Environmental Scanning of Environmental HUL HU L
Prepared Prepare d by : Guntas Kour
(MBA-4507/10) Aditi Chopra (MBA-4556/10)
Introduction of the Organization Hindustan
Unilever Limited (HUL) is India's largest Fa Fasst Moving Co Consumer Goods Company, touching the lives of two out of three Indians with over 20 distinct categories in Home &Personal Care Products and Foods & Beverages. HUL
has enjoyed a competitive advantage as a sole provider of personal hygiene care products before the liberalization of Indias economy. The company's Turnover is Rs. 17,523 crores (for the financial year 2009 2010). HUL
is a subsidiary of Unilever, one of the worlds leading suppliers of fast moving consumer goods with strong local roots in more than 100 countries across the globe with annual sales of about 40 billion in 2009 Unilever has about 52% shareholding in HUL.
Introduction of the Organization Hindustan
Unilever was recently rated among the top four companies globally in the list of Global Top Companies for Leaders by a study sponsored by Hewitt Associates, in partnership with Fortune magazine and the RBL Group. The company was ranked number one in the Asia-Pacific region and in India. The mission that inspires HUL's more than 15,000 employees, including over 1,400 ma nagers,is to help people feel good, look good and get more out of life with brands and services that are good for them and good for others. It is a mission HUL shares with its parent company,Unilever, which holds about 52 % of the equity.
Porters Five Forces Five Forces is a framework for industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. Porter's
It draws upon Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability
P orters Five forces Analysis
P orters Five Force Analysis of HUL
B argaining P ower of
Customers High
bargaining power due to low cost of switching. Price sensitivity in customers. Customers are not reluctant to buy/try new products off the shelf. Product Loyalty can be a favourable factor.
B argaining P ower of
Suppliers Suppliers may determine the cost of raw material and other inputs affecting profitability. But their bargaining power is not very high. Oligopoly in the supplier side i.e. many suppliers available.
T hreat of New Entrants Suppliers accessible. Distributors accessible. Low-cost switching. Market Growth. Cost effectiveness.
T hreats of Substitute P roducts Complex and never ending needs of consumers. Wide range of choices. High expectations
of consumers.
Low-cost switching. Beneficial Alternatives.
Competition within Industry A large number of players. Highly saturated
industry therefore scarce
customers.
Intensive Advertisements and low prices.
Environmental T hreats & Opportunities P rofile ( E TO P )
ETOP Analysis
W hy E TO P? Helps
organization in identifying Opportunities and Threats. To consolidate and strengthen organisation's position. Helps
strategists in appripriate strategy formulation. Helps
to know the current position.
How is E TO P done? Environment is divided in different segments. The impact of each segment is analyzed. Each segment is sub-divided into sub-segments. Impact of each sub-segment on Organization.
E TO P P ros and Cons Pros
Cons
Help
to determine the key factors of threats and opportunities.
Does not show the interaction between these factors.
Help
It cant reflect the dynamic environment.
In strategy formulation.
E TO P Factors
Could Include
Political
International Trade, taxation policy
Economic
Interest rates, exchange rates, national income , inflation rate, unemployment, stock market
Social
Ageing Population, Attitude to work, Income distribution
Technological
Innovation, New Product development
Environmental
Global warming, environmental issues
Legal
Competition laws, corporate laws, employment laws, health and safety
Opportunity Matrix Market
Leaders Brand Awareness and Brand Value. Expansion of horizons - countries beyond Asia.
New products and product lines.
Opportunities in food sectors.
New markets may be available due to increase in disposable income and living standards.
Threat Matrix Increasing competition from Organizations like ITC which has entered sectors like food,retailing.,etc.
Low-cost switching over.
low priced substitutes and new entrants.
Dis-satisfaction or high quality of products of other organizations.
Saturation in industry. Counter fight between its own products like Lux and Lifebuoy.
Conclusion and Recommendations HUL
is certainly the market leader in FMCG sector but there are a few recommendations: HUL lowers the promotion cost so as to save money which is used in promotion more than required and thus increases the profit. HUL aims at customer satisfaction rather than margins and profits. HUL keeps a track of new products and promotion schemes of other firms and design policies accordingly.
Conclusion and Recommendations HUL Adopts the method Segmentation,Targetting a nd Positioning so as to get back all the consumers which it lost to other firms. HUL comes out of the cocoon and try some new fields and come up with some new products. HUL should stop playing the 70s and 80s script of brand extensions and big nationwide ad spend and think beyond that .
T hank You .
