hul

1. INTRODUCTION
FMCG Industry:
• FMCG products are products that have
quick shelf turnover, at relatively low cost
and don’t require a lot of thought, time
and financial investment to purchase.
• FMCG Industry mainly deals with
production, distribution & marketing of
packaged goods to all consumers

2. INTRODUCTION
FMCG Industry in India:
• Present
– Fourth largest sector in the economy
– Size - US$13.1 billion
– Strong MNC Presence
– Well established distribution network
– Competition between organized and
unorganized sector
– Low Costs of labour and Easy
availability of key raw materials

3. INTRODUCTION
FMCG – Major Domestic Players
• Domestic Players
– Britannia India Ltd (BIL)
– Dabur India Ltd
– Indian Tobacco Corporation Ltd (ITCL)
– Marico
– Nirma Limited

4. INTRODUCTION
FMCG – Major Foreign Players
• Foreign Players
– Cadbury India Ltd (CIL)
– Cargill
– Coca Cola
– Colgate-Palmolive India
– H J Heinz Co
– Hindustan Unilever Ltd (HUL)
– Nestle India Ltd (NIL)
– PepsiCo
– Procter & Gamble Hygiene and Health Care
Limited

5. Hindustan Unilever Ltd
• HUL touches the lives of two out of every three
Indians everyday
• Part of the €40 billion Unilever Group. The
Group has more than 400 brands spanning 14
categories of home, personal care and food
products
• Presence in over 100 countries and employs
more than 174,000 people worldwide
• The Company was incorporated in 1933 but its
products have been sold in India since 1888

6. Hindustan Unilever Ltd
• India’s largest FMCG Company
• Headquartered in Mumbai
• Over 700 million consumers
• More than 15,000 employees, including
1,300 managers
• More than 200 highly qualified scientists
and technologists
• Shares listed at BSE (Stock code -
500696) and NSE (Stock code –
HINDUNILVR)
• Shareholder base of over 3.5 lakh

7. HUL – The Journey so far…
1931: HUL set up its first subsidiary
1956: HUL offered 10% of its equity to the Indian public
1972: Lipton Acquisition
1984: Brooke Bond Acquisition
1986: Pond’s Acquisition
2000: Modern Foods Acquisition

8. HUL – Mission
Mission
Unilever's mission is to add Vitality to
life. We meet everyday needs for
nutrition, hygiene, and personal care
with brands that help people feel
good, look good and get more out of
life.

9. HUL – Geographic Presence
• Production
More than 35 manufacturing locations
across India, with major hubs being
Assam, Uttaranchal, Himachal
Pradesh, Pondicherry and Dadra & Nagar
Haveli
• Marketing – All States in India, Project

10. HUL – Product Portfolio
Revenue Share
Ice Creams
Soaps and Detergents
Other 2%
Operations 8%
Personal Products
Foods (Bakery)
1% Beverages
Exports Soaps and
4% Detergents Exports
48%
Foods (Bakery)
Beverages Personal
11% Products Other Operations ( Water etc.)
26%
Ice Creams

11. SWOT - HUL

12. STRENGTHS
Strong parentage and R&D, healthy cash
coffers to support innovation
Strong position in most of the categories
of its presence
Unmatched distribution network , a must
to cater rural markets
STRENGTHS
Presence across price points to straddle
across entire income pyramid
Healthy Shareholder Returns in the form
of RoE and dividend yield
Native Know How

13. WEAKNESSES
49% of HUVR's sales
come from detergents
and personal wash
WEAKNESSES
Increase in Ad
Spending, which may
affect the margins

14. OPPORTUNITIES
OPPORTUNITIES
• Change in Rural • Favorable • Consumer
India’s source of Demographics expenditure in food
income • Increasing sector rose by 13%
• Government Focus Consumer • Valued at USD240mn
• Futures Market aspirations – packaged foods –
• Increase in MSP • Buoyant topline for 5%, 14%(g)
FMCG companies • Modern retailing
• Massive Election
gaining coverage
Spending
Consumer
Growing Opportunity
sector on a
opportunities in Food
secular
in Rural India growth trend Sector

15. THREATS
Losing market share in Stiff competition from local
most of the categories , as well as MNC players
Matured and Growing
THREATS
- Rural income is yet dependant
Receding pricing power on agriculture and in turn
monsoon
- Spurious Products

16. FIVE FORCE MODEL

17. PORTER’S FIVE FORCE
MODEL…
Threat of New Entrant Supplier Power
•Time and Cost of Entry
•Specialist Knowledge
• Number of
•Economies of Scale Suppliers
•Cost Advantage •Size of Suppliers
•Technology Protection •Your Ability to
•Barriers to Entry Change
•Cost of Changing
Threat of Substitution
•Substitute Performance
•Cost of Change
Buyer Power Competitive Rivalry
• Number of Customers • Number of Competitors
• Size of Each Order •Quality Differences
• Differencebetween •Other Differences
Competition •Switching Costs
• Price Sensitivity •Customer Loyalty
• Ability to Substitute •Costs of Leaving Market
• Cost of Changing

18. THREAT OF NEW ENTRANT
• In early 2000, HUL decided to enter Retail Market through
direct selling brand (B2C) by the name SANGAM direct
• Started in Bombay…with 2 stores, Sangam has vision to
grow to 15stores.
• With highly competitive retail market, Sangam faced 3
problems:
– Specialized knowledge
• Space constraints
• Cost disadvantage (No disc on competitor’s product)
• Time and Cost

19. COMPETITIVE RIVALRY
• Number of Competitors
• Quality Differences
• Other Differences
• Switching Costs
• Customer Loyalty

20. SUPPLIER POWER
• Large economies of scale
• HUL adopts Backward
Integration, therefore
– No. of suppliers are less
– Size of Suppliers are moderate
– Ability to Change is Flexible
– Cost of Changing is Low

21. BUYER POWER
• No. of customer’s is moderate
• Size of Each Order is in Bulk quantity
• Price Sensitivity
• Ability to substitute
• Cost of changing
• Tie-ups with local complementary product
manufacturer to get products at cheaper
and minimal rates

22. HUL VALUE CHAIN

23. HUL VALUE CHAIN
• Business optimisation through
Technology
• Integrating suppliers and distributers
through SAP
• Best marketing talent from top B schools
• TPM and product flexibility in Operations
• Emotional buying of satisfied customer