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Hindustan Unilever Limited

Hindustan Unilever Limited. A Case Study. Strategy of Hindustan Unilever Limited.

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Hindustan Unilever Limited

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  1. Hindustan Unilever Limited A Case Study

  2. Strategy of Hindustan Unilever Limited Hindustan Unilever Limited (HUL) is India’s largest Fast Moving Consumer Goods Company. It touches upon the lives of every two out of three Indians. It has over 20 distinct categories in Home, Personal Care, Food and Beverages with a scale of combined volume of about 4 million tones and sales of Rs.10, 000 crores.

  3. Strategy • Grow ahead of market by leading Market development activities. • Leverage positive impact of growing Indian economy on consumer spending. • Grow a profitable foods and top-end business. • Grow the bottom-line ahead of top-line. • Strong commitment to sustainable development.

  4. Uniquely positioned to create value • Unmatched Brand Portfolio • The strategy • Competitive strength • Innovation and R&D capabilities to straddle the pyramid • Versatile distribution network • Strong Corporate Responsibility and Governance • Strong local talent base

  5. HUL’s Brands HUL has a large brand portfolio consisting of nearly 110 bands. In every product line, it has built a number of brands over a period of time. Quite a few brands have come to its fold from the parent companies like Lifebuoy, Lux, Surf excel, Wheel, Fair&Lovely, Ponds, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke- bond, Kissan-annapurna, Kwality Walls spanning many categories like soap, detergents, personal products, tea, coffee, branded staple food, ice-cream and culinary products.

  6. Innovation and R&D capabilities HUL leads global research in Oral, Skin and Laundry

  7. Some achievements • Single Shot Soap making process • Skin Lightening Cream • Non Soap Detergent Bars • Poly coated Dish Wash Bar • Drinking water purifier (Pure-It) • Amaze

  8. Distribution Strength • Direct coverage – 1milllion outlets, Brands reach – 6.3 million outlets. • Strong IT capability, end to end connectivity. • Unique channel initiatives to win at “Point of Purchase”. • Portfolio of category and Brands give unique reach in Modern Trade. • Project Shakti, a competitive advantage in Rural India. • Corporate Responsibility – Aiding in the Development of the Country.

  9. Contd… • Lifebuoy SwasthyaChetana - Health & Hygiene • Shakti– Empowerment of women through micro-enterprise Opportunity • Yashodadham- Relief and Reconstruction in Gujarat's Kutch district • AshaDaan - Happy Home actively supported by HUL

  10. Strategy: Grow the core ahead of the market • Personal Wash (HUL) Context: • Category penetration- 92 per cent. • Per capita consumption- $1.4. • Per annum market growth- 8 per cent. • A well penetrated market. • Low consumption levels (~1/10th that of Brazil).

  11. Contd… • Affluent: Dove, Pears • Aspiring: Lux, Hamam • Striving: Lifebuoy, Breeze • (Strategy:-To straddle the pyramid and move consumers up to more aspirational brands. Grow share by growing ahead of market).

  12. Laundry • Context- • Category penetration-87%, • Per capita consumption- $1.4 p.a, • Market growth-8% well penetrated market, • Low consumption level (1/10 that of the Brazil) 

  13. Contd… • Affluent: Surf Excel • Aspiring: Rin Advanced • Striving: Wheel • (Strategy: Grow profitably ahead of the market; Regain profitability through judicious price increases and cost effective programs).

  14. Hair care • Affluent: Clinic All Clear, Dove Hair Care • Aspiring: Sunsilk • Striving: Clinic Plus, • (Strategy: - Work the pyramid, convert non-users and increase penetration; upgrade the existing users to aspirational brands).

  15. Skin care • Context: • Category penetration: 22 percent, per capita consumption- $0.3 p.a, market growth-16% with potential for accelerated growth. •  Affluent: Ponds, Olay • Aspiring: Fair & Lovely • Striving: Vaseline • (Strategy- Grow the top-end market using Unilever international expertise; build Ponds as a face care brand and Vaseline as an H &B brand; drive penetration and consumption using Fair & Lovely.)

  16. Tooth paste • Category penetration: 49 per cent, per capita consumption- $0.6 p.a, market growth-12% •  Affluent: Close-up • Aspiring: Pepsodent • Striving: satche of Pepsodent • (Strategy: Grow with market with brand Close-up on freshness platform and Pepsodent on family and health platform).

  17. Tea • Category: Well penetrated market; 2/3rd of tea consumed is loose. • Tea/local form: Market growth- 17 per cent. •  Affluent:  TajMahal, Lipton • Aspiring: Red Label • Striving:  Taaza • (Strategy: Presence across the pyramid: drive-up trading of consumers; convert loose tea drinkers to packet tea consumers).

  18. Coffee • Category: A lifestyle beverage with proliferation of cafes and premium value add coffee formats. • Market growth: Four per cent • Affluent: Bru Cappuccino       • Aspiring: Bru Instant • Striving:  Bru (satche) • Strategy: Format-led innovation to drive penetration and consumption. Introduction of low unit packs to drive penetration and adoption by the masses.

  19. Processed foods • Category: Highly under-penetrated category as bulk of the consumption is still of unpackaged food. • Affluents: Ketchup, soups, squash, Jams, Atta, and salt. • (Strategy: Implement the food strategy; use of Unilever know- how to cater the local taste; enter new exciting (margining point) market within the processed food space.)

  20. Water • Water business - ‘Pure-it’ • Context- ~220 Mln households where safe drinking water is in short supply. • Proposition: ‘as safe as boiled water’ without hassles of boiling. • Assured safety: No harmful virus, bacteria, parasites, pesticides. Works without electricity and piped water. • Great taste, clear and odour-free water. • Business model based on sale of consumables • Affordable price: Cost of unit -~$39 • Cost of battery: $7 • Being rolled out across key towns and areas.

  21. Contd.. • COST -220 liters of pure water for $ 1 • (Strategy: Build brand image; leadership and strong consumer relationship through effective communication; secure ongoing sale of consumables.) • Summary • Focus on grooming the core ahead of the market. • Leverage the impact on the consumer from the growing Indian economy. • Successfully implement the food strategy. • Build momentum to the water business. • Build on competitive capabilities across business system. • Manage cost pressure effectively to improve margin. • Strong commitment to governance and CSR.

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