analysis of huls strategic management

{draw:g} INDEX *Introduction………………………………………………. *3 Page *Strategic Management Pyramid…………………………. *3 Page *Goals……………………………………………………….. *4 Page {text:list-item} {text:list-item} {text:list-item} {text:list-item} Structure……………………………………………………5 Page Resources…………………………………………………… 6 Page Products…………………………………………………….. 6 Page {text:list-item} {text:list-item} {text:list-item} {text:list-item} Market………………………………………………………. 9 Page 10. Pyramid Base………………………………………………11 Page 11. {text:list-item} {text:list-item} {text:list-item} 12. Michal Porter’s five forces………………………………… 2 Page Introduction Hindustan Unilever Limited (HUL) is India’s largest fast moving consumer goods company, with leadership in home and personal care products and Food & Beverages. HU:’s brands, spread across 20 distinct consumer categories, touch the lives of two out of three Indians. They endow the company with a scale of combined volumes of about 4 million tones and sales of Rs. 13,718 crores. The mission that inspires HUL’s over 15000 employees is to “add vitality to life”. With 35 power brands, HUL meets everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life.

It is a mission HUL shares with its parent company, Unilever, which holds 52. 10% of the equity. A fortune 500 transnational, Unilever sells Foods and home and personal Care brands in about 100 countries worldwide. Strategic Management Pyramid {draw:frame} {draw:frame} {draw:frame} {draw:frame} Goals Vision: HUL’s vision is to ‘Earn the Love and Respect of India, by making a real difference to every Indian. ’ Mission: HUL’s mission is to add vitality to life. HUL meets everyday needs for nutrition, hygiene and personal care with brands that people feel good, look good and get more out of life. Corporate Purpose:

Unilever’s deep roots in local cultures and markets around the world give them their strong relationship with consumers and are the foundation for future growth. They have shared their wealth of knowledge and international expertise to the service of local consumers – a truly multi-local-multinational. Long term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively, and to a willingness to embrace new ideas and learn continuously. To succeed also requires, HUL believes, the highest standards of corporate behavior towards everyone.

HUL works with, the communities they touch, and the environment on which they have an impact. This is their road to sustainable, profitable growth, creating long term value for share holders, people and business partners. Values at HUL: Unilever has earned its reputation for conducting its business with integrity and with respect for the interests of those our activities can affect. This reputation is an asset, just as real as our people and brands. HUL’s first priority is to be a successful business and that means investing for growth and balancing short term and long term interests.

It also means caring about consumers, employees and shareholders, business partners and the world they live in. To succeed requires the highest standards of behavior from the whole company. The general principles contained in this code set out those standards. More detailed guidance tailored to the needs of different countries and companies will build on these principles as appropriate, but will not include any standards less rigorous than those contained in this code. HUL wants this code to be more than a collection high sounding statements.

It must have practical value in their day to day business and each one of us must follow these principles in the spirit as well as the letter HUL’s code of business principles: Business should support and respect the protection of internationally proclaimed human rights Business should ensure that they are not complicit in human rights abuses Business should uphold the freedom of association and the effective recognition of the right to collective bargaining. Business should support the elimination of all forms of forced and compulsory labor Business should support the ffective abolition of Child Labour Business should support the elimination of discrimination in respect of employment and occupation Business should support a precautionary approach to environmental challenges Business should undertake initiatives to promote greater environmental responsibility Business should encourage the development and diffusion of environmentally friendly technologies 10. Business should work against corruption in all its forms, including extortion and bribery Structure {draw:frame} Resources

The principal asset of HUL is the talent pool of more than 250 highly skilled people, out of which some 80+ are Scientists with PhDs and Post Doctoral experience from renowned universities around the world. More than 15000 employee base. HLL’s strongest competencies are its R&D and marketing. Highly effective supply chain. By partnering for manufacturing capacity and sharing distribution assets with other HLL products, the investment in fixed assets for new products is nearly zero. The supply chain involves very few middle men. Sometimes it ends on wholesalers rather than retailers.

Products Home and Personal Care {draw:frame} Foods {draw:frame} Exports: {draw:frame} Today, HUL is one of India’s largest exporters of branded Fast Moving Consumer Goods. It has been recognized by the Government of India as a Golden Super Star Trading House. Over time HUL has developed into a viable & competitive sourcing base for Unilever worldwide in Home and Personal Care & Foods & Beverages category of products. HUL is also a global marketing arm for select licensed Unilever brands and also works on building categories with core country advantage such as branded basmati rice.

HUL Exports offers high level of service with flexibility and responsiveness thorough out the supply chain. It has a dedicated organization structure to support this endeavor and this has helped in growth of these businesses in particular. Intrinsic cost competitiveness in the end to end Supply chain with appropriate technology and competitive capital investment operations while delivering best in class quality enables HUL to position itself as a key sourcing hub for Unilever and also become a preferred partner for Global customers in categories we operate.

HUL’s key focus in the exports business is on two broad categories. It is a sourcing base for Unilever brands in Home & Personal Care (HPC) and Food and Beverages (F&B) for supplies to other Unilever companies. It also focuses on becoming a preferred supplier to both non-Unilever and Unilever clients in three categories in which India, as a country, has competitive advantage – Branded Rice, Marine Products and Castor and its Derivatives. HUL enjoys international recognition within Unilever and outside for its quality, reliability and speed of customer service.

HUL’s Exports geography comprises, at present, countries in Europe, Asia, Middle East, Africa, Australia, and North America etc Water: {draw:frame} Pureit – The world’s most advanced in-home water purifier Pureit, a breakthrough offering of Hindustan Unilever (HUL), comes with many unique benefits – complete protection from all water-borne diseases, unmatched convenience and affordability. Pureit’s unique Germ kill Battery technology kills all harmful viruses and bacteria and removes parasites and pesticide impurities, giving you water that is ‘as safe as boiled’.

It assures your family 100% protection from water-borne diseases like jaundice, diarrhoea, typhoid and cholera. What’s more, it doesn’t need gas, electricity or continuous tap water supply. Pureit not only renders water micro-biologically safe, but also makes the water clear, odorless and good-tasting. You will be further reassured to know that Pureit meets the stringent germ-kill criteria of the Environmental Protection Agency (EPA), the toughest regulatory agency in the USA. The performance of Pureit has also been tested by leading scientific and medical institutions in India and abroad.

This patented technological breakthrough has been developed by HUL. This state-of–the-art engineering developed by a team of over 100 Indian and international experts from HUL and Unilever Research Centres has made Pureit possible at the consumer price of just Rs. 2000. Pureit runs with a unique ‘Germ kill battery Kit’™ that typically lasts for 1500 liters* of water. The Germ kill Battery Kit™ is priced at Rs. 350. This means consumers will get four liters of water that is ‘as safe as boiled water’ ™ for just one rupee. Which works out to an extremely affordable 23 paise per litre. Market: draw:frame} The company has a distribution channel of 6. 3 million outlets and 35 major Indian brands. HUL recorded 20. 02% year over year (yoy) growth in revenue at Rs 16660. 38 crores during the year ended Dec’08. Increase in per capita income in urban, as well as rural areas, of India has a positive effect on demand of consumer goods along with a shift in demand towards high end lifestyle products. Long a provider of low cost consumer goods, HUL has recently launched products in its high end segments. {draw:frame} {draw:frame} Sales growth of 13. 36% in CY’07 (Calendar Year 2007) and 9. 8% in CY’06 can be attributed to aggressive launches, re-launches of products and a hike in product prices. The net Income of the company has not increased at the same pace as revenues because of a decline in margins (from 18. 5% in CY’04 to 16. 7% in CY’07) in its soaps and detergents business and investment in IT and water purifier business in CY 05-06. Soaps and Detergents business contributes highest (46%) towards revenues followed by Personal care products (26%). Despite being highest revenue generator soaps and detergents business is not the most profitable segment. Personal care contributes highest (46. %) towards the EBIT which is due to high margins and low penetration of the market. Increasing raw material prices drove HUL to raise its prices but on the other hand increasing per capita income drive sales growth. HUL has consistently been the top advertisement spender over the years with expenditure of Rs 650 crore in the year 2008. Per Capita consumption of personal care products in India is one of the lowest among developing economies of the world. Pyramid Base Core Aspect Acting with integrity and delivering on every promise Commitment and passionate to excel in everything we do. Competing to lead as a team.

Ensuring the employees remains satisfied. Ensuring that the employees reach their full potential. Treating everyone openly, honestly and with respect. Business concept Innovation Catering to the masses Creating value and making a difference Focus on market Work efficiently Learn from outcome: what worked and what did not. Be the brand – inspire leadership, creativity, passion, optimism and fun. Competitive strategy {text:list-item} {text:list-item} {text:list-item} Michael Porter’s five forces: Buyer Power: Consumer faces weak buying power because customers are fragmented and have little influence on price of product.

Considering buying powers of retailers it is very high since they are able to negotiate the price with the companies. Verdict: strong buyer power from retailers. Supplier power: Consumer products face some amount of supplier power simply because of the cost they incur when switching suppliers. Suppliers that do a large amount of business with these companies are also beholden to their customers. Verdict : limited supplier power *Threat of* New Entrants: Given the amount of capital investment needed to enter certain segment in house hold consumer products, the threat of new entrants is fairly low.

Whether the new entrant can get its products on the shelves of the same retailers as its much larger rivals. Verdict: low threat of new entrants. Threat of Substitutes: Within the consumer product industry, brand succeeds in helping to build a competitive advantage, but even the pricing power of the brands can be eroded. Verdict : High threat of substitutes Degree of rivalry: Consumer in this category enjoy multitude of choices. It does not cost anything for a consumer to buy one brand of shampoo instead of another, making the industry quite competitive.

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