Hll Swot

INTRODUCTION

The largest FMCG player with a presence in almost every FMCG product category; market
leadership or #2 position in most of these categories, a strong brand portfolio, unmatched
distribution network; a business with a vast growth potential - given India's population size &
current per capita consumption levels; and the most respected management in the country - What
more can you ask for?

Hindustan Lever Limited (HLL) is India's largest fast moving consumer goods company, with
leadership in Home & Personal Care Products and Foods & Beverages. HLL's brands, spread
across 20 distinct consumer categories, touch the lives of two out of three Indians. HLL'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- household names
across the country. They endow the company with a scale of combined volumes of about 4
million tonnes and sales of Rs.10, 000 crores.

They are manufactured in close to 80 factories. The operations involve over 2,000
suppliers and associates. HLL's distribution network, comprising about 7,000
redistribution stockists, directly covers the entire urban population, and about 250
million rural consumers.

In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati

Manufacturing Company, followed by Lever Brothers India Limited (1933) and
United Traders Limited (1935). These three companies merged to form HLL in
November 1956; HLL offered 10% of its equity to the Indian public, being the first
among the foreign subsidiaries to do so. The mission that inspires HLL's 36,000
employees, including about 1,350 managers, is to "add vitality to life". With 35
Power Brands, HLL meets everyday needs for nutrition, hygiene, and personal care
with brands that help people feel good, look good and get more out of life.

HLL has five main divisions, Soaps & Detergents, Personal Products, Beverages,
Foods and Ice...

Hindustan Lever Ltd

Hindustan Lever Ltd (HLL) is India's largest Fast Moving Consumer Goods (FMCG)
company. HLL'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 a host of categories, such as soaps, detergents, personal
products, tea, coffee, branded staples, ice cream and culinary products. These
products are manufactured over 40 factories across India and the associated
operations involve over 2,000 suppliers and associates. Hindustan Lever Limited's
distribution network comprises about 4,000 redistribution stockists, covering 6.3
million retail outlets reaching the entire urban population, and about 250 million
rural consumers. HLL is also one of India's largest exporters. It has been recognised
as a Golden Super Star Trading House by the Government of India. Presently, HLL
has over 16,000 employees including over 1,200 managers. Its mission is to "add
vitality to life." The Anglo-Dutch company Unilever owns a majority stake in
Hindustan Lever Limited.

In the late 19th and early 20th century Unilever used to export its products to India.
This process began in 1888 with the export of Sunlight soap, which was followed by
Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim soon after. 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). The three companies were merged in November 1956 and the new
entity that came into existence after merger was called as Hindustan Lever Limited.
HLL offered 10% of its equity to the Indian public, and it was the first among the
foreign subsidiaries to do so. Currently, Unilever holds 51.55% equity in the
company while the rest of the shareholding is distributed among about 380,000
individual shareholders and financial institutions.

Brooke Bond entered Indian market in 1900 and in 1903 it launched Red Label tea
in the country. In 1912, Brooke Bond & Co. India Limited was formed. Unilever
acquired Brooke Bond through an international acquisition. Similarly, Lipton's link
with India date back to 1898. Unilever acquired Lipton in 1972 and in 1977 Lipton
Tea (India) Limited was incorporated. Pond's (India) had been in Indian market since
1947. It joined the Unilever ranks through an international acquisition of
Chesebrough Pond's USA in 1986.

The liberalization of Indian economy in 1991 and subsequent removal of the

regulatory framework allowed HLL to explore every single product and opportunity
segment, without any constraints on production capacity. The 1990s witnessed a
string of crucial mergers, acquisitions and alliances. 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 Ice-cream
business from Cadbury India. In one of the most talked about events of India's
corporate history, the erstwhile Tata Oil Mills Company (TOMCO) merged with HLL,
effective from April 1, 1993. In July 1993, Brooke Bond India and Lipton India
merged to form Brooke Bond Lipton India Limited (BBLIL). Brooke Bond Lipton India
Limited launched Wall's range of Frozen Desserts in 1994 and by the end of the
year, HLL entered into a strategic alliance with the Kwality Icecream Group families.
BBLIL merged with HLL, with effect from January 1, 1996. HLL has also set up a
subsidiary in Nepal, Nepal Lever Limited (NLL). The NLL factory manufactures HLL's
products like Soaps, Detergents and Personal Products both for the domestic
market and exports to India. In January 2000, as part of its divestment strategy, the
government decided to award 74 per cent equity in Modern Foods to HLL. In 2002,
HLL acquired the government's remaining stake in Modern Foods. In February 2007,
the company has been renamed to "Hindustan Unilever Limited" to strike the
optimum balance between maintaining the heritage of the Company and the future
benefits and synergies of global alignment with the corporate name of "Unilever".

Note: The above information was last updated on 21-07-2007

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presentation

Hindustan Unilever Limited (HUL) (BSE: 500696) is India's largest fast moving consumer
goods company. The Anglo-Dutch company Unilever owns a 52% majority stake.

HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as
Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co.
Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and has an employee strength
of over 15,000 employees and contributes to indirect employment of over 52,000 people. The
company was renamed in June 2007 as “Hindustan Unilever Limited”.

Hindustan Unilever's distribution covers over 1 million retail outlets across India directly and its
products are available in over 6.3 million outlets in the country, nearly 80% of all retail outlets in
India. It estimates that two out of three Indians use its many home and personal care products,
food and beverages.[2]

Brands

Wheel Detergent ad in rural Nepal area.

HUL is the market leader in Indian consumer products with presence in over 20 consumer
categories such as soaps, tea, detergents and shampoos amongst others with over 700 million
Indian consumers using its products. Sixteen of HUL’s brands featured in the ACNielsen Brand
Equity list of 100 Most Trusted Brands Annual Survey (2008).[3] According to Brand Equity,
HUL has the largest number of brands in the Most Trusted Brands List. It has consistently had
the largest number of brands in the Top 50, and in the Top 10 (with 4 brands).

The company has a distribution channel of 6.3 million outlets and owns 35 major Indian brands.
[4]
Its brands include Kwality Wall's ice cream, Knorr soups & meal makers, Lifebuoy, Lux,
Pears, Breeze, Liril, Rexona, Hamam and Moti soaps, Pureit water purifier, Lipton tea, Brooke
Bond (3 Roses, Taj Mahal, Taaza, Red Label) tea, Bru coffee, Pepsodent and Close Up
toothpaste and brushes, and Surf, Rin and Wheel laundry detergents, Kissan squashes and jams,
Annapurna salt and atta, Pond's talcs and creams, Vaseline lotions, Fair and Lovely creams,
Lakmé beauty products, Clear, Clinic Plus, Clinic All Clear, Sunsilk and Dove shampoos, Vim
dishwash, Ala bleach, Domex disinfectant, Modern Bread, Axe deosprays and Comfort fabric
softeners.

[edit] Leadership

HUL has produced many business leaders for corporate India; one of these, Manvinder Singh
Banga, has become a member of Unilever's Executive (UEx). HUL's leadership-building
potential was recognized when it was ranked 4th in the Hewitt Global Leadership Survey 2007
with only GE, P&G and Nokia ranking ahead of HUL in the ability to produce leaders with such
regularity.[5][6][7]

[edit] Other awards

HUL is one of the country's largest exporters; it has been recognised as a Golden Super Star
Trading House by the Government of India.[2]

In 2007, Hindustan Unilever was rated as the most respected company in India for the past 25
years by Businessworld, one of India’s leading business magazines.[8] The rating was based on a
compilation of the magazine's annual survey of India’s most reputed companies over the past 25
years.

HUL was one of the eight Indian companies to be featured on the Forbes list of World’s Most
Reputed companies in 2007.[9]

HUL was ranked 39th in The Brand Trust Report published by Trust Research Advisory in 2011.

[edit] Research facilities

The Hindustan Unilever Research Centre (HURC) was set up in 1967 in Mumbai, and Unilever
Research India in Bangalore in 1997. Staff at these centres developed many innovations in
products and manufacturing processes. In 2006, the company's research facilities were brought
together at a single site in Bangalore.[10]
[edit] Community services

HUL also renders services to the community, focusing on health & hygiene education,
empowerment of women, and water management. It is also involved in education and
rehabilitation of underprivileged children, care for the destitute and HIV-positive, and rural
development. HUL has also responded to national calamities, for instance with relief and
rehabilitation after the 2004 tsunami caused devastation in South India.[2]

In 2001, the company embarked on a programme called Shakti, through which it creates micro-
enterprises for rural women. Shakti also includes health and hygiene education through the
Shakti Vani Programme, which now covers 15 states in India with over 45,000 women
entrepreneurs in 135,000 villages. By the end of 2010, Shakti aims to have 100,000 Shakti
entrepreneurs covering 500,000 villages, touching the lives of over 600 million people. 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. So far it has reached 120 million people in over 50,000 villages.[2]

[edit] Direct Selling Division

HUL also runs Hindustan Unilever Network (HULN), a direct selling business arm. Under
HULN, health products are marketed by AYUSH[disambiguation needed] in collaboration with Arya
Vaidya Pharmacy, Coimbatore; beauty products by Aviance; home products by Lever Home, and
male grooming by DIY.[disambiguation needed] There are also premium products for beauty salons and
others.

[edit] Controversy

[edit] Mercury pollution

In 2001 a thermometer factory in Kodaikanal run by Hindustan Unilever was accused of

dumping glass contaminated with mercury in municipal dumps, or selling it on to scrap
merchants unable to deal with it appropriately.[11]

[edit] Skin lightening creams

Hindustan Unilever's "Fair and Lovely" is the leading skin-lightening cream for women in India.
[12]
The company was forced to withdraw television advertisements for the product in 2007.
Advertisements depicted depressed, dark-complexioned women, who had been ignored by
employers and men, suddenly finding new boyfriends and glamorous careers after the cream had
lightened their skin.[13] In 2008 Hindustan Unilever made former Miss World Priyanka Chopra a
brand ambassador for Pond's,[14] and she then appeared in a mini-series of television commercials
for another skin lightening product, White Beauty, alongside Saif Ali Khan and Neha Dhupia;
these advertisements were widely criticised for perpetuating racism.[15]

[edit] Triclosan
Several academic papers have pointed out the firm's continued use of the antibacterial agent
Triclosan ('Active B') in India because is under review by the American Food and Drug
Administration (FDA).[16]

hll
Value proposition Market segment Value chain structure Revenue generation & margins
Position in value network Competitive strategyNirma A low cost branded detergent offering
high value for money People who want to wash clothes Raw materials from local
suppliers.All non-core functions were contracted. Minimum overhead costs.Low cost of
labor.Cheaper polythene packaging. Low margin. High volume. A branded detergent
competing against all (un)branded soaps and detergents. Cost FocusHLL High quality
branded safe detergent. People who are willing to pay a premium for the higher quality High
tech plant.Multi layered distribution network. Higher cost of labour.Higher packaging cost.
Higher margin. A branded product, which faces competition from quality detergent
producers. DifferentiationElements of competitive strategy: NirmaDefining business arena
and competitive terrain:HLL was in the business of selling high quality branded detergents
to middle and high income group customers who wanted quality and were willing to pay
premium for it. HLL served India’s small elite who could afford to buy MNC products. Nirma
Ltd., began offering detergent products for

Nirma"tms Competitive advantageLow Cost ProductThe product"tms cost was so low that its
price automatically comes down. Deep PocketsHLL has very deep pockets. Strategies
adopted by HLL to overcome of PGLaunch of Surf ExcelHLL compressed its conventional
method of product development and launched its new product in 4 months instead of 2
years. Distribution NetworkHLL has a very good distribution network catering to every nook
and corner of the Country. Advertising: Change in advertising campaign showing the
product"tms value in terms of "quality and price"tm. Price: Discounts were offered to reduce
price. They targeted only the premium segment. Price-As the operation cost of Nirma was
very low, the price was also low. Distribution Network-Nirma followed a 3-tier distribution
system compared to HLL"tms 4-tier distribution system, thus keeping its cost structure low.
ATo get rid of export commitment under FERA and to tackle labor problems, the marketing
and distribution activity were given to a subsidiary unit called Stepan Chemicals. Strategies
adopted by HLL to overcome the threats of Nirma were Changes in Marketing Strategy of
SurfPackaging: Offering Surf in polybags than the more expensive cartons. Global AccessHLL
has global access of technology through its parent company Unilever. The Relaunch of
Sunlight-Sunlight was relaunched at a much lower cost as its volume was dropping under
attacks from lower cost producers. Loyal DistributorsNirma distributors displayed intense
loyalty to Patel. It changed its cost structure so that it could afford to come up with a lower
priced product which would still be better than Nirma.
Case Title:

New Distribution Initiatives at HLL

Publication Year : 2005

Authors: Abhijit Sinha & Bitan Chakraborty

Industry: Home Appliances and Personal Care Products

Region:US

Case Code: SDN0011K

Teaching Note: Not Available

Structured Assignment: Not Available

Abstract:
This case analyses the distribution strategy of Hindustan Lever Limited (HLL), the 51.6%
subsidiary of Unilever and the largest FMCG Company in India. Traditionally HLL’s
distribution network consisted of wholesalers and retailers. HLL had presence in 80 lakhs retail
outlets and there was ‘one size fit for all’ distribution strategy to serve all those outlets. But due
to change in consumer demography, consumer behavior and market structure, the traditional
distribution system failed to deliver the results. Urban customers wanted products with unique,
value added and customized offerings with convenient shopping. Apart from this, emergence of
rural market also forced HLL to change its distribution system. HLL dealt with these two issues
differently. For urban market it developed different distribution system cater to different type of
customers. Along with this, it provided value added service, convenience and customized
offering to urban customers. On the other hand, in rural markets, to increase brand awareness and
product availability, it introduced alternative distribution systems. Through these changes, HLL
brought its brands closer to customers. HLL’s approach to distribution was holistic and
developed a three-way convergence of product availability, brand communication and brand
experience.

Pedagogical Objectives:

• To understand the supply chain management and logistics system in FMCG

market
• To understand the effectiveness of logistics system in rural market
• To understand the evolution of market logistics system
• To understand how effective implementation of information technology helps
a company to make its supply chain an efficient one
 • To understand the importance of supply chain
• To understand the different types, nature of the supply chain.

Keywords : Hindustan Lever Ltd (HLL), FMCG (fast moving consumer goods) industry, Lever
Brothers, Hindustan Lever Research Centre, HLL’,s joint ventures, Soap business, Distribution
network, Marketing Strategies Case Study, Channel management, Rural India, Efficient
consumer response, Project Shakti

Contents:

• Background
• The Evolution of HLL's Distribution Network
• The Shifting Paradigm
• Strategy devised for Urban India
• The Hurdles in the Race of Distribution: The Sustainability Factor
• Conclusion

http://www.ibscdc.org/index.asp]

http://www.scribd.com/doc/12950828/Distribution-Management-of-Hindustan-
Unilever-Ltd