Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods company. A report analyzed HUL using Porter's Five Forces framework and an ETOP analysis. Porter's Five Forces showed high bargaining power of customers, bargaining power of suppliers is not very high. Threat of new entrants and substitute products is high due to market saturation and customer expectations. Competition within the industry is intense. The ETOP analysis identified opportunities for HUL in new markets and product lines, while threats include increasing competition and customer switching to low-priced substitutes. Recommendations include lowering promotion costs, focusing on customer satisfaction, and exploring new markets and products.

1. Environmental Scanning of
HUL
Prepared by :
• Guntas Kour
(MBA-4507/10)
• Aditi Chopra
(MBA-4556/10)

2. Introduction of the
Organization
• Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer
Goods Company, touching the lives of two out of three Indians with over
20 distinct categories in Home &Personal Care Products and Foods &
Beverages.
• HUL has enjoyed a competitive advantage as a sole provider of personal
hygiene care products before the liberalization of India’s economy.
• The company's Turnover is Rs. 17,523 crores (for the financial year 2009 -
2010).
• HUL is a subsidiary of Unilever, one of the world’s leading suppliers of fast
moving consumer goods with strong local roots in more than 100
countries across the globe with annual sales of about €40 billion in 2009
Unilever has about 52% shareholding in HUL.

3. Introduction of the
Organization
• Hindustan Unilever was recently rated among the top four
companies globally in the list of “Global Top Companies for
Leaders” by a study sponsored by Hewitt Associates, in partnership
with Fortune magazine and the RBL Group. The company was
ranked number one in the Asia-Pacific region and in India.
• The mission that inspires HUL's more than 15,000 employees,
including over 1,400 managers,is to help people feel good, look
good and get more out of life with brands and services that are
good for them and good for others. It is a mission HUL shares with
its parent company,Unilever, which holds about 52 % of the equity.

4. Porter’s Five Forces
• Porter's Five Forces is a framework for industry analysis and
business strategy development formed by Michael E. Porter of
Harvard Business School in 1979.
• It draws upon Industrial Organization (IO) economics to derive
five forces that determine the competitive intensity and
therefore attractiveness of a market.
• Attractiveness in this context refers to the overall industry
profitability. An "unattractive" industry is one in which the
combination of these five forces acts to drive down overall
profitability

5. Porter’s Five forces Analysis

6. Porter’s Five Force Analysis of HUL

7. Bargaining Power of
Customers
• High bargaining power due to low cost of
switching.
• Price sensitivity in customers.
• Customers are not reluctant to buy/try new
products off the shelf.
• Product Loyalty can be a favourable factor.

8. Bargaining Power of
Suppliers
• Suppliers may determine the cost of raw
material and other inputs affecting profitability.
• But their bargaining power is not very high.
• Oligopoly in the supplier side i.e. many suppliers
available.

9. Threat of New Entrants
• Suppliers accessible.
• Distributors accessible.
• Low-cost switching.
• Market Growth.
• Cost effectiveness.

10. Threats of Substitute
Products
• Complex and never ending needs of consumers.
• Wide range of choices.
• High expectations of consumers.
• Low-cost switching.
• Beneficial Alternatives.

11. Competition within Industry
• A large number of players.
• Highly saturated industry therefore scarce
customers.
• Intensive Advertisements and low prices.

12. Environmental Threats &
Opportunities Profile ( ETOP )

13. ETOP Analysis

14. Why ETOP?
• Helps organization in identifying Opportunities
and Threats.
• To consolidate and strengthen organisation's
position.
• Helps strategists in appripriate strategy
formulation.
• Helps to know the current position.

15. How is ETOP done?
• Environment is divided in different segments.
• The impact of each segment is analyzed.
• Each segment is sub-divided into sub-segments.
• Impact of each sub-segment on Organization.

16. ETOP Pros and Cons
Pros
• Help to determine the
key factors of threats
and opportunities.
• Help In strategy
formulation.
Cons
• Does not show the
interaction between
these factors.
• It can’t reflect the
dynamic environment.

17. ETOP
Factors Could Include
Political International Trade, taxation policy
Economic Interest rates, exchange rates, national
income , inflation rate, unemployment,
stock market
Social Ageing Population, Attitude to work,
Income distribution
Technological Innovation, New Product development
Environmental Global warming, environmental issues
Legal Competition laws, corporate laws,
employment laws, health and safety

18. Opportunity Matrix
• Market Leaders – Brand
Awareness and Brand Value.
• Expansion of horizons - countries
beyond Asia.
• Opportunities in food sectors.
New products and product lines. • New markets may be available due
to increase in disposable income
and living standards.

19. Threat Matrix
• Increasing competition from
Organizations like ITC which has
entered sectors like
food,retailing.,etc.
• low priced substitutes and new
entrants.
• Low-cost switching over.
• Dis-satisfaction or high quality of
products of other organizations.
• Saturation in industry.
• Counter fight between its own
products like Lux and Lifebuoy.

20. Conclusion and Recommendations
HUL is certainly the market leader in FMCG sector but there are
a few recommendations:
• HUL lowers the promotion cost so as to save money which is
used in promotion more than required and thus increases the
profit.
• HUL aims at customer satisfaction rather than margins and
profits.
• HUL keeps a track of new products and promotion schemes of
other firms and design policies accordingly.

21. Conclusion and Recommendations
• HUL Adopts the method Segmentation,Targetting and
Positioning so as to get back all the consumers which it lost to
other firms.
• HUL comes out of the cocoon and try some new fields and
come up with some new products.
• HUL should stop playing the 70s and 80s script of brand
extensions and big nationwide ad spend and think beyond that .

22. Thank You
.