Portfolio Analysis_Personal Care_Group 2_Section C.pdf

IIM INDORE

Portfolio Analysis of Personal Care Industry

Strategic Management II

3/28/2012

Name Roll Number

Ashish Kumar PGP2011578

Debayan Ghosh PGP2011613

Deepak Sudhakar PGP2011617

Janmajit Das PGP2011662

Manoj Verma PGP2011712

Piyali Sarkar PGP2011779

Sudeep Mokal PGP2011900

Submitted By: Group 2

Section C

Portfolio Analysis Group 2

Section C Page 2

Table of Contents Personal Care .......................................................................................................................................... 3

Market Structure ................................................................................................................................. 3

Industry analysis ................................................................................................................................. 4

Hindustan Unilever Ltd ........................................................................................................................... 4

SWOT .................................................................................................................................................. 4

Category Analysis .................................................................................................................................... 5

Bath and Shower Category ................................................................................................................. 5

Skin Care ............................................................................................................................................. 6

Deodorants Category .......................................................................................................................... 7

Oral care Category .............................................................................................................................. 8

Hair Care category .............................................................................................................................. 9

Portfolio Analysis .................................................................................................................................. 10

McKinsey/GE Matrix ......................................................................................................................... 10

Analysis of McKinsey/GE Matrix ....................................................................................................... 11

BCG Matrix ........................................................................................................................................ 11

Unilever Global and HUL ....................................................................................................................... 13

Exhibits .................................................................................................................................................. 14

References ............................................................................................................................................ 25


Section C Page 3

Personal Care Personal Care Industry has shown significant growth in the past decade owing to growing

conspicuous consumption by the burgeoning youth population of the country. The industry,

segmented into sub-categories like Skin Care, Hair Care, Oral Care, Deodorants and Bath and

Shower, grew at 13% CAGR between 2005 and 2010. The following points summarise the latest

trends in the industry.

Market Attractiveness Trends

Overall market size of Rs 331 billion with a double-digit growth rate in 2010

69% of the business comes from urban India while rural India accounts for 31% of the

business

Shift towards more herbal and natural products owing to increased awareness about effects

of chemicals on the skin and hair

Men’s grooming products see a growing trend as men become more conscious about

looking good (sales of fairness creams for men, razors etc increase)

Direct selling brands like Amway and Oriflame see an increase in sales as customers increase

their acceptance levels – these brands now account for more than 10% of total value sales

Good economic growth, increase of middle class consumer base, higher disposable income

of youth help the industry to grow

Premium brands grow at a higher rate than mass products – premium cosmetics grew at the

rate of 25% and premium skin care products grew at the rate of 22% compared to mass

products which grew at 18%

Multinational companies’ shares rise owing to customers’ search for better perceived quality

– brands like Dior, Elca, Mac have started expanding

Market Structure

Number of independent sellers Many

Seller concentration Non-existent

Product differentiation Low / based on perception Seller Entry barrier No

Buyer Number Many

Buyer Entry barrier No

The market structure of the personal care industry is analysed using the factors mentioned above.

Seller concentration is low because no firms collude to influence the market. Also the product

differentiation within each category is low or based on perception only.

We do not consider this a perfect competition because:

In perfect competition each firm is so small that it cannot affect the market in any significant

way. However, HUL with 46% of market share can influence the market to a certain extent

Also in perfect competition no firm can have higher profits since all products are identical. In

this case HUL due to its brand name can charge premium prices for its products. However, in

the long run no firm can have excess profits from market.


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Industry analysis 5 forces Features Result

Bargaining power of buyers Consumers have a wide variety

of choices. High

Bargaining of suppliers Most raw materials are available

easily with a number of suppliers.

Low

Threat of new Entrants

New companies can easily manufacture but the marketing and distribution is very hard to

copy

Medium

Threat of substitute products Substitute products are not

available Low

Competition Competition is fierce for market

share. Very High

Overall, it is a moderately attractive industry

Hindustan Unilever Ltd HUL was formed in 1956 as a subsidiary of Unilever Group. Since then, it has grown both organically

and through mergers and acquisitions to become one of the key players in the FMCG industry. The

company invests heavily in product innovation and launches products which are locally accepted,

unlike some of its competitors like P&G (which launches global products in local markets). It has a

deep distribution network and over 200 production facilities. The company receives some help in

R&D from its parent company –Unilever Group and exports products to Unilever companies all over

the world. Being one of the dominant players in the personal care industry, the company owns some

of the most respected brands in the country like Fair & Lovely, Pond’s, Lakme, Pepsodent, Lifebuoy,

Axe etc.

Business Competitiveness of HUL

HUL is a dominant player in the Personal care industry accounting for 33% of sales of the

industry

Strong product portfolio and a deep distribution system helps it stay competitive in both

urban and rural markets

In 2010, the company saw a slight overall decline in its market share from 34% to 33% due to

minor declines in product sales in its various sub-categories

Even though bulk of its revenues comes from mass products, the company continues to

invest in the masstige products which show the fastest growing trends in the industry

SWOT HUL products are widely used throughout the country because of its flanked product portfolio.

Approximately one out of every three products used by consumers is an HUL product. Due to this,

the company enjoys a high bargaining power and thus, an exceptional competitive advantage.

However, recently it has seen a decline in sales due to foreign players coming into the industry and


Section C Page 5

rivals launching products at cheaper price-points. Also, the changing demography of India is forcing

the company to constantly innovate and change according to the consumers’ needs.

Strengths Weakness

Strong brand portfolio

Wide product range with presence in all price points

Focus on innovation

Distribution

Protection of market share at the cost of near-term profit deterioration

Opportunities Threats

Higher per capita income

Youth population with varied choices

Rural penetration

Local brands and private labels

Intense competition

Changing trends

HUL has also divided its Personal Care category into 5 business units: Bath and Shower, Skin Care,

Deodorants, Hair Care and Oral Care. A brief analysis of these categories is given below

Category Analysis

Bath and Shower Category Bath and Shower category consists of mass products like soaps and premium products like shower

gels etc. This category has a market size of around 31.6% of the total sales revenue in the Personal

Care category, i.e. around Rs 104 billion in 2010


Overall, bath and shower value sales continued to see double-digit value growth in 2010, of

almost 11%

This was, however, a slight slowdown compared to 2009’s growth, which was over 12%. Bath

and shower is projected to grow by a constant value CAGR of 4% between 2010 and 2015

Liquid soap is forecast to be the star growth performer in the forecast period with a predicted

constant value CAGR of 21%

All the bar soap players increased prices in 2010, by an average of 6% in current terms, partly to

offset increases in prices of raw materials like palm oil, and to counter high inflation

Industry rivalry is high. Hindustan Unilever Ltd continued to dominate the competitive landscape

in 2010, with almost 51% of Godrej Consumer Products was placed second, with over 10% of

value sales, followed by Wipro, Reckitt Benckiser, with its Dettol brand, and ITC Ltd, with Vivel

Macro Factors include the general demographic shift of the Indian population and the

forecasted economic environment. India's per capita income is projected to grow by 17.3%

The rising incomes of Indian households, coupled with strong distribution, particularly in modern

grocery retailers such as supermarkets/hypermarkets, helped masstige bar soaps

The market in India is at a stage where new products trial is very likely to occur if there is enough

visibility for the product. New products are more probable to come from already established

companies rather than new entrants


Section C Page 6


Hindustan Unilever Ltd continued to dominate the competitive landscape in 2010, with almost

51% of value sales. The company has a strategy of straddling all price points and deploying a full

portfolio, supported by advertising for all of its brands

HUL’s market share in this category has decreased over the past few years, from 54.3% in 2008

to 51% in 2010

Lux and Lifebuoy are the leading brands in the Indian market followed by Santoor and Dettoal

HUL's distribution network comprises 6.4 million retail outlets reaching over 700 million

consumers. Its distribution network is one of the major strengths

During 2010-11, HUL significantly increased its direct retail coverage by adding over 600,000

outlets. Project Shaktimaan, the second phase of Project Shakti was launched and was a key

enabler for this rural expansion

HUL’s production facilities are split between its own facilities and those of third party

manufacturers. The company owns over 40 manufacturing units, and it ties up with

approximately 150 third party manufacturers to which it contracts out the manufacturing of

various products

Profit margins for bar soaps have decreased from 14% to around 7.5-9% in the past few years

Customer loyalty for some of HUL’s brands like Lifebuoy, Pears, Dove etc is very high

Skin Care HUL is the overall the market leader in the Skin Care Category, and is thriving because of the wide

range of products it has, targeting various strata. Also important is the innovations that they present

in the products, which form the key to customer retention. Their aggressive marketing and

distribution network has enabled various products to be the masstige products.


Skin Care value sales grow by 18% in 2010, to almost Rs41 billion

Market size of Skin Care corresponded to 12.68% of the total Sales Revenue in the PC Category

in 2010

Premium category sees the fastest growth of almost 22% in 2010, compared to growth of mass

category of 18%

Unit prices of mass products shows little variance, price of premium products expected to

marginally rise

Skin Care is projected to grow by a constant value CAGR of 10% between 2010 and 2015

Hindustan Unilever remains the top player in 2010, due to its strength in innovation

Hindustan Unilever Ltd continued to dominate the competitive landscape in 2010, with almost

56.2% of value sales.

L’Oreal India was placed second, with over 10% of value sales, followed by Amway and

CavinKare Pvt Ltd

Prices are kept in check due to stiff competition and economic downturn restricting consumers’

budgets


Section C Page 7

Business Competitiveness Trends

HUL is the market leader in Skin Care Category followed by L’Oreal India and Amway India

Fair & Lovely and Pond’s are the leading brands in the Indian market.(Figure 3)

HUL’s market share has decreased over the years due to increasing competition from L’Oreal,

Amway, ITC etc

HUL's distribution network comprises 6.4 million retail outlets reaching over 700 million

consumers. Its distribution network is one of the major strengths

Project Shakti helped in increasing HUL’s direct retail coverage by adding over 600,000 outlets

Profit margins for skin care products have decreased from 5% to around 2-3% in the past few

years

Customer loyalty for some of HUL’s brands like Fair & Lovely, Dove etc is very high

Anti-ageing ,anti-cellulite and firming gels are the new product concepts that HUL and other

competitors are getting into to differentiate

Deodorants Category In the past few years, deodorants have started becoming daily use products. Hence, the growth in

this category is expected to be high in the coming years. This category contributed to around 2.39%

of the total sales in the personal care segment


In 2010, deodorant value sales grew by almost 40%. Growth was driven by company advertising

campaigns, supporting higher penetration across India. Growth in 2010 was, however, slightly

slower than in 2009, when sales grew by over 44%

Deodorant sprays saw growth of 40% in 2010, while roll-ons increased by only 13%

Deodorant sprays will retain their dominance in the forecast period, with an 18% constant value

CAGR between 2010 - 2015

In 2010, the market size was 2.39% (% of sales) of the total personal care segment. It is

forecasted to grow to around 8.35% in the coming years (w.r.t to sales)

Premium deodorants accounted for less than 2% of value in 2010, reflecting the fact that

deodorants are a daily use product

Deodorant sales are led by Hindustan Unilever Ltd, with the Axe brand; Paras Pharmaceuticals

Ltd, with Set Wet; and McNroe Chemicals Pvt Ltd, with Wild Stone. These three manufacturers

held a combined value share of over 49% in 2010

Domestic companies improved their position in the latter part of the review period through the

launch of a number of new deodorant products, aggressive promotion as well as leveraging the

increased presence of chained modern grocery retailers, such as supermarkets/hypermarkets

Unit prices of deodorant sprays are expected to grow only minimally, as companies aggressively

pursue volume growth

The increasing availability of domestic and international brands, and greater product availability

at affordable prices has led consumers to move away from using products from the unorganised

channel


Section C Page 8


HUL is the market leader in Deodorants Category with 29.4% market share followed by Paras

and McEnroe

The leading brand is Axe, with 25% of value in 2010, followed by Set Wet and Wild Stone with

10% and 9%, respectively. Axe is a well-established and widely distributed brand, and is heavily

supported by advertising across India

HUL’s market share has decreased over the years from 39% in 2008 to 29.3% in 2010, due to

increasing competition from Park Avenue, Set Wet and private labels

Profit margins of deodorants is relatively high around 15-20%

Customer loyalty for deodorants brands like Axe and Dove is very high

Unit prices of deodorant sprays are expected to grow only minimally over the forecast period, as

companies aggressively pursue volume growth

Sure – an antiperspirant brand which was launched by Hindustan Unilever Ltd in the middle of

2010 – is expected to carve a niche in the forecast period

The number of Private Labels in the category has been increasing over the years and is a cause of

concern for HUL. For example, Future Group with its private label called John Miller

Oral care Category

Market Size Rs. 47 billion (2010) Market Growth rate Avg. rate 10.23% (CAGR 8%) (2005-10) HUL’s share 19.7% Growth in market share -4.3% Major competitors Colgate-Palmolive, P&G (International)

Dabur, Anchor (domestic) Major Brands Pepsodent, Close-Up


In 2010, oral care value sales grew by almost 13%. Growth was driven by sale of herbal products

from Vicco, Dabur etc. Also the increasing penetration of toothbrush and toothpaste fuelled the

growth. Growth in 2010 was slightly better than in 2009, when sales grew by 11%

Mouthwash/Dental rinses grew by over 70% in 2010 followed by toothbrushes by 18%

Major chunk of sales comes from selling of tootpastes which is around 82% of total sales in oral

care.

In 2015, the oral care market is forecasted to be at Rs. 60billion growing at a CAGR of 5%(2010-

15)

Premium toothpastes like ‘Total Care’ and ‘Total Whitening’ saw impressive growth. Also

potential of gel toothpastes looks promising

Competition intensified as a number of domestic companies introduced herbal products like

Amar remedies, Jaikaran, Smyle Herbal etc.

Although majority of sales took place through local retailers, private labels like ‘Sach’ is expected

to make a mark in future.

Industry profitability remained constant. Although inflationary pressures were present but

intense competition stopped prices from going up.


Section C Page 9


HUL is No.2 in market with a market share of 19.7% (following Colgate-Palmolive at 46%)

The leading brands are Pepsodent (11.2%) and Close-Up at 8%

HUL’s market share has decreased from over 23% in 2005 to 19% in 2010. Last year it declined

by 0.6% from 20.3% to 19.7%.

Profit margins in oral care is relatively high around 15%

Unit prices of oral care are expected to grow only minimally over the forecast period, as

companies aggressively try to gain market share

HUL lacks products in the most growing segments of mouthwash and electric toothbrushes

which is hampering its growth

The distribution, technology and management are the strong points of HUL which it needs to

leverage to start growing again in this category

Hair Care category Market Size Rs. 80 billion (2010) Market Growth rate CAGR 9% HUL’s share 19.7% Growth in market share Constant with 2009 Major competitors Dabur, Marico, P&G (Mass)

L’Oréal India Pvt Ltd,(Premium) Major Brands Clinic Plus, Sunsilk, Dove


• Hair care sales grow by 13% to 80 billion INR with Salon hair care sales growing by 22% in 2010. Conditioners -accounted for around 42% of value sales

• Hair colorant was one of the best performing categories in 2010, with value growth of over 20%.

• Overall unit prices of hair care rose minimally in 2010, as companies pushed for volume growth rather than higher margins.

• Hair care remains dominated by mass products, with almost 97% of all value sales derived from this segment. Premium brands, like L’Oréal Professional and Schwarzkopf Professional, did, however, gain share between 2005 and 2 010, to over 3%.

• HUL dominated with 19.4 % of share, it is a highly competitive market with the top four companies accounting for over 49% of value


• HUL is the market leader with 19.4 % of market followed by Dabur India Ltd, Marico Ltd and

Procter & Gamble Home Products Ltd.

• The major Brands of HUL in hair care are Clinic Plus, Sunsilk, Dove Conditioners and

Shampoo and Clear.

• Its overall market share in this segment is constant


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• However, it is losing market due growth of premium brands like L’Oréal Professionnel and

Schwarzkopf Professional.

• Dove achieved a value share of almost 4% in 2010, up from less than 1% in 2007 this is due

to a trend of people inclining and going towards premium products and brands.

Portfolio Analysis

McKinsey/GE Matrix The GE/McKinsey Matrix is a nine-cell (3 by 3) matrix used to perform business portfolio analysis as a

step in the strategic planning process. The aim of the GE/McKinsey Matrix Portfolio Analysis is to:

• Analyse the current business portfolio and decide which businesses should receive more

or less investment

• Develop growth strategies for adding new products and businesses to the portfolio

• Decide which businesses or products should no longer be retained

The GE/McKinsey matrix is based on 2 factors: Industry Attractiveness and SBU Business Strength.

These factors are further divided into various parameters and based on the different weightages

given to each parameter the weighted average is used to calculate the position of the SBU along the

X and Y Axis.

For the Personal Care segment, the different SBU’s decided were: Bath and Shower, Skin Care, Hair

Care, Oral Care and Deodorants. Various parameters were chosen to differentiate between the

different categories and analyze their attractive and the strength of HUL in each of these categories.

Industry Attractiveness Parameters

S.No Parameter Weightage (%)

1 Market Size

35 2 Market Growth

3 Market Diversity

4 Pricing Trends

5 Industry Rivalry 30

6 Distribution

7 Industry Profitability

15 8 Entry/Exit Barriers

9 Inflation Rate

10 Differentiation 10

11 Global Opportunities

15 12 Macro Environment

13 Demographic Shift


Section C Page 11

SBU Strength Parameters

S.No Parameter Weightage (%)

1 Market Share 30

2 Growth in Market Share

3 Distribution 30

4 Brand Equity

5 Finance 10

6 Profit Margin relative to Competitors

7 Technology

20 8 Research and Development

9 Production Capacity

10 Customer Loyalty 10

Using these factors the weighted average was used to find the industry attractiveness and business

competitiveness for each of the 5 categories in Personal Care.

Analysis of McKinsey/GE Matrix The GE/McKinsey Matrix was plotted for HUL and its portfolio and is displayed in Fig ___, Appendix.

Looking at the matrix the following points can be concluded:

Skin Care Category: This is the only category in the high industry and high business strength

cell. Hence, HUL should invest and grow in this sector. This sector is driven by innovation and

high distribution, hence, HUL should invest in R&D and continue its stronghold in this

category

Bath and Shower and Deodorant Category: These 2 categories are in the medium – high

industry attractiveness and high SBU strength cell. This means these categories are selective

growth segments. Because of the high competitive strength in this industry, HUL should

continue its dominance in these categories.

Selective brands in each of these categories should be invested in and brands with low

growth prospects can be divested from. The revenue from these categories can be used to

invest in the growth of the Skin Care Category

Hair Care and Oral Care Category: These 2 categories are in the medium growth and

medium SBU strength cells. The growth prospects of these 2 categories are not attractive

and HUL should consider divesting from these. However, if there is a strategic advantage in

these categories, the company should consider investing only in certain brands or segments

of these categories.

BCG Matrix An analysis of the BCG matrix for the four categories under Personal Care, in the context of the

business units of Hindustan Unilever, reveals the strengths and weaknesses of the units in its

portfolio.

Analysis of Business Units

Figure I.1 shows the BCG matrix drawn in for HUL’s SBU (Personal Care).Many of its products,

especially in Skin Care, are the market leaders and thus make this as a star performer. Having star

performers in its Deodorants business has spruced the division up, making it as a star. The company


Section C Page 12

observed modest growth in market share in the Hair Care segment as well and hence was more or

less a question mark.

The bath and shower was the category where the products of HUL were a winner in the market

share- a large part of the revenues of HUL come from this division. However, dearth of premium

products in its portfolio stands as an obstacle for the growth. Nonetheless, this category is a cash

cow and hence provides other products in the portfolio, especially the question marks.

The oral care, as a sector has seen a pretty good advancement and innovations, with a wide range of

products, varying from mouth washes to floss coming up in the market. Though the growth of these

products has not been high as of now, but a shifting demographic trend indicates a future growth in

this sector. However, HUL did not have many products in this segment and hence needs to consider

its policies and strategic stand on this part of its portfolio.

All in all, this analysis presents with the picture that HUL has a strong portfolio. Its Stars are good

performers and hence provide good competitiveness in the short term. Its cash cows are pretty

strong to provide for the sufficient short development of its stars and future growth of its question

marks. A detailed analysis of its individual brands presents a better picture of its performance of the

business units.

Analysis of Brands

The results of Figure I.2 match with those of figure 1. HUL’ skin care business, as mentioned

previously, falls in the category of star, as it has some of the most competitive brands in its portfolio-

Fair & Lovely, which is a Masstige product and leads the market, and Vaseline, which deals largely in

the lower segment of the market. Ponds’ has a considerable market share, and shows high prospects

of getting converted to a star. Others in the category are Lakme and Pears. Whereas Lakme has a

small share, after L’oreal and currently is a question mark, the changing demographics of the nation,

coupled with the increasing population with higher dispensable income, and preference for

premium products present considerable growth opportunity. HUL also has advanced products,

where the focus of the industry is said to be shifting: Anti Cellulites and Firming products.

As far as the deodorants are considered, HUL’s AXE is the market leader, but the other product in

the portfolio, Rexona, is equally lagging and is a question mark. However, deodorants have become

a daily use product for the population and hence the growth expected in this category is very high.

The segment should, however, see other product developments from HUL so as to be able to sustain

the benefit that t has achieved from its brand AXE. Unilever’s portfolio previously had Calvin Klein

Cosmetics, which was later divested. Considering the growth that the Premium segment is

observing, such products will add another dimension to the portfolio.

In the hair care segment, the company has three brands, Sunsilk, Clinic Plus and Clear with Clinic Plus

leading the sale amongst the three of them and is the star in the category. Sunsilk, though a

question mark, has a huge customer base, and has shown strong capabilities through innovations in

the product, like Sunsilk Co-creations. Also, the brand being present in the parent portfolio provides

with its advantage of innovations. Clear, on the other hand has a small share of the market and

targets the lower segments, with not many innovations. If the product doesn’t serve any strategic

purpose, it can be divested.


Section C Page 13

The bath and shower care segment is lead by Lux, which is a cash cow. Following Lux is lifebuoy

which is on the verge of becoming a cash cow. The change is Lifebuoy has come about as a change in

the preference of the consumer towards products with germ fighting capabilities. Pears, Breeze and

Hamam follow. Pears, though low in market share, but has a wide customer base and loyalty. The

company should take proper decisions regarding the investment in the brands, and if need be can

divest a few of them.

As mentioned earlier, the Oral Care, as a portfolio itself, stands as a dog, as the products lack in the

development, as the segment is expecting to grow with technology innovations, where the company

hasn’t exhibited anything in this regard. Strategic review of the investment in this part of the

portfolio is required.

Unilever Global and HUL Unlike PnG, HUL has both Global and country-specific brands depending on acceptance by local

people. Unilever places high priority on emerging markets (around 50% of business generated by

emerging countries)

Portfolio Difference

o Global brands not present in India – St.Ives, Radox, VO5, Simple, Tresemme, Fissan

o Indian brands – Ayush, Clear, Clinic Plus, Hamam, Fair & Lovely etc

Parental Advantage

– HUL leverages Unilever’s scale in global procurement to manage commodity costs

– Receives technology and brand development inputs from Unilever


Section C Page 14

Exhibits A. Personal Care Industry

Table A.1 Y-o-Y growth of Personal Care Industry

Year 2005 2006 2007 2008 2009 2010

Revenues 1,78,152.10 1,97,745.20 2,21,603.80 2,55,783.50 2,91,134.90 3,31,496.30

Figure A.1 Y-o-Y growth of Personal Care Industry

Table A.2 Company Shares in Personal Care Industry, 2010(%)

Companies 2005 2006 2007 2008 2009 2010

Unilever Group 36.6 35.4 34.9 34.9 33.7 33.1

Colgate-Palmolive Co 6.4 6.6 6.8 6.8 6.9 6.8

Procter & Gamble Co, The 4.2 4.5 4.7 4.8 5.0 5.4

Dabur India Ltd 4.7 4.8 4.9 5.0 5.0 4.9

Godrej Group 3.9 4.0 4.1 4.2 4.4 4.7

L'Oréal Groupe 1.8 2.2 2.6 3.0 3.3 3.6

Reckitt Benckiser Plc 1.5 1.7 1.8 2.1 2.7 2.9

Wipro Ltd 2.1 2.3 2.5 2.5 2.7 2.9

Marico Ltd 1.7 2.6 2.5 2.3 2.3 2.3

Johnson & Johnson Inc 2.4 2.4 2.3 2.1 2.1 2.1

CavinKare Pvt Ltd 1.8 1.8 1.9 1.9 1.9 1.8

Amway Corp 1.4 1.5 1.5 1.5 1.6 1.7

Emami Ltd 0.9 1.1 1.3 1.3 1.4 1.5

ITC Ltd - - - 0.7 1.2 1.4

Nirma Ltd 2.9 2.4 2.2 1.9 1.7 1.4

Revlon Inc 0.8 0.9 1.0 1.1 1.1 1.2

Oriflame Cosmetics SA 0.3 0.5 0.7 0.8 1.0 1.1

Anchor Health & Beauty Care Pvt Ltd 0.5 0.5 0.4 0.6 0.8 0.9

Henkel AG & Co KGaA 1.0 0.9 0.9 0.8 0.7 0.7

Hygienic Research Institute 0.5 0.5 0.6 0.6 0.6 0.6

Bajaj Sevashram Ltd 0.7 0.8 0.7 0.7 0.6 0.6

SuperMax Corp 0.8 0.8 0.7 0.7 0.6 0.6

0.0

1,00,000.0

2,00,000.0

3,00,000.0

4,00,000.0

2005 2006 2007 2008 2009 2010

Beauty and Personal Care

Beauty and Personal Care


Section C Page 15

Figure A.2 Company Shares in Personal Care Industry, 2010

B. HUL Figure B.1 Y-o-Y growth of HUL in Personal Care Industry

C. Bath and Shower Category

Table C.1 YoY Sales Figures in Bath and Shower (%)

Categories 2005-06 2006-07 2007-08 2008-09 2009-10

Bath and Shower 10.7 10.6 16.8 11.6 10.5

Premium Bath and Shower 10.7 24.4 10.3 18.2 16.6

Mass Bath and Shower 10.7 10.5 16.8 11.6 10.5

Figure C.1 YoY Sales Figures in Bath and Shower (%)

33%

7% 5% 5% 5% 4% 3%

3% 2%

2%

31%

2010

Unilever Group

Colgate-Palmolive Co

Procter & Gamble Co, The

30.0

32.0

34.0

36.0

38.0

2005 2006 2007 2008 2009 2010

HUL

Unilever Group

0

5

10

15

20

25

2006 2007 2008 2009 2010

Bath and Shower

Premium Bath and Shower

Mass Bath and Shower

Sales Growth YoY


Section C Page 16

Table C.2 Company Share in Bath and Shower Category

Companies 2005 2006 2007 2008 2009 2010

Unilever Group 54.4 53.7 53.5 54.3 51.8 51.0

Godrej Group 8.3 8.7 8.9 9.3 10.0 10.3

Wipro Ltd 6.0 6.8 7.3 7.4 8.2 8.8

Reckitt Benckiser Plc 4.4 4.6 5.0 5.5 7.0 7.9

Nirma Ltd 8.6 7.3 6.6 5.6 5.1 4.3

ITC Ltd - - - 1.7 2.9 3.4

Anchor Health & Beauty Care - - - 0.4 1.1 1.6

Cholayil Pharmaceuticals Pvt Ltd 3.0 2.8 2.8 2.7 2.0 1.5

Johnson & Johnson Inc 1.9 1.8 1.7 1.5 1.4 1.4

Henkel AG & Co KGaA 2.4 2.1 1.9 1.7 1.4 1.3

Amway Corp 0.8 0.8 0.8 0.8 0.8 0.9

Emami Ltd 0.4 0.5 0.5 0.5 0.6 0.8


Heinz Co, HJ 0.7 0.7 0.6 0.5 0.5 0.4

Oriflame Cosmetics SA 0.1 0.1 0.2 0.2 0.3 0.4

Dabur India Ltd 0.2 0.3 0.4 0.1 0.2 0.2

Colgate-Palmolive Co 0.2 0.2 0.2 0.2 0.2 0.2

Marico Ltd - 0.2 0.2 0.2 0.1 0.1

Fem Care Pharma Ltd 0.2 0.2 0.1 - - -

Oriental Extractions Pvt Ltd 0.2 - - - - -

Muller & Philips India Ltd - - - - - -

Others 7.7 8.8 8.6 6.9 5.9 5.1

Total 100.0 100.0 100.0 100.0 100.0 100.0

Figure C.2 Company Shares in Bath and Shower, 2010

Table C.3 Brand Shares in Bath and Shower

Brand Company name (GBO) 2005 2006 2007 2008 2009 2010

Lux Unilever Group 14.4 14.4 14.6 15.3 13.8 13.7

Lifebuoy Unilever Group 12.6 12.6 12.7 13.3 12.6 11.8

Santoor Wipro Ltd 5.7 6.4 6.9 7.1 7.9 8.5

Dettol Reckitt Benckiser Plc 4.4 4.6 5.0 5.5 7.0 7.9

Godrej Godrej Group 4.6 4.9 5.2 5.4 5.8 6.0

Pond's Unilever Group 7.7 7.3 6.9 6.3 5.8 5.3

Cinthol Godrej Group 3.5 3.5 3.6 3.7 4.0 4.0

Hamam Unilever Group 3.8 3.7 3.5 3.8 4.0 4.0

Breeze Unilever Group 6.3 6.2 6.2 5.6 4.0 3.6

Dove Unilever Group 0.7 0.8 1.2 1.5 2.6 3.6

Unilever Group 51%

Godrej Group 10%

Wipro Ltd 9%

Reckitt Benckiser Plc

8%

Nirma Ltd 4%

ITC Ltd 4%

Others 14%

2010


Section C Page 17

Pears Unilever Group 2.3 2.3 2.3 2.7 2.8 2.9

Nima Nirma Ltd 4.1 3.5 3.1 2.6 2.7 2.3

Nirma Nirma Ltd 4.5 3.8 3.5 3.0 2.3 2.0

Vivel ITC Ltd - - - 0.9 1.3 1.6

Dyna Anchor Health & Beauty - - - 0.4 1.1 1.6

Medimix Cholayil Pharmaceuticals 2.8 2.7 2.7 2.5 1.8 1.3

Johnson's Johnson & Johnson Inc 1.5 1.5 1.4 1.3 1.3 1.2

Liril Unilever Group 1.5 1.3 1.1 1.0 1.0 1.1

Margo Henkel AG & Co KGaA 1.0 0.9 0.9 0.8 0.9 0.9

Himani Emami Ltd 0.4 0.5 0.5 0.5 0.6 0.8

Total Total 100.0 100.0 100.0 100.0 100.0 100.0

Figure C.3 Brand Shares in Bath and Shower, 2010

Figure C.4 Decrease in Market Share of HUL, 2005-10

D. Skin Care Category Figure D.1 YoY Sales Figures in Skin Care (%)

Lux, 13.7 Lifebuoy,

11.8

Santoor, 8.5

Dettol, 7.9

Godrej, 6.0

Pond's, 5.3

Breeze, 3.6

Dove, 3.6

Pears, 2.9

Others, 36.7

48.0

50.0

52.0

54.0

56.0

2005 2006 2007 2008 2009 2010

Unilever Group

Unilever Group

0

20

40

60

2006 2007 2008 2009 2010

Sales Growth YoY

Skin Care

Premium Skin Care

Mass Skin Care


Section C Page 18

Figure D.2 Company Shares in Skin Care, 2010

Figure D.3 Brand Shares in Skin Care, 2010

Figure D.4 Decrease in Market Share of HUL, Skin Care, 2005-10

E. Deodorants Category

Table E.1 YoY Sales Figures in Deodorants Category (%)

Categories 2005-06 2006-07 2007-08 2008-09 2009-10

Deodorants 20.0 27.3 38.7 44.3 39.8

Deodorant Roll-Ons 12.8 15.9 14.7 13.6 12.9

Deodorant Sprays 20.2 27.7 39.3 45.0 40.2

HUL 56%

L'Oreal 6%

Amway 5%

CavinKare 3%

Oriflame 3%

Emami 3%

Zydus 2%

Nivea 2% Himalaya

2% J&J 1%

Lotus 1%

Others 16%

2010

Fair&Lovely 43%

Pond's 6%

Lakme 5%

Vaseline 2%

Aviance 1%

Pears 1%

Others 43%

54

56

58

60

2007 2008 2009 2010

Unilever Group

Unilever Group


Section C Page 19

Figure E.1 YoY Sales Figures in Deodorants (%)

Table E.2 Company Share in Deodorants Category

Companies 2005 2006 2007 2008 2009 2010

Unilever Group 43.0 41.2 38.9 39.3 31.7 29.5

Paras Pharmaceuticals Ltd - - 3.9 4.9 8.8 10.4

McNroe Chemicals Pvt Ltd - - - 2.0 6.9 9.5


Henkel AG & Co KGaA 11.9 11.3 10.1 8.3 6.7 5.9

TTK Healthcare Ltd 3.2 3.2 3.2 3.4 4.4 5.2

Beiersdorf AG 1.1 2.2 2.4 2.9 3.9 4.7

Procter & Gamble Co, The 0.7 1.8 2.7 3.1 3.2 2.7

Others 25.6 25.7 24.1 21.4 19.8 19.3

Total 100.0 100.0 100.0 100.0 100.0 100.0

Figure E.2 Company Shares in Deodorants, 2010

Table E.3 Brand Shares in Deodorants

Brand Company name (GBO) 2005 2006 2007 2008 2009 2010

Axe/Lynx/Ego Unilever Group 25.9 26.6 24.5 26.4 26.1 25.2

Set Wet Paras Pharmaceuticals - - 3.9 4.9 8.8 10.4

Wild Stone McNroe Chemicals - - - 2.0 6.9 9.5

Spinz CavinKare Pvt Ltd 4.8 5.3 5.8 6.4 6.6 6.2

Fa Henkel AG & Co KGaA 11.9 11.3 10.1 8.3 6.7 5.9

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

Deodorants

Deodorant Roll-Ons

Deodorant Sprays

Unilever Group, 29.5

Paras Pharmaceut

icals Ltd, 10.4

McNroe Chemicals

Pvt Ltd, 9.5

CavinKare Pvt Ltd, 6.2

Henkel AG & Co

KGaA, 5.9

TTK Healthcare

Ltd, 5.2

Beiersdorf AG, 4.7

Procter & Gamble Co,

The, 2.7

Others, 25.9


Section C Page 20

Eva TTK Healthcare Ltd 3.2 3.2 3.2 3.4 4.4 5.2

Nivea Beiersdorf AG 1.1 2.2 2.4 2.9 3.9 4.7

Dove Unilever Group - - 1.0 1.5 2.0 2.8

Oriflame Oriflame Cosmetics SA 1.5 1.5 2.1 2.0 2.2 2.3

Old Spice Procter & Gamble Co, The

- 1.0 1.9 2.4 2.6 2.2

Park Avenue Raymond Ltd 1.8 2.2 2.2 2.4 2.2 1.7

Yardley Wipro Ltd - - - - - 1.6

Rexona Unilever Group 15.9 14.3 13.1 11.2 3.5 1.4

Others Others 25.6 25.7 24.1 21.4 19.8 19.3

Total Total 100.0 100.0 100.0 100.0 100.0 100.0

Figure E.3 Brand Shares in Deodorants, 2010

Figure E.4 Decrease in Market Share of HUL, Deodorants, 2005-10

F. Hair care category Figure F.1 YoY Sales Figures in Hair Care Category (%)

Axe/Lynx/Ego, 25.2

Set Wet, 10.4

Wild Stone, 9.5 Spinz, 6.2 Fa, 5.9

Eva, 5.2

Nivea, 4.7

Dove, 2.8

Others, 30.1

0.0

20.0

40.0

60.0

2005 2006 2007 2008 2009 2010

Unilever Group

Unilever Group

0

20

40

60

80

100

1 2 3 4 5 6

Premium 2.1 2.5 2.8 3 3.2 3.5

Mass 97.9 97.5 97.2 97 96.8 96.5


Section C Page 21

Table F.2 Company Share in Hair Care Category

Company 2006 2007 2008 2009 2010

Hindustan Unilever Ltd 0 19.4 18.9 19.2 19.3

Dabur India Ltd 12.1 11.8 12.1 11.8 11.5

Marico Ltd 10.5 10.4 9.6 9.3 9.5

Procter & Gamble Home Products Ltd 7.1 7.7 8.2 8.5 8.2

L'Oréal India Pvt Ltd 5.6 6.1 7.0 7.3 7.7

Godrej Consumer Products Ltd 4.5 4.5 4.3 4.4 5.6

CavinKare Pvt Ltd 4.8 4.9 4.9 4.6 4.4

Emami Ltd 3.3 3.7 3.9 3.8 3.7

Hygienic Researc Institute 2.2 2.4 2.6 2.6 2.6

Bajaj Consumer Care Ltd 3.2 3.1 2.8 2.6 2.5

ITC Ltd 0 0 0.4 0.8 1.4

Dey's Medical Stores 2 1.7 1.5 1.3 1.1

Others 44.7 24.3 23.8 23.8 22.5

Total 100 100 100 100 100

Figure F.2 Company Share in Hair Care Category (2010)

Table F.3 Brand Shares in Hair Care

Brand Company 2007 2008 2009 2010

Clinic Plus Hindustan Unilever Ltd 9.7 9.6 9 8.7

Dabur Dabur India Ltd 5.6 5.7 5.7 5.7

Parachute Marico Ltd 5.4 5.1 5.1 5.2

Head & Shoulders Procter & Gamble Home Products Ltd 4.6 4.8 4.8 4.5

Sunsilk Hindustan Unilever Ltd 4.8 4.7 4.6 4.4

Godrej Hair Dye Godrej Consumer Products Ltd 3.7 3.5 3.6 3.8

Pantene Procter & Gamble Home Products Ltd 3.1 3.4 3.7 3.7

Dove Hindustan Unilever Ltd 0.9 1.4 2.7 3.5

Dabur Vatika Dabur India Ltd 3.2 3.4 3.3 3

Chik CavinKare Pvt Ltd 3.3 3.4 3.1 2.9

Hindustan Unilever Ltd

19.3%

Dabur India Ltd

11.5 %

Marico Ltd 9.5% Procter &

Gamble Home

Products Ltd 8.2%

L'Oréal India Pvt Ltd 7.7%

Godrej Consumer

Products Ltd 5.6%

CavinKare Pvt Ltd 4.4%

ITC Ltd 1.4 %

Others 22.5%


Section C Page 22

Clear Hindustan Unilever Ltd _ _ 1.7 2.5

Bajaj Bajaj Consumer Care Ltd 3.1 2.8 2.6 2.5

Nihar Marico Ltd 3.2 2.8 2.6 2.4

Super Vasmol Hygienic Research Institute 2.1 2.3 2.3 2.3

L'Oréal Excellence L'Oréal India Pvt Ltd 1.3 1.5 1.5 1.6

L'Oréal Professionnel L'Oréal India Pvt Ltd 1.2 1.4 1.4 1.4

Others Others 40.2 60.6 62.5 63

Total

100 100 100 100

Figure F.3 Brand Shares in Hair care, 2010

Figure F.4 Market Share of HUL (from 2007-2010)

G. Oral Care Category

Figure G.1: Growth in Market Size, 2005-2010

Clinic Plus 8.7

Dabur 5.7

Parachute 5.2%

Head and shoulders

4.5%

Sunsilk 4.4%

Others 71.5%

18.6

18.8

19

19.2

19.4

19.6

2007 2008 2009 2010

HUL

HUL

0.0

10,000.0

20,000.0

30,000.0

40,000.0

50,000.0

2005 2006 2007 2008 2009 2010

Market Size

Market Size


Section C Page 23

Figure G.2: Market Share of Companies in Oral Care, 2010

H. McKinsey/GE Portfolio Matrix for HUL

Colgate-Palmolive

47%

HUL 20%

Dabur 11%

Gillette 6%

Amway 3% Anchor

3%

J&J 1%

Others 9%

Market Share

Bath and Shower

Deodorants

Skin Care

Hair Care

Oral Care

Invest & Grow Selective growth Selectivity Selective growth Selectivity Harvest / divest Selectivity Harvest / divest Harvest / divest

Co

mp

etit

ive

Ad

van

tage

Market Attractiveness

McKinsey Portfolio Analysis

High Low

Low

H

igh

Bubbles = Revenue -- Max = 56.2


Section C Page 24

I. BCG Matrix Analysis of HUL

Figure H.1: BCG of HUL’s Business Units

Figure H.2: BCG of HUL’s Brands


Section C Page 25

References 1. Bath and Shower Care in India 2011, Euromonitor International Report

2. Beauty and Personal Care in India 2011, Euromonitor International Report

3. Introduction to GE/Mckinsey Matrix Portfolio Analysis, H. Siemann ‐ 17.03.2009

4. Deodorants in India 2011, Euromonitor International Report

5. Hair Care in India 2011, Euromonitor International Report

6. Oral Care in India 2011, Euromonitor International Report

7. Skin Care in India 2011, Euromonitor International Report

8. HUL Annual Report, 2010-2011

9. HUL Beauty and Personal Care, Euromonitor International Report

10. HUL Data Monitor Financials, 2011

11. Unilever Group in Personal Care, Euromonitor, August 2011

Documents

Portfolio Analysis_Personal Care_Group 2_Section C.pdf