Case Study by

Srirang K Jha
Associate Professor
Apeejay School of Management
About HUL: Overview
• Established in November 1956 by merging three Indian
subsidiaries of Unilever viz. Hindustan Vanspati (1931), Lever
Brothers India (1933) and United Traders (1935)
• 10% equity to Indian public at the start
• Legacy of over 80 years
• Largest FMCG company in India
• On any given day, nine of ten households use HUL products
• 44 brands in 14 distinct categories
About HUL: Overview
• 21000 employees
• One of the best companies to work for (Aon Hewitt)
• Employer of choice for last 12 years in FMCG sector
• Most innovative Company (#8 globally) (Forbes)
• Sales revenue in 2020-21: INR 45311 crore
• Manufacturing locations: 31
• Suppliers: 1150+; Distributors: 4500+; Outlets: 8 million+
About HUL Leadership Team

Sanjeev Mehta Ritesh Tiwari Willem Uijen Dev Bajpai Anuradha Razdan
CMD CFO ED Supply Chain ED and CS ED HR

O P Bhatt Sanjiv Misra Kalpana Morparia Leo Puri Ashish Gupta

Independent Directors
About HUL: Products
About HUL: Products
About HUL: Products
About HUL: Products
HUL: Vision Statement
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 every day 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
To earn the love and respect of India, by making a real difference to
every Indian
HUL: Mission Statement
• Our 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.
Analysis of Mission Statement
• Customers: 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
• Products or services: everyday needs for nutrition, hygiene and
personal care
• Markets: Not mentioned specifically. But as name of the company
Hindustan Unilever suggests, it caters to India.
• Technology: Not mentioned
• Concern for survival, growth, and profitability: Our mission is to add
Vitality to life. We meet everyday needs for nutrition, hygiene and
personal care….
Analysis of Mission Statement
• Philosophy: Our mission is to add Vitality to life
• Self-concept: 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.
• Concern for public image: Our mission is to add Vitality to life
• Concern for employees: Not mentioned
External Factors affecting HUL
• Political
• Economic
• Socio-cultural
• Technological
• Environmental
• Legal
Political Factors: Indian Scenario
• Presence of democracy
• Presence of a vocal opposition
• Stable government
• Political consensus reg globalization, free market
• Lesser political interference in private businesses
• Focus on good governance and increasing ease of doing business
• Focus on being investor-friendly to attract FDI/FII
• Friendly relations between political parties and industry associations
Economic Factors: Indian Scenario
• Agriculture sector largely unaffected by the Covid-19 pandemic
(resulting in lower input cost for food processing companies)
• Downward slope in service sector (causing reduction in demands)
• Higher incidence of unemployment rate in India (8-9% all India,
alarming in some states like Haryana 36%, Rajasthan 27%) ) (causing
reduction in demands)
• Wholesale price index (WPI) is now rising at the double-digit inflation
rate of 11.4% year-on-year (causing reduction in demands)
• Revival of investment cycle (A rise in the investment rate from 24% to
32% of GDP)
Economic Factors: Indian Scenario
• Food inflation at 3.11% in August has been the lowest so far in 2021.
• sharp 11% fall in vegetable prices
• Erratic rainfall may spoil agricultural yields leading to price rise
Socio-cultural factors: Indian Scenario
• Change in consumer Profile:
▪ Rapid urbanization, increased literacy, increase in nuclear families and
rising per capita income, have all caused rapid growth and change in
demand patterns, leading to an explosion of new opportunities.
▪ Around 45 per cent of the population in India is below 20 years of age
and the young population is set to rise further.
Socio-cultural factors: Indian Scenario
• Change in Lifestyle : In past decade changes are taking place in
consumption pattern of Indian consumer with more spending on
discretionary ( 52%) than necessities ( eg food, clothings). In last
decade the apparel, footwear and healthcare segments have
registered highest growth whereas essentials such as cereals, edible
oil, fruits and vegetables shown decline.
Socio-cultural factors: Indian Scenario
• Rural focus: As market is getting saturated, companies are focusing on
rural area for penetration by providing consumers with small sized or
single-use packs such as sachets
Technological factors affecting FMCG sector
• Artificial intelligence
• Automation
• Social media
• Information & Communication Technologies (ICTs)
• E-commerce (10% share of FMCG market)
Environmental factors affecting FMCG Sector
• Global warming
• Climate change
• Environmental pollution
• Increased awareness and consciousness about environmental issues:
▪ Green products
▪ Green packaging
▪ Green supply chain
▪ Green consumerism
Environmental factors @ HUL
• Mercury Pollution:
▪ In 2001, a thermometer factory of HUL based at Kodaikanal was
accused of dumping glass contaminated with mercury in municipal
dumps or disposing off the same as scrape
▪ HUL failed to dispose off mercury waste appropriately causing
environmental hazard
Legal factors affecting FMCG Sector
• Tax Laws: GST, Corporation Tax, reduction in excise duties
• Labour Laws: reforms balances interests of both employers and
employees
• Policy re automatic FDI in FMCG sector
• Regulatory framework conducive for growth of FMCG sector
• 100% export-oriented units allowed
• Use of foreign brand names allowed
• Environmental protection act: Compliance mandatory
• Consumer protection laws:
▪ Remedies available to affected consumers
▪ Pressure on companies to fulfil promises and meet quality norms
Internal Factors: HUL
• Research & Development Centres in Bengaluru and Mumbai (200+
scientists)
• Governance: CRISIL Rating AAA
• HR:
▪ focus on diversity and inclusion,
▪ career growth opportunities
▪ career by choice: rehiring of female employees after motherhood
▪ Project Sunset: internal conflict resolution mechanism with 88%
satisfaction levels
▪ Learning and development opportunities
• CSR: multiple projects with high level of stakeholder involvement
 SWOT Analysis
Strengths Weaknesses
• Legacy of Unilever • High costs (advertising and promotions)
• Strong brand portfolio (price/variety) • Poor record of managing environmental issues
• Strong distribution network both in rural and • Controversies regarding gender and racial
urban markets discrimination
• Strong R&D • Low raw material cost—high prices of finished
• HR best practices products
• Impactful CSR with greater involvement of
stakeholder (example Project Shakti)
Opportunities Threats
• Growing popularity of Online retail/E- • Rising input costs
commerce(The number of internet users in India is • Food inflation
likely to reach 1 billion by 2025) • Tough competition from global FMCG majors (P&G)
• Increased disposable income in rural India as well as new domestic FMCG players (e.g.,
• Low penetration in rural markets Patanjali)
• Favorable public policy (100% FDI in Single retail • Copycat products by local players
brand, 15% Corporation Tax in new Companies) • Rise in environmental awareness and
• Robust demand (US$220 billion by 2025) consciousness
• Pandemic like Covid-19
Strategic Imperatives for HUL
• Current scenario
▪ The market of FMCG is growing
▪ Market share of HUL is growing
▪ HUL profits have grown 2.5x over the last ten years. And the stock
price almost 8 times (https://bit.ly/3COKMog)
• Imperatives
▪ Expansion strategies: Integration, Diversification
Plan of Action for Implementation
• Strength-Opportunity Strategy (SO Strategy)

Strength Opportunity Strategy

Strong distribution Growing popularity Start own e-
network both in of Online retail/E- commerce site
rural and urban commerce (forward
markets integration)
Plan of Action for Implementation
• Strength-Opportunity Strategy (SO Strategy)

Strength Opportunity Strategy

Strong distribution • Increased Set up organized
network both in disposable income multi-brand retail
rural and urban in rural India chain in semi-urban
markets • Low penetration locations (forward
in rural markets integration)
Plan of Action for Implementation
• Strength-Opportunity Strategy (SO Strategy)

Strength Opportunity Strategy

Strong brand Favorable public Start manufacturing
portfolio policy (15% facilities (backward
(price/variety) Corporation Tax in integration)
Strong R&D new Companies)
Plan of Action for Implementation
• Strength-Opportunity Strategy (SO Strategy)

Strength Opportunity Strategy

Strong brand Favorable public Start own
portfolio policy (15% manufacturing
(price/variety) Corporation Tax in facilities (backward
Strong R&D new Companies) integration)
Robust demand
(US$220 billion by
2025)
Plan of Action for Implementation
• Strength-Threat Strategy (ST Strategy)
Strength Threat Strategy
Strong brand • Rising input costs Low cost production
portfolio • Food inflation centres through
(price/variety) • Copycat products contract
Strong R&D by local players manufacturing by
local players who
are into copycat
products (backward
integration)
Plan of Action for Implementation
• Strength-Threat Strategy (ST Strategy)
Strength Threat Strategy
Strong brand • Rise in Launch green
portfolio environmental products leveraging
(price/variety) awareness and green
Strong R&D consciousness manufacturing and
green packaging
(diversification)
Conclusion
• HUL a strong FMCG player in Indian market
• Constantly growing since its inception in 1933
• Now is the time to go for backward and forward integration for
leveraging its unique position
• HUL may also ride on rising trend of green consumerism by launching
green products
References: Websites
• https://www.hul.co.in
• https://www.unilever.com
• https://www.huf.co.in/en/
References: Articles and other resources
• Business Standard (2020). Cosmetic changes. Business Standard:
https://www.business-standard.com/article/opinion/cosmetic-changes-
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• Dutta, A. (2020). After acquiring Ruchi Soya, Ramdev's Patanjali aims to beat HUL
in sales. Business Standard: https://www.business-
standard.com/article/companies/after-acquiring-ruchi-soya-ramdev-s-patanjali-
aims-to-beat-hul-in-sales-120012401440_1.html
• Dutta, A. (2021). Nestle India digs deeper in the rural market, aims to grow
business. Business Standard: https://www.business-
standard.com/article/companies/nestle-india-digs-deeper-in-the-rural-market-
aims-to-grow-business-121032201429_1.html
• Gupta, A., & Sur, D. (2013). Business and financial risks in Hindustan Unilever Ltd.:
an empirical analysis. Asia-Pacific Finance and Accounting Review, 1(4), 77.
• Iyer, A. (2021). Drop in retail inflation is a comfort but some spoilers lie ahead.
The Mint: https://www.livemint.com/market/mark-to-market/drop-in-retail-
inflation-is-a-comfort-but-some-spoilers-lie-ahead-11631556460534.html
• Kaur, M. (2013). Rural marketing: A case study on Hindustan Unilever
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reaches tipping point. Business Standard: https://www.business-
standard.com/article/companies/companies-fight-to-protect-margins-as-
inflation-reaches-tipping-point-121081100111_1.html
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Mint: https://www.livemint.com/opinion/online-views/what-recent-data-says-
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• Pinto, V. S. (2019). HUL future-proofing itself through precision skilling: CMD
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Thank You