HINDUSTAN UNILEVER LIMITED

By: GROUP 4 (PRN 079 to 085)

Hitendra Kishanchandani Nivedita Kerketta Karan Singh Kumar Kamal

Kushagra Bhatnagar Manish Ahuja

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.

The nine cells are grouped into three zones:

TheGreen Zoneconsists 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. TheYellow Zoneconsists 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. TheRed Zoneconsists 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.

Ref : http://www.brs-inc.com/models/model17.asp

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

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

HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger ofLever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. Largest fast moving consumer goods company. Touching the lives of two out of three Indians. Over 20 distinct categories in home & personal care products and food & beverages. Combined volumes of about 4 million tonnes and sales of over Rs. 13,000 crores.
(http://en.wikipedia.org/wiki/Hindustan_Unilever)

Food Brands : 3 roses, Annapurna, Brook Bond, Bru, Kissan, Knorr, Kwality walls, Lipton. Personal care Brands : Axe, Breeze, Hamam, Lakme, Lux, Lifebuoy, Pepsodent, Sunsilk. Home Care Brands : Wheel, Cif, Comfort, Domex, Rin, Sunlight, Surf Excel, Vim.

http://www.hul.co.in/brands/index.aspx

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)

The shampoo market in India is estimated to be Rs. 2,500-3,000 crore.

(http://www.dnaindia.com/money/report_2nd-strike-p-and-g-cuts-shampooprices_1369108)

With a market share of 44%, the trio leads the market.

(http://www.dnaindia.com/money/report_2nd-strike-p-and-g-cuts-shampooprices_1369108)

DOVE,CLININC, SUNSILK OVERALL MARKET SIZE

Weight 0.25

Rating 4

value 1.00

Reasons Total market size is Rs. 2,500-3,000 cr.

(http://www.dnaindia.com/money/report_2ndstrike-p-and-g-cuts-shampoo-prices_1369108)

ANNUAL MARKET GROWTH RATE HISTORICAL PROFITMARGIN

0.15

0.45

Annual growth rate is 9.3%

(http://www.dnaindia.com/money/report_2ndstrike-p-and-g-cuts-shampoo-prices_1369108)

0.15

0.30

Rs. 533.2 cr. A drop of 1.8 % from last year

(http://economictimes.indiatimes.com/news/ne ws-by-company/earnings/earningsanalysis-/HUL-profit-dip-mirrors-growthconstraints-of-FMCGsector/articleshow/6225226.cms)

COMPETITIVE INTENSITY TECHNOLOGY REQUIREMENTS TOTAL

0.15 0.30

2 3

0.30 0.90

High competition from PnG Dabur LOreal Favorable, as 4 products have been introduced in the market according to different needs.

1.00

2.95

DOVE, CLININC,SUNSILK Market share

Weight 0.10

Rating 4

Value 0.40

Reasons Market share is 44%

(http://www.dnaindia.com/money/report_2n d-strike-p-and-g-cuts-shampooprices_1369108)

Share growth

0.05

0.10

Share on a decline 45.4 % to 44 %

(http://www.thehindubusinessline.com/2010 /03/13/stories/2010031352130500.htm)

Product quality Brand reputation Distribution network Promotional Effectiveness Production capacity

0.10 0.20 0.05 0.10 0.10

4 4 4 4 4

0.40 0.80 0.20 0.40 0.40

World class High Excellent, 6.3 million outlets Rs.633 cr. Marketing investment, very high Improved from 75% to 92%
(http://www.livemint.com/2010/07/1223342 2/HUL-aims-to-react-faster-to-ma.html)

Production effectiveness

0.05

0.20

Very good, a reduction in defects per 1,000 pieces by 50% and a drop in wrapper wastage by 70%. Excellent, HUL has its R&D centers all across the Globe. Very good due to high capacity plants and high production capacity.

R&D performance Material supplies

0.20 0.05

4 3

0.80 0.15

Clinic All Clear Hair oil comes as light hair oil having anti dandruff properties and also the coconut oil. The market size of the segment is around Rs.3000 Cr. Market share of 6.2% makes it a tougher path to traverse for HUL in this segment.

CLINIC PLUS Weight

OVERALL MARKET SIZE ANNUALMARKT GROWTH RATE 0.25

Rating value 4 1.00

Reasons Total market size is Rs.2930 cr (Perfumed Oil) Value growth of 23.8 per cent and a volume growth of 14.1 per cent in 2009.

(http://www.thehindubusinessline.com/2010/04/22/ stories/2010042251110500.htm)

0.15

0.60

(http://www.thehindubusinessline.com/2010/04/22/ stories/2010042251110500.htm)

HISTORICAL PROFITMARGIN COMPETITIVE INTENSITY TECHNOLOGY REQUIREMENTS TOTAL

0.15 0.15

2 2

0.30 0.30

Recently introduced thus profit margins not high. Highly competitive due to market sharing of branded as well as unbranded products. Favorable, as its introduced in 3 variants of Heavy oil, cooling oil and light hair oil

0.30

0.90

1.00

3.10

CLINIC PLUS
Market share

Weight
0.15

Rating
2

Value
0.30

Reasons
Market share is 6.2% (Market leader Bajaj Almond drops has a market share of 46.8%)
(http://www.thehindubusinessline.com/2010/ 04/22/stories/2010042251110500.htm)

Product quality Brand reputation

0.10 0.20

4 2

0.40 0.40

World class Medium due to the advancement of herbal care in hair oil arena and the Indianness of the product. Brand reputation is more due to Clinic shampoo. Large distribution network but not much effective in rural areas. Promotion is more for Clinic All Clear shampoo and not much for hair oil. High capacity plants HUL being an MNC has got good R&D for global products like shampoos. Good due to high capacity plants

Distribution network Promotional Effectiveness Production capacity R&D performance Material supplies TOTAL

0.05 0.15 0.10 0.20 0.05 1.00

2 2 3 2 2

0.10 0.30 0.30 0.40 0.10 2.30

The market size for this segment is a staggering Rs.8800 Cr. Market share of 37.38% makes it the leader in the market but faces a stiff competition from the players like Proctor and Gamble.
(http://www.marketresearchdata.org/index.php?option=com_content&view=article&id=59:indian-householdcare-market-an-overview&catid=35:household-industrial-and-institutional-hiai&Itemid=55)

(http://www.stockmarketsreview.com/news/hul_3qfy2010_performance_highlights_and_results_update_2010012 8_2622/)

The market share has decreased since the last financial year.

SURF EXCEL, RIN Weight

Rating

value

Reasons

OVERALL MARKET SIZE ANNUAL MARKET GROWTH RATE HISTORICAL PROFITMARGIN

0.40

1.60

Total market size is Rs.8800 cr.

(http://www.stockmarketsreview.com/news/hul_3qfy201 0_performance_highlights_and_results_update_201001 28_2622/)

0.05

0.10

Stagnant since past few years. profit margins low due to competitions from TIDE and ARIEL and Competitive Pricing. Rin prices slashed to Rs.50 from Rs.70 High competition from rivals like P&G

0.05

0.15

COMPETITIVE INTENSITY TECHNOLOGY REQUIREMENTS TOTAL

0.20

0.60

0.30

1.50

Requirements are high to cater new demands.

1.00

3.95

SURF EXCEL, RIN Market share

Weight 0.05

Rating 4

Value 0.20

Reasons Market share is 37.38%

(http://www.marketresearchdata.org/index.php? option=com_content&view=article&id=59:indian -household-care-market-anoverview&catid=35:household-industrial-andinstitutional-hiai&Itemid=55)

Share growth

0.05

0.10

Decreased by 1.9% from last year.

(HUL Annual Report)

Product quality Brand reputation Distribution network Promotional Effectiveness Production capacity R&D performance

0.15 0.20 0.10 0.10 0.10 0.15

4 4 4 4 4 4

0.60 0.80 0.40 0.40 0.40 0.60

World class High Excellent, 6.3 million outlets

(HUL Annual Report)

Aggressive High capacity plants Excellent, HUL has its R&D centers across the Globe. Good due to high capacity plants

Material supplies TOTAL

0.10 1.00

0.30 3.80

The overall market size of the oral care market is Rs.3000 Cr. http://economictimes.indiatimes.com/articleshow/5946606.cms Market share of 22% makes it stand just next to the leader Colgate with 53% market share.
(http://economictimes.indiatimes.com/articleshow/5946606.cms)

Recently, HUL has signed up Shahrukh Khan for promotion of Pepsodent.

PEPSODENT,CLOSE Weight UP OVERALL MARKET SIZE 0.40

Rating

value

Reasons

1.60

Total market size is Rs.3000 cr.

(http://economictimes.indiatimes.com/articles how/5946606.cms)

ANNUAL MARKET GROWTH RATE COMPETITIVE INTENSITY TECHNOLOGY REQUIREMENTS TOTAL

0.10

0.20

Stagnant since past few years. High competition ,market share 1/2 of the market leader. Requirements are high to cater new demands.

0.20

0.40

0.30

1.50

1.00

3.70

PEPSODENT,CLOSEUP

Weight

Rating

Value

Reasons

Market share

0.05

0.15

Market share is 22%

(http://economictimes.indiatimes.com/art icleshow/5946606.cms)

Share growth

0.05

0.05

Depreciated from 24.5% to 22%

(http://economictimes.indiatimes.com/art icleshow/5946606.cms)

Product quality Brand reputation Distribution network

0.15 0.20 0.10

4 3 3

0.60 0.60 0.30

Reputed Quality Lesser recall value. Excellent, 6.3 million outlets but low penetration in rural markets(HUL Annual report) Decent High capacity plants Strong, HUL has its R&D centers across the Globe. Good due to high capacity plants

Promotional Effectiveness Production capacity R&D performance Material supplies TOTAL

0.10 0.10 0.15 0.10 1.00

3 4 4 3

0.30 0.40 0.60 0.30 3.30

Accounted for Rs.4969.36 Cr turnover.

(http://www.ghallabhansali.com/admin/file/FMCG.pdf)

Market share of 53 % makes it the market leader in the segment. (http://www.ghallabhansali.com/admin/file/FMCG.pdf) Lux is the Flagship brand of HUL. It has excellent presence in the rural as well as the urban market.

LUX,LIFEBUOY,LIRIL Weight

Rating

value

Reasons

OVERALL MARKET SIZE ANNUAL MARKET GROWTH RATE HISTORICAL PROFITMARGIN COMPETITIVE INTENSITY TECHNOLOGY REQUIREMENTS TOTAL

0.25

1.00

Total market size is Rs.4399 cr.

(http://www.ghallabhansali.com/admin/file/FM CG.pdf)

0.15

0.60

Annual growth rate is 18.90 %

(http://www.livemint.com/2010/05/30195815/ Price-war-affects-HUL8217s.html?d=1)

0.15

0.60

16%
(http://www.hul.co.in/mediacentre/pressreleas es/2010/HULDecQuarterResults2009.aspx)

0.15 0.30

2 3

0.30 0.90

High competition due to 50% market share with rivals. Many variants in the market like beauty soap LUX, antiseptic LIFEBUOY, etc.

1.00

3.40

LUX,LIFEBUOY,LIRIL Market share

Weight 0.10

Rating 4

Value 0.40

Reasons Market share is 53%

(http://www.ghallabhansali.com/admin/file/F MCG.pdf)

Share growth

0.10

0.40

Share growth of 19%

(http://www.hul.co.in/mediacentre/pressrele ases/2010/HULMarQuarterResults2010.aspx)

Product quality Brand reputation Distribution network

0.10 0.20 0.05

4 4 4

0.40 0.80 0.20

World class High Excellent, 6.3 million outlets

(www.hul.co.in/.../MorganStanleyAsiaPacificC onference2006_tcm114-136572.pdf)

Promotional Effectiveness Production capacity R&D performance Material supplies TOTAL

0.10 0.10 0.20 0.05 1.00

4 3 4 2

0.40 0.30 0.80 0.10 3.80

LUX is considered to be the soap of beauty stars. High capacity plants Excellent, HUL has its R&D centers across the Globe. Good due to high capacity plants

The Market size of the segment is Rs.2100 Cr.

(http://fmcgmarketers.blogspot.com/2007/09/indian-skin-care-anti-ageingcategory.html)

Lakme is the most trusted Cosmetics brand in India. With a market share of 53%, it is the clear cut leader in the segment.
(http://fmcgmarketers.blogspot.com/2007/09/indian-skin-care-anti-ageingcategory.html)

LAKME,PONDS

Weight

Rating

value

Reasons

OVERALL MARKET SIZE ANNUALMARKT GROWTH RATE

0.40

1.20

Total market size is Rs.2100 cr.

(http://fmcgmarketers.blogspot.com/2007/09/i ndian-skin-care-anti-ageing-category.html)

0.10

0.40

Market growth rate of 16 % is highly opportunistic.

(http://fmcgmarketers.blogspot.com/2007/09/i ndian-skin-care-anti-ageing-category.html)

COMPETITIVE INTENSITY TECHNOLOGY REQUIREMENTS TOTAL

0.20

0.80

Low competition ,market share 1/2 of the market pie. Requirements are high to cater new demands.

0.30

1.50

1.00

3.90

LAKME,PONDS Market share

Weight 0.05

Rating 4

Value 0.20

Reasons Market share is 53%

(http://fmcgmarketers.blogspot.com/200 7/09/indian-skin-care-anti-ageingcategory.html)

Product quality Brand reputation Distribution network Promotional Effectiveness Production capacity R&D performance Material supplies TOTAL

0.15 0.20 0.10 0.15 0.10 0.15 0.10 1.00

4 4 4 4 4 4 3

0.60 0.80 0.40 0.60 0.40 0.60 0.30 3.90

World class High ,world leader Lakme is companys flagship product Excellent, 6.3 million outlets Aggressive High capacity plants Strong, HUL has its R&D centers across the Globe. Good due to high capacity plants

SBU NAME

MARKET ATTRACTIVENESS

BUSINESS STRENGTHS

HAIR WASH HAIR CARE DETERGENT ORAL CARE PERSONAL SKIN CARE

2.95 3.10 3.95 3.70 3.40 3.90

3.85 2.30 3.80 3.30 3.80 3.90

GE Model
Business Strength Strong 5.00 Medium Weak

High

Market attractiveness

Invest/grow

3.67

Medium

Selective Earning

2.33

Harvest/Divestt

1.00 5.00

Low

3.67

2.33

1.00

Strategy of market leaders revolves around protecting their position by stop gap arrangements to arrest the losses in market share. HUL is renovating its marketing strategies in all 4 basic different elements of marketing mix: Promotion. (Communication) Pricing. (Cost) Place. (Channel) Product. (Commodity)

1. 2. 3. 4.

Regional players have hit HUL where it hurts the most Market share.

Anchor Health & Beauty Care launched 100 per cent vegetarian Anchor toothpaste. In detergents, smaller regional players like Ghadi, Sasa and Power have dented the volumes and market share of HULs Rs 2000 crore detergent brand Wheel. Chennai-based CavinKare with brands like Chik, Nyle, Meera and Karthika, came out with single serve packs to make inroads into the market

HUL is now tweaking its go-to-market strategy by focusing on individual states and even districts. The strategy glocal is - think global, act local. Each state presents a different nature of competition and a different growth challenge whether it is increasing penetration or driving consumption through deployment. The idea is winning state by state.

Project Shakti is a unique win-win rural initiative that catalyses rural affluence. It covers 15 states in India and has over 37,000 Shakti Ammas (women entrepreneurs) reaching 1 lakh villages. HUL invests resources in training these village women to become entrepreneurs. They are also a source of inspiration for the other women in the community. The Shakti initiative also enables rural consumers to access world class products, thereby reducing the menace of spurious products.

State wise promotion The company is now strengthening its regional brands like Hamam in Tamil Nadu; Rexona in Andhra Pradesh and Karnataka; Breeze in the Hindi belt and Sunlight in Kerala and West Bengal.

Relaunching of older brands Lifebuoy and Liril were re-launched; In shampoo, Clinic All Clear was relaunched.

There were new brand launches Ponds White Beauty, the premium skin lightening cream, and Vaseline Healthy White body lotion. Pepsodent returned with its orginal proposition of fighting germs for longer hours. And Wheel saw its net content (grammage) increase. HUL and P&G are hitting each other below the belt in detergent wars.

HUL has identified right pricing as a primary tool to increase its price competitiveness in a market. HUL devises different price strategies for products and a key enabler to right pricing is reducing the cycle time substantially. HUL has a considerably short cycle time (1 day) for its stockists who order products online using HULs CRM system UNIFY. Due to this stockists are able to supply fresh stocks which are newly priced for the customer to benefit.

Besides relaunching the product in different forms and packages, HUL follows the process of constant innovation for its products. HUL studied the clothes washing process followed in India and realised that its rinsing that often takes most time and uses most water water that is extremely scarce, especially if you live in the dry, southern states of Andhra Pradesh and Tamil Nadu. HUL found just the right ingredient that doesnt suppress lather significantly during the main wash, yet aids significant foam reduction during the rinsing step. This is how new Surf Excel Quick Wash can deliver a good lather at the washing stage, and reduce the need for the rinsing