Personal
Care and a member of the Unilever Executive team – bid adieu to Unilever after a 33-year stint. Banga
joined the private equity firm, Clayton, Dubilier & Rice, as an Operating Partner.22 Meanwhile, Harish
Manwani was appointed as Unilever’s Chief Operating Officer in 2011.23
Polman outlined some important pillars of his management philosophy. These included a focus on
sustainability as an integral part of doing business, an orientation towards managing the company for the
long term, and changes in the company’s organization structure and governance.
Unilever Sustainable Living Plan
To incorporate sustainability as an integral part of doing business at Unilever, Polman outlined the
“Unilever Sustainable Living Plan” (USLP) in 2010. The plan envisaged improving the well-being of
people, reducing the environmental impact of products, sourcing 100% of the agricultural materials
sustainably, and enhancing livelihoods of people associated with the supply chain.24 Polman said:25
Too many people think in terms of trade-offs, that if you do something which is good for
you, then it must be bad for someone else. That’s not right and it comes from old thinking
about the way world works and what business is for: Milton Friedman’s optimization of
short-term profits […] Our new business model will decouple growth from
Page 3 of 25
environmental impact. We will double in size, but reduce our overall effect on the
environment.
In line with USLP’s vision, Unilever articulated the “Compass” strategy in 2009 with the goal of doubling
business while reducing the environmental footprint and increasing social impact. The strategy
encompassed using technology to build innovation platforms (winning with brands), excelling at
customer service and in-store execution to win and sustain relationships (winning in the marketplace),
working on speed and flexibility of the supply chain (winning through continuous improvement), and
creating a performance-oriented culture (winning with people).26
In 2012, the “Compass” strategy was sharpened in the form of a business model with USLP as its core
(Exhibit 4). The model’s inputs comprised brands, people, and operators. The “Winning in the
marketplace” and “Winning through continuous improvement” pillars of the strategy served as the
operations-related strands of the model. The output was threefold: sustained growth, lower environmental
impact, and positive social impact.
By 2016, Unilever’s portfolio included 12 sustainable living brands such as Knorr, Lifebuoy, Dove, and
Lipton, among others. These brands had grown 40% faster than the rest and delivered close to half of
Unilever’s growth. Unilever reached 538 million people through programs on handwashing, safe drinking
water, and oral hygiene. 35% of Unilever’s portfolio by volume met the highest global nutritional
standards. Unilever achieved sustainable sourcing of agricultural raw materials to the tune of 51%. For its
efforts, Unilever was named “leader” of the Household & Personal Products Industry Group in the Dow
Jones Sustainability Index (DJSI), a global sustainability performance benchmark.27
Long-Term Orientation
Another pillar of Polman’s philosophy was to manage the company for the long term. On taking charge,
he announced that Unilever will no longer provide quarterly guidance to investors.28 He considered
quarterly forecasts unviable as predictions made under volatile economic conditions were often
inaccurate.29 He believed that the short-term approach of investors was not beneficial for the company or
for society, and that such a mindset had led to the 2008 global financial crisis.30 Polman explained:31
It’s easy to be a short-term hero. It is very easy for me to get tremendous results very
short term, get that translated into compensation and be off sailing in the Bahamas. But
the goal for this company – and it’s very difficult to do – the goal is to follow a four or
five year process. We need to change the strategy and the structure as well as the culture.
[…]
I do not work for the shareholder, to be honest; I work for the consumer, the customer. I
discovered a long time ago that if I focus on doing the right thing for the long term to
improve the lives of consumers and customers all over the world, the business results will
come…I’m not driven and I don’t drive this business model by driving shareholder value.
I drive this business model by focusing on the consumer and customer in a responsible
way, and I know that shareholder value can come.
Page 4 of 25
One critical aspect of the long-term orientation was a focus on emerging and developing markets. In
2011, Polman announced that as many as 27 factories were being built in these markets, and people and
capabilities were being shifted (including R&D staff) to reap future opportunities.32 Commenting on the
growth potential of these markets, Polman said:33
We have 54% (of our business) in the emerging markets and we are only reaching two
billion consumers a day. There’s no reason why we cannot reach four billion consumers.
We have introduced, over the last two years, 130 of our products in countries where they
were not in.
Polman’s strategy for the Home & Personal Care and Foods businesses reflected in Unilever’s
acquisitions and divestitures. Unilever acquired Sara Lee’s personal care business in 2009.34 The business
included hand-wash, shower gel, and deodorants, and complemented Unilever’s existing portfolio of
brands such as Lifebuoy soaps and Dove deodorants. The business was meant to help Unilever stretch
across various price points.35 Further, it was meant to strengthen Unilever’s position in the European
market and provide more variety in emerging and developing markets.36 In 2010, Unilever acquired
Alberto Culver, the maker of haircare and styling brands such as TRESemme and VO5. Polman justified
the acquisition since the personal care segment of Unilever grew at 30% in 2010 against 20% a decade
earlier.37 The acquisition was meant to help Unilever serve the haircare market across diverse price points
and push products through its wide distribution network.38 The acquisition was also meant to challenge
P&G and L’Oréal that had leadership positions in the US market.39 These acquisitions were followed by
those of Kate Somerville Skincare in 2015 and Dollar Shave Club in 2016.40
Unilever’s home care category comprised laundry brands such as Omo, Surf, and Skip, and household
care brands such as Cif, Domestos, and Sun/Sunlight.41 In 2016, Unilever – in line with the USLP –
acquired US-based Seventh Generation, Inc. that made green laundry detergents and diapers.42
In 2011, the Foods business created a separate division called “Refreshments” comprising ice creams, tea-
based beverages, weight management products, and nutritionally-enhanced staples.43 To sharpen the
foods portfolio, Polman divested underperforming businesses – Italian frozen foods in 2010, North
American frozen meals in 2012, peanut spread in 2013, and North American pasta sauces in 2014.44 After
fending off the takeover bid by Kraft Heinz, Unilever announced its intention to sell its spreads business,
which included brands such as Country Crock and I Can’t Believe It’s Not Butter, along with some of its
baking lines. Shortly thereafter, it acquired the condiment maker Sir Kensington’s,45 consistent with
Unilever’s strategy of sustainable nutrition with negligible environmental impact.46
To help the businesses achieve growth in a cost-effective way, Polman launched the “Connected 4
Growth” (C4G) program in 2016. The program was anchored around three initiatives – first, simplify the
organizational structure to free up time, resources, and entrepreneurial skills for increasing agility and
responsiveness (organizational changes); second, analyze expenditures and benchmark Unilever on
spending against its peers (zero-based budgeting); and third, drive volumes through a mix of right pricing
and channels (net revenue management). The organizational change and zero-based budgeting initiatives
aimed to deliver €1 billion worth of savings by 2018.
Page 5 of 25
Organization Structure and Governance
Another pillar of Polman’s plans focused on organization design and governance (Exhibit 5). On his first
day as the CEO, he froze staff salaries and cut down overseas travel for managers. He also declared
attractive bonus for good performers and penalties for under-performers.47 To facilitate quick decision-
making and check the performance of its top ten brands in its ten largest countries by revenue, Polman
announced a 30-day action plan. This plan aimed to fix problems swiftly against the existing process of
lengthy internal analysis and debate.48 The remuneration structure for Executive Directors was changed
incrementally by increasing the performance-based component from about 67% in 200949 to about 72% of
the salary in 2011.50 He also moved personnel across functions such as finance, R&D, and supply chain,
which he justified as necessary to keep up with competitors.51
Unilever’s Board of Directors also underwent changes. Around 2008, most Board members were of
Dutch, British, and American origin. By 2016, the Board’s composition had diversified to include
members from China, Zimbabwe, and Italy, among others.52 To better align pay with performance, the
Board proposed that compensation for Executive Directors be assessed based on a combination of
financial results, share price performance, and non-financial measures that contribute to the company’s
long-term objectives. For members of the Unilever Leadership Executive and the company’s top 500
managers, the Board proposed a revised reward framework that ensured greater personal commitment
through shared ownership to support the C4G program.53
HINDUSTAN UNILEVER LIMITED
Syncing Ship
In March 2006, the Zimbabwe-born Englishman, Douglas Baillie, was appointed the CEO and MD of
Hindustan Lever Limited (HLL). He thus became the first non-Indian to head HLL.54 Before joining
Unilever in 1978, Baillie had worked in marketing positions in Coca Cola and Gillette in Latin America.55
At Unilever too, he had worked in sales and marketing roles.56 Prior to his appointment at HLL, he
headed Unilever’s Africa, Middle East, and Turkey (AMET) region.57 HLL’s non-executive Chairman,
Harish Manwani, said:58
Douglas is an experienced and an outstanding leader with a proven track record. He has
successfully held several key assignments across both developing and developed markets.
This will be of enormous value to HLL in the current business environment.
Under Baillie’s leadership, HLL moved to a new management structure to achieve greater balance
between focus and scale. While business directors were made responsible for financial performance,
functional directors were to focus on excellence and capability building in functions. Manwani said:59
The appointments are a part of our ongoing efforts to leveraging the scale and size of our
organization, to bring more focus on our ‘go-to-market’ and brand building capabilities
and to build functional excellence across the organization. Together, these will ensure the
company’s competitiveness and sustained profitable growth. […] The business will
remain focused on market leadership, cost leadership and thought leadership.
Page 6 of 25
New Identity
With the “One Unilever” plan as a backdrop, Hindustan Lever Limited formally changed its name to
Hindustan Unilever Limited (HUL) in 2007.60 The company also relinquished the leaf mnemonic and
adopted the Unilever logo as its corporate identity. Doug Baillie said:61
The new name and the new logo will leverage the positioning, scale and synergy that
comes with being part of Unilever globally. It positions our organization on a global scale
and through the combination of retaining ‘Hindustan’ in the name brings the very best of
local and global to the forefront. For us this is really an opportunity, collectively as an
organization, to renew and strengthen our commitment to continue our endeavor to earn
the love and respect of India, by making a real difference to every Indian.
Even the parent company had high expectations from its Indian subsidiary. In December 2006, during his
second visit to India as Group CEO of Unilever, Patrick Cescau said:62
It’s fair to admit that for the past two or three years there was a bit of criticism of the
company. I want this to change and want this company to be the most admired again. […]
And I expect India to be to Unilever what China has been to other companies.
Under Baillie, HUL made other changes as well. A notable change was disbanding the New Ventures
division. In early 2007, HUL sold the e-tailing venture, Sangam, to Wadhawan Food Retail.63 However,
HUL planned to scale up its new venture Pureit, the in-home water purifier, to multiple states. Project
Shakti was integrated with the sales function while the Hindustan Unilever Network and Ayush businesses
were folded into the Home & Personal Care division.64
Baillie further rejigged HUL’s structure. He merged the Foods division with the Home & Personal Care
division, thereby emulating Unilever’s structure (Exhibit 6). He also aligned brand building and brand
development streams with the global functions and reduced manager-level jobs,65 consistent with
Unilever’s decision to prune the workforce for improving profitability.66
In the Home & Personal Care business, brands such as Lifebuoy, Lux, Sunlight, Dove, and Fair & Lovely
were relaunched.67 Wheel’s “Smart Shrimati” (Smart Housewife) campaign on Doordarshan (the state-
owned television channel) and brand activation activities in over 30,000 villages helped the brand
strengthen consumer loyalty.68
The Foods business saw the launch of several international flavors of Knorr soup, relaunch of Brook
Bond tea,69 addition of Bertolli olive oil to the portfolio, and the launch of new variants of ice creams,70
among other initiatives.
Baillie’s stint at HUL ended in 2008. He took over as President of the Western Europe region and also
joined the Unilever Executive team.71 Reflecting on his stint at HUL, Baillie said:72
[I] tried to get the business on track and grow the bottom line ahead of the topline. But
the journey is not yet over and now the job is to take it to the next level.
Page 7 of 25
Passing the Baton
Forty-four-year-old Nitin Paranjpe, Executive Director of HUL’s Home & Personal Care business and a
member of the Board,73 replaced Douglas Baillie as CEO and MD. He thus became the youngest to hold
the position in HUL’s history.74 Harish Manwani spoke about the transition:75
Nitin Paranjpe is a career Hindustan Unilever person. I believe that he’s one of our best,
without doubt. Thanks to Doug Baillie who formed a new management committee at
HUL, we have built a great pool of talent and leadership talent. He’s been a great coach
and a great mentor. The legacy that he leaves behind is a legacy of consistent growth,
competitive growth and profitable growth. It will continue.
Like Manwani, Paranjpe was a graduate of Mumbai’s Jamnalal Bajaj Institute of Management Studies.
He joined HLL in 1987 as a management trainee and worked in marketing and sales roles, mainly in the
Home & Personal Care business. He had been part of HLL’s “Project Millennium” team in 1999 and had
also worked with the Unilever Executive Committee in London for a year (2000-01).76 Speaking on his
appointment, Paranjpe said:77
I will build the business from where Mr. Baillie left off. There are several growth engines
and foods is one category which is still underdeveloped and there is enormous
opportunity for growth. Water is also another category where resources would be
required for growth.
In 2008, HUL scaled up the Pureit water purifier venture.78 In a country with limited access to safe
drinking water, the market was estimated to be worth Rs. 1,000-1,200 crores (1 crore = 10 million) in
annual sales.79 Pureit was the only water purifier in the world that did not use electricity, cooking gas, or
pressurized tap-water.80 Soon after, it sold one million units across 700 towns of India and generated sales
of Rs. 190 crores. HUL then launched Pureit Marvella at a price lower than the market leader, Eureka
Forbes’ Aquaguard with some modifications to its erstwhile model.81 Marzin Shroff, CEO of Direct Sales
at Eureka Forbes, brushed off the challenge:82
Comparing Aquaguard and Marvella is like comparing a Honda Accord and a Maruti
800.
Shortly thereafter, Pureit entered the premium segment by launching Pureit Marvella RO which complied
with US Environmental Protection Agency norms.83 Introducing more variations and differentiation, HUL
launched Pureit across several price points – Pureit sachets,84 Pureit Advanced,85 and Pureit Marvella
UV86 – against competitors such as Kent, Aquaguard, and Tata Swachh.87
Pureit received the “UNESCO Water Digest Water Award 2008-09” in the category of best non-electric
water purifiers.88 During his visit to India in 2009, Paul Polman said:89
We are using India to develop the Pureit brand worldwide. We are looking at a long-term
viable economic model with Pureit that can be extended to other places in the world.
Page 8 of 25
In 2010, Pureit was introduced in Bangladesh and Indonesia,90 and subsequently in Brazil, Mexico,
Nigeria, and Sri Lanka. By 2013, it reached 45 million people globally.91
HUL was also doing its bit to support Unilever’s “sustainability in business” drive. One of USLP’s
objectives was to change certain hygiene-related habits of one billion people in Asia, Africa, and Latin
America by 2020.92 HUL took up several initiatives aligned with this objective. Marking the “Global
Handwashing Day” (launched in 2008 by Unilever),93 HUL launched the “Help a child reach 5” initiative
in 2012. For every pledge taken by people to support the initiative, HUL promised to educate one child
about the benefits of handwashing.94 In 2013, HUL devised a campaign during the Maha Kumbh Mela, a
prominent religious event attracting 100 million people.95 It embossed a reminder in Hindi (‘Did you
wash your hands with Lifebuoy?’) on rotis, an Indian bread, served during the event.96 From 2010 to
2013, HUL reached a total of 47 million people through various Lifebuoy handwashing campaigns.97
Another objective of USLP was to enhance livelihoods, which HUL sought to accomplish through
Project Shakti. By 2013, 48,000 Shakti entrepreneurs (all women) across 15 states were serving 135,000
thousand villages and reaching nearly 3.3 million households. By the same time, HUL also sourced 15%
of its tea and 100% of its palm oil from sustainable sources. It also reported a 77% reduction in waste
generated at manufacturing sites in 2013 against its 2008 baseline.98 In 2013, Nitin Paranjpe spoke about
his plan for the next 5 years:99
I am trying to develop a business model which focuses on sustainability. I want to

decouple it from resource use and re-couple it with societal growth.
Apart from sustainability-related initiatives, Nitin Paranjpe also outlined HUL’s strategy with regard to
the Home & Personal Care business:100
We will bring winner brands from Unilever’s global portfolio. Top end haircare, skincare
and categories such as deodorants are some categories in point.
Paranjpe’s comments came in the backdrop of a roller-coaster ride for India’s FMCG sector. In early
2008, the prices of raw materials had first shot up and then reduced due to falling oil prices.101 HUL
responded in 2009 by slashing the prices of key soaps and detergents brands by 4-20% through a
combination of increasing the weight of some packs and reducing the retail price of others.102 However,
HUL’s performance suffered. Announcing Unilever’s financial results for 2009, CEO Polman said:103
Although improving, we still have some country/category positions that need to do better.
Our competitive positions in India, Spain and Eastern Europe have not yet improved to
the extent I would expect.
In 2011 and 2012, Wheel, which contributed 12% to HUL’s topline, faced stiff competition from Ghadi
detergent. It temporarily surpassed Wheel to become the market leader in the laundry market. However,
Wheel soon regained its position as India’s largest laundry brand.104 HUL also launched Rin Advanced, a
new variant of Rin detergent, to counter the price reduction of P&G’s Tide detergent.105 Relaunches were
done in several other brands – Vim,106 Sunsilk,107 Lux,108 and Lifebuoy.109
Page 9 of 25
From Unilever’s stable, HUL introduced Comfort fabric conditioners in 2008110 in the pre-wash sub-
category.111 Cif multi-purpose cleaner was launched in 2009 in the home-cleaning category.112 Despite the
small size of these categories, HUL believed in their potential due to rising household incomes.113 HUL
also expanded the brand Dove, one of the former launches from Unilever’s kitty, from soaps to
deodorants,114 hair oil,115 and body lotion.116
In the personal care category, HUL launched the Sure anti-perspirant range from its parent’s portfolio in
2010 and backed it with a campaign to educate consumers about anti-perspirants. In 2012, TRESemme
found its way to India owing to Unilever’s acquisition of Alberto Culver.117 TRESemme targeted the high-
end salon-going consumers.118 In 2013, HUL also announced the launch of the professional hair products
brand TIGI, popularly known as Tony & Guy, which was acquired by Unilever in 2009.119 These launches
were in line with HUL’s strategy to launch premium products for accelerating growth and fending off
competitors such as L’Oréal.120
The skin care brand Lakme launched new products including the Lakme Pure Defence Anti-Pollution
range121 and Lakme Absolute range.122 Several other products were also relaunched in personal care
brands such as Fair & Lovely, 123 Close-up,124 and Rexona.125
In the beverages category of the Foods business, HUL launched Brooke Bond Sehatmand, thereby
entering the economy segment of the tea market. Since HUL led the domestic tea market in terms of value
sales, this launch was an attempt to increase volume sales in a segment where Tata Tea’s Agni dominated.
Vikram Grover, Category Head (Beverages), said:126
All these years we operated in just 33 percent of the tea market. Considering 70 percent
of the category exists in the lower end, we would be now be operating in 100 percent of
the market.
To capitalize on the growing tea-bag market, HUL launched 11 flavors of Taj Mahal and Lipton brands in
the flavored and green tea segments.127 HUL also communicated the benefits of tea through the “Red
Label Health Challenge” campaign. In the coffee market, HUL launched variants of Bru.128
In processed foods, HUL entered a first of its kind partnership with Future Group in 2011 to jointly
develop and brand a range of bakery items. These items were to be sold only at the Future Group’s Big
Bazaar stores.129 This partnership was meant to leverage HUL’s ability to make bakery products and
distribute nationally, and Future Group’s large network of stores across India.
In 2011, Geetu Verma replaced Shrijeet Mishra as the Executive Director of the Foods business. Prior to
joining HUL, she was the Executive Director and Vice President for Innovation at Pepsico, where she
drove initiatives for Pepsico’s low-priced snack foods business. Before Pepsico, she had worked with
spirits maker Seagram and with Procter & Gamble.130
New Deal
In early 2013, HUL and Unilever revised their agreement in matters of technology, trademark licenses
and other services provided by Unilever to HUL. The royalty of 1.4% of sales paid by HUL to Unilever
was increased to 3.15%.131 In a visit to India in 2013, Paul Polman justified the revision:132
Page 10 of 25
The success of HUL that you see now is because HUL can benefit to a great degree due
to the global scale of this company. We have centralized our R&D, manufacturing, we’ve
created global categories that are stronger than before. Our model now is much more of
interdependent [sic]. As a result, some of the cost base has changed and the right cost
base has to be reflected. That is why you have seen these adjustments in HUL.
The same year, Unilever announced its intention to increase its stake in HUL from 52.48% to 75%
through an open offer in the stock market. Polman commented:133
This represents a further step in Unilever’s strategy to invest in emerging markets and
offers a liquidity opportunity at what we believe to be an attractive premium for existing
shareholders.
Unilever ended up owning 67.28% of HUL’s shares. Polman responded:134
We are pleased to have received such as good response to our voluntary open offer and
that – as a result – we will significantly increase our stake in Hindustan Unilever, an
excellent Indian business with a proud heritage and the potential for attractive long-term
growth.
In 2010, Polman had mandated longer tenures for middle and top managers to ensure greater
organizational stability for combating competition and business volatility. However, subsequent events
unfolded differently. In October 2013, Nitin Paranjpe was made President of Unilever’s Home Care
business and a member of the Unilever Leadership Executive (ULE).135 Harish Manwani said:136
I wish to take this opportunity to express my deep appreciation for the significant
contribution that Nitin made to the business in India and his leadership in driving the
growth agenda. I would like to congratulate him on his richly deserved elevation to the
ULE.
Indian Outsider
In October 2013, Sanjiv Mehta, Chairman of Unilever’s North Africa and Middle East (NAME) region,
was appointed the new CEO of HUL. He was the only India-born HUL CEO to have never worked in
HUL.137 Harish Manwani spoke about the leadership change:138
We have a great leadership team here and we have great depth of talent. So, in many
ways, this is a good time to change because the business is in a very good place. Sanjiv
brings a solid general management experience. This is not his first CEO appointment. He
knows how to run businesses, how to manage teams and be a good leader. He will be able
to build on where Nitin (Paranjpe) left off and bring a fresh perspective on how we can
accelerate the business even further […] and I have absolutely no doubt he will fit in
HUL and perform his role from day one.
Page 11 of 25
Sanjiv Mehta was a commerce graduate and chartered accountant by training.139 In 1983, he joined Union
Carbide where he was part of the crisis management team after the Bhopal gas tragedy of 1984. In 1992,
he joined Unilever Arabia as its commercial head for Home & Personal Care.140 In 1999, he moved to
Unilever Bangladesh where he became Chairman and MD in 2002. His subsequent stints were with
Unilever Philippines as its Chairman and CEO, and with Unilever’s NAME region as its Chairman.141 At
an investor conference in Mumbai, he said:142
A change in CEO does not entail a change in strategy. That is something both Unilever
and HUL are clear about. Having said that, when a new person comes on board, he looks
at the business with a new lens. That is what I have been doing with my team here. To
look and satisfy myself at the world of opportunity that is in India. Next is to look at our
business, strengths and development needs and say what can we do different to tap this
opportunity […] What do I bring to the table? Years of experience from various markets
at Unilever such as South Asia, Southeast Asia, North Africa and West Asia. I will look
at the business with a slightly different lens in comparison to my predecessors.
Soon after taking charge, Mehta began a pilot study in two consumer clusters – Tamil Nadu and Andhra
Pradesh, and Karnataka and Kerala – to check the effectiveness of HUL’s sales and marketing. The study
revealed gaps in HUL’s assessment of the market size and reach of its products. Mehta concluded that
HUL was not dissecting the market enough and called for creating “many small Indias” within HUL’s
operations.143 However, some HUL managers believed that the Indian market was reaching a point of
saturation.144 Challenging this belief, Mehta said:145
None of the categories in which we operate are saturated. Not even soaps and detergents,
which are highly penetrated categories. If the per capita consumption in fabric
conditioner was to increase to the same level as Vietnam, the market in India for fabric
conditioners would be 40x larger.
In September 2014, Mehta announced a new initiative called “Winning In Many Indias” (WIMI). He
changed the erstwhile structure of 4 branches (north, south, east, and west) headquartered in the 4 metros
(Delhi, Chennai, Kolkata and Mumbai) to 14 consumer clusters aggregated into 5 sales branches based
out of 7 cities. The fifth branch – for central India – was headquartered in Lucknow and covered the
Hindi-speaking heartland comprising the states of Bihar, Madhya Pradesh, Rajasthan, and Chhattisgarh.
The WIMI planning and execution framework applied not just to sales but also to marketing, supply
chain, and finance.146 Optimistic about the new structure, Mehta said:147
The four-branch framework worked very well for us over the years. Now no longer is the
growth concentrated around the four metros. It is in the tier 2/tier 3 cities and villages
with 55% of private consumption in the country coming out of rural India. For us, the
challenge was to have a framework, whereby we leverage the scale, but have an intense
go-to-market focus. […] There are many competitors who operate in different parts of the
country, many don’t feature in your radar if you only have a pan-India approach.
Towards the end of 2014, Harish Manwani retired as the Chief Operating Officer of Unilever but
continued as HUL’s non-executive Chairman.148 Paul Polman said:149
Page 12 of 25
Harish is an inspirational leader and leaves a remarkable legacy. He has been at my side
in helping to drive the turnaround of Unilever, making this once again one of the most
admired companies in the world. Over the last three years, especially as Chief Operating
Officer, Harish has been instrumental in the transformation of the company. Under his
leadership, we have seen a step-change in our go-to-market organization and there has
been a relentless focus on flawless execution globally.
In the meantime, HUL continued its drive the USLP plan through various initiatives in India. As part of
its “Help a Child Reach 5” campaign, the company conducted a pilot study to track the correlation
between handwashing with Lifebuoy and the decline in deaths of young children from pneumonia and
diarrhea.150 Data collected by Nielsen showed that the incidence of diarrhea in the selected village
decreased from 36% to 5%.151 Mehta said:152
The results of Lifebuoy’s efforts so far prove that when a social mission is embedded into
a successful brand’s core values, significant and indeed lifesaving change can happen
fast. So far, Lifebuoy has impacted hand washing behaviors of 183 million people in 16
countries and 58 million people in India.
By 2016, Lifebuoy had become one of HUL’s few brands to cross revenue of Rs. 2,000 crores. In a novel
initiative to support the “World Toilet Day”,153 HUL launched the Domex Toilet Academy in 2013 to
build 24,000 toilets in 1,200 villages in the states of Maharashtra and Orissa by 2015.154 Another initiative
called Prabhat engaged with communities around HUL’s manufacturing sites and focused on health and
hygiene, livelihood, and water conservation.155
In 2014, Mehta announced a new structure mirroring Unilever’s structure.156 HUL now had eleven
“1,000-crore plus brands” in its stable. Six of them – Lux, Lifebuoy, Dove, Fair & Lovely, Clinic Plus, and
Pond’s – were in personal care while four – Rin, Surf Excel, Wheel, and Vim – were in home care. In
2016, HUL divested its 50% stake in the 21-year joint venture with Kimberly-Clark Corporation. The
joint venture distributed Huggies (children’s diapers) and Kotex (feminine hygiene).157
In personal care, HUL decided to focus on high-margin products in male grooming, haircare, and
skincare.158 HUL extended Pond’s, a skin care brand for women, into male grooming products by
launching a face wash and moisturizer. HUL was already catering to the men’s segment through its
deodorant brand Axe and skincare brands Fair & Lovely Max and Vaseline for Men. HUL also planned to
launch the Dollar Shave Club razor brand in India after Unilever acquired it in 2016. Adding a razor
brand would help plug a gap in HUL’s male grooming portfolio and compete with P&G’s Gillette.159 In
haircare, TRESemme became the fastest brand in HUL’s portfolio to cross Rs. 100 crores in sales (in just 2
years).160 By 2015, TRESemme briefly overtook P&G’s Pantene in supermarket sales. HUL also
relaunched other personal care brands such as Fair & Lovely, Lux, and Pepsodent.161
Some home care brands also focused on premiumization. Sanjiv Mehta believed:162
There is significant headroom for premiumization. In the laundry segment, if Rin is used
as much as it is used in Tamil Nadu, it will be six times of what it is now. Similarly, Surf
Excel will be three times of the current rate. Premium laundry for HUL has grown two
times that of the mass brand. Rin bar in UP has grown five times. Premium powders have
Page 13 of 25
a potential to grow 7.5 times, while premium bars can jump 3.5 times. Vim liquid can be
three times among under-penetrated geographies if penetration reaches the national
average.
In 2016, Surf Excel crossed Rs. 3,000 crores in sales to become the largest brand by value in HUL’s
portfolio.163 Wheel and Rin were relaunched and each crossed Rs. 2,000 crores in sales in 2016.164
The foods category comprised brands such as Knorr, Kissan, and Annapurna while the refreshments
category comprised Brooke Bond, Lipton, Bru, and Kwality Wall’s, among others. In 2015, HUL launched
Knorr noodles to take on Nestle’s Maggi noodles that had near-monopoly in a Rs. 2,700 crore market.
Until then, Knorr was mainly present in soups and ready-to-eat categories. HUL priced its noodles at a
premium over Maggi and ITC’s Yippie. Further, it launched Chinese flavors instead of the dominant
masala flavor.165 HUL also relaunched its Kissan culinary products,166 and Brown & Polson and Rex Jelly
brands in dessert powders. These two brands became part of HUL’s portfolio when Unilever acquired
Bestfoods in 2000.167 In ice creams, HUL rolled out the premium ice cream Magnum nationally in
2014.168 In contrast to launches and relaunches, HUL sold its Modern bread and bakery business to
Nimman Foods. Mehta justified the divestment to be aligned with HUL’s strategy of exiting non-core
businesses and driving growth in the core packaged foods business.169
To meet growing demand in the naturals segment, HUL relaunched its Ayurveda brand, Lever Ayush. In
2015, the Ayurveda-based personal care market was estimated to be worth Rs. 5,000 crores. It comprised
local players such as Marico, Dabur, Emami, Himalaya, and Patanjali.170 Lever Ayush products were
priced higher than competing brands.171 HUL also acquired hair care brand Indulekha from Mosons Group
for Rs. 330 crores. Launched in 2009, Indulekha was a popular premium ayurvedic hair oil in south India.
Prior to this acquisition, HUL had no hair oil brand in its portfolio after it had sold Nihar to Marico.172
HUL also planned to launch products from Unilever’s portfolio in the naturals segment. For example,
Citra was a skin care brand present in Indonesia, Thailand, and the Middle East.173 Sanjiv Mehta
commented on HUL’s naturals portfolio:174
We are introducing naturals variants for existing brands like TRESemme and Clinic Plus
(shampoos). Then, we have our master naturals brand Lever Ayush that has now seen a
full quarter of growth since its launch and we are very pleased with its performance.
Finally, we have specialist brands like Indulekha (hair-oil).
Mehta also simplified work processes and sharpened the roles of employees to avoid overlaps and speed
up decision-making.175 Harish Manwani commented:176
While we are the No. 1 [sic] organization, we need to ensure we remain agile with a spirit
of a small company even though we want to leverage the scale of a big company. That is
the culture we want to bring, which is not about being too engrossed internally, but
giving people space and time to engage externally.
Mehta also announced the formation of Country Category Business Teams (CCBT). Each team,
representing one category, comprised employees from multiple functions and was expected to work with
an entrepreneurial mindset.177 Mehta commented on HUL’s initiatives to tackle competitors:178
Page 14 of 25
The important bit is the organization adapt, (be) agile and flexible. Three years back, we
started the Winning In Many Indias (WIMI) initiative. That was a fabulous start and I am
so happy we got into that space because India is not a homogenous country. Today, our
strategies are made by clusters. They are so different. […] More importantly, in HUL, we
have got the CCBTs. They have been empowered to run the business. The CCBT is like a
mini operating board of the company and we have given them full authority to run these
divisions. Our job is to mentor them, coach them to achieve their goals. […] So the
structure of HUL today with WIMI, CCBT and the coming together of the brand building
and marketing teams will allow us to not only bring in the best of Unilever but also very
close to the consumer. […] As far as efficiency and effectiveness is concerned, we are
also bringing in more science and more analytics.
Amidst mounting competition, Mehta’s call for HUL to be agile was prophetic (see Exhibits 7 and 8 for
HUL’s market shares in different categories). A new rival had emerged in the form of a privately held
Indian company, Patanjali. Founded by yoga guru Baba Ramdev, Patanjali had brought the ancient Indian
medicine system of Ayurveda back into mainstream consciousness.179 The company’s product portfolio
spanned the foods, personal care, home care, and healthcare categories. In 2016-17, the company had
doubled its turnover to Rs. 9,346 crores (Rs. 93 billion) over the previous year.180 Baba Ramdev claimed
that Patanjali would double its turnover yet again in 2017-18.181 Until March 2017, the ayurvedic segment
had registered 60% volume growth (against 6% for all of consumer goods) over the previous year.182
Mehta commented on local competition in India:183
This is a trend across the world. Regional companies are chipping away at the share of
multinational companies because they are close to the consumer and they are agile. These
are the two big factors. It’s not that they have access to better R&D. It’s not that they
have speed or better talent.
The intensifying competition made Mehta wonder if HUL had to make a decisive shift in its strategy. On
the one hand, the WIMI initiative signaled HUL’s willingness to customize its strategy to different
clusters within India. On the other hand, HUL continued launching products from Unilever’s portfolio
and rolling out initiatives aligned with Polman’s strategy for Unilever. For Mehta, it was time to confront
the question that has long occupied country heads of multinational companies: Where would the
pendulum rest between adapting to the local environment and advancing the parent firm’s agenda?
Page 15 of 25
Exhibit 1
Unilever: Ten-Year Performance
In € billions unless specified 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Turnover 39.6 40.2 40.5 39.8 44.3 46.5 51.3 49.8 48.4 53.3 52.7
Research and development 0.9 0.9 0.9 0.9 0.9 1.0 1.0 1.0 1.0 1.1 1.0
Advertising and promotion 5.2 5.3 5.1 5.3 6.1 6.1 6.8 6.8 NA NA NA
Operating profit 5.4 5.2 7.1 5.0 6.3 6.4 7.0 7.5 8.0 7.5 7.8
Profit Before Tax 4.8 4.9 6.9 4.9 6.0 6.1 6.5 7.1 7.6 7.2 7.5
Net Profit Margin 12.0 9.1 12.0 8.4 9.3 8.9 8.5 9.7 10.7 9.2 9.8
Market Capitalization 63.4 72.5 46.9 63.4 64.8 73.9 81.8 83.8 93.9 113.4 110.2
Ungeared cash flow 4.2 2.5 2.3 4.1 3.4 3.1 4.3 3.9 3.1 4.8 4.8
Acquisition of group companies 0.1 0.2 0.2 0.4 1.3 3.1 0.1 0.1 0.3 1.9 1.7
Disposal of group companies 1.9 0.2 2.5 0.3 0.9 1.4 0.2 1.1 1.7 0.2 0.03
Number of acquisitions/disposals NA 26 24 15 12 31 6 12 10 12 8
Closing net funds / (Debt) -7.5 -8.3 -8.0 -6.4 -6.7 -8.8 -7.4 -8.5 -9.9 -11.5 -12.6
Number of employees ('000) 179 175 174 168 165 169 172 174 173 171 169
Turnover per employee ('000) NA 230 233 237 268 275 298 286 280 312 312
Percentage of turnover 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Europe 38 36 36 33 30 29 27 27 27 25 25
Americas 35 33 32 32 33 33 33 33 32 33 32
Asia / Africa 27 31 32 36 37 38 40 40 41 42 43
Foods 54 35 35 33 32 30 28 27 26 24 24
Refreshments - 19 19 20 19 19 19 19 19 19 19
Home Care 18 18 18 17 18 18 18 18 19 19 19
Personal Care 28 28 28 30 31 33 35 36 37 38 38
Notes: Market capitalization numbers are end-of-the-year figures for the combined PLC and NV entities.
Source: Unilever annual reports, Unilever website
Page 16 of 25
Exhibit 2
Hindustan Unilever Limited: Ten-Year Performance
2006- 2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015-
In Rs. billions
07 08 09* 10 11 12 13 14 15 16
Gross Sales 130.4 147.2 216.5 182.2 202.8 228.0 266.8 289.5 320.9 338.6
Net Sales 121.0 136.8 202.4 175.2 194.0 217.3 252.1 280.1 308.0 319.9
Other income 3.5 4.3 5.9 3.5 6.3 6.6 12.1 12.3 12.5 10.6
Advertising costs 12.7 14.4 21.3 23.9 27.6 26.3 32.3 36.1 38.7 45.3
Interest 0.1 0.3 0.3 0.07 0.002 0.01 0.3 0.4 0.2 0.002
Depreciation / Amortization 1.3 1.4 1.9 1.8 2.2 2.2 2.4 2.6 2.9 3.2
Profit Before Tax (PBT) 18.6 21.5 30.3 27.1 27.3 33.5 43.5 48.0 55.2 59.1
PAT, before exceptional items 15.4 17.4 25.0 21.0 21.5 26.0 33.1 35.6 38.4 40.8
Exceptional items, net of taxes 3.2 1.8 0.04 1.0 1.5 1.2 6.1 2.3 6.6 0.4
Net Profit 18.6 19.3 25.0 22.0 23.1 26.9 38.0 38.6 43.1 40.8
Number of shares (millions) 2,207 2,177 2,180 2,181 2,159 2,162 2,162 2,162 2,163 2,164
Earnings per share of Re. 1 8.41 8.73 11.46 10.10 10.58 12.46 17.56 17.88 19.95 18.87
Dividend per share of Re. 1 6.00 9.00 7.50 6.50 6.50 7.50 18.50 13.00 15.00 16.0
Reserves excl. revaluation reserve 25.0 12.2 18.4 23.7 24.4 33.0 24.6 30.6 35.1 34.7
Economic value added (Rs. billion) 11.3 13.1 21.5 17.9 17.5 22.5 29.3 31.5 33.8 35.3
Return on capital employed (%) 67.0 78.0 107.5 103.8 87.5 96.8 109.1 130.2 127.7 128.4
Return on net worth (%) 68.1 80.1 103.6 88.2 74.0 77.7 94.7 104.1 99.5 88.7
2006- 2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015-
% Sales by Segment
07 08 09* 10 11 12 13 14 15 16
Soaps & Detergents 47 47 49 48 46 48 49 49 49 47
Personal Products 29 29 29 30 32 31 31 29 29 30
Foods (Beverages, Processed Foods,
20 21 19 20 20 19 18 18 18 19
Ice Creams)
Others 4 3 3 2 2 2 2 4 4 4
% Average annual exchange rate 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
INR per Euro 56.84 56.42 63.61 67.36 60.59 64.89 68.60 77.93 81.04 71.2
INR per USD 45.31 41.35 43.51 48.41 45.73 46.67 53.44 58.60 61.03 64.15
Notes: (1) * Numbers for 2006-07 and 2007-08 are for financial year ending in December 2006 and December 2007, respectively
(2) Numbers for 2008-09 are for 15 months since financial year ends in March 2009; every subsequent financial year ends in March.
(3) Earnings and dividend per share adjusted for bonus issue
(4) Average exchange rates are for the calendar year
Source: (1) Hindustan Unilever Limited annual reports, other research reports
(2) USD-INR exchange rate data from OECD and EUR-INR data from statista.com
Page 17 of 25
Exhibit 3
Globally Aligned “Dirt Is Good” Campaign
Source: (1) OMO Carnival 2015 in Dubai, UAE, dubaitravelator.com, January 31, 2015
(2) OMO South Africa, omosouthafrica.tumblr.com
(3) OMO says Dirt is Good, Unilever Australia website
(4) Unilever’s Biggest Selling Brands: In Pictures, The Telegraph, UK
(5) Surf Excel IMC in India, Slide Share, February 2, 2012
Exhibit 4
Unilever’s Compass Business Model
Source: Unilever annual report 2012
Page 18 of 25
Exhibit 5
Unilever Senior Leadership 2006 to 2016
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Patrick Patrick Patrick Paul Paul Paul Paul Paul Paul Paul Paul
Chief Executive Officer
Cescau Cescau Cescau Polman Polman Polman Polman Polman Polman Polman Polman
Harish Harish Harish Harish
Chief Operating Officer
Manwani Manwani Manwani Manwani
REGIONS
President, Asia, Africa, Central Harish Harish Harish
− − − − − − − −
& East Europe Manwani Manwani Manwani
Harish Harish
President, Asia and Africa − − − − − − − − −
Manwani Manwani
President, Russia, Africa &
− − − − − − − Alan Jope − − −
Middle East
President, North Asia − − − − Alan Jope Alan Jope − − − −
Kees van Kees van
Jan Jan Jan Jan Jan Jan
President, Europe der der − − −
Zijderveld Zijderveld Zijderveld Zijderveld Zijderveld Zijderveld
Graaf Graaf
Doug Doug Jan
President, Western Europe − − − − − − − −
Baillie Baillie Zijderveld
John Michael Michael Michael Dave
President, Americas − − − − − −
Rice Polk Polk Polk Lewis
Kees Kees Kees Kees Kees Kees
President, North America − − − − −
Kruythoff Kruythoff Kruythoff Kruythoff Kruythoff Kruythoff
DIVISIONS / CATEGORIES
Ralph Ralph
President, HPC − − − − − − − − −
Kugler Kugler
Antoine Antoine Antoine Antoine
Vindi Vindi Amanda Amanda
President, Foods − − − de Saint- de Saint- de Saint- de Saint-
Banga Banga Sourry Sourry
Affrique Affrique Affrique Affrique
President, Foods, Home & Vindi Vindi Michael
− − − − − − − −
Personal Care Banga Banga Polk
Nitin Nitin Nitin Nitin
President, Home Care − − − − − − −
Paranjpe Paranjpe Paranjpe Paranjpe
Dave Dave Dave
President, Personal Care − − − − − Alan Jope Alan Jope Alan Jope
Lewis Lewis Lewis
Kevin Kevin Kevin Kevin Kevin Kevin
President, Refreshment − − − − −
Havelock Havelock Havelock Havelock Havelock Havelock
Source: Unilever annual reports, Hindustan Unilever Limited website

Exhibit 6
Page 19 of 25
HUL Senior Leadership 2006 to 2016
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Harish Harish Harish Harish Harish Harish Harish Harish Harish Harish
Chairman
Manwani Manwani Manwani Manwani Manwani Manwani Manwani Manwani Manwani Manwani
Vice Chairman MK Sharma − − − − − − − − −
Douglas Douglas Nitin Nitin Nitin Nitin Nitin Sanjiv Sanjiv Sanjiv
CEO and MD
Baillie Baillie Paranjpe Paranjpe Paranjpe Paranjpe Paranjpe Mehta Mehta Mehta
FUNCTIONS
Finance and IT D. Sundaram D. Sundaram − − − − − − − −

Vice Chairman & Chief
− − D. Sundaram − − − − − − −
Financial Officer
Sridhar
Chief Financial Officer − − − − − − − − −
Ramamurthy
Sridhar Sridhar Sridhar Sridhar P. B. P. B.
Chief Financial Officer & IT − − − −
Ramamurthy Ramamurthy Ramamurthy Ramamurthy Balaji Balaji
Pradeep Pradeep Pradeep Pradeep Pradeep Pradeep Pradeep
Supply Chain Dhaval Buch Dhaval Buch Dhaval Buch
Banerjee Banerjee Banerjee Banerjee Banerjee Banerjee Banerjee
Sales and Customer Sanjiv Hemant Hemant Hemant Manish Manish Manish Punit Punit
Sanjay Dube
Development Kakkar Bakshi Bakshi Bakshi Tiwari Tiwari Tiwari Misra Misra
BP BP BP BP
Human Resources − Leena Nair Leena Nair Leena Nair Leena Nair Leena Nair
Biddappa Biddappa Biddappa Biddappa
Legal & Corporate Affairs, Dev Dev
− Ashok Gupta Ashok Gupta Dev Bajpai Dev Bajpai Dev Bajpai Dev Bajpai Dev Bajpai
and Company Secretary Bajpai Bajpai
DIVISIONS / CATEGORIES
Nitin Nitin Hemant Hemant Hemant
Home & Personal Care Gopal Vittal Gopal Vittal Gopal Vittal − −
Paranjpe Paranjpe Bakshi Bakshi Bakshi
Priya Priya
Home Care − − − − − − − −
Nair Nair
Samir Samir
Personal Care − − − − − − − −
Singh Singh
S.
Foods (MD) − − − − − − − − −
Ravindranath
Sanjiv Shrijeet Shrijeet Shrijeet Shrijeet Geetu Geetu Geetu
Foods − −
Kakkar Mishra Mishra Mishra Mishra Verma Verma Verma
Geetu Geetu
Foods & Refreshment − − − − − − − −
Verma Verma
Source: HUL annual reports
Page 20 of 25
Exhibit 7
HUL versus Competitors
Home Care
% Retail value at retail sales price 2012 2013 2014 2015 2016
Hindustan Unilever Ltd. 30.5 30.9 30.8 30.7 30.4
RSPL 11.0 11.2 11.4 11.4 11.5
Godrej Consumer Products Ltd. 7.5 8.1 8.5 8.6 8.5
Reckitt Benckiser (India) Ltd. 7.7 7.7 7.8 7.9 8.0
Procter & Gamble Home Products Ltd. 7.9 7.8 7.9 7.8 7.6
Jyothy Laboratories Ltd. 5.7 5.5 5.6 5.6 5.5
Nirma Ltd. 5.8 5.6 5.4 5.3 5.3
SC Johnson Products Pvt. Ltd. 3.1 3.0 3.0 3.0 3.1
Others 20.8 20.2 19.6 19.7 20.1
Total 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International
Personal Care
Hindustan Unilever Ltd. 27.1 26.5 26 25.7 25.2
Colgate-Palmolive India Ltd. 7.1 7.2 7.2 7.1 7
L'Oréal India Pvt. Ltd. 3.3 3.5 3.6 3.7 3.8
Godrej Consumer Products Ltd. 4.3 4.1 3.9 3.8 3.7
Procter & Gamble Home Products Ltd.* 5.7 5.7 5.5 5.2 5.1
Dabur India Ltd. 4.9 4.7 4 3.8 3.6
Johnson & Johnson (India) Ltd. 2.5 2.6 2.7 2.8 3
Reckitt Benckiser (India) Ltd. 2.6 2.6 2.6 2.6 2.6
Marico Ltd. 2.2 2.2 2.4 2.5 2.6
Wipro Consumer Care & Lighting Ltd. 2.5 2.4 2.3 2.3 2.3
Others 37.8 38.5 39.8 40.5 41.1
Total 100.0 100.0 100.0 100.0 100.0
Notes: * Gillette India Ltd. numbers have been clubbed with Procter & Gamble Home Products Ltd.
Packaged Food
Gujarat Co-operative Milk Marketing Federation Ltd. 6.4 6.2 6.1 6.1 6.0
Ruchi Soya Industries Ltd. 3.7 3.4 3.4 3.4 3.3
Mother Dairy Fruit & Vegetable Pvt. Ltd. 3.6 3.4 3.3 3.2 3.2
Britannia Industries Ltd. 3.5 3.5 3.3 2.9 2.7
Karnataka Cooperative Milk Producers Federation Ltd. 2.4 2.3 2.3 2.4 2.4
Parle Products Pvt. Ltd. 3.1 2.9 2.8 2.5 2.4
Nestlé India Ltd. 3.9 3.7 3.5 2.4 2.4
PepsiCo India Holdings Pvt. Ltd. 1.9 1.9 2.0 2.2 2.3
ITC Ltd. 2.0 2.1 1.9 2.2 2.1
Others 68.8 69.7 70.7 72.0 72.7
Total 100.0 100.0 100.0 100.0 100.0
Page 21 of 25
Exhibit 7 (contd.)
Refreshments: Tea
Tata Global Beverages Ltd. 27.6 26.6 24.5 23 21.9
Wagh Bakri Ltd. 6.8 6.6 6.3 6.0 6.0
Private Label 2.6 2.8 2.8 2.7 2.5
Others 37.3 39.3 43.6 46.7 49.4
Total 100.0 100.0 100.0 100.0 100.0
Refreshments: Ice Cream
Gujarat Co-operative Milk Marketing Federation Ltd. 17.7 17.5 17.9 17.7 17.4
Mother Dairy Fruit & Vegetable Pvt. Ltd. 8.1 7.9 8.0 7.9 7.8
Vadilal Industries Ltd. 6.2 6.2 5.9 5.5 5.3
Others 56.5 57.0 58.3 59.2 59.8
Total 100.0 100.0 100.0 100.0 100.0
Exhibit 8
HUL’s Competitive Position across Categories in 2016
Home Care Personal Care

Product type Value share Rank Product type Value share Rank
Home Care 30.4% 1 Beauty and Personal Care 25.2% 1
Laundry Care 37.4% 1 Bath and Shower 43.3% 1
Dishwashing 60.2% 1 Color Cosmetics 16.8% 1
Surface Care 3.8% 3 Deodorants 9.5% 4
Toilet Care 7.5% 3 Fragrances 3.7% 7
Hair Care 15.9% 1
Men’s Grooming 7.7% 3
Oral Care 16.5% 2
Skin Care 46.5% 1
Sun Care 25.1% 1
Page 22 of 25
ENDNOTES
1 “The ‘Warren Buffett of Brazil’ Behind the offer for Unilever”, The New York Times, 7 February 2017
2 “Why the Kraft Heinz bid for Unilever could make an odd match”, The New York Times, 7 February 2017
3 “The ‘Warren Buffett of Brazil’ Behind the offer for Unilever”, The New York Times, 7 February 2017
4 “Kraft’s failed bid jolts Unilever Chief into protective revamp”, Wall Street Journal, 6 April 2017
5 “Unilever promises cash to shareholders after rebuffing Kraft Heinz bid”, Economic Times, 7 April 2017
6 ibid
7 “At HUL, volume push, cost cuts may get priority”, Economic Times, 7 April 2017
8 “Business Interview: Patrick Cescau, Chief Executive, Unilever: Farmers Unilever’s X-Factor that kills 99% of all known failings”, The
Independent, 16 October 2005

9 Unilever annual report 2007
10 ibid
12 Arkwright, David (2014) The Making of Dirt is Good: A Personal Journey of Brand Transformation, LID Publishing Inc.
13 “Unilever: Changes to further simplify board structure”, Dow Jones International News, 28 February 2008
14 “Narayana Murthy on board at Unilever”, www.dnaindia.com, 8 February 2007
15 “Unilever goes outside for chief”, Financial Times, 4 September 2008
16 “Nestle taps P&G veteran Polman for key job in rare look outside”, The Wall Street Journal, 27 September 2005
17 “Nestle: Paul Polman leaves Nestle”, Dow Jones International News, 4 September 2008
19 “Nestle’s former CEO ‘Hopeful’ Polman becomes Unilever CEO”, Dow Jones International News, 4 September 2008
22 “Former Unilever executive joins CD&R”, The Wall Street Journal, 24 June 2010
23 “Harish Manwani appointed as Unilever COO”, Business Today, 24 June 2011
25 “The MT Interview: Paul Polman”, Management Today, 1 March 2011
28 “Unilever’s Paul Polman: CEOs can’t be ‘slaves’ to shareholders”, Forbes.com, 20 July 2015
29 “Polman tears up Unilever targets”, Daily Mail, 6 February 2009
31 “Outsider in a hurry to shake up Unilever”, Financial Times, 4 April 2010
32 “View from the Top: Paul Polman, Chief Executive of Unilever”, Financial Times, 13 June 2011
33 “The Monday Interview – Paul Polman: Rebuilding a greener Unilever – CEO Polman pushing to make consumer-goods behemoth more agile
while filling in market ‘white spots’”, The Wall Street Journal Europe, 15 August 2011
34 “Unilever, Sara Lee in deal; Anglo-Dutch giant to buy Radox, Sanex and other brands”, The Wall Street Journal, 28 September 2009
35 “Unilever to buy Sara Lee personal care brands”, Financial Times, 25 September 2009
36 “Unilever, Sara Lee in deal; Anglo-Dutch giant to buy Radox, Sanex and other brands”, The Wall Street Journal, 28 September 2009
37 “Unilever to buy Alberto Culver in $3.7 bn deal”, Financial Times, 28 September 2010
38 “Unilever primps in hair aisle”, The Wall Street Journal, 28 September 2010
39 “Unilever looks to clean up in Alberto Culver buy”, Financial Times, 28 September 2010
40 Unilever company website
41 Unilever annual report 2014-15
42 “Unilever buying Seventh Generation”, Fortune.com, 19 September 2016
44 Unilever company website
45 “Unilever buys Sir Kensington’s, maker of fancy ketchup”, The New York Times, 20 April 2017
46 “Sir Kensington’s acquired by Hellmann’s Mayonnaise maker Unilever”, New Hope, 21 April 2017
48 “Promotions lift Unilever’s global sales”, The Independent, 7 August 2009
51 “Unilever’s new boss cleans up executives”, The Sunday Telegraph, 22 February 2009
52 Unilever annual reports 2008 and 2016
54 “Hindustan Lever move breaks with tradition”, Financial Times, 17 December 2005
55 “The new broom at Hindustan Lever”, Bloomberg News, 28 December 2005
56 “Unilever chooses expat to head HLL”, The Press Trust of India Limited, 16 December 2005
57 “Baillie to take charge as HLL CEO”, Business Standard, 16 December 2005
58 “Baillie to be CEO, HLL India; Adhikari to head Unilever Japan”, domain-b.com, 16 December 2005
59 “HLL announces key appointments”, domain-b.com, 25 January 2006
60 “HLL to get new name, logo”, Business World, 2 March 2005
61 “HLL announces new corporate identity”, HLL Press Release, 2007
62 “We expect India to be to Unilever what China has been to other companies”, Business Line (The Hindu), 6 December 2006
63 “Unilever India Exports Limited to transfer Sangam business to Wadhawan Food Retail”, HLL Press Release, 2007
64 Hindustan Lever Limited annual report 2006
65 “Hindustan Unilever set to slash jobs”, Economic Times, 4 February 2008
66 “Nitin Paranjpe replaces Baillie as HUL chief”, Livemint, 29 February 2008
67 Hindustan Unilever Limited annual report 2007
Page 23 of 25
68 Hindustan Lever Limited annual report 2006

69 ibid
71 “Nitin Paranjpe crowned at HUL”, DNA – Daily News & Analysis, 29 February 2008
72 “Nitin Paranjpe replaces Baillie as HUL chief”, Livemint, 29 February 2008
73 “Nitin Paranjpe new Hind Lever CEO”, Business Line (The Hindu), 29 February 2008
74 “Nitin Paranjpe crowned at HUL”, DNA – Daily News & Analysis, 29 February 2008
75 “At HUL, you work with many great leaders”, DNA – Daily News & Analysis, 29 February 2008
77 “Nitin Paranjpe new Hind Lever CEO”, Business Line (The Hindu), 29 February 2008
78 “HUL’s new strategy”, Indian Business Insight, 15 October 2008
79 “HUL to take water purifiers to villages”, Livemint, 18 September 2008
80 Hindustan Unilever Limited annual report 2008-09
81 “HUL-Eureka Forbes face off”, Management Compass, 1 July 2010
82 ibid
83 “HUL launches premium range water purifier Marvella worth Rs. 13,500”, India Retail News, 11 October 2011
84 “Hindustan Unilever introduces Pureit sachets”, The Times of India, 28 June 2012
85 “HUL launches water purifier for the masses”, Business Line (The Hindu), 29 June 2012
86 “HUL unveils ‘Pureit Marvella UV’ water purifier”, Indiainfoline News Service, 24 January 2013
87 “Godrej, Prestige to enter water purifier market”, Financial Chronicle, 15 January 2012
88 “Unilever’s Pureit wins the UNESCO Water Digest Water Award 2008-09”, The Economic Times, 17 December 2008
89 “We should drive people’s habits”, Business Line (The Hindu), 19 March 2009
90 “Unilever Sustainable Living Plan Launch”, Orissa Diary, 20 November 2010
91 “HUL: A clear solution”, Business Today, 7 July, 2013
92 “Unilever Sustainable Living Plan Launch”, Orissa Diary, 20 November 2010
93 “1000 children die of diarrhoea everyday in India”, Andhranews.net, 15 October 2008
94 “Lifebuoy leads pledge to help children reach their fifth birthday”, Indiainfoline News Service, 15 October 2012
95 “Second life”, The Economic Times – Bangalore Edition, 27 February 2013
96 ibid
98 “HUL’s ‘sustainability’ battle: How CEO Nitin Paranjpe is trying to attain a leadership position”, The Economic Times, 3 August 2013
99 “Hindustan Unilever: Shifting levers with time”, Business Today, 26 May 2013
100 “HUL plans to add food items, alignment with parent firm stays”, Livemint, 3 August 2008
101 “HUL loses ground”, Business Today, 14 June 2009
102 “HUL slashes prices of key soaps, detergents by 4-20%”, Livemint, 1 April 2009
103 “Unilever chief executive says Indian arm underperforming”, Livemint, 4 February 2010
104 “Ghadi moves out Wheel to be No.1 in laundry market”, The Economic Times, 11 January 2012
105 “HUL slashes prices of key soaps, detergents by 4-20%”, Livemint, 1 April 2009
108 Hindustan Unilever Limited annual report t 2012-13
109 Hindustan Unilever Limited annual report t 2009-10
110 “Hind Lever mulls launch of new Unilever brands”, Business Standard, 20 February 2011
111 “Comfort factor”, Business Standard, 12 July 2010
112 “HUL enters kitchen cleaning segment with Cif”, Business Line (The Hindu), 12 June 2009
113 “Comfort factor”, Business Standard, 12 July 2010
115 “Dove launches ‘Dove Elixir’”, Food and Nightlife, 27 November 2012
117 “Hindustan Unilever Limited to launch hair care brand TRESemme in India soon”, The Times of India, 2 August 2012
118 “Can HUL take over L’Oreal’s hair care market share?”, Rediff.com, 15 November 2012
119 “Hindustan Unilever to launch premium brands for hair styling”, Accord Fintech, 13 June 2013
120 “HUL’s new strategy”, Indian Business Insight, 15 October 2008
121 “HUL to launch new skincare range with ‘Pollution Protection’”, Livemint, 23 January 2008
126 “HUL brews a bigger business”, Business Line (The Hindu), 23 April 2009
128 ibid
129 “Future Group, Hindustan Unilever to co-develop, co-brand bakery products”, India Retail News, 22 August 2011
130 “Pepsico’s Executive Director and Vice-President for Innovation Geetu Verma to join Hindustan Unilever; to lead its Food Division”, The
Economic Times, 10 September 2011

131 “HUL Board approves proposal for new agreement with Unilever Plc”, ENP Newswire, 24 January 2013
132 “Higher royalty ‘No big deal’, says Unilever CEO Paul Polman”, Business Line (The Hindu), 1 November 2013
133 “Unilever to raise stake in HUL, acquire 22.52 per cent of the equity”, India Today, 30 April 2013
134 “Unilever raises stake in HUL to 67.28% via open offer”, Business Line (The Hindu), 5 July 2013
135 “HUL recast: Sanjiv Mehta to take over as CEO as Nitin Paranjpe gets elevated to global role”, The Times of India, 28 July 2013
136 “HUL appoints Sanjiv Mehta new MD and CEO”, Business World, 27 July 2013
137 “Naming of Sanjiv Mehta as HUL CEO comes as a surprise”, The Economic Times, 28 July 2013
Page 24 of 25
138 “No individual is greater than Hindustan Unilever: Harish Manwani”, The Economic Times, 28 July 2013
139 “Sanjiv Mehta takes over the leadership of Hindustan Unilever”, Middle East Company News, 5 August 2013
140 “Leader in the spotlight: Sanjiv Mehta”, Livemint, 31 July 2013
141 “Sanjiv Mehta takes over the leadership of Hindustan Unilever”, Middle East Company News, 5 August 2013
142 “Change in CEO doesn’t mean change in strategy”, Business Standard, 18 February 2014
143 “How HUL CEO Sanjiv Mehta is taking forward the process of embracing the market”, The Economic Times, 23 September 2014
144 ibid
145 ibid
146 “Hindustan Unilever kicks off new operating framework of ‘Winning in Many Indias’”, The Economic Times, 20 September 2014
147 ibid
148 “Unilever’s Harish Manwani to retire as COO this December”, Business Standard, 30 September 2014
149 ibid
150 “Second life”, The Economic Times (Bangalore edition), 27 February 2013
151 “Lifebuoy reduces diarrhoea from 36% to 5% in Thesgora”, Indiainfoline News Service, 21 March 2014
152 ibid
153 Hindustan Unilever Limited website
154 “HUL launches academy to build toilets”, Livemint, 18 November 2013
155 “HUL launches Prabhat , an initiative for community development in villages,”Exchange4Media.com, 7 May 2014
156 “Rejig aimed at sharper marketing focus – HUL unit gets a woman head in biz recast”, The Economic Times, 12 August 2014
157 “HUL exits from Kimberley Clark venture”, Hindu BusinessLine, 18 July 2016
158 “HUL bets on high-margin products to boost sales”, Business Standard, 4 July 2014
159 “HUL eyes new product categories”, Business Standard, 27 October 2016
160 “Tresemme outshines Pantene in supermarkets”, The Economic Times (Delhi Edition), 18 March 2015
162 “HUL identifies headroom for premium push”, Deccan Herald, 3 September 2015
163 “Surf Excel rides the premium wave”, Business Standard, 25 July 2016
165 “HUL to launch instant noodles Knorr to take on Maggi in noodle war”, The Economic Times, 12 March 2015
167 “HUL dusts off its dessert brands”, Business Standard, 11 February 2015
168 “Hind Unilever goes for the cream”, Business Line (The Hindu), 27 February 2014
169 “Hindustan Unilever Limited sells bread and bakery business Modern to Everstone Group”, Financial Express, 8 September 2015
170 “Indulekha buy can strengthen HUL’s Ayurveda play”, Business Line (The Hindu), 18 December 2015
171 “First time – HUL revives Ayush with e-launch”, The Times of India (Delhi edition), 12 September 2015
172 “HUL to acquire hair-care brand Indulekha for Rs. 330 crore”, The Economic Times, 18 December 2015
173 “FMCG battle heats up: HUL plans these products to take on Baba Ramdev’s Patanjali”, Financial Express, 18 May 2017
174 “HUL focuses on ‘Naturals’ portfolio, reducing costs”, Livemint, 18 May 2017
175 “HUL wants to be agile with spirit of small company”, The Times of India, 2 May 2014
176 ibid
177 “HUL carves out 15 teams to buck slowdown trend, beat rivals like Patanjali”, The Economic Times, 19 May 2017
178 “HUL CEO Sanjiv Mehta: To survive local competition, the key is to adapt, be flexible”, Livemint, 19 May 2017
179 “Baba brand or quality? Patanjali’s USP under watch in FMCG churn”, The Economic Times, 3 May 2016
180 “FMCG battle heats up: HUL plans these products to take on Baba Ramdev’s Patanjali”, The Financial Express, 18 May 2017
181 ibid
182 “Patanjali’s success is rubbing off on entire ayurvedic consumer products segment”, The Economic Times, 13 June 2017
183 “HUL CEO Sanjiv Mehta: To survive local competition, the key is to adapt, be flexible”, Livemint, 19 May 2017
Page 25 of 25
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Technical Report · April 2019

Bidhi Kashyap J. Ramachandran

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HINDUSTAN UNILEVER LIMITED (B):

PRANAV GARG, BIDHI KASHYAP, AND J RAMACHANDRAN

Strengthening the Core

Unilever Sustainable Living Plan

Organization Structure and Governance

HINDUSTAN UNILEVER LIMITED

Passing the Baton

I am trying to develop a business model which focuses on sustainability. I want to

Unilever ended up owning 67.28% of HUL’s shares. Polman responded:134

Source: Unilever annual report 2012

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HUL Senior Leadership 2006 to 2016

Finance and IT D. Sundaram D. Sundaram − − − − − − − −

Source: HUL annual reports

Source: Euromonitor International

Source: Euromonitor International

Source: Euromonitor International

Refreshments: Ice Cream

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Home Care Personal Care

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Independent, 16 October 2005

68 Hindustan Lever Limited annual report 2006

Economic Times, 10 September 2011

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