Case Study on HLL

Presented by: Sandipan Chatterjee (M5-33) Dipanjan Chatterjee (M5-08)

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Chirantan

Contents

About Hindustan lever limited Challenges faced by HLL Analyzing the Challenges Proposed solution for Challenges

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History

Hindustan Lever Limited

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History

Hindustan Unilever Limited (HUL) is India's largestfast moving consumer goods company. In 1888 Kolkata witnessed an era of marketing branded FMCG. 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 HLL in November 1956. Brooke Bond came in India in 1900 and by 1903 the company launched Red Label

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After liberalization

After liberalization in Indian economy in 1991 HUL and the s Groups growth curve marked an inflexion. Tata Oils Mills Company (TOMCO) merged with HUL in April1,1993 and in 1996 another Tata Company Lakme limited formed a 50:50 joint venture, Lakme Unilever limited to market its product. In 1998 Lakme sold its brand to HUL. HUL formed 50:50 joint venture with the US based Kimberly Clark Corporation in 1994 which markets Huggies Diapers etc. HUL has set up a subsidiary in Nepal, Unilever Nepal limited

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Challenges

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With these acquisitions Hindustan Lever Limited became a giant company in FMCG sector. But it has become as UNMANAGABLE GROWTH because of the following challenges and these are as follows:MARKETING CHALLENGES LOGISTICS CHALLENGES HR CHALLENGES FINANCE CHALLENGES

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Marketing Challenges

The company penetrated into such a deep level of markets where further penetration became almost impossible.

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Analysis of Marketing Challenges

According to the problem HUL reached maturity level where the customer base is a huge mass market and competition is intense. In this stage sales is constant as because no further scope of high sale as it reached deep into mass and profit increases at a decreasing rate.
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Solutions for Marketing Challenges

Product differentiation or new specifications in existing products . Innovation of new products. Bringing awareness among mass about the use of new products and use of existing products. Attractive promotion strategies and pricing strategies.
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Lucrative offer for the buyers on

Logistics Challenges

HLL had a centralized policy for the distribution of products. Any marketing team from any part of the country should summon the requirement from Mumbai warehouse only.

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Analysis of Logistics Challenges

In this problem HUL follows centralized distribution system which causes big delays to deliver the products to retailers in different parts of the country and hence causes transportation costs also.

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Solutions for Logistics Challenges

Decentralization of product stock to different parts of the country at least four in four regions i.e. east, west, north and south. Active channel of distribution and proper usage of middleman and wholesale dealers all over the country.
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HR Challenges

HLL had a very bad experience during the placement week at IIM Ahmadabad in 1999 when they were given last slot as because none of the top cream opted for HLL. When enquired its was found that HLL has limited career prospect.

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Analysis of HR challenges

Career growth and job satisfaction level is less according to students of IIM Ahmadabad PGP students. According to them there is limited career prospect in HUL.

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Solutions for HR Challenges

Decentralization of each product line under which each segment of product has its own control body. Brand managers and product manager for each products product line. Decentralization of authority or control body for each segments hence more scope for young 3/4/12 managers for their career prospect.

Finance Challenges

The company was operating on Low margin high volume business model which was not accepted by parent company i.e. Unilever at UK because profits are not that visible.

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Analysis of Financial Challenges

They targeted every segment of the market and hence followed the Low margin high volume business model. So profit was less with respect to the total turnover of the company i.e. Rs.58000 crore per annum.

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Solutions for Finance Challenges

Length of existing product line should be minimized so that few products with high pricing range can be introduced rather than large amount of low price products. Quality products for middle class and elite class consumers with various specification and innovative uses which was undiscovered till now. They should consider about profit structure rather than quantity of low price products. 3/4/12

THANK YOU

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