1. ISSUE PRIORITY MATRIX FOR HUL BEVERAGES
IssuesrelatedtoHuL Beveragescanbe classifiedunderfollowingcategories –
Economic Issues -
1. Inflation/Recession
2. Hike inglobal currencyexchange values
Political / Legal Issues –
3. Waste ManagementLaws
4. Retail Laws
Technological Issues –
5. Usage of Social Mediafor marketing
6. Adoptionof more automatedtechnology
Socio Cultural Issues -
7. Lifestyle Changes
8. Educationlevel
Issues from Porters five forces –
9. Industrygrowth
10. Distribution
11. No.of Rivals
2. ISSUE PRIORITY MATRIX
HIGH MEDIUM LOW
HIGH 1,5,9
MEDIUM 2,3,4,6 10,11
LOW 7,8
Impact on Corporate
Probabilityof Occurrence
3. PORTERS FIVE FORCES FOR BEVERAGES INDUSTRY
The forces acting upon the beverages industry in the five force model are as following :
Industry Competitors – Usually the competition in the market brings down the profit for the
beverage segment of HUL. In pursuing the competitive advantage the firm can take the following
strategies
Changingprices
Improvingproductdifferentiation
Creativelyusingchannelsof distribution
Threat of Substitute Products – In the porter’s five force model the threat of substitutes refers to
the products in other industries. As more substitutes are available, customers will have more
alternatives.Threatof substitutescomesfromoutsidethe industry.Forexample,the introduction of
aluminium cans created a threat in glass bottle industry.
The managers of HUL must be aware of such kind of substitute products available and adjust the
waybusinessisrun.Customerschoosing otherdrinksorbeveragesotherthanthe type of beverages
offered by HUL is an example of threat of substitutes.
Buyer Power – This exists when there are only a few buyers and more suppliers. In such cases the
buyer put the price. Buyers are the customers of the food service operation. A strong bargaining
powerof buyerswill make iteasierforbuyerstoattempttoforce the price down,whilstatthe same
time demanding better quality.
Suppliers- Suppliersprovidethe materialsand other stocks for the business. The bargaining power
of suppliers tends to be powerful in the following conditions –
Where the switching costs are high, for example, switching from one software company to
another.
Power is high where the brand is powerful, e.g. Pizza hut,
Possibility of supplier integrating forward, e.g. brewing company buying bar.
Customersare fragmented,andnobargainingpower,e.g.few restaurantsin remote places,
so that supplier can demand the price of raw materials.
Potential entrants – These are the new organizations, which may threaten the business of existing
organizations within the market. The barriers to entry into the market are the factors that might
deter new operations. They include –
Capital cost of entry (e.g. machinery and building)
License requirements and govt. policy
The businessmanagersshouldbe aware of the microand macro environment to be in the forefront
of the competition. Understanding the corporate environment is essential to be equipped to face
the competition.
