Submitted by:

A028: Ankit Jalan

A029: Harsimrat Kaur

A030: Govind Krishnan

A031: Mayank Kumar

A032: Sahib Lamba

A033: Ashar A Latheef

A035: Aashna Manaktala

A036: Hari Manwani

A037: Omkar Marballi

A038: Kshitij Mundhada

A039:

A040: Prerita Nigam

AGENDA

• Overview• M&A Strategy, Core Competencies,

Competitive Advantage• Strategies for Remote Markets• PESTLE Analysis• SWOT Analysis• Porter’s Five Forces• Value Chain• Mckinsey’s 7s Framework• 5 Ps of Strategy• Ansoff Growth Strategy• BCG Market Share Analysis• Blue Ocean Strategy

Overview

1931 : Unilever sets up Hindustan

Vanpasti ManafacturingCompany

1933: Lever Brothers set up

Indian Subsidiary

1935: United Traders Limited

enter India

1956: Hindustan Lever Ltd(HLL)

is formed following the merger of the three

companies

1982: Government allows 51 per cent Unilever shareholding in HLL

2007: Company name changed to Hindustan

Unilever Ltd (HUL)

2008: Market Leader with sales

of $2.8 Billion

2017: Maintains Market Leader position with 34.7% share

“Our Vision is to earn the love and respect of India by making a real difference to every India”-Nitin Paranjpe,CEO and Managing Director

• Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company with a heritage of over 80 years in India.

• On any given day, two billion people use Unilever products to look good, feel good and get more out of life.(26% of the World Population)

• 9 out of 10 Indians use an HUL product on a daily basis• Ranked No 1 in India on the Forbes list of The World’s Most Innovative Companies 2017.• In India 18,000 people work for Unilever out of which 30% are women• Identified their purpose as making sustainable living a commonplace.• In 2009, HUL launched The Compass – our strategy for sustainable growth.

Overview

• Identified their purpose as making sustainable living a commonplace.• In 2009, HUL launched The Compass – our strategy for sustainable growth. • Principles followed by HUL :1. A better future for children2. A healthier future3. A more confident future4. A better future for the planet5. A better future for farming and farmers

What does the Logo Stand for?

Product Mix

• Product Mix Width : 11

• Product Mix Length : 52

• Unilever has more than 400 brands, 14 of which generate sales in

excess of €1 billion a year.

• 17 Brands of HUL feature in the top 100 ‘Most Trusted Brands’ list for

2016 published by The Economic Times, 4 of which are in the Top 10

Consistency Mix

M&A STRATEGY, CORE COMPETENCIES

COMPETITIVE ADVANTAGE

Network of about 7000 redistribution stockists covering about 1 Million direct retail outletsTotal coverage :~ 7 Million

•2000+ suppliers•7500 distributors

Serving HUL’s 100 decentralized factories

Point of purchase method • Higher level of direct contact through in-store facilitators , sampling, education and experience

•Customer management •Supply chain capabilities for partnering emerging self service stores & supermarkets,

Unify IT solution allowing real time tracking of secondary sales and stocks at the retail outlets

Separate channels identified on the basis of consumer behavior and

buying pattern

CORE COMPETANCY? HUL’s Wide & Versatile Distribution Network

RURAL INDIA’S COMPETITIVE ADVANTAGE

Shakti Programme empowered 72,000 Shakti Entrepreneurs across 16 states by December 2016 supported by 48000 Shaktimaans

In 2010, HUL extended Project Shakti to include ‘Shaktimaans’. Shaktimaans are typically the husbands or brothers of Shakti Ammas

This model has been the growth driver for HUL and presently about 50% of HUL's FMCG sales

come from rural markets

Project Shakti is HUL’s initiative to financially empower rural women and create livelihood opportunities for them

Business strategy:• Volume led growth and improvement in operating margin. •FY 17 saw an Ebitda margin growth of just 90 basis points

•Market slowdown and channel correction were the reasons for lower than expected volumes in the last quarter

M & A Strategy

•Lakme :used its already established distribution network

•Ponds (India) Limited : started a significant economic base in specialty products and personal products

Cosmetics & Personal care

Food & Beverages

•UB group’s Kissan Products: entered food business•Brook Bond Lipton India Ltd

•Considers takeovers as a preferred mode of strategy for rapid expansion

• Monthly report to Board and Chairman during the 15 month pilot project

• Venture Leaders to oversee projects which are potentially viable, scalable & worthy of future investment

Consistently ensuring top leadership participation in the project

• To ensure initiative is continually aligned , design of metrics was the key

• Initially focus was on scalability & sustainability later focus shifted to financial targets and organizational structure

Designing unique metrics and making adjustments to organizational structure

• Difficult to predict customer data for rural Indian population

• Used ‘Density Mapping Technology’ to determine population density and distance between villages

Using technology to design a flexible rural supply chain and sales network

Strategies for success in Remote markets

• 70% of the Indian population lives in rural market

• 65% of HUL’s sales is from rural market only

• HUL grew over 6% in rural market where as its competitors grew at 1-3% only

PESTLE ANALYSISPolitical

LegalEnvironmental

TechnologicalSocial

Economical• Deregulatory environment in 1991• Market regulations, Eg. GST• Rin bar- 17% slashed price• Trade agreements

• Monsoon 2017; 4% revenue growth• Global Warming• Solid waste mangement• Water conservation

• Avenues for women to earn livelihood• Project Shakti a big success• Lifebuoy hand washing program• Pureit provides clean water and reduces

CO2 emission

• Raw material price fluctuation• Price sensitivity of FMCG products• Stiff competition from local players

Eg. Wheel vs Ghadi

• Digitization to engage customers• CRM in modern trade• Predictive analytics and big data• E-com is key driver for industry growth

• Health and safety; Factories Act 1948• Equal opportunities, Eg. MNREGA• Advertising standards• Consumer rights and laws

STRENGTHS• Strong brand equity- Unilever group

• 18000 employees

• Extensive distribution system- reach to 6.4 million retail

outlets

• Innovative FMCG company- Two R&D centres in India in

Mumbai and Bangalore

• Products with presence in over 20 consumer categories

• 700 million Indian consumers using its products

WEAKNESS• Market share is limited due to presence of other strong

FMCG brands

• High advertising and promotion spend- 12-14% of its

sales

• Low growth in food business- Knorr soups, Annapurna

atta etc.

THREATS• Low global growth and geopolitical uncertainties in India

• Increasing no. of local and national players e.g. Patanjali,

Ghari etc.

• Emerging e-commerce channels

• Sluggish rural demand – due to poor monsoons and

demonetization (2016-17)

• GST impact-Increased tax for detergent, shampoo and

skin care products

OPPORTUNITIES• Increase its ‘naturals’ (Ayurvedic / herbal) portfolio

through M&A

• Using big data and analytics for effectively meeting the

objectives of campaigns

• Increasing purchasing power of people in India-demand

for premium products

SWOT ANALYSIS

PORTER’S 5 FORCES

COMPETITION

OR

COMPETITIVE

RIVALRY

BARGAINING

POWER

OF

BUYERS

BARGAINING

POWER

OF

SUPPLIERS

THREAT

OF

SUBSTITUTES

THREAT

OF

NEW

ENTRANTS

PORTER’S 5 FORCES

Competitive RivalryFACTORS DETERMIING

RIVALRY

INTENSITY `

HIGH NUMBER OF FIRMS STRONG FORCE ITC , P&G

AGGRESSIVENESS OF

FIRMS

STRONG FORCE Marketing expense of HUL is

9.9% of revenues, ITC-2.25%,

P&G- 7.1%

LOW SWITCHING COSTS STRONG FORCE Sunsilk (80ml)- 48 Rs

L'Oreal (75 ml) – 51 Rs

Pantene (80 ml) – 50 Rs Bargaining Power of Customers

FACTORS DETERMIING

BARGAINING POWER

INTENSITY

LOW SWITCHING

COSTS

STRONG FORCE

HIGH QUALITY OF

INFORMATION

STRONG FORCE Access to online information

through customer reviews and

other insights

PORTER’S 5 FORCESBargaining Power of Suppliers

FACTORS DETERMIING

RIVALRY INTENSITY

SIZE OF INDIVIDUAL

SUPPLIERS

MODERATE FORCE PAT for Galaxy Surfactants -106

crores. PAT for HUL- 4082

crores

POPULATION OF SUPPLIERS MODERATE FORCE Backward Integration – HUL

owns 19 tea estates. Investment

of 40 crores in skin care factory

at Silvasa

OVERALL SUPPLY MODERATE FORCE Any change in supplier’s

production levels affects overall

industry Threat of Substitutes

FACTORS DETERMIING

RIVALRY INTENSITY

LOW SWITCHING COSTS STRONG FORCE

LOW SUBSTITUTE

AVAILABILITY

WEAK FORCE Substitutes needed by

consumers not readily available.

Close Up of HUL is readily

available at grocery stores

LOW PERFORMANCE TO

PRICE RATIO OF

SUBSTITUTES

WEAK FORCE Vicco Toothpaste (100gm)- 74

Close Up (80 gm) - 45

PORTER’S 5 FORCES

FACTORS DETERMIING RIVALRY INTENSITY

HIGH COST OF BRAND

DEVELOPMENT

WEAK FORCE Himalaya started as a FMCG company in

2009 has a target of 12% market share.

Exception- Patanjali

HIGH ECONOMIES OF SCALE WEAK FORCE Competitive pricing

To achieve better economies of scale,

focus on better structure & Organization

Ex: Axe deodorant launched together in

52 countries

Threat of New Entrants

VALUE CHAINPrimary Activities

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

19 tea estates

Operations:• Implements kaizen, TQM and cost optimization• Sumerpur factory won ‘National Energy Conservation

Award’ for saving 567 MWh

Outbound Logistics• Total 35 C&F agents . Partnered with Future Group

logistics• Hindustan Lever Network-Direct selling channel• Covers 50,000 villages. Shakti amma provides

penetration in villages with no roads for trucks• Full-scale sales organisation for supermarkets• RS Net for monitoring

Marketing and Sales• Celebrity endorsement• Kaan Khajura Tesan-50 lakh subscribers

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

Support Activities

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

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

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

Procurement • Follows sustainable sourcing code of conduct

McKinsey’s 7S Framework

STRATEGY

STYLES

SYSTEMS

STRUCTURE

STAFF

SKILLS

In house monitoring of database, reduces costs, dependency and time

On-the-fly demand projections and helps avoid stock-out losses

Zero-based budgeting

Stepping into One programme among shop floor employees for leadership & technical skills In house manufacturing R&D support from Unilever

Attrition rate – 5%FMCG average – 15%36% women managersGraduate Employer of Choice by Nielson

'Connected 4 Growth’: Pruned reporting layers: Agility, Quick decision, Innovations

Winning in Many Indias(WiMi)

Nitin Paranjpe –Youngest CEO, Lever Lifters promote young talentBusiness Leadership Trainee (BLT)

programme

Unilever Sustainable Living Plan (USLP)Prabhat: promotes health and hygiene

for employees51% of raw material sustainably sourced

Compass: 2x growth in market cap by 2017, while reducing environmental footprint₹30 Crore investment in R&D

5 P’S OF STRATEGY

ANSOFF’S GROWTH STRATEGY

MARKET

PRODUCTSExisting New

Existin

gNew

Diversification

New Product: Ayurvedic products under brand Ayush

Market: India

• Why- Behemoth vs Baba• Launch 20 products of toothpaste, skin creams and other

beauty products with mass market positioning• Price range between Rs. 30 and Rs. 130

Product development

New Product: Various new products of Dove

• Shift from soap brand to a beauty brand

• The ads made used real women as opposed to models

• High priced and good quality

• Needed to be differentiated to remain competitive

• Brand extension- Deodorant, Facewash, Lotions etc

Market penetration

Market: India

Product: Lifebuoy

• Re-launched as sales plummeted in 2001 by 15%• Swasthya Chetna Campaign and a new shape of the soap• In 2009, introduced the Lifebuoy Way to reach rural

markets

Market development

Market: India

• Existing product- Citra, skin care brand which is available in Middle east and South East Asia

• Competition to Patanjali, Dabur and Himalaya • Targets women between the age 15-35 yrs• Why-further strengthen HUL’s dominance in skin care

BCG

Market Share Analysis

BCG

Market Share Analysis

HU

LBCG

MARIX OF HUL

BLUE OCEAN STRATEGY

Creation by the company of a new, uncontested market space that makes competitors

irrelevant and that creates new customer value while decreasing costs

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

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

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

• Market share as of 2016 – 60% (Source – Euromonitor International), 0.5% rise compared to the previous year

BLUE OCEAN STRATEGY

Creation by the company of a new, uncontested market space that makes competitors

irrelevant and that creates new customer value while decreasing costs

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

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

• Market leader ever since its launch.

• Market share as of 2016 – 53%.• Closest competitor – Emami’s Fairever – Approx. 23%.

BLUE OCEAN STRATEGY

Creation by the company of a new, uncontested market space that makes competitors

irrelevant and that creates new customer value while decreasing costs

• Launched worldwide in 1969, in India in 2008.

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

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

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

27

THANKS!• Any questions?