Macro Organizational Behaviour

ITC vs HUL
Presented By Group 3
Table of Contents

1. Mission & Vision 5. Strategy Followed

2. Organizational Structure 6. Competitive Position

3. Lifecycle Stage 7. Culture

4. Interorganizational Relationships
 Mission

Our mission is to add vitality to life. We

To enhance the wealth generating
meet everyday needs for nutrition, hygiene
capability of the enterprise in a globalizing
and personal care with brands that help
environment, delivering superior and
people feel good, look good and get more
sustainable stakeholder value
out of life.
 Vision
Sustain ITC's position as one of India's most valuable
corporations through world class performance,
creating growing value for the Indian economy and
the Company's stakeholders
To be a leader in sustainable business. We will
demonstrate how our purpose-led, future-fit business
model drives superior performance delivering
consistent, competitive, profitable and responsible
growth.
 Analysis & Rationale

• The Mission and Vision framework of both the organizations are similar in nature, though it aims to
achieve distinctive targets and are driven by a different set of core values and beliefs

• HUL follows a tangible image framework which focuses on the organization’s goal to be a leader in the
sustainable business which is driven by the compelling goal of the organization to add vitality to life,
thus unifying the organization’s efforts.

• ITC also follows a similar framework however driven by the core philosophy of creating value for the
stakeholders and the organization as a whole which is made more alive and engaging through the clear
mission that the organization has embibed
 Organizational Structure

• HUL follows a product type divisional
organizational structure. The organization is divided
into components based in their product focus
• The organization is headed by the chairman who is
reported to by the divisional heads of multiple
divisions like Beverages, Personal products,
Detergents Etc.
• ITC has implemented a three tier governance
structure to support effective management of
multiple businesses while retaining focus on each
one of them
• Board of directors sit at the top of the hierarchy for
strategic supervision which is then followed by the
corporate management committee and strategic
business units

Analysis & Rationale

Both the organizations have similar organizational structure (Divisional)

• Since conglomerates own multiple brands the organisation is divided into multiple brands comprising of their
own functional departments
• These departments are responsible for running these brands and while also following the chain of commands to
the top of the hierarchy
 Lifecycle Stage

• HUL FMCG is a streamlined operation with small company HUL- streamline small company thinking
thinking and is driven by innovation across its sectors.
• Despite poor performance during the lockdown the organization
has bounced back strongly and has increased its domestic
consumer base by 11% and PAT by 9% in Q2 of 2021-22.
• Home Care grew 15% driven by high double-digit growth in
Fabric Wash
Beauty & Personal Care grew 10% led by Skin Care, Color
Cosmetics and Hair Care
• Lakme saw 30% of its sales come through digital platforms.
• Foods & Refreshment grew at 7% against a strong prior year
comparator. Tea grew on a very strong base and further
strengthened its market leadership.
• Kissan Peanut Butter’ and ‘Hellman’s Mayonnaise’ innovations are
picking up momentum
• Horlicks’ expanded its high sciences range with the launch of
‘Horlicks Diabetes Plus’.
• Apart from an innovation driven approach the organization
focusses strongly on sustainability in its operations.
 Lifecycle Stage

• Packing and Paperboards includes brands such as classmate

which have had a difficult time in lockdown however are
bouncing back with new products and 25% YoY growth with
high double digit margins-Streamlined small company
thinking
• Cigarette sales have seen a revival and are matching pre covid
levels in sale volumes. 34% YoY growth in q1 of 21-22.-
Continued maturity
• Hotel segment generated only 9% of the operating profit in q1
and 5% operating profit in Q2. Large portion of profits
generated from cigarette business are pumped into the Hotel
industry.
• ITC has tried to cut costs and generate revenue via curated
profits.
• FMCG sector is aggressively expanding with new
acquisitions. As of now FMCG is in a revitalization phase.
 Lifecycle Stage
• Key differences can be marked in the FMCG sector that both companies compete in. HUL is driven by
innovation and sustainability. This allows them to adjust to sudden changes caused by COVID more
efficiently. They are not only further consolidating the strength of their established brand such as Brooke bond
but have expanded the Hellman's range as well as the Kissan Peanut butter and Horlicks line.

• ITC on the other hand needs revitalization of its FMCG line. The Profits from the division are the lowest
among all the divisions. ITC has begun to acquire smaller organizations in order to acquire their technical
know how to push innovation. As of now it is sapping out overall profits made from the cigarette business
which is the cash cow for ITC.
 Interorganizational Relationships

• Strong presence in the Ready to eat, Biscuit, Wafer

• HUL is only present in the Ice cream segment with
segments through brands such as sunfeast,
quality walls and Magnum. They do not compete in
Kitchens of India, etc.
the ready to eat segment with only Knorr as a brand
• ITC presence in the beauty and personal care
• Strong presence in the beauty and personal care
product segment such as vivel and Engage in the
product segment with products such as glow and
personal care segment however do not enter the
lovely, Ponds, Lakme, etc.
skin care market with any of their brands
• Direct competition to ITC with Ponds in the
• Competes with Shower to Shower
Powders segment
• No presence in the tea segment
• Strong presence in the Tea market with established
• Clothing brand of WLS faces no competition from
brand of Brooke Bond
HUL
• No brand in the clothing line
• Strong presence in the Tobacco market with
• No presence in the Tobacco market
cigarette brand such as Classic.
 Interorganizational Relationships
• These two companies exist in a Population ecology for products lines such as skincare,
ready to eat and beauty products. There is stiff competition from smaller and newer
companies which are adapting very quickly to customer demands which is key to a
population ecology. They also exist in independent markets and are individually part of
other population ecologies.
 Strategy Followed
• Create multiple drivers of growth by developing a portfolio of world class businesses that best matches
organizational capability with opportunities in domestic and export markets.
• Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards & Packaging, Agri Business
and Information Technology.
• Benchmark the health of each business comprehensively across the criteria of Market Standing, Profitability
and Internal Vitality.
• Ensure that each of its businesses is world class and internationally competitive.
• Enhance the competitive power of the portfolio through synergies derived by blending the diverse skills and
capabilities residing in ITC's various businesses.
• Create distributed leadership within the organization by nurturing talented and focused top management teams
for each of the businesses.
• Continuously strengthen and refine Corporate Governance processes and systems to catalyse the
entrepreneurial energies of management by striking the golden balance between executive freedom and the
need for effective control and accountability.
 Strategy Followed

• A belief that sustainable business drives superior performance lies at the heart of the Unilever Compass
• Their strategy to create long-term value for their stakeholders.
• Overall, HUL’s strategy has remained consistent over the past 2-3 years.
• Execution of strategy keeps getting better and the company is firmly on track for digital transformation, much
ahead of its competition.
• HUL’s growth strategy includes focus on strengthening the core (around 40-45% of company’s business),
create categories of the future and drive premiumization.
• The company has increased its EBITDA margin by 7.4 percentage points over the last 10 years to 23% in
FY19. Ebitda is earnings before interest, tax, depreciation and amortization.
 Analysis & Rationale
ITC HUL

• Focused on development of all verticals including
FMCG, Hotels, Cigarette sales, etc.
• High reliance on the performance of cigarettes despite
heavy investment in overall portfolio
• No definite plan for development of digital
transformation
• Focus has shifted to acquisitions instead of developing
brands within especially in the FMCG segment
• Core focus is only the FMCG sector where their
product are market leaders.
• They do not rely completely on one brand and have
strengthened their entire product portfolio.
• Have been actively working on a digital
transformation strategy as mentioned in their annual
reports.
• More reliant on internal development of brands.

Strategy Level ITC HUL

Corporate Strategy Focus on Diversification of entire Focus on only 1 portfolio i.e. FMCG.
portfolio
Competitive • Analyzer • Analyzer
Strategy/Business Level Str • Cost Leadership • Cost Leadership 
ategy • Niche:- Hotels are high end 5 • Niche (Tony and Guy professional hair care
stars  products and equipment)
 Competitive Position
• Market Cap: 5,49,945 Crores (As on December 9, 2021)
• Market Leader in Detergent and Soap Industry (Close
Competition - Nirma and P&G)
• Number 2 in Oral Care Industry (Competition to Colgate
Palmolive)
• 40+ brands across 14 distinct categories
• Approx. 90% households use one or more than one HUL
product
• Dominant in Home Care and Beauty and Personal Care
segment.
• More than 50% market share in Beauty and Personal Care
segment (Source: Statista)
• Market Cap: 2,77,191 Crores (As of December 9,
2021)b) Market Leader in Tobacco and Cigarettes
segment)
• Growing FMCG segment. Brands in the FMCG
segment like Savlon became a Rs. 1,000 crore
brand recently)
• Established brands in Packaging and Printing and
Paperboard industry. Likely to benefit from the
consumer revolution and growing per capita
income and lifestyle standards)
• Growing FMCG brands and acquisition of other
major FMCG brands like Sunrise Foods thus,
adding to the diversity and growth of the product
portfolio"
 Analysis

Both the organizations are very similarly positioned on the FMCG segment in different domains

Rationale

• Both the organizations are market leaders in distinctive FMCG segments e.g.: HUL in home care and beauty and
personal care segment while ITC is market leader in tobacco and cigarette segment.

• Both the organizations are close competitors to market leader in multiple FMCG segments
• ITC and HUL are both renowned FMCG conglomerates with multiple brands namely : Boost, Bru, red Label
(HUL) and Sunfeast, Aashirwad, Fiama (ITC)
• Both the orgs are gunning to increase their market share in the Multi billion Dollar Indian FMCG market
 Culture
HUL has a mix of Clan culture and Mission Culture.

Clan culture:-
- Focus has been maintained on Growth Culture based on three tenets: Human, Purposeful and Accountable.
- Strong emphasis on development of employee skillset
- Close interaction with employees to monitor well being through " Care to Connect" Programme during the pandemic
- Established the "Mental Health Champions" programme to provide training and support to ensure good mental health of all employees
- Revamp of medical insurance policies and Extended their medical insurance policies to all members of the value chain during COVID-19
- Focus on improving gender diversity by introducing female shop floor employees at their Haldia and Kidder pore plants

Mission Culture:-
Focus has been kept by HUL to ensure that the organization is meeting its performance objectives in the following ways-
- 100% remote working for all office-based employees was done and infrastructure was provided so that employees continue to contribute
effectively to growth.
- Factories and distribution centers were kept operational even in the peak of pandemic with adequate measures
- Strong focus on future development through ‘Reimagine HUL’ is our multi-year transformation programme that aims to transform the
Company by leveraging the power of data & technology
- ‘UniVoice' module used to receive feedback from the employees as well as state the objectives and strategies clearly to ensure that
employees are well on the track for success.
 Culture
ITC has a mix of Bureaucratic and Clan Culture Clan Culture

• Company has a well laid-out Development Planning System anchored on the principle of ensuring equitable opportunity for all
employees –
• The platform competency programmes include the Business Planning Workshops, Business Strategy, Digital Marketing, and Analytics
and Data Sciences.
• ‘Young Digital Innovators Lab’ has been constituted by ITC which comprises of select managers, drawn from ITC’s Businesses.
• They carried out their 3rd edition of the companywide engage Survey, which captures employee perceptions and views on various
workplace dimensions.
• The thrust on leadership communication was continued by ITC with several editions of ‘StudioOne Townhall’ led by the Chairman. This
was supplemented by a more personalized engagement through the ‘StudioOne Xchange’ initiative.

Bureaucratic culture
• ITC conducts regular induction programmes for various talent segments to build an appreciation of ITC’s culture, awareness of various
businesses, sources of competitive advantage and synergy, thereby instilling a sense of pride amongst the participants.
• Several ITC employees have participated in ITC’s Social Investments Programmes in the catchment areas of their Business Unit. ITC
uses these social activities to further strengthen the values and traditions which is characteristic of a Bureaucratic culture.
 Analysis & Rationale
These two organizations have a mix of cultures. HUL however has a much stronger Clan culture than its
counterpart ITC. They have a greater focus on the overall development and well being of the employees as
well as their members down the value chain. As can be seen from the initiatives they carry out they
encourage greater participation and boost the sense of responsibility of the employees to a greater extent than
ITC.

The greatest difference lies between the fact that HUL has more of a Mission culture where they push
towards meeting of targets by individual employees to push to achieve organizational goals. They are an
competitive and have a fair amount of profit making orientation which allows them to remain adaptable to
the market and adjust their product portfolio to remain one of the top FMCG brands in India.

ITC has more of a beaurocratic culture where they firmly believe in the legacy of the organization. This can
be seen from the regular induction programmes they have which is to make employees more appreciative of
the organization. A characteristic of the Bureaucratic culture. Their social initiatives are also attached to the
name of ITC very strongly and employees work under the banner of this further pushing a symbolic and
ceremonious nature of the event.
 Aswin C M016-21
Astha Manak Bohara M015-21
Darshan Patil- M060-21
Gaurav Vijay Prasad M029-21
Thank You. Jayesh Pathak M039-21
Kishlay Krishna M043-21
Niharika Nimesh M057-21
Rahul Roshan Behera M065-21
Ritika Chhatwal M069-21
Shreeyashree Rajlaxmi Rath M089-21