CHAPTER 1

INTRODUCTION

India is the second-largest producer of raw silk in the world after China. The country has a
unique distinction of being the only country producing five different types of silks in the
world. Mulberry silk is produced predominantly in southern states of Karnataka, Tamil
Nadu, Telangana, and non-mulberry varieties (Vanya silk) such as Tussar is produced in
Chhattisgarh, Jharkhand, Odisha, and West Bengal. Moga silk is specific to Assam state and
Eri silk is grown in Meghalaya and Nagaland. Mulberry silk constitutes nearly 70 per cent
of the total silk produced in India with Karnataka leading the production of mulberry silks.
Realizing the huge employability potential spawning across the value chain of the silk
industry, that could put the country on economic growth trajectory, the Government of India
established the Central Silk Board (CSB) soon after the country attained Independence, and
with it a series of policies. With low capital requirement and remunerative nature of
production from rural on-farm and off-farm activities, and an ever-growing culture bound
domestic market, silk industry has been central to the socio-economic development of large
agrarian population, providing employment to 9.4 million people in rural and semi-urban
areas.

Unlike seasonal crops, sericulture can be done round the year and harvested as many as 5–6
times a year. With attractive prices for cocoons at '550 per kg in present day, sericulturists
find it lucrative than growing any other cash crops. An estimated 35,820 MT of raw silk was
produced during 2019–20, which fell by almost 30 per cent during the pandemic. Though
part of the raw silk demand is met with imports, much of silk exports earnings is from silk
garments, silk carpets and silk wastes, which totalled to '1466 crore in 2020–21.

The industry which has received funding from convergence of various ministries such as the
Ministry of Rural development, Ministry of Textiles, and schemes such as Mahatma Gandhi
National Rural Employment Guarantee Act (MGNREGA) and Seri-forestry has given
sustainable livelihood to farmers, in particular to women of marginalized communities in
the states of Jharkhand, Odisha, West Bengal, Chhattisgarh, Maharashtra, Andhra Pradesh
and Bihar by way of 36,000 jobs. Around 36,154 farmers including 2497 women farmers
were given help to raise 1521 hectares (ha) Tussar plantations in private wastelands. Under
Special projects, 14,227 commercial seed rearers produced 2240 lakh of reeling cocoons.

1
 Further expansion of programme under the rural livelihood mission will include 35,000
women farmers.

INDUSTRY PROFILE
Karnataka Silk Industries Corporation Limited (KSIC) is a government-owned enterprise
that was established in 1912 to promote and support the development of the silk industry in
the state of Karnataka, India. The silk industry is a major contributor to the Indian economy,
with Karnataka being one of the leading silk-producing states in the country.
Some key aspects of the silk industry in Karnataka and the role of KSIC are:

1. Sericulture
KSIC supports sericulture farmers by providing them with cocoons, mulberry leaves, and
other inputs required for silk production. The farmers cultivate mulberry trees, which are the
primary food source for silkworms. The silkworms then spin cocoons, which are harvested
by the farmers. The harvested cocoons are taken to the silk processing units, where they are
sorted, boiled, and unwound to obtain the silk fibers. The silk fibers are then processed
further to remove any impurities and to make them suitable for weaving. The processes silk
fibers are then woven into silk products, including sarees, dress materials, scarves, and
shawls. The weaving process involves interlacing the silk fibres with threads running
perpendicular to them to create the desired design and also dyeing, Once the silk products
are woven, they are then dyed using natural or synthetic dyes to obtain the desired color.

2. Marketing and distribution

KSIC have a network of showrooms, emporiums, and retail outlets across Karnataka and
other parts of India. The corporation also exports its silk products to various countries,
including the USA, Europe, and the Middle East. The silk industry in Karnataka is a major
source of employment, particularly in rural areas. KSIC provides employment opportunities
to a large number of people, including weavers, dyers, designers, and other skilled and
unskilled workers.

CHALLENGES FACED BY KSIC

2
 Given that the KSIC has its market has huge revenues and is very competitive. The market
is continuously working to advance and succeed at the highest level. Currently, the market
is facing several challenges, and here are five of the most significant ones:

 Competition
KSIC faces stiff competition from other silk producers in India and abroad. With the
growth of the textile industry in India, several new players have entered the market, offering
similar silk products at competitive prices. One of the main challenges for KSIC is price
competition. Many other silk producers in India and abroad offer similar products at
competitive prices. This puts pressure on KSIC to maintain competitive pricing while
ensuring that it maintains its quality standards.

 Cost of Production
The cost of production for silk products in India is relatively high due to factors such as the
cost of raw materials, labor costs, and power costs. This puts pressure on KSIC's profit
margins and makes it challenging for the corporation to offer competitive prices for its
products.

 Quality Control
KSIC has to maintain high standards of quality for its silk products to compete in the
international market. However, ensuring consistent quality is a challenge due to factors
such as variations in raw materials, seasonal fluctuations, and dependence on manual
labor. Ensuring consistent quality is critical for KSIC to compete in the market. The
corporation has to maintain high standards of quality in its silk products to retain its
customer base and attract new customers.

 Marketing and Distribution

KSIC faces challenges in marketing and distributing its silk products, especially in the
international market. The corporation has to invest in marketing and distribution strategies
that are tailored to different customer preferences and market conditions. KSIC has to invest
in marketing and branding to promote its silk products and build its brand image. The
corporation has to create effective marketing strategies that are tailored to different
customer segments and market conditions.

3
 Sustainability
Ensuring sustainability is a critical challenge for the silk industry in India. KSIC has to
adopt sustainable practices in the production, processing, and distribution of silk products to
meet the increasing demand for environmentally-friendly products. The main factors
include
 Raw Material Sourcing:
Silk production requires large quantities of raw materials, including mulberry leaves and
water. The corporation has to ensure that the raw materials are sourced sustainably and do
not contribute to deforestation, water pollution, or other environmental problems.
 Energy Consumption:
The silk industry is an energy-intensive industry, with significant energy consumption
during the production and processing of silk. KSIC has to adopt energy-efficient
technologies and practices to reduce its energy consumption and carbon footprint.
 Water Management:
Water is a critical resource for silk production, and the corporation has to adopt sustainable
water management practices to ensure that its water usage is minimized and does not
contribute to water pollution.
 Waste Management:
Silk production generates significant amounts of waste, including mulberry leaves, silk
waste, and wastewater. KSIC has to adopt sustainable waste management practices to
reduce its environmental impact and ensure that the waste generated is recycled or disposed
of sustainably.
 Social Sustainability:
KSIC has to ensure that its silk production practices do not negatively impact the local
communities where it operates. The corporation has to provide fair wages and safe working
conditions for its employees and ensure that its silk production practices do not negatively
impact the health and livelihoods of the local communities.

 Technological Obsolescence
To remain competitive, KSIC needs to adopt modern technology and machinery to improve
the efficiency and quality of its silk production. However, technological obsolescence and
lack of access to modern machinery are significant challenges faced by KSIC.

4
 FACTORS INFLUENCING CHALLENGES IN KSIC

For any challenges which are being faced/facing in KSIC and are being influenced by
several factors and those factors affect the operations and profitability of particular company
in that industry. Some of the factors are briefly mentioned below

 Economic Conditions:
Economic conditions, both in India and globally, have a significant impact on KSIC's
business. Fluctuations in exchange rates, inflation, and other economic factors can affect the
demand for silk products and the cost of raw materials.
 Technological Advances:
Technological advances in silk production and processing can have a significant impact on
KSIC's business. The corporation has to adopt new technologies and production methods to
remain competitive in the market.
 Global Competition:
KSIC faces stiff competition from other silk producers in India and abroad. The corporation
has to compete with other producers who offer similar products at competitive prices.
 Environmental Regulations:
Environmental regulations have a significant impact on KSIC's business. The corporation
has to comply with environmental regulations related to waste management, water usage,
and pollution control.
 Social Responsibility:
KSIC has to ensure that its silk production practices are socially responsible and do not
negatively impact the local communities where it operates. The corporation has to provide
fair wages and safe working conditions for its employees and ensure that its silk production
practices are sustainable.
 Consumer Preferences:
Changes in consumer preferences can have a significant impact on KSIC's business. The
corporation has to stay up-to-date with changing consumer preferences and adapt its
products and marketing strategies accordingly.

A RELEVANT SOLUTION FOR THE PARTICULAR CHALLENGES

5
 However, not all of the strategies chosen can provide a competitive advantage. As a result,
executives at KSIC must be able to make accurate decisions in order to identify the
appropriate strategies that can provide solutions. Hence, here are some things industries can
do to overcome various challenges in the KSIC:

 Modernization of production processes:

KSIC could invest in modernizing its production processes to increase efficiency and
reduce costs. This could include upgrading equipment and machinery, adopting new
technologies such as automation and digitalization, and introducing lean manufacturing
principles.

 Diversification of product portfolio:

To increase revenue and expand its customer base, KSIC could consider diversifying its
product portfolio beyond traditional silk sarees and fabrics. This could involve developing
new products such as silk-based home decor items or silk-based fashion accessories.

 Branding and marketing:

KSIC could focus on improving its branding and marketing efforts to increase awareness
and demand for its products. This could involve developing a strong brand identity, using
social media and other digital marketing channels to reach new customers, and partnering
with influencers or fashion designers to showcase its products.

 Capacity building:

KSIC could invest in building the skills and knowledge of its workforce through training
and development programs. This could help improve productivity, quality, and innovation
within the organization, leading to improved business outcomes.

 Sustainable practices:

6
 KSIC could adopt sustainable practices such as using eco-friendly production methods,
reducing waste and carbon footprint, and supporting ethical and fair trade practices. This
could help improve the company's reputation and appeal to socially and environmentally
conscious consumers.

Customers are technologically savvy, and their needs are constantly changing. As a result,
KSIC exploring and testing newer, more innovative delivery models. Using analytics KSIC
can identify the most efficient and successful business models based on customer profile
data and success factors. Having a highly flexible dynamic delivery model can help to keep
sales costs low.

GLOBAL, NATIONAL AND REGIONAL PERSPECTIVES OF KSIC

 Global Perspective:
The global silk industry has been growing steadily in recent years, with increasing demand
for silk products in both traditional and modern markets. Countries like China, India, and
Thailand are major producers and exporters of silk products. As a major player in the silk
industry, KSIC can take advantage of this global growth trend by expanding its export
markets and exploring new product opportunities.
 National Perspective:
In India, the silk industry is a significant contributor to the country's economy and
employment. The central and state governments have taken several initiatives to support the
growth of the silk industry, including providing financial assistance, implementing research
and development programs, and promoting export opportunities. KSIC can leverage these
initiatives and work collaboratively with the government to accelerate its growth and
competitiveness in the national market.
 Regional Perspective:

Karnataka is a major silk-producing state in India, with a rich tradition of silk weaving and
manufacturing. The state government has implemented several initiatives to promote the
growth of the silk industry, including setting up silk clusters, providing financial assistance,
and supporting research and development. KSIC can work closely with the government and
other stakeholders in the region to take advantage of these initiatives and further strengthen
the region's position as a major hub for silk production and manufacturing. Additionally,

7
 KSIC could also explore opportunities to collaborate with other industries in the region,
such as fashion and home decor, to create synergies and unlock new growth opportunities.

ROLE OF FMCG SECTOR IN SUPPORTING AND GROWTH OF ALLIED

INDUSTRIES

Karnataka Silk Industries Corporation (KSIC) can play an important role in supporting and
promoting the growth of allied industries by leveraging its expertise and resources in the
silk industry. Here are some ways in which KSIC can support and promote the growth of
allied industries:

 Raw material supply

KSIC can provide raw materials such as silk yarn and fabrics to other industries such as
fashion and home decor. This can help support the growth of these industries by providing a
reliable and high-quality source of raw materials. KSIC can support and promote the growth
of allied industries through raw material supply like Silk yarn and fabrics, Quality control,
Diversification, Innovation, KSIC is a major producer of silk yarn and fabrics, by supplying
these raw materials to other industries such as fashion and home decor, KSIC can support
their growth and provide a reliable source of raw materials, KSIC can ensure that its raw
materials meet the high-quality standards required by allied industries. This can help
improve the quality and reliability of the final products produced by these industries, KSIC
can diversify its product offerings to cater to the needs of allied industries. For example,
KSIC could develop silk-based materials that are more suited to the needs of the fashion
industry, such as lighter-weight fabrics or fabrics with specific finishes or textures, KSIC
can invest in research and development to develop new silk-based products that can be used
in allied industries. This can help create new growth opportunities and keep KSIC at the
forefront of innovation in the silk industry

 Research and development

KSIC can invest in research and development to develop new silk-based products and
technologies that can be used in allied industries. For example, silk can be used to develop
eco-friendly and sustainable textiles, which can be of interest to industries focused on
sustainability. KSIC can support and promote the growth of allied industries through R&D
like Developing new silk-based products, enhancing silk quality, Developing new
technologies, Collaboration. KSIC can invest in R&D to develop new silk-based products

8
 that can be used in allied industries. For example, KSIC can develop eco-friendly and
sustainable textiles that can be used in the fashion industry or develop new materials for the
home decor industry. KSIC can invest in R&D to improve the quality of silk produced. This
can benefit not only KSIC but also allied industries that rely on silk as a raw material.
Improved silk quality can help create higher-quality products, leading to better business
outcomes. KSIC can develop new technologies that can be used in allied industries. For
instance, KSIC can develop new weaving or dyeing techniques that can be used to create
unique silk-based products. By investing in R&D and collaborating with allied industries,
KSIC can create new growth opportunities and unlock new markets. This can help drive the
overall economic development of the region and create new opportunities for employment
and business growth.

 Skill development

KSIC can provide training and skill development programs to workers in allied industries to
enhance their skills and knowledge. This can help improve the quality and productivity of
these industries, leading to better business outcomes. KSIC can support and promote the
growth of allied industries through skill development like Training programs, KSIC can
offer training programs to workers in allied industries to enhance their skills and knowledge.
For instance, KSIC can offer training programs on silk weaving techniques, dyeing,
finishing, or silk-based product design. This can help improve the quality and productivity
of these industries, leading to better business outcomes. Collaborations with educational
institutions, KSIC can collaborate with educational institutions to develop skill development
programs that cater to the needs of allied industries. For instance, KSIC can collaborate with
vocational schools, community colleges, or technical institutes to develop training programs
that align with the skill requirements of the fashion or home decor industry. On-the-job
training, KSIC can provide on-the-job training to workers in allied industries. This can be
done by inviting workers to KSIC's facilities to learn about silk production techniques or by
sending KSIC's experts to the facilities of allied industries to provide training. Knowledge
sharing, KSIC can share its expertise and knowledge in silk production and product
development with workers in allied industries. This can be done through workshops,
seminars, or webinars, where KSIC's experts can share their knowledge and insights with
workers in allied industries. By providing training and skill development programs, KSIC
can enhance the capabilities of workers in allied industries and improve the quality and
productivity of these industries. This can help create new opportunities for growth and
employment, and drive the overall economic development of the region.

9
By supporting and promoting the growth of allied industries, KSIC can create a more
vibrant and diversified ecosystem that benefits all stakeholders. This can help create new
opportunities for growth and employment, and drive the overall economic development of
the region.

CONTRIBUTION TOWARDS GDP

The contribution of the Karnataka Silk Industries Corporation (KSIC) towards the Gross
Domestic Product (GDP) of Karnataka and India is significant. Here are some estimates of
the contribution of KSIC to the GDP:

According to a report by the Ministry of Textiles, Government of India, the silk industry,
including sericulture and silk processing, contributes about 0.5% to the GDP of India.
Karnataka is one of the major silk-producing states in India, and KSIC is a leading silk
production and processing organization in the state. Therefore, it is safe to assume that
KSIC contributes a significant share of the 0.5% contribution by the silk industry to India's
GDP.

According to a report by the Associated Chambers of Commerce and Industry of India

(ASSOCHAM), the silk industry is one of the major contributors to the GDP of Karnataka,
accounting for around 2% of the state's GDP. The report further states that the silk industry
provides direct and indirect employment to around 9 million people in the state.

According to the Annual Report of KSIC for the year 2019-20, the corporation reported a
turnover of Rs. 210.37 crores and a net profit of Rs. 4.86 crores. The report further states
that KSIC's products are sold across India and in other countries, including the USA,
Canada, UK, and Japan. The revenue generated by KSIC from its operations directly
contributes to the GDP of Karnataka and India.

Therefore, it is evident that KSIC's contribution to the GDP of Karnataka and India is
significant, both directly and indirectly. KSIC's operations support the livelihoods of
millions of people and help drive the overall economic development of the region.

MAJOR GLOBAL PLAYERS

10
 KSIC is dominated by several players that have established themselves over many years.
The Karnataka Silk Industries Corporation (KSIC) operates in a highly competitive market,
with several players in the silk industry. Here are some of the competitors of KSIC:

 Private silk companies: There are several private silk companies operating in India,
including companies like Kanchi Kamakshi Silks, Mysore Silk Udyog, and Murshidabad
Silk Mills. These companies produce a range of silk products, including sarees, dress
materials, and home decor items.
 Other state-run silk corporations: Apart from KSIC, there are other state-run silk
corporations in India, including the Tamil Nadu Handloom Weavers' Cooperative Society
and the Andhra Pradesh State Handloom Weavers' Cooperative Society. These
corporations also produce silk products and compete with KSIC in the market.
 International silk producers: India is a major exporter of silk products, and there are
several international silk producers that compete with KSIC in the global market. These
producers include companies from China, Italy, Thailand, and Japan, among others.
 Synthetic fabric manufacturers: With the rise of synthetic fabrics, manufacturers of
synthetic fabrics have become indirect competitors of KSIC. Synthetic fabrics offer
several advantages over silk, including affordability and durability. Therefore,
manufacturers of synthetic fabrics can compete with KSIC by offering cheaper alternatives
to silk products.

To remain competitive in the market, KSIC needs to focus on product innovation, quality
control, and marketing. KSIC can leverage its heritage and legacy to create unique products
that stand out in the market. Additionally, KSIC can explore new markets and distribution
channels to reach a wider audience.

PRODUCTION DISTRIBUTION AND CONSUMPTION PATTERN OF

KSIC

The Karnataka Silk Industries Corporation (KSIC) is primarily engaged in the production
and distribution of silk products. Here is a brief overview of the production, distribution,
and consumption patterns of KSIC:

Production: KSIC produces a wide range of silk products, including sarees, dress materials,
shawls, scarves, and accessories. The corporation has several production centers in
Karnataka, including Mysore, Bangalore, and Channapatna. KSIC also has tie-ups with
sericulture farmers in the state who supply raw silk for production.

11
 Distribution: KSIC distributes its products through its own showrooms and retail outlets, as
well as through partnerships with other retailers and e-commerce platforms. The corporation
has a network of over 50 retail outlets across India, including in major cities like Bangalore,
Mysore, and Chennai. KSIC also exports its products to several countries, including the US,
UK, and Singapore.

Consumption: KSIC's products are popular among consumers in India and abroad. The
corporation's silk sarees, in particular, are highly sought after for their quality and
craftsmanship. KSIC's products are consumed by a wide range of customers, including
individual consumers, retailers, and wholesalers.

In recent years, KSIC has focused on diversifying its product portfolio and adopting new
technologies to increase efficiency and productivity. The corporation has also embraced e-
commerce to reach a wider audience and offer a seamless shopping experience to its
customers. With its rich heritage and legacy, KSIC is well positioned to continue to grow
and thrive in the competitive silk industry.

DOMESTIC AND GLOBAL COMPETITIVENESS FOR SILK INDUSTRY

The KSIC is highly competitive, both domestically and globally. Domestic and global
competitiveness are critical factors that impact the industry's growth and performance. Here
are some key factors that contribute to domestic and global competitiveness in the silk
industry:

 Product Innovation: The silk industry is highly competitive, and companies must
continually innovate to maintain their market position. This means developing new
products and improving existing ones to meet changing consumer needs and
preferences. Companies must invest in research and development (R&D) to identify
market trends, consumer preferences, and emerging technologies. They must also be
able to quickly adapt to changes in the market and consumer behavior.
 Branding and Marketing: Strong branding and effective marketing strategies are
essential for silk companies to build brand recognition and loyalty among domestic
consumers. Companies must invest in advertising and promotional activities to reach
their target audience and differentiate themselves from competitors. They must also
ensure that their branding is consistent across all channels and that their messaging
resonates with their target market. Silk industry companies must conduct extensive
market research and localization efforts to understand the unique needs and

12
 preferences of consumers in different regions. This includes adapting product
formulations, packaging, and branding to suit local markets.
 Pricing Strategy: KSIC must price their products competitively to remain competitive
in the domestic market. This requires understanding the pricing strategies of
competitors and the willingness of consumers to pay for their products. Companies
must also consider factors such as production costs, distribution costs, and margins
when setting their prices.
 Distribution Channels: KSIC must ensure that their products are accessible to
domestic consumers through various distribution channels. This includes both
traditional retail channels such as e-commerce platforms. Companies must invest in
distribution infrastructure and logistics to ensure that their products reach consumers
efficiently and cost-effectively. The silk industry relies heavily on efficient supply
chain management to ensure that products are produced and delivered on time and at
the right cost. Companies must manage relationships with suppliers, optimize
transportation and logistics, and minimize inventory costs to remain competitive.
 Regulatory Compliance: KSIC must comply with local regulations and standards in
the countries they operate in. This includes complying with labeling, packaging, and
advertising regulations and product quality standards.
 Brand Recognition: Building brand recognition is essential to succeed in the global
market. Companies must invest in advertising and promotional activities to reach their
target audience and differentiate themselves from competitors. They must also ensure
that their branding is consistent across all channels and that their messaging resonates
with consumers in different regions.

FACTORS DRIVING THE GROWTH OF KSIC

The Goods and Services Tax (GST) has proved to be beneficial for the KSIC. After the
introduction of GST, experts are expecting the transformation into a modern and efficient model
as all major corporations are remodeling their operations into larger logistics and warehousing.
The government of Karnataka has been providing support to Karnataka Silk Industries
Corporation (KSIC) since its inception in 1912. The support provided by the government has
helped KSIC to grow and become one of the leading silk producers in India, also the products
are sold quickly. There are several factors that have contributed to the growth of Karnataka Silk
Industries Corporation (KSIC) over the years. Some of these factors include:

13
 1. Government support

KSIC is a state-owned enterprise, and it has received consistent support from the
government of Karnataka. This support has helped KSIC to access funding, infrastructure,
and other resources needed for its operations like

o financial support: The government of Karnataka has provided financial support to

KSIC through grants, loans, and subsidies. These funds have been used to invest in
infrastructure, modern technology, and research and development.
o Policy support: The government of Karnataka has implemented policies to support
the growth of the silk industry in the state. These policies include tax incentives,
subsidies, and other measures to encourage investment in the industry.
o Research and development support: The government of Karnataka has supported
research and development activities in the silk industry through the provision of
grants and funding. KSIC has benefited from this support by investing in research
and development activities to improve its production processes and develop new
products.
o Infrastructure support: The government of Karnataka has invested in the
infrastructure required for silk production, such as sericulture farms, mulberry
plantations, and silk reeling units. KSIC has benefited from this infrastructure by
having access to high-quality raw materials and production facilities.
o Marketing support: The government of Karnataka has supported the marketing of
KSIC's products by participating in trade fairs and exhibitions, organizing
promotional events, and providing funding for advertising and marketing campaigns.
o Skill development support: The government of Karnataka has supported the skill
development of the workforce in the silk industry. KSIC has benefited from this
support by having access to skilled workers and by investing in training and
development programs for its employees.

The government of Karnataka has provided significant support to KSIC in various forms,
such as financial, policy, research and development, infrastructure, marketing, and skill
development support. This support has been critical in enabling KSIC to grow and become
one of the leading silk producers in India.

2. High-quality silk production

KSIC is known for producing high-quality silk, which is highly valued by customers both
in India and abroad. The company has invested in modern technology and production

14
processes to maintain the quality of its products. There are several factors that have
contributed to the growth of high-quality silk production in Karnataka Silk Industries
Corporation (KSIC). Some of these factors include:

o Mulberry cultivation: Mulberry is the primary food source for silkworms and is
essential for the production of high-quality silk. KSIC has invested in mulberry
cultivation to ensure a consistent supply of high-quality raw materials.
o Sericulture techniques: Sericulture techniques such as silkworm rearing, cocoon
harvesting, and silk processing have a significant impact on the quality of silk
produced. KSIC has adopted modern sericulture techniques to improve the quality
of its silk products.
o Quality control measures: KSIC has established rigorous quality control measures
to ensure that its silk products meet international standards. These measures
include testing for fiber strength, color fastness, and other quality parameters.
o Skilled workforce: KSIC has a skilled workforce that is dedicated to producing
high-quality silk products. The company has invested in training and development
programs to ensure that its employees have the necessary skills and knowledge.
o Technology adoption: KSIC has adopted modern technology and production
processes to improve the quality of its silk products. The company has invested in
modern reeling machines, dyeing equipment, and other technology to enhance the
quality of its silk products.
o Research and development: KSIC have invested in research and development
activities to improve the quality of its silk products. The company has collaborated
with research institutions and universities to develop new sericulture techniques,
improve production processes, and develop new silk blends.

In conclusion, the growth of high-quality silk production in KSIC can be attributed to a

combination of factors such as mulberry cultivation, sericulture techniques, quality control
measures, skilled workforce, technology adoption, and research and development. These
factors have helped KSIC to produce high-quality silk products that are highly valued by
customers both in India and abroad.

3. Strong brand image:

KSIC has built a strong brand image over the years, which has helped it to gain the trust and
loyalty of customers. Its brand is associated with quality, reliability, and authenticity.

15
several factors that have contributed to the growth of high-quality silk production in
Karnataka Silk Industries Corporation (KSIC). Some of these factors include:

o Heritage and tradition: KSIC have a long history and tradition of producing high-quality
silk products. This heritage has helped to establish the brand as a trusted and reliable
producer of silk products.
o Quality assurance: KSIC has established rigorous quality control measures to ensure that
its silk products meet international standards. This commitment to quality has helped to
build trust and loyalty among customers.
o Design and innovation: KSIC have invested in design and innovation to create unique
and innovative silk products. This has helped to differentiate the brand from its
competitors and attract a loyal customer base.
o Marketing and promotion: KSIC have invested in marketing and promotion to build
awareness and increase the visibility of its brand. The company has participated in trade
fairs and exhibitions, organized promotional events, and collaborated with fashion
designers and celebrities to promote its brand.
o Customer service: KSIC has a customer-centric approach to business and is committed to
providing exceptional customer service. This has helped to build a loyal customer base
and establish a positive reputation for the brand.
o Social responsibility: KSIC is committed to social responsibility and sustainability. The
company supports local communities through various social initiatives and has
implemented environmentally friendly production practices. This commitment to social
responsibility has helped to enhance the brand's image and reputation.
In conclusion, the growth of a strong brand image for KSIC can be attributed to a
combination of factors such as heritage and tradition, quality assurance, design and
innovation, marketing and promotion, customer service, and social responsibility. These
factors have helped to establish KSIC as a trusted and respected brand in the silk industry
and have contributed to the company's continued success.
4. Skilled workforce:

KSIC has a highly skilled workforce that is dedicated to producing high-quality silk
products. The company has invested in training and development programs to ensure that its
employees are equipped with the necessary skills and knowledge. Karnataka Silk Industries
Corporation (KSIC) has a skilled workforce that is dedicated to producing high-quality silk
products. The company employs a range of skilled workers across different functions such

16
as sericulture, weaving, dyeing, printing, quality control, marketing, and administration.
Some of the key aspects of the skilled workforce in KSIC include:

o Training and development: KSIC have a comprehensive training and development

program for its employees. The company provides both on-the-job training and off-site
training programs to help employees acquire the necessary skills and knowledge to
perform their jobs effectively.
o Experience and expertise: KSIC have a team of experienced and skilled professionals
who have been working in the silk industry for many years. These professionals bring a
wealth of expertise and knowledge to the organization and help to ensure that KSIC's silk
products are of the highest quality.
o Innovation and creativity: KSIC encourage its employees to be innovative and creative in
their approach to work. The company provides a supportive work environment that
encourages experimentation and creative problem-solving.
o Teamwork and collaboration: KSIC promote a culture of teamwork and collaboration.
The company encourages employees to work together and share their knowledge and
expertise to achieve common goals.
o Performance and recognition: KSIC recognize and rewards the performance of its
employees. The company has a performance-based appraisal system that helps to
motivate employees and recognize their contributions to the organization.
In conclusion, the skilled workforce is a critical asset for KSIC. The company's commitment
to training and development, experience and expertise, innovation and creativity, teamwork
and collaboration, and performance and recognition has helped to build a skilled and
motivated workforce that is dedicated to producing high-quality silk products.
5. Diversification of products:

KSIC has diversified its product portfolio to include a wide range of silk products, including
sarees, fabrics, dress materials, and home textiles. This has helped the company to expand
its customer base and increase its revenue streams. Karnataka Silk Industries Corporation
(KSIC) has diversified its product range in recent years to meet changing market demands
and expand its customer base. Some of the key aspects of product diversification in KSIC
include

o New product lines: KSIC has introduced new product lines to its existing range of silk
products. These include silk blends, silk-cotton blends, and silk-synthetic blends. By

17
 diversifying its product range, KSIC has been able to cater to a wider range of customer
preferences and increase its market share.
o Value-added products: KSIC has introduced value-added products such as silk sarees
with intricate embroidery work, designer silk sarees, and silk garments with modern
designs. These products have helped to differentiate the brand from its competitors and
attract a new customer base.
o Collaborations with designers: KSIC has collaborated with leading fashion designers to
create exclusive collections of silk products. These collaborations have helped to
position the brand as a trendsetter in the silk industry and attract fashion-conscious
customers.
o Customization: KSIC offers customization options for its silk products, such as tailored
silk suits and customized silk sarees. This allows customers to personalize their silk
products and create unique and one-of-a-kind pieces.
o Online sales: KSIC has expanded its sales channels to include online sales through its e-
commerce platform. This has helped to reach customers who prefer to shop online and
increase the brand's visibility in the digital space.

In conclusion, product diversification has been an important strategy for KSIC to remain
competitive and expand its customer base. By introducing new product lines, value-added
products, collaborations with designers, customization options, and online sales, KSIC has
been able to cater to the changing market demands and position itself as a leading player in
the silk industry.

 In conclusion, the growth of KSIC can be attributed to a combination of factors such as

government support, high-quality production, strong brand image, skilled workforce,
diversification of products, and innovation and technology adoption. These factors have
helped the company to establish a strong presence in the silk industry and maintain its
competitive edge.

18
 CHAPTER 2: COMPANY PROFILE

HISTORY

Hindustan Unilever (HUL) is India's largest

fast moving consumer goods company, with
leadership in Home & Personal Care Products
and Foods & Beverages. HUL's brands, spread
across 20 distinct consumer categories, touch
the lives of two out of three Indians. 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 and
the famous Dalda brand came to the market in 1937.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; HUL offered 10% of its equity to the Indian public, being the first
among the foreign subsidiaries to do so. Unilever now holds 52.10% equity in the company.
The rest of the shareholding is distributed among about 360,675 individual shareholders and
financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company
had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was
formed. Brooke Bond joined the Unilever fold in 1984 through an international acquisition.
The erstwhile Lipton's links with India were forged in 1898. Unilever acquired Lipton in
1972, and in 1977 Lipton Tea (India) Limited was incorporated.Pond's (India) Limited had
been present in India since 1947. It joined the Unilever fold through an international
acquisition of Chesebrough Pond's USA in 1986.

19
Since the very early years, HUL has vigorously responded to the stimulus of economic
growth. The growth process has been accompanied by judicious diversification, always in
line with Indian opinions and aspirations.The 1990s also witnessed a string of crucial
mergers, acquisitions and alliances on the Foods and Beverages front. In 1992, the erstwhile
Brooke Bond acquired Kothari General Foods, with significant interests in Instant Coffee. In
1993, it acquired the Kissan business from the UB Group and the Dollops Icecream business
from Cadbury India.As a measure of backward integration, Tea Estates and Doom Dooma,
two plantation companies of Unilever, were merged with Brooke Bond. Then in July 1993,
Brooke Bond India and Lipton India merged to form Brooke Bond Lipton India Limited
(BBLIL), enabling greater focus and ensuring synergy in the traditional Beverages business.
1994 witnessed BBLIL launching the Wall's range of Frozen Desserts. By the end of the year,
the company entered into a strategic alliance with the Kwality Icecream Group families and
in 1995 the Milkfood 100% Icecream marketing and distribution rights too were acquired.

Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal
restructuring culminated in the merger of Pond's (India) Limited (PIL) with HUL in 1998.
The two companies had significant overlaps in Personal Products, Speciality Chemicals and
Exports businesses, besides a common distribution system since 1993 for Personal Products.
The two also had a common management pool and a technology base. The amalgamation was
done to ensure for the Group, benefits from scale economies both in domestic and export
markets and enable it to fund investments required for aggressively building new categories.

In January 2000, in a historic step, the government decided to award 74 per cent equity in
Modern Foods to HUL, thereby beginning the divestment of government equity in public
sector undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic
extension of the company's wheat business. In 2002, HUL acquired the government's
remaining stake in Modern Foods.In 2003, HUL acquired the Cooked Shrimp and Pasteurised
Crabmeat business of the Amalgam Group of Companies, a leader in value added Marine
Products exports.HUL's brands – like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely,
Pond's, Sunsilk, Clinic, Pepsodent, Close–up, Lakme, Brooke Bond, Kissan, Knorr–
Annapurna, Kwality Wall's – are household names across the country and span many
categories – soaps, detergents, personal products, tea, coffee, branded staples, ice cream and
culinary products. They are manufactured over 37 factories across India. The operations
involve over 2,000 suppliers and associates. HUL's distribution network, comprising about

20
2,500 redistribution stockists, covering 6.3 million retail outlets reaching the entire urban
population, and about 250 million rural consumers.

HUL has traditionally been a company, which incorporates latest technology in all its
operations. The Hindustan Unilever Research Centre (HURC) was set up in 1958, and now
has facilities in Mumbai and Bangalore. HURC and the Global Technology Centres in India
have over 200 highly qualified scientists and technologists, many with post–doctoral
experience acquired in the US and Europe.HUL is also running a rural health programme –
Lifebuoy Swasthya Chetana. The programme endeavours to induce adoption of hygienic
practices among rural Indians and aims to bring down the incidence of diarrhoea. It has
already touched 120 million people in approximately 50, 676 villages across India. The
vision is to make a billion Indians feel safe and secure.

FMCG major Hindustan Unilever (HUL) has received its board’s nod for divestment of
43.31% stake in Hindustan Field Services (HFS) to Smollan Group 30 June 27, 2010. HFS is
a joint venture (JV) company between HUL and Smollan Holdings. It was incorporated for
building capabilities for 'in–store' execution in Modern Trade and operates as a dedicated
venture with processes, capability and culture of execution. Smollan Group currently holds
49% stake in HFS.In 2012 HUL entered into an agreement with Unilever for manufacturing,
marketing and distributing the Brylcreem brand in India.

VISSION, MISSION, OBJECTIVES

Hindustan Unilever Limited, also known as

HUL, is one of India's largest consumer goods
companies with a rich history spanning over
eight decades. The company's vision, mission,
and objectives have been critical in guiding the
organization towards its success, making ita
household name in the country.

Vision: HUL's vision statement reflects the company's aspirations and long-term goals. The
company aims to be the best fast-moving consumer goods (FMCG) company in India by
providing products and services that improve the quality of people's lives. HUL recognizes

21
that consumers' needs are diverse, and to meet these needs, the company strives to offer a
wide range of products that cater to all age groups and social classes.

Mission: HUL's mission statement defines its primary purpose and outlines how the company
intends to achieve its vision. The mission is to earn the love and trust of consumers by
consistently delivering products and services of the highest quality that meet their needs and
enhance their well-being. The company understands that to achieve this mission, it must
continuously innovate and improve its products, ensuring that they are accessible and
affordable to all its consumers.

Objectives: HUL's objectives are specific, measurable, and achievable targets that help the
company realize its vision and mission. Here are some of the company's key objectives:

 Maintain a leading position in the FMCG market in India: HUL aims to maintain its
position as the market leader in the FMCG industry by continuously improving its
products and expanding its presence across the country. The company understands
that consumer preferences and market dynamics are constantly evolving, and it must
keep pace with these changes to stay ahead of the competition.
 Expand the company's footprint in India and grow market share in new categories:
HUL is continually looking for growth opportunities and expanding its product
portfolio in existing and new categories. The company's objective is to cater to the
diverse needs of its consumers and provide them with innovative and high-quality
products. HUL is committed to investing in research and development to create new
and exciting products that will drive growth and profitability.
 Prioritize sustainability and responsible business practices: HUL understands that
sustainability and responsible business practices are essential for long-term success.
The company's objective is to reduce its environmental footprint and promote
sustainable practices across its value chain. HUL aims to achieve this by reducing its
carbon emissions, conserving water, and promoting sustainable sourcing of raw
materials.
 Provide a positive and empowering workplace culture: HUL recognizes that its
employees are its greatest asset and is committed to providing them with a positive
and empowering workplace culture. The company's objective is to attract and retain
the best talent in the industry by offering a challenging and fulfilling work

22
 environment, providing opportunities for career development, and promoting diversity
and inclusivity.
 Deliver sustainable and profitable growth for shareholders: HUL's ultimate objective
is to deliver sustainable and profitable growth for its shareholders. The company is
committed to creating long-term value for its shareholders by continuously improving
its financial performance, maximizing operational efficiency, and investing in growth
opportunities.

MAJOR MILESTONES OF HUL1

Year Events
Application made for setting up soap factory next to the Vanaspati factory at Sewri;
1933 Lever Brothers India Limited incorporated on October 17.
Soap manufacture begins at Sewri factory in October; North West Soap Company's
1934 Garden Reach Factory, Kolkata rented and expanded to produce Lever brands
1935 United Traders incorporated on May 11 to market Personal Products.
1937 Mr. Prakash Tandon, one of the first Indian covenanted managers, joins HVM.
Garden Reach Factory purchased outright; concentration on building up Dalda Vanaspati
1939 as a brand.
Agencies in Mumbai, Chennai, Kolkata and Karachi taken over; company acquires own
1941 sales force
Unilever takes firm decision to 'train Indians to take over junior and senior management
1942 positions instead of Europeans'
1943 Personal Products manufacture begins in India at Garden Reach Factory. –
Reorganisation of the three companies with common management but separate
1944 marketing operations
Mr. Prakash Tandon becomes first Indian Director. Shamnagar, Tiruchy, and Ghaziabad
1951 Vanaspati factories bought
1955 65% of managers are Indians.
Three companies merge to form Hindustan Unilever Limited, with 10% Indian equity
1956 participation.
1957 Unilever Special Committee approves research activity by Hindustan Unilever

1961 Mr. Prakash Tandon takes over as the first Indian Chairman; 191 of the 205 managers
1
https://www.hul.co.in/our-company/hul-history/

23
 are Indians.
1962 Formal Exports Department starts.
1963 Head Office building at Backbay Reclamation, Mumbai, opened
Lever's baby food, more new foods introduced; Nickel catalyst production begins; Indian
shareholding increases to 15%. Statutory price control on Vanaspati; Taj Mahal tea
1966 launched.
1967 Hindustan Unilever Research Centre, opens in Mumbai
Mr. V. G. Rajadhyaksha takes over as Chairman from Mr. Prakash Tandon; Fine
1968 Chemicals Unit commissioned at Andheri; informal price control on soap begins.
Mr. V. G. Rajadhyaksha presents plan for diversification into chemicals to Unilever
1971 Special Committee – plan approved; Clinic shampoo launched
1973 Mr. T. Thomas takes over as Chairman from Mr. V. G. Rajadhyaksha
Pilot plant for industrial chemicals at Taloja; informal price control on soaps withdrawn;
1974 Liril marketed.
Ten–year modernisation plan for soaps and detergent plants; Jammu project work begins;
statutory price control on Vanaspati and baby foods withdrawn; Close–up
1975 toothpaste launched
Construction work of Haldia chemicals complex begins; Taloja chemicals unit begins
1976 functioning.

1977 Jammu synthetic Detergents plant inaugurated; Indian shareholding increases to 18.57%.
Dr. A. S. Ganguly takes over as Chairman from Mr. T. Thomas; Unilever shareholding
1980 in the company comes down to 51%.
1982 Government allows 51% Unilever shareholding.
1984 Foods, Animal Feeds businesses transferred to Lipton
Agri–products unit at Hyderabad starts functioning – first range of hybrid seeds comes
1986 out; Khamgaon Soaps unit and Yavatmal Personal Products unit start production.
1990 Mr. S. M. Datta takes over as Chairman from Dr. A. S. Ganguly.
1992 HUL recognized by Government of India as Star Trading House in Exports.
HUL's largest competitor, Tata Oil Mills Company (TOMCO), merges with the company
with effect from April 1, 1993, the biggest such in Indian industry till that time. Merger
ultimately accomplished in December 1994; Launch of Vim bar; Kissan acquired from
1993 the UB Group.

1994
HUL forms Unilever Nepal Limited, HUL and US–based Kimberley–Clark Corporation

24
 form 50:50 joint venture – Kimberley–Clark Lever Ltd. – to market Huggies diapers and
Kotex feminine care products. Factory set up at Pune in 1995; HUL acquires Kwality
and Milkfood 100% brandnames and distribution assets. HUL introduces Wall's.
HUL and Indian cosmetics major, Lakme Ltd., form 50:50 joint venture – Lakme Lever
Ltd.; HUL enters branded staples business with salt; HUL recognised as Super Star
1995 Trading House.
Mr. K. B. Dadiseth takes over as Chairman from Mr. S. M. Datta; Merger of Group
company, Brooke Bond Lipton India Limited, with HUL, with effect from January 1;
1996 HUL introduces branded atta; Surf Excel launched
Unilever sets up International Research Laboratory in Bangalore; new Regional
1997 Innovation Centres also come up.
Group company, Pond's India Ltd., merges with HUL with effect from January 1, 1998.
1998 HUL acquires Lakme brand, factories and Lakme Ltd.'s 50% equity in Lakme Lever Ltd.
Mr. M. S. Banga takes over as Chairman from Mr. K. B. Dadiseth, who joins the
Unilever Board; HUL acquires 74% stake in Modern Food Industries Ltd., the first
2000 public sector company to be disinvested by the Government of India.
HUL enters Ayurvedic health & beauty centre category with the Ayush range and Ayush
2002 Therapy Centres.
2006 Brookefields food operations moved to Mumbai
Company name formally changed to Hindustan Unilever Limited after receiving the
approval of share holders during the 74th AGM on 18 May 2007 Sales of Brooke Bond
2007 and Surf Excel each cross the Rs 1,000 crore mark
2008 HUL completes 75 years on 17th October 2008
HUL decided to license 'Lakme' and 'Lever Ayush', brands to its subsidiary, Lakme
2009 Lever Private Limited, for the Beauty and Wellness services business
Ø HUL and Star Bazaar, of Trent Hypermarket Limited, the retail arm of Tata Group,
launched a unique consumer initiative titled ‘India’s Favorites’ to promote the cause of
education of underprivileged children.HUL and Bharti Retail’s ‘easyday Market’ and
‘easyday’ stores, launched a joint initiative to promote plastic recycling among
2011 consumers in NCR.

In March, 2012 HUL’s state of the art Learning Centre was inaugurated at the Hindustan
Unilever campus at Andheri, Mumbai. In April, 2012, the Customer Insight &
2012 Innovation Centre (CiiC) was inaugurated at the Hindustan Unilever campus at Andheri,

25
 Mumbai
HUL completes 80 years of corporate existence in India. HUL launches ‘Prabhat’
(Dawn) - a Unilever Sustainable Living Plan (USLP) linked program to engage with and
contribute to the development of local communities around our manufacturing sites. In
2013 October 2013, Sanjiv Mehta took over as the CEO and Managing Director of HUL.
The ‘Winning in Many Indias’ operating framework, piloted in 2013, launched
nationally. Sales offices expanded from four to seven with launch of offices in Lucknow,
Indore and Bangalore in addition to the existing sales offices in Delhi, Kolkata, Mumbai
2014 and Chennai
HUL signed an agreement with Mosons Group for acquisition of its flagship brand
‘Indulekha’. HUL announced signing of an agreement for the sale and transfer of its
2015 bread and bakery business under the brand “Modern” to Nimman Foods Private Limited.
Sales of six HUL brands namely Surf excel, Brooke Bond, Wheel, Lifebuoy, Rin and
2016 Fair & Lovely cross the rupee 2000 crore mark. Surf excel crosses the 3000 crore mark
A new state-of-the-art manufacturing facility was commissioned in Doom Dooma
2017 Industrial Estate, Assam on 11th March 2017.
HUL signs an agreement with Vijaykant Dairy and Food Products Limited (VDFPL) and
its group company to acquire its ice cream and frozen desserts business consisting of its
2018 flagship brand ‘Adityaa Milk’ and front end distribution network across geographies
HUL announced acquisition of VWash, the market leader in female intimate hygiene
category to enter the currently underpenetrated and rapidly growing market segment.
Merger of GSK Consumer Healthcare with Hindustan Unilever Limited. Iconic health
food drink brands – Horlicks and Boost enter the foods & refreshment portfolio of HUL,
2020 making it the largest F&R business in India.
HUL's turnover crossed the INR 50,000 Crore mark for FY 2021 – 2022 In July 2022,
Unilever India Limited's new Home Care factory and an automated distribution centre
were inaugurated in Sumerpur, Uttar Pradesh. The factory is a zero-carbon factory and
2022 Unilever South Asia's first gender-balanced factory.

ACHIEVEMENTS OF HUL2

2
https://www.hul.co.in/our-company/hul-history/

26
 Hindustan Unilever Limited (HUL) has emerged as the No. 1 Employer of Choice
across all sectors for the 2014 graduating batch of B–School students
 Awarded top Indian company in the 'FMCG' sector for the third consecutive year at
Dun & Bradstreet–Rolta Corporate Awards, 2009
 HUL ranked fourth in the ‘Top Companies for Leaders, 2009' (Asia Pacific region)
and 10th place in the global rankings in a survey carried out by Hewitt Associates
 Awarded Customer and Brand Loyalty Award by Business India & Business Standard
in 2009
 Awarded for Best Corporate Social Responsibility Practice at the Social & Corporate
Governance Awards 08–09 by BSE, Nasscom Foundation and Times Foundation.
 Awarded in the Category 'FMCG Manufacturing Supply Chain Excellence' at the
Third Express, Logistics & Supply Chain Awards by APL Logistics, Indiatimes,
Mindscape, Business India Group in 2009
 The company’s Orai unit received the Gold Excellence award and the Khalilabad unit
received the Silver Excellence award in the environment category by Greentech
Foundation in 2009
 HUL's Goa factory won a Gold Trophy at the Greentech Awards in 2009 the
manufacturing sector category for their outstanding work in Safety Management
 Project Shakti won the Silver Trophy at the EMPI–Indian Express Indian Innovation
Awards, 2009
 Kwality Wall's Swirl's awarded 'The Franchisor of the year' for the Ice–cream parlour
category by Franchise India in 2009.
 HUL was felicitated for receiving the highest number of patents in the year 2009 at
Annual Intellectual Property Awards 2010. The award was instituted by
Confederation of Indian Industry (CII) in association with Department of Industrial
Policy & Promotion (DIIP) and Intellectual Property India (IPI) in New Delhi.Six
HUL brands (Lux, Lifebuoy, Clinic Plus, Pond's, Fair & Lovely and Pepsodent)
featured in the top 10 and eight in the top 20. All together there are 17 HUL brands
among the ‘100 most trusted brands’ in the 2010 survey.
 Received CNBC AWAAZ Consumer Awards in six categories for 2010 – Green
company of the year, Value for money brand of the year, Ad effectiveness award,
Marketer of the year award across all categories, Most preferred personal care and
home care company in FMCG category (for the third consecutive year).

27
  HUL received the Award for Excellence in HR in 2010 from Confederation of Indian
Industry (CII). This is a rigorous fact–based assessment which is conducted by a team
of external assessors. HUL has won this award for the third consecutive year.
 Five of HUL's leading brands – Lux, Dove, Pears, Clinic Plus and Sunsilk – won the
Reader's Digest Trusted Brand 2008 Awards.
 Four HUL brands featured in the top 10 list of the Economic Times Brand Equity's
Most Trusted Brands 2008 survey
 HUL was awarded the Bombay Chamber Civic Award 2007 in the category of
Sustainable Environmental Initiatives.
 HUL was selected as the top Indian company in the FMCG sector for the Dun &
Bradstreet – American Express Corporate Awards 2007.
 HUL is also one of the country's largest exporters; it has been recognized as a Golden
Super Star Trading House by the Government of India.

PRODUCTS AND SERVICE PROFILE

With nearly 90 years of heritage in India, Hindustan Unilever Limited (HUL) is India’s
largest fast-moving consumer goods company. On any given day, nine out of ten Indian
households use one or more of our brands, giving us a unique opportunity to build a brighter
future. Company is known for our great brands, the positive social impact company creates
and our belief in doing business the right way. 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 the planet.

With 50+ brands spanning 15 distinct categories such as fabric solutions, home and hygiene,
life essentials, skin cleansing, skin care, hair care, colour cosmetics, oral care, deodorants,
tea, coffee, ice cream & frozen desserts, foods and health food drinks, the company is a part
of the everyday life of millions of consumers across India. Its portfolio includes leading
household and personal care. HUL is a subsidiary of Unilever, one of the world’s leading
suppliers of Food, Home Care, Personal Care and Refreshment products with sales in over
190 countries. And some of the products are-

 Personal Care: HUL is a leading player in the personal care category, offering a wide
range of products, including skin care, hair care, oral care, and deodorants. Some of

28
 the popular brands under the personal care category are Dove, Lux, Lifebuoy,
Pepsodent, Clinic Plus, and Axe.
 Home Care: HUL is also a dominant player in the home care category, offering a wide
range of products, including laundry detergents, household cleaners, and air
fresheners. Some of the popular brands under the home care category are Surf Excel,
Rin, Vim, Domex, and Comfort.
 Foods and Beverages: HUL has a presence in the foods and beverages category,
offering a wide range of products, including tea, coffee, ice cream, and packaged
foods. Some of the popular brands under the foods and beverages category are Brooke
Bond, Lipton, Bru, Kwality Wall's, and Knorr.
 Water: HUL is also present in the water category, offering a range of packaged
drinking water and water purifiers under the brand name Pureit.
 Customer Care Support: HUL has a dedicated customer care support team that is
available round the clock to address customer queries and complaints. Customers can
reach out to the team via phone, email, or social media and expect a prompt and
satisfactory resolution to their issues.
 Home Delivery: HUL offers home delivery services for its products, making it
convenient for customers to get their favorite HUL products delivered to their
doorstep. The company's online shopping platform, HULstore, allows customers to
place orders online and get them delivered to their preferred location.
 Loyalty Programs: HUL offers various loyalty programs, such as the "Wheel Active
Challenge" and "Lipton Challenge," aimed at rewarding loyal customers and
encouraging them to purchase more products.
 Consumer Education: HUL also offers consumer education programs, aimed at
creating awareness about the proper usage of its products and their benefits. The
company conducts various campaigns and workshops to educate consumers on the
importance of hygiene, nutrition, and sustainable living.

KEY COMPETITOR PROFILE AND ANALYSIS

1. Procter & Gamble (P&G): P&G is a leading competitor of HUL in the Indian FMCG
market. In 2021, P&G's net sales in India amounted to approximately USD 1.8 billion,
a growth of 16% compared to the previous year. P&G's fabric care segment, which
includes brands such as Ariel and Tide, is one of its strongest categories in India, with

29
 a market share of around 25%. The company also has a strong presence in the hair
care and grooming segments with brands such as Gillette and Head & Shoulders.
2. Nestle: Nestle is a Swiss multinational food and beverage company that competes
with HUL in the Indian FMCG market. In 2020, Nestle India's net sales amounted to
approximately USD 1.9 billion, a growth of 10.1% compared to the previous year.
Nestle India's key categories include milk and nutrition, beverages, and prepared
dishes and cooking aids. Nestle's Maggi noodles, which were launched in India in
1983, is one of the most popular instant noodle brands in the country.
3. Colgate-Palmolive: Colgate-Palmolive is a global consumer goods company that
competes with HUL in the oral care category in India. In 2020, Colgate-Palmolive's
net sales in India amounted to approximately USD 876 million. Colgate-Palmolive's
toothpaste brands, such as Colgate Dental Cream and Colgate Active Salt, compete
with HUL's Pepsodent and Close-Up. The company also has a strong presence in the
toothbrush and mouthwash segments.
4. Dabur: Dabur is an Indian consumer goods company that competes with HUL in the
personal care category. In 2020, Dabur's consolidated revenue amounted to
approximately USD 1.3 billion. Dabur's key categories include hair care, oral care,
skin care, and health supplements. The company's hair care brand, Vatika, is a major
competitor of HUL's Dove and Clinic Plus.
5. ITC: ITC is an Indian conglomerate that competes with HUL in the personal care and
home care categories. In 2020, ITC's FMCG segment revenue amounted to
approximately USD 4.4 billion. ITC's key categories include personal care, home
care, and packaged foods. The company's personal care brand, Fiama Di Wills,
competes with HUL's Lux and Lifebuoy, while its home care brand, Nimyle,
competes with HUL's Domex.

HUL faces stiff competition from both multinational and domestic players in the Indian
FMCG market. Despite intense competition, HUL has been able to maintain its market
leadership position due to its strong product portfolio, innovative marketing strategies, and
focus on customer satisfaction,

ORGANIZATIONAL HIERARCHY

30
HUL, or Hindustan Unilever Limited, has a complex organizational structure that reflects the
company's size, scope, and diverse operations. Here is a detailed overview of HUL's overall
organizational structure:

• Board of Directors: The Board of Directors is the highest decision-making body in the
company, responsible for setting the company's strategic direction and overseeing its
operations. The Board comprises 12 members, including the Chairman and Managing
Director, Executive Directors, Non-Executive Directors, and Independent Directors.

• Leadership Team: The Leadership Team comprises senior executives who are responsible
for managing the day-to-day operations of the company. The Leadership Team reports to the
Board of Directors and is responsible for implementing the company's strategy and achieving
its objectives.

• Business Segments: HUL operates in various business segments, including Home Care,
Personal Care, Foods and Beverages, and Water. Each business segment has a separate
management team responsible for managing the operations and achieving the segment's
objectives.

• Functional Departments: HUL has various functional departments that provide support to
its business segments, including Finance, Human Resources, Information Technology, Legal,
Research and Development, and Supply Chain. These departments are responsible for
ensuring that the company's operations are efficient, effective, and aligned with its strategic
objectives.

• Regional and Area Offices: HUL has a vast distribution network, with regional and area
offices located across the country. These offices are responsible for managing the distribution
of HUL's products in their respective regions and ensuring that the company's products reach
its customers on time.

• Manufacturing Plants: HUL has manufacturing plants located across the country,
producing a wide range of products. The manufacturing plants are responsible for producing
high-quality products, ensuring that they meet the company's standards and comply with
regulatory requirements.

31
• Sales and Marketing Teams: HUL has a robust sales and marketing organization
responsible for promoting its products and ensuring that they reach the company's customers.
The sales and marketing teams work closely with the regional and area offices to develop
effective sales and marketing strategies and implement them in the field.

Rohit Jawa will succeed Sanjiv Mehta as the MD & CEO of the
company with effect from June 27, 2023. Hindustan Unilever Ltd
(HUL) Friday announced that Rohit Jawa will take over as the
company’s new Managing Director and Chief Executive Officer from
June 27

32
OUR LEADERS AS ON 2022

33
.

34
HUL ‘s PORTERS FIVE FORCE MODEL ANALYSIS

Porter's Five Forces of Competitive

Position Analysis were developed in
1979 by Michael E Porter of Harvard
Business School as a simple
framework for assessing and
evaluating the competitive strength and
position of a business organisation.

This theory is based on the concept

that there are five forces that determine
the competitive intensity and
attractiveness of a market. Porter’s five
forces help to identify where power lies in a business situation. This is useful both in
understanding the strength of an organisation’s current competitive position, and the strength
of a position that an organisation may look to move into Strategic analysts often use Porter’s
five forces to understand whether new products or services are potentially profitable. By
understanding where power lies, the theory can also be used to identify areas of strength, to
improve weaknesses and to avoid mistakes.

 Competitive Rivalry or Competition with Unilever

The main competitors of Unilever are Procter and Gamble, Johnson and Johnson, Colgate-
Palmolive, Dabur, and many more. Unilever has many companies which are against it and
that each firm has a wide variety of sectors under it. Since the products have very little
differentiation, the cost of switching is also very low, almost zero. There are many companies
mainly in this Fast-Moving Consumer Goods industry with low switching costs. The
presence of many companies prevents a monopolistic kind of environment and supports
healthy competition. To remain relevant in this industry, Unilever can launch new products
from time to time. If there is no product launch, then at least the packaging has to be renewed
to make it more attractive. Advertisements also play a crucial role in placing the product in
the customer's mind. Discounts, sales, and various offers also increase sales. Another way to
make the company more visible is to hop onto the trends and post witty tweets or Instagram
posts.

35
  Bargaining Power of Unilever’s Customers/Buyers

Customers of Unilever come from every walk of life. The company provide goods to mass
merchandisers, grocery stores, drug stores, E-commerce retailers, and distributors. Unilever is
located in 190 countries with a huge customer base of around 2.5 billion people using the
products. The cost of switching is almost zero, therefore it is easy for the customer to switch
over to other products. Unilever also tries to increase their sale by providing the customers
with interesting discounts and offers. To entice more customers, the company has to
continuously innovate in terms of product or packaging to keep themselves relevant in the
market. The customers do not have much bargaining power as they cannot influence prices,
instead they simply can switch customers. Successfully, Unilever has a strong brand equity
and many of their products are etched in the minds of their customers.

 Bargaining Power of Unilever’s Suppliers

Unilever has 56000 suppliers all over the world, which is present in over 150 countries. The
company also presents awards to its top-performing business partners. Usually, in FMCG
products, the distribution system plays a very crucial role in the sales of the company. There
is a possibility of forward integration as the amount of research and development in this
sector is very low. The suppliers provide all the raw materials and technology required for
manufacturing and packaging the materials. The switching cost is also very low. As a result,
the chances of them influencing the prices are very low. If there are some issues with the
suppliers and the suppliers had increased the prices, the company costs would increase
drastically, then Unilever could easily replace the suppliers as and when required. It is
extremely important to have an efficient supply chain in the FMCG company for the
smoothing manufacturing and distribution of all the products. The company should make sure
that the raw materials received should be standardized and up to quality. Therefore, it is of
utmost importance for the suppliers to be compliant with the regulations of the company.

 Threat of Substitutes or Substitution

Unilever is present in various segments; therefore, every sector has its own set of market
leaders. The switching cost in various FMCG products is very low; therefore, the threat of
substitutes is always very high. Unilever is the market leader in many segments; therefore,
new substitutes could hamper its leadership position. Each and every brand under Unilever

36
have to differentiate their product. The differentiation could be based on the product, price,
quality, or packaging. Most of their brands are well-known and service-oriented rather than
just being an FMCG company. Another issue that could take place is that Unilever might
have more than one product in the same segment. There is a great chance that one brand
could cannibalize the other. Therefore, it is extremely important for the company to place its
brand at two different price levels. There is also a possibility of cheaper knock-offs being
placed on the same market shelf as the market leader; this could hamper the sale to a certain
extent.

 The threat of new entrants

Unilever, a multinational company based in London, England, was started in 1929. Unilever
owns around 400 brands, including toothpaste, cleaning agents, ice cream, food, condiments,
water and air purifiers, pet food, etc. The threat of new entrants in the Fast-Moving Consumer
Goods for one segment is relatively easier but having a huge legacy of many brands is
extremely difficult. The main reason is the requirement of high capital and resources. These
products are easily scalable and are mass-produced. The company has high brand equity and
is located in more than 190 countries. The cost of switching in this industry is very low. The
company is the market leader in many segments; therefore, it would be very difficult for the
new entrant to get market share. Another issue that a new entrant would face would be
following the rules and regulations of the country it is located in. Legal requirements could be
another problem that a new entrant could face.

OVERVIEW: Unilever deals with a wide variety of external factors, considering the extent
of its operations in the global consumer goods market. However, as shown in this Five Forces
analysis, such external factors lead to variations in the intensities of the five forces impacting
the business. The following are the intensities of the five forces in affecting Unilever:

1. Competitive rivalry or competition (strong force)

2. Bargaining power of buyers or customers (strong force)
3. Bargaining power of suppliers (moderate force)
4. Threat of substitutes or substitution (weak force)
5. Threat of new entrants or new entry (weak force)

37
SWOT ANALYSIS OF HUL ( HINDUSTAN UNILEVER LIMITED )

The SWOT Analysis of HUL (Hindustan Unilever Limited) includes its strengths,
weaknesses, opportunities, and threats. And in this reading of the SWOT Analysis of HUL
which will examine the beauty and wellness company in terms of its internal and external
factors.

1. S Stands For Strengths ( Internal Factor )

 Leader in FMCG Market: Two out of three Indian consumers use HUL products,
according to Nielsen Study. To establish itself as a market leader in the Indian market,
HUL has adopted a targeted approach in the supply chain & other things.
 Most Preferred Brand: From soap to mineral water, HUL shapes the lives of 1.3
billion people every day. HUL’s presence in the consumer market with its 20
categories such as soap, tea, detergent, shampoo, etc., and its wide range of products
has helped it occupy a large share of shelf space in grocery and department stores,
which explains the acceptance/demand for its products in the market.
 Innovations: Hindustan Unilever Research Center (HURC), Mumbai, and Unilever
Research India, Bangalore, both research facilities were merged at one location in
Bangalore in 2006. The people at this facility are continuously working on developing
innovations in products and manufacturing processes that will help HUL establish
itself as a frontrunner in the consumer goods market.

38
 High Brand Awareness: HUL generated positive word of mouth over the years by
enlisting celebrities to promote their brands. This allowed them to socially anchor
their brands, which were intelligently tailored to different income brackets.
 Wide Range of Products: It offers product categories, namely, oral care, personal care,
household surface care, textile care, and pet food, etc., and has a wide range of
products in all product categories.
 Social Media: HUL has a strong social media presence with millions of followers on
the three most popular social networking platforms: Facebook, Twitter and Instagram.
The company has a high level of customer engagement with a low response time on
these channels.

2. W Stands For Weaknesses ( Internal Factor )

 Declining Market Share: competitors focusing on a particular product eating up
HUL’s share, such as Ghadi & Nirma detergents eating up HUL’s market share in
wheel washes.
 Large selection of brands in various product categories: A large portfolio of brands
often leads to incorrect positioning. Price placement in some segments ensures low
price competition, such as the market share gained by Amul from Kwality.
 Limited Market Share: The market share of HUL is limited due to the presence of
other strong FMCG brands.

3. Stands For Opportunities ( External Factor )

 Expanding the market: Greater penetration of rural markets through Project Shakti
AMMA and the transition from unorganized to organized enterprises will lead to
further expansion of the consumer market.
 Awareness of the use of consumer products: advertising, word of mouth and medical
prescribing raise people’s awareness of the use of consumer products, leading to an
increase in the rate of use of these products.
 Growing income level: due to a stable political situation, higher literacy rate and
regulated inflation, people’s disposable income is increasing, leading to higher
demand and changing lifestyles.
 Ayurvedic products: May start manufacturing or marketing Ayurvedic products under
the brand name of HUL.
 Partnerships: Mergers and acquisitions can further strengthen the brand in a long run.

39
4. T Stands For Threats ( External Factor )
 Market competition: with the increasing number of local and national suppliers, it is
becoming very difficult for businesses to differentiate themselves from others. There
is also a risk of counterfeit products destroying the brand image in the market.
 Price of raw materials: rising prices of raw materials will lead to further increases in
prices. The further price increase will lead to a decrease in sales, profit margins and
brand switching.
 Buyer Power: In a highly diversified consumer goods market, where many brands are
promising different benefits, it is very difficult for consumers to get loyal to a
particular brand. This leads to brand switching where consumers have the power to
choose a brand based on various factors such as availability, recommendations from
reference groups, preferences and price.
 Government regulations: Changing government norms and regulations can also
directly affect business policies and practices.

Suggestions:

This SWOT analysis of Unilever highlights a number of internal and external strategic
factors that managers must include in strategy development. For example, the weaknesses
of limited business diversification and imitable nature of products are significant because
they influence business stability and performance. In this regard, suggestion is to diversify
Unilever’s business through acquisition of related firms not in the consumer goods
industry. Also, Unilever needs to consider product innovation as an opportunity to boost
business performance. It is recommended that the company must use its strengths, such as
economies of scale, for product innovation to address competition and the threat of
imitation.

 HUL needs to focus more on advancing its supply chain system and manufacturing
department.
 HUL needs to focus on the quality and also quantity of the product
 HUL needs to launch more ayurvedic products and more.

40
41