55485715 hul-ppt


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55485715 hul-ppt

  1. 1. A Presentation onHINDUSTAN UNILEVER LIMITED BY -:
  2. 2. THE FMCG INDUSTRY…• Fast Moving Consumer Goods (FMCG) industry alternatively called CPG (Consumer Packaged Goods) industry• Primarily deals with the production, distribution and marketing of consumer packaged goods• Principal constituents are: – Household Care – Personal Care – Food & Beverages• FMCG products are those which have a quick turnover and relatively low cost
  3. 3. FEATURES• Characterised by a well established distribution network, low operating costs, low per capita consumption and intense competition between the organised and unorganised segments• Availability of key raw materials, cheap labour costs and presence across the entire value chain gives India the competitive advantage• Resulted in presence of global players through their subsidiaries
  4. 4. THE INDIAN FMCG SECTOR • Market size: – US$ 13.1 billion (in 2005) – US$ 18.2 billion (in 2008) i.e. Rs. 85,000 crore • The fourth largest sector in the economy • Creates employment for more than three million people in downstream activities
  5. 5. TOP 10 FMCG COMPANIES (INDIA)1. Hindustan Unilever Ltd.2. ITC (Indian Tobacco Company)3. Nestlé India4. GCMMF (AMUL)5. Dabur India6. Asian Paints (India)7. Cadbury India8. Britannia Industries9. Procter & Gamble Hygiene and Health Care10. Marico Industries
  6. 6. DOMESTIC PLAYERS Company Brands Key Feature (s)Britannia India Tiger Glucose, Mariegold, Fifty- 40% market share in the overallLtd (BIL) Fifty, Good Day, Pure Magic, organised biscuit market BourbonDabur India Ltd. Dabur Amla, Dabur Largest Indian FMCG and Chyawanprash, Vatika, Hajmola, ayurvedic products company Lal Dant Manjan, Pudin Hara and the Real fruit juicesIndian Tobacco Kitchens of India, Sunfeast, Diversified presence inCorporation Ltd. Candyman, Bingo cigarettes, hotels, paperboards,(ITCL) food products
  7. 7. DOMESTIC PLAYERS Company Brands Key Feature (s)Marico Industries Parachute, Saffola, Sweekar, Shanti Leading Indian group in Amla, Hair & Care, Revive, Consumer Products & Mediker, Oil of Malabar and Sil Services in the Global processed foods Beauty & Wellness space (Kaya Skin Clinics)Nirma Limited Nirma Soap, Nirma Detergent, Homegrown FMCG major Shudh Salt Presence in the detergent and soap marketsGCMMF (Amul) Amul products (butter, ghee, Began as a cooperative cheese, milk powder, ice-cream) movement
  8. 8. FOREIGN PLAYERS• Cadbury India Ltd (CIL) Dairy Milk, Perk, Crackle, 5 Star, Éclairs, Gems, Bournvita• Coca-Cola India Thums Up, Limca, Maaza, Gold Spot, Citra Coca-Cola, Diet Coke, Kinley, Sprite, Fanta, Schweppes• Colgate-Palmolive India Charmis skin cream and Axion dish wash• H J Heinz Co Complan, Glucon-D, Farex, Nycil, Heinz ketchup• Nestle India Ltd (NIL) Nescafe, Milkmaid, Maggi, Cerelac• PepsiCo Pepsi• Procter & Gamble Hygiene and Health Care Limited Vicks, Whisper
  9. 9. MARKET SIZE(HOUSEHOLD PRODUCTS) Household Care Product Personal Wash Detergents Category Rs. 8,300 Cr. Rs. 12,000 Cr.Market SizeHUL’s Market Share 53% 38%
  10. 10. POTENTIAL FOR GROWTHPer capita consumption in India is low for almost all the productsGrowing demand in the market (rural & urban) for FMCG Rural (volumes) – 2.2% of the world population is in the villages of India – Rural income is rising, boosting purchasing power • Low price products in convenient packaging Urban (value) – Increase in the urban population – Increase in income levels • New categories to meet change in demand patterns
  11. 11. HINDUSTAN UNILEVER LTD.• Indias largest FMCG• A subsidiary of Unilever which holds 52% of the equity• 2 out of 3 Indians use its products• Over 42 factories across India• Around 45% of HUL’s sales turnover of Rs. 17,524 crore comes from rural markets, valued at around Rs. 8,000 crore
  12. 12. HISTORY OF HUL• In the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers". With it, began an era of marketing branded Fast Moving Consumer Goods (FMCG).• Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati was launched in 1918.• In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three companies merged to form HUL in November 1956.
  13. 13. PRODUCTS/BRANDS OF HUL• Food Brands Red Label, Brooke Bond, Taj Mahal, Bru, Kissan, Knorr, Lipton , Kwality Walls…• Personal Care Brands Lux, Liril, Ponds, Pears, Dove, Rexona, Hamam, Close up, Clinic Plus, Pepsodent, Vaseline, Sunsilk, Lakme, Fair and Lovely, Lifebouy…• Home Care Brands Surf Excel, Wheel, Rin, Domex, Cif…• Water Pure It
  14. 14. VISION STATEMENT… The four pillars 1. Create a better future everyday 2. Help people feel good, look good & get more out of life with brands & services that are good for them & for others 3. Inspire people to take small everyday actions that can add up to a big difference for the world 4. Develop new ways of doing business that double the size of the company while reducing environmental impact
  15. 15. MISSION STATEMENT…• Add Vitality to Life• Meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life• Total commitment to exceptional standards of performance and productivity
  16. 16. PURPOSE• Always working with integrity• Creating positive impact• Continuous commitment• Setting out our aspirations• Working with others
  17. 17. 10 PRINCIPLESBUSINESS PARTNERS CODE1) Compliance with all applicable laws and regulations2) Respect for human rights, and no employee shall suffer harassment, physical or mental punishment etc.3) Wages & working hours will comply with all applicable wage and labour laws as per the rules and regulations4) No use of forced or compulsory labour, and employees shall be free to leave employment after reasonable notice5) There shall be no use of child labour
  18. 18. 10 PRINCIPLES6) There shall be respect for the right of employees to freedom of association7) Safe and healthy working conditions will be provided for all employees8) Operations will be carried out with care for the environment9) All products and services will be delivered to meet the quality and safety criteria10) No improper advantage sought, including the payment of bribes, to secure delivery of goods or services to Unilever companies
  19. 19. PORTER’S FIVE FORCE MODEL… Competitive RivalryThreat of New Entrant • Number of Competitors• Time and Cost of Entry Threat of • Quality Differences• Specialist Knowledge New Entry • Other Differences• Economies of Scale • Switching Costs• Cost Advantage • Customer Loyalty• Technology Protection • Costs of Leaving Market• Barriers to Entry Supplier Power Competitive Rivalry Buyer Power Supplier Power • Number of Suppliers Buyer Power • Size of Suppliers • Number of Customers • Your Ability to Change • Size of Each Order • Cost of Changing Threat of • Difference between Substitution Competition Threat of Substitution • Price Sensitivity • Substitute Performance • Ability to Substitute • Cost of Change • Cost of Changing
  20. 20. 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 15 stores.• With highly competitive retail market, Sangam faced 3 problems :• Specialized knowledge – Space constraints – Cost disadvantage (No disc on competitor’s product) – Time and Cost
  21. 21. COMPETITIVE RIVALRY• Number of Competitors• Quality Differences• Other Differences• Switching Costs• Customer Loyalty
  22. 22. 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
  23. 23. BUYER POWER• No of customer’s is moderate• Size of Each Order is in Bulk quantity• Price Sensitivity• Ability to substitute• Cost of changingTie-ups with local complementary product manufacturer to get products at cheaper and minimal rates
  24. 24. PESTLE ANALYSIS…• POLITICAL - Guhwati Tea Factory- had to be shut down because of threat and extortion• ECONOMIC – Increase in Oil Rates…yet HUL maintains its profits and pricing power• SOCIAL – 2009, SANKALP an initiative taken by HUL managers to drive health and hygiene in rural areas• TECHNOLOGICAL – 1991, first time soap bar was introduced…Vim Bar and Odopic Bar• LEGAL – HUL, so far has abided laws of land in regional as well as national level.• ENVIRONMENT – First company in its vision statement to address the growing environmental damage
  25. 25. STRENGTHS…• More than 50 years of operation (Rs. 3500 Cr. Fixed Assets and Rs. 2000 Cr. Cash)• Soaps and detergents segment contribute 47% revenue• Sales (Rs. 17,500 Cr.) are 5 to 6 times that of Dabur, P&G and Godrej• Extensive product innovation through R&D for 51 years• Business optimisation & integration of suppliers and distributers through IT• YOY increase in growth, EPS and dividend• Very high returns e.g. ROA, ROC and RON
  26. 26. WEAKNESSES…• Profitability margin parameters are low compared to ITC, P&G, Dabur, Marico and Godrej• Expenditure is 85% of sales (16% Advertising Expense)• More emphasis on power brands or low focus• Gain from other segments
  27. 27. OPPORTUNITIES…• Huge Rural Market• Increased purchasing power of middle class• Growth of other segments e.g. food• New markets e.g. Ayurvedic products• Export advantage
  28. 28. THREATS…• Huge players both Domestic & International• Inflation is reducing buying power• Price rise• Stiff competition with ITC• Counterfeit products in rural areas
  29. 29. 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
  31. 31. GROWTH STRATEGIES• Organic Growth• Inorganic Growth through Acquisitions – Increasing Product PortfolioAcquisitions Mergers• Lipton 1972 • Tata Oil Mills Company (TOMCO) April 1, 1993• Brooke Bond 1984 • Alliance with the Kwality Ice cream Group, 1995• Ponds USA 1986 • Brooke Bond Lipton India Limited (BBLIL)• Dollops Ice-cream 1993 January 1, 1996• Lakme Ltd. (50:50 joint venture) 1996• Kissan 1993 (from UB)• Modern Foods 2002
  32. 32. MARKETING STRATEGIES• Straddling the pyramid & deploying full portfolio• To meet every need of people everywhere
  33. 33. MARKETING STRATEGIES• Leading to Strong Portfolio across categories
  34. 34. MARKETING STRATEGIESFOR RURAL INDIA• For long term benefits, HUL started Project Streamline in 1997• Integrate Economic, Environment & Social objectives with Business agenda• Project Shakti, a partnership with Self Help Groups of rural women extended to about 15 states in 80,000 villages with 45,000 women entrepreneurs generating Rs.700 to1000 per month for each woman
  35. 35. R&D STRATEGIES• Innovation is the key• Research & Development in Unilever includes: – Looking at emerging technologies – Exploring possible applications – Collaborating with external experts to adapt products for local markets• Build segments & markets for the future in areas where Unilever has strong expertise
  37. 37. R&D STRATEGIESSix principal research and development centresLocation ExpertisePort Sunlight, UK Fabric Wash, Hair Care, Deos, Oral Care, Surface CleanersColworth, UK Beverages & Processed FoodsVlaardingen, the Fabric Wash, Beverages & Processed FoodsNetherlandsTrumbull, US Skin Care, Deos, ShampoosBangalore, India Skin Care, Fabric Wash, Beverages, Ice Cream, , Processed Foods, WaterShanghai, China Shampoos, Skin Care, Ice Cream, Beverages, Processed Foods
  38. 38. DISTRIBUTION STRATEGIES• Mission is “to meet the everyday needs of people everywhere”• 7,000 redistribution stockists covering about one million retail outlets• Provide tailor-made services to its channel partners• Powered distribution RSNet – online interaction on orders, dispatches, information sharing and monitoring• Rural distribution through Projects Streamline and Shakti
  39. 39. HR STRATEGIESAttracting, Motivating and Retaining the Best Talent• The companys believes that a fair days work deserves a fair days wages’• 36,000 employees, including about 1,400 managers, are all sharply focused on the common goal, which is to "add vitality to life".• 200,000 indirect jobs in those sectors of the economy connected with the companys operations• On an average, HUL creates five indirect jobs for every single permanent employee• Environment for Empowering the people
  40. 40. HR STRATEGIES• The manager works in different functions across villages and international locations• Progress is based on: – Merit – Ability and Performance – Adhering to the Companys Code of Business Principles• The values of Truth, Courage, Action and Caring form the bedrock of these business principles• Creating a new generation of Industrial Workmen
  41. 41. FUTURE RECOMMENDATIONS• Product Innovations• Economic Development• Focus on Service• Creating Alliances• Cost &Waste Reduction
  42. 42. PRODUCT INNOVATIONS Plan:-  Create health-promoting products (Low Calories, High Nutrition)  Reducing salt/sugar in food  Food structuring – Creating food structures to suit changing tastes and needs for millennia  Clean clothes, less water  Smoother, straighter hair  Intelligent deodorant  Healthy ice creams Benefits:-  Better customer satisfaction by providing them latest technology products  Adaptability to changing trends in market  Higher competitive strength  Increased Product portfolio
  43. 43. ECONOMIC DEVELOPMENT Plan:-  Promoting biodiversity & alleviating poverty in various rural areas  Empowering women through micro enterprises  Unilever Foundation for Education & Development  Creating rural entrepreneurs Benefits:-  Market penetration in rural areas  Economic development  Creating company image  Building trust in minds of customers
  44. 44. FOCUS ON SERVICE Plan:-  Customer feedback is the best way to improve the product  Add benefit schemes like discount vouchers for customers who give feedback  Get feedback from customers on various products and on nutrition, health and hygiene education, empowering livelihoods and eco-efficiency Benefits:-  Company image will move from pure product based to product-service based company  Customer will feel more valued in turn brand loyalty can be created and maintained  Product is better accepted by customer would result in increased sales
  45. 45. CREATING ALLIANCES Plan:-  Farmer development program – Support farmers financially to grow key ingredient in a popular Unilever brand  Building partnerships with suppliers  Tree planting in deprived communities supported by Unilever volunteers Benefits:-  Cost reduction  Strategic alliance with suppliers and farmers will help long term growth  Rural/deprived community development
  46. 46. COST & WASTE REDUCTION Plan:-  Constantly monitor and re-engineer operations to reduce waste and improve production process  Putting palm oil waste to good use  Reusing waste plastic to make jewellery & flower pots Benefits:-  Reduced manufacturing cost & waste would result in high margins and more profit  Better utilisation of resources  Additional products from waste would add to product portfolio
  47. 47. ANY QUESTIONS???
  48. 48. THANK YOU…!!!