Introduction to HUL

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company with a heritage of over 75 years in India and touches the lives of two out of three Indians. HUL works to create a better future every day and helps people feel good, look good and get more out of life with brands and services that are good for them and good for others. With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers, the Company is a part of the everyday life of millions of consumers across India. Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Ponds, Vaseline, Lakm, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Walls and Pureit. The Company has over 16,000 employees and has an annual turnover of around Rs. 21,736 crores (financial year 2011 - 2012). HUL is a subsidiary of Unilever, one of the worlds leading suppliers of fast moving consumer goods with strong local roots in more than 100 countries across the globe with annual sales of about 46.5 billion in 2011. Unilever has about 52% shareholding in HUL. Unilever products touch the lives of over 2 billion people every day whether that's through feeling great because they've got shiny hair and a brilliant smile, keeping their

homes fresh and clean, or by enjoying a great cup of tea, satisfying meal or healthy snack.

A Clear Direction
The four pillars of our vision set out the long term direction for the company where we want to go and how we are going to get there:

We work to create a better future every day We 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.

We will inspire people to take small everyday actions that can add up to a big difference for the world.

We will develop new ways of doing business with the aim of doubling the size of our company while reducing our environmental impact. We've always believed in the power of our brands to improve the quality of peoples lives and in doing the right thing. As our business grows, so do our responsibilities. We recognise that global challenges such as climate change concern us all. Considering the wider impact of our actions is embedded in our values and is a fundamental part of who we are.

Our Mission

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.

Our Vision To Earn the Love and Respect of India, by making a real difference to every Indian

Our Purpose

At the heart of the corporate purpose, which guides us in our approach to doing business, is the drive to serve consumers in a unique and effective way. This purpose has been communicated to all employees worldwide.

ORGANIZATION CULTURE

Corporate Purpose
Our deep roots in local cultures and markets around the world give us our strong relationship with consumers and are the foundation for our future growth. We will bring our wealth of knowledge and international expertise to the service of local consumers - a truly multi-local multinational. Our long-term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively, and to a willingness to embrace new ideas and learn continuously. To succeed also requires, we believe, the highest standards of corporate behavior towards everyone we work with, the communities we touch, and the environment on which we have an impact.

Code of Business Principles

HUL has earned a reputation for conducting its business with integrity and with respect for the interests of those their activities can affect. This reputation is an asset, just as real as their people and brands. HULs first priority is to be a successful business and that means investing for growth and balancing short term and long term interests. It also means caring about their consumers, employees and shareholders, their business partners and the world in which they live.

Standard of Conduct
HUL conducts their operation with honesty, integrity and openness, and with respect for the human rights and interests of their employees. They similarly respect the legitimate interests of those with whom they have relationships.

Obeying the Law

HUL companies and their employees are required to comply with the laws and regulations of the countries in which they operate.

Employees
HUL is committed to diversity in a working environment where there is mutual trust and respect and where everyone feels responsible for the performance and reputation of their company. They recruit, employ and promote employees on the sole basis of the qualifications and abilities needed for the work to be performed. They are committed to safe and healthy working conditions for all employees. They do not use any form of forced, compulsory or child labor. They are committed to working with employees to develop and enhance each individual's skills and capabilities. They respect the dignity of the individual and the right of employees to freedom of association. They maintain good communications with employees through company based information and consultation procedures.

Consumers
HUL is committed to providing branded products and services which consistently offer value in terms of price and quality, and which are safe for their intended use. Products and services are accurately and properly labeled, advertised and communicated.

Shareholders
HUL conducts its operations in accordance with internationally accepted principles of good corporate governance. They provide timely, regular and reliable information on their activities, structure, financial situation and performance to all shareholders.

Business Partners
HUL is committed to establishing mutually beneficial relations with their suppliers, customers and business partners. In their business dealings they expect their business partners to adhere to business principles consistent with their own.

Community Involvement
HUL strives to be a trusted corporate citizen and, as an integral part of society, to fulfill their responsibilities to the societies and communities in which they operate.

Public Activities
HUL companies are encouraged to promote and defend their legitimate business interests. HUL co-operates with governments and other organizations, both directly and through bodies such as trade associations, in the development of proposed legislation and other regulations which may affect legitimate business interests. HUL neither supports political parties nor contributes to the funds of groups whose activities are calculated to promote party interests.

The Environment
HUL is committed to making continuous improvements in the management of their environmental impact and to the longer-term goal of developing a sustainable business. HUL will work in partnership with others to promote environmental care, increase understanding of environmental issues and disseminate good practice.

Innovation
In their scientific innovation to meet consumer needs they respect the concerns of their consumers and of society. HUL works on the basis of sound science applying rigorous standards of product safety.

Competition
HUL believes in vigorous yet fair competition and supports the development of appropriate competition laws. HUL companies and employees will conduct their operations in accordance with the principles of fair competition and all applicable regulations.

Business Integrity
HUL does not give or receive whether directly or indirectly bribes or other improper advantages for business or financial gain. No employee may offer give or receive any gift or payment which is, or may be construed as being, a bribe. Any demand for, or offer of, a bribe are rejected immediately and reported to management. HUL accounting records and supporting documents are accurately described and reflect the nature of the underlying transactions. No undisclosed or unrecorded account, fund or asset are established or maintained.

Conflicts of Interests
All HUL employees are expected to avoid personal activities and financial interests which could conflict with their responsibilities to the company. HUL employees must not seek gain for themselves or others through misuse of their positions. This is our road to sustainable, profitable growth, creating long-term value for our shareholders, our people, and our business partners.

PRODUCT PORTFOLIO KWALITY WALL'S ICE CREAM LIFEBUOY LUX BREEZE LIRIL REXONA HAMAM MOTI SOAPS PURE IT WATER PURIFIER LIPTON TEA BROOKE BOND TEA BRU COFFEE PEPSODENT AND CLOSE UP TOOTHPASTE AND BRUSHES SURF AXE DEOSPRAYS. RIN WHEEL LAUNDRY DETERGENTS KISSAN SQUASHES AND JAMS ANNAPURNA SALT AND ATTA POND'S TALCS CREAMS VASELINE LOTIONS FAIR AND LOVELY CREAMS LAKM BEAUTY PRODUCTS CLINIC PLUS CLINIC ALL CLEAR SUNSILK SHAMPOOS DOVE SHAMPOOS VIM DISHWASH

 ALA BLEACH DOMEX DISINFECTANT REXONA

Household Care
Fabric wash (laundry soaps and synthetic detergents) Household cleaners(dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners, insecticides and mosquito repellents, metal polish and furniture polish)

Personal Care
Oral care, hair care, skin care, personal wash (soaps) Cosmetics and toiletriesdeodorants Perfumes Feminine hygiene Paper product

Food & Beverage

Health beverages; soft drinks Staples/cereals Beverages bakery products (biscuits, bread, cakes) Snack food Chocolates Ice cream Tea Coffee Soft drinks Processed fruits, vegetables Dairy products Bottled water Branded flour

Company structure
Hindustan Unilever Limited is India's largest Fast Moving Consumer Goods (FMCG) company. It is present in Home & Personal Care and Foods & Beverages categories. HUL has over 16,500 employees, including over 1500 managers

HUL (Hindustan Unilever Limited)

Parent Company

Unilever Limited

Category

Consumer Products, Food & Beverages

Sector

FMCG

Tagline/ Slogan

Small Actions, Big Difference

USP

India's largest fast-moving consumer goods company

STP

Segment

Products and services for daily needs

Target Group

Every Indian household especially the middle class

Being the largest FMCG company , their little efforts make a huge Positioning difference in the lives of people

Milestones
1895 - Lifebuoy soap was launched 1902 -Pears soap was introduced 1903 - Brooke Bond Red Label tea launched 1905 - Lux flakes introduced. 1913 -Vim scouring powder introduced. 1914 - Vinolia soap launched in India. 1918 - Vanaspati introduced. 1922 - Rinso soap powder introduced. 1924 - Gibbs dental preparations launched 1996 -Formation of Hul 1969- Rin bar 1972 ClinicPlus were introduced both of which made HuL take a firm platform. 1968 - Mr. V. G. Rajadhyaksha takes over as Chairman from Mr. Prakash Tandon (the first indian director) 1982- the Government allowed 51% Unilever shareholding. 1993 -HLL's largest competitor, Tata Oil Mills Company (TOMCO), merged with the company. Brooke Bond India acquired Kissan Business from the UB Group and Dollops icecream business from Cadbury . 2007- the company was renamed as Hindustan Unilever Limited.

Integrated Management System

PEST ANALYSIS
P: since the budget range is decontrolled, no political effects are envisaged. E: increasing per capita income resulting in higher Disposable income Growing middle class/urban population increase in Demand Low cost of production better penetration S: Per capita consumption expected to increase fashion Increasing gifts culture increase in demand T: Will have to reinforce technology to international levels Once India is afully free economy

SWOT ANALYSIS OF HINDUSTAN LEVER LIMITED

STRENGTHS
1] Deep Roots In Local Culture & Markets & Great Understanding Of Consumer Needs.

2] Wealth Of Local Knowledge & International Expertise Helps It To Be Globally Competitive.

3] Exceptional High Quality Standard Products.

4] New Innovative Ideas & Products.

5] Highily Professional Management.

6] Excellent Distribution Network & Good Relationship With The Wholesalers & Retailers.

7]Continous Efforts To Reduce Cost & Pass On Benefit To Consumers.

8] Good Reputation & Goodwill In The Market For Its Products.

9] Good Advertisements So As To Make The Consumers Aware Of Its Products,Uses & Price & Also Have A Lasting Impression By Catchy Ads.

10] Excellent Brand Making Capability. It Has 110 Brands Out Of Which 30 Are Power Brands (Ie, Leader In Market Share With High Growth Potential)

11] Ability To Provide Good Quality Goods To Middle Class At Reasonable Rates & Also Cater To The Premuim Segment For The Upper Class.

12] Very High Market Price Per Share Compared To The Face Value.

13]Good Returns By Way Of Dividend Per Share Every Year.Last Year 5/- Rs Dividend Per Share.

14]Steady Increase In The Return On Capital Employed.

15] Continous Increase In Earning Per Share (Eps)

16]Good Cash Reserves.

17]Excellent Past Performances For A Number Of Years.

18]Ability To Manage Diverse Business

19]Having Unilever As Parent Company Gives It A Global Presence.

20]Excellent Research & Development.

21]Use Of Rs-Net A Web Enabled Customer Management System To Establish Two Way Connectivity With Stockist.

22] Using Information Technology To Connect Supply Chain

23] Excellent Finacial Support From Banks & Financial Institituions.

24]Good Finacial Liquidity & Also Ability To Complete Projects On Time.

25] Good Export Earnings

WEAKNESS
1]Diversification Into Various Lines In Which It Does Not Have Much Knowledge Would Be Very Risky Proposition.

2] High Competition From Established Brands Which Has Resulted In Reduction In Profit Margins.

3] Non Fmcg Products Are Losing Ground & Their Market Share & Sales Have Been Declining.

4]Working Capital Turnover Is Negative.

5]Unale To Make A Big Impact In Rural Areas.

6] Competition From Its Own Brands ( Lux, Liril, Lifebuoy )

OPPORTUNITIES
1]Big Untapped Market Available., Especially The Rural Areas.

2]Growth Potential Is High For The Power Brands.

3]Good Source Of Revenue & Foreign Exchange Available By Way Of Exports Of Its Products. 4]Its Competitors Dont Have The Fianacial Banking Like It So It Can Take Advantage Of This.

5]Due To Good Reputation It May Experiment & Introduce New Innovative Products In The Market.

6] The Food,Culinary & Icecream Category Have A Lot Of Growth Potential Available

THREATS
1] High Competition From Established Brands.(Nirma,Colgate,P & G )

2] Competition From Unbranded Products.

3] Competition From Its Own Brands.( Lux,Breeze,Liril) (Pepsodent & Close Up)

4]Poor Monsoon Leads To Poor Growth Due To Lack Of Purchasing Power By The Rural Areas.

5]Negative Working Capital Turnover May Lead To Short Term Instability. 6] Its Food,Culinary, Icecream Segment & Beverage Segment Are Facing Reduction In Sales & Hence Innovation Required To Meet Threats Of Competitiors

TOWS MATRIX

INTERNAL FACTORS/EXTERNAL FACTORS

STRENGTHS

WEAKNESS

Strong parentage and R&D, healthy cash offers to support innovation

Opportunities

Growing potential in food business Strong position in most of the categories of its presence

Losing market share in most of the categories

Threats

49% of HUL's sales come from detergents and personal wash

Increase in Ad Spending, which may affect the margins

BCG MATRIX
Soap & Detergent and Tea are Cash Cow for the company. It has high relative market share and low growth rate. Personal Products and Coffee are stars for the company as it have high relative market share as well as high market growth rate. Only food is a segment which is a Question Mark for the company. The company have a low relative market share where as it is under high market growth rate. HUL is taking several steps to capture more market share so that food segment can also be a part of Star.

What IS GE Matrix ?

General Electric GE McKinsey Matrix model is a nine-cell matrix. Used to perform detailed analysis about a particular SBU of an organization. Uses exhaustive analysis parameters like industry attractiveness and business strength, therefore better than BCG model.

Description of the Model

Skin care & Detergent

Oral care

Processed Foods

Hair wash & Personal care

Proces sed Foods

Sea-food exports

Processed Foods

Sea-food exports

Sea-food exports

 The Green Zone consists of the three cells in the upper left corner. If your enterprise falls in this zone you are in a favourable position with relatively attractive growth opportunities. This indicates a "green light" to invest in this product/service. The Yellow Zone consists of the three diagonal cells from the lower left to the upper right. A position in the yellow zone is viewed as having medium attractiveness. Management must therefore exercise caution when making additional investments in this product/service. The suggested strategy is to seek to maintain share rather than growing or reducing share. The Red Zone consists of the three cells in the lower right corner. A position in the red zone is not attractive. The suggested strategy is that management should begin to make plans to exit the industry.

Industry Attractiveness
The vertical axis of the GE / McKinsey matrix is industry attractiveness, which is determined by factors such as: Market growth rate Market size Industry profitability Industry rivalry Global opportunities Demand variability

Business Unit Strength

The horizontal axis of the GE / McKinsey matrix is the strength of the business unit, which is determined by factors such as: Market share Growth in market share Brand equity Distribution channel access Production capacity Profit margins relative to competitors SBUs of HUL Hair Wash (Dove, Clinic, Sunsilk) Hair Care (Clinic Plus Oil) Detergent (SurfExcel, Rin) Oral Care (Pepsodent, Close-up) Personal Wash ( Lifebuoy, Liril, Lux) Skin Care (Lakme, Ponds)

GE Matrix table values

SBU NAME

MARKET ATTRACTIVENESS

BUSINESS STRENGTHS

HAIR WASH

2.95

3.85

HAIR CARE

3.10

2.30

DETERGENT

3.95

3.80

ORAL CARE

3.70

3.30

PERSONAL

3.40

3.80

SKIN CARE

3.90

3.90

PORTER'S FIVE FORCES MODEL

Rivalry among Competing Firms: In the FMCG Industry, rivalry among competitors is very fierce. There are scarce customers because the industry is highly saturated and the competitors try to snatch their share of market. Market Players use all sorts of tactics and activities from intensive advertisement campaigns to promotional stuff and price wars etc. Hence the intensity of rivalry is very high.

Potential Entry of New Competitors: FMCG Industry does not have any measures which can control the entry of new firms. The resistance is very low and the structure of the industry is so complex that new firms can easily enter and also offer tough competition due to cost effectiveness. Hence potential entry of new firms is highly viable.

Potential Development of Substitute Products: There are complex and never ending consumer needs and no firm can satisfy all sorts of needs alone. There are plenty of substitute goods available in the market that can be re-placed if consumers are not satisfied with one. The wide range of choices and needs give a sufficient room for new product development that can replace existing goods. This leads to higher consumers expectation.

Bargaining Power of Suppliers: The bargaining power of suppliers of raw materials and intermediate goods is not very high. There is ample number of substitute suppliers available and the raw materials are also readily available and most of the raw materials are homogeneous. There is no monopoly situation in the supplier side because the suppliers are also competing among themselves.

Bargaining Power of Consumers: Bargaining power of consumers is also very high. This is because in FMCG industry the switching costs of most of the goods is very low

and there is no threat of buying one product over other. Customers are never reluctant to buy or try new things off the shelf.

HUL The McKinsey 7S

Structure
Board at the apex-Headed by Chairman, comprising 5 whole time Directors and 5 independent non-executive Directors. Divisions: Each division is self-sufficient with dedicated resources and assets in sales, marketing, commercial, and manufacturing. For managing sales operations, HUL divides the country into four regions, with regional branches in Delhi, Kolkata, Chennai and Mumbai.

Systems
Substantial investments in IT-based sales system All orders are fed into a central database from the distributor point. This extensive network is installed at all 3,500 distributor pointswhich makes for accurate on-the-fly demand projections and helps avoid stock-out losses.

Style
Nitin Paranjpe- Youngest CEO & MD HUL's leadership development model has groomed managers by providing a well-rounded view of the business through job rotation and various new assignments. The system was designed to identify fast-trackers, who were called the Lever listers and groom them for handling greater responsibilities. For every position, typically three people competed.

Shared values
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. Singular belief that what is good for India is good for HUL. It has strategically introduced new products on think global and act local concept.

Staff
15,000 employees, including 1200 managers, 200 scientists. HUL has a strong management bandwidth having a team of professionals for each SBU. At HUL, career paths are designed such that they will build employees into business leaders. Employees would start from a managerial level in any of the following functions: commercial, technical, sales & marketing, IT, HR

Skills
Has in-house manufacturing as well as outsourcing R&D support from parent company Large distribution network Strong management Has the best marketing talent in the industry

Strategy
Aimed at the broad market, products perceived as unique. Charges a premium for its product. HUL's brand loyalty lowers customers' sensitivity to price. Increased costs are usually passed on to the buyers.

Marketing Strategies

COMPETITOR S OF HUL
DABUR INDIA COLGATE PALMOLIVE GODREJ CONSUMER MARICO P&G HYGINE GODREJ INDUSTRIES GILLETTE INDIA EMAMI

Survey
We have conducted the survey about the popularity of Hindustan Unilever Ltdproducts. We asked a few people from various backgrounds through variouslocations.We asked the questions about popularity of HUL brands. We asked the usage of Products of FMCG(Fast moving Consumer Groups). HUL brands were veryPopular. Our Findings:

Soap
In soap Category Huls Dove was most preferred followed by Lux, Pears andCinthol. Dove is the brand of HUL so is Lux and Pears. So we can say that HULenjoys Majority Of market Share.

Detergents
In Detergents category Surf Excel was preferred by majority of the people followeby Rin and Local detergents. Surf Excel was The market leader in this category.

Shampoo
In shampoo category Clinic and Head and shoulders faced stiff competition.Majority of the competitors had the market share. But HULs share was substantial.

Toothpaste
In Toothpaste category HUL was left tottering. Colgate enjoyed the market sharewhile Closeup and Pepsodents market share was minimal.

Perfume
In Perfumes category Axe was clear favourite among the youth. Savy advertisinghas made the brand most popular and it enjoys majority of the market share.

Fairness cream
In the category of fairness creams market leader Fair and lovely faced a stiff competition from fairever and other brands. Still it hass held on to the majority of the market share.

Cosmetic Brand
In case of cosmetic brand Garnier of Loreal was the market leader. Even thoughLakme was not far behind.

Tea
In case of tea category Market share was found to be relatively uneven. Tata teahas slight edge over other brands like Brookebond and Taj mahal were alsopopular.

Coffee
In case of Coffee Nescafe was the most popular. In the sample we surveyed It waspreferred by all of them. Brooke bond of HUL was not even heard of in thiscategory.

CONCLUSION
Hindustan Unilever Limited considers quality as one of the principal strategic objectives to guarantee its growth and leadership in the markets. The fundamental principle determining the organization structure is to infuse speed and flexibility in decision making and implementation the companys nationwide operation. FMCG companies such as HUL are still to be adversely hit by the economic slowdown, which is beginning to make its impact felt across other sectors. They manufacture items of everyday consumption and are usually the last to be hit by a slowdown. FMCG growth has been supported by strong demand in rural markets, which has been growing at between 15% and 18%, after three years of good agricultural output. HUL derives more than 50% of its sales from rural markets. With the presence of 12.2% of the world population in the villages of India, the Indian rural FMCG market is something no one can overlook. Increased focus on farm sector will boost rural incomes, hence providing better growth prospects to the FMCG companies. Better infrastructure facilities will improve their supply chain. FMCG sector is also likely to benefit from growing demand in the market. Because of the low per capita consumption for almost all the products in the country, FMCG companies have immense possibilities for growth. And if the companies are able to change the mindset of the consumers, i.e. if they are able to take the consumers to branded products and offer new generation products, they would be able to generate higher growth in the near future. It is expected that the rural income will rise in 2009, boosting purchasing power in the countryside. However, the demand in urban areas would be the key growth driver over the long term. Also, increase in the urban population, along with increase in income levels and the availability of new categories, would help the urban areas maintain their position in terms of consumption.

QUESTIONNAIRE

NAME: AGE: OCCUPATION:

Q1) Do you use FMCG products? Yes -----No -----Q2) Which brand ofFMCG products do you use? Hindustan Unilever -------P &G -------Nivea --------Others -------Q3) Where do you buy FMCG products from? Super stores --------Retail Stores --------Others --------

Bathing soaps -----Skin care ------Foods -------Deodorants --------

Others -------Q5) Do you think Hindustan Unilevers product is easily available in market ? Yes -----No -----Q6) ) During purchase what in influence your purchase? Price -------Quality ------Packaging -------Experience ------Influence by others -------Q7) Describe Hindustan Unilever in one word? --------------------------------------------------8. Your comments on Hindustan Unilevers product? ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------