Professional Documents
Culture Documents
Vision
HLL formed a 50:50 joint venture with the US-based Kimberly Clark
Corporation in 1994
BUSINESS
Home & Personal Care Foods
• Personal Wash • Tea
• Fabric Wash • Coffee
• Home Care • Branded Staples
• Oral Care • Culinary Products
• Skin Care • Ice Creams
• Modern Foods ranges
• Hair Care
• Deodorants & Talc
• Colour Cosmetics
Current
markets
HLL’s business principles helped create a new detergent market among the
poor in Brazil- ALA is a huge success
Response of HLL
Testing
Packaging fragrances
Test markets
If successful, capacity
New Process
Surf Ultra
Market by September
1991
Revamping the company
processes
Elaborate segmentation and positioning exercise carried out
HLL went on top become the lowest cost and highest quality producer in
a variety of products, both within existing categories and in new areas
ANALYSIS OF FINANCIALS
Year
Particulars
1982 1983 1984 1985 1986 1987 1988 1989 1990 1991
Fixed assets 8202 8114 8432 9472 10828 12556 14747 17126 18770 20113
Net current assets 8585 8530 11023 12956 11983 17879 17603 18545 22674 25471
Total capital employed 16787 16644 19455 22428 22811 30435 32350 35671 41444 45584
Shareholders's funds 11498 11333 12425 14281 16522 18349 20607 22852 25538 29110
Sales ( with excise) 52623 58240 63424 72586 84459 95331 102106 121642 146027 177529
Profit before tax 4455 4222 4401 5556 6507 7829 7938 8961 11074 13770
Profit available for distribution 2331 1913 2128 2551 3429 3775 5264 6015 7403 10000
Retained earnings 1602 863 1008 1151 1843 1442 2278 2749 3438 4610
Dividends 729 1050 1120 1400 1586 2333 2986 3266 3920 5390
No. of shareholders 91549 93694 98313 104780 111849 119912 129010 127761 129505 136404
• Marginal increase in turnover from 1990 to 1991 which did not translate into an
increase in operating profit
• Return on capital employed fell from 17.3 % in 1990 to 16.4 % in 1991
• Net gearing declined drastically by over 30% from 36.7 % in 1990 to 27.9 % in 1991
• Net interest cover increased by 17% to 7.5
• The sales for soaps and detergents has remained same,personal products has almost
doubled
• The foods portfolio sales have almost halved
• HUL has exited the chemicals, agri, fertilizers and animal feeds market
• EBIT as a % of sales has fallen from a peak of 18.4 % and stagnated at around 13 %
Foods portfolio
Objective
To enhance the value of the products and the brand
Various brands in the food and beverages portfolio are integrated into one
segment - Foods portfolio
Consolidation of the brands in the minds of the consumers to ensure higher brand
recall and to increase the bottom line
Segregation of the gamut of tea brands into two mother brands, Lipton and Brooke
Bond each catering to a different segment of the market
Consolidation of the tea portfolio with 23 brands under the mega-brand Brooke Bond
and reinvention of the supply chain management
The business units are set up based on the brands and the 30 stock keeping units
are flushed to ensure quick turn around time and easy availability
Sales & Distribution Strategies Of
Business Strategies -
“The company will compete with low price competitors by playing to their
strengths - using strongest brands backed by superior technology and the
lowest cost supply chain”.
“There is a big opportunity to grow processed foods, which are still a very
small proportion of the overall largely, commoditized foods market”, HLL
chairman M S Banga said
Corporate Strategy -
The new sales organization named 'One HLL' brings "Household and
Personal Care" and foods distribution networks together, thereby aligning
all the units towards the common goal of achieving success.
HLL has been continuously able to grow at a rate more than growth rate
for FMCG Sector, thereby reaffirming its future stronghold in Indian
market.
HUL’S DISTRIBUTION
NETWORK
Hindustan Unilever covers the consumers mainly with the
combination of C&F and stockists who indirectly deal with
the retail outlets .
HLL has come up with a unique and successful initiative wherein the
women from the rural sector market HLL products, and hence, are able
to reach the same wavelength as of the common man in village.
Apart from product reach, the initiative also creates brand awareness
amongst the lower strata of society.
Functional Strategy -
Consider Sunsilk - To perk up volumes, HLL occupied various price points:
It also introduced 100-ml “smart packs” targeted at small towns with a price tag
of Rs 35.
(The cost of a 50 ml bottle of Sunsilk).
This was a ploy targeted at the heavy sachet users to upgrade them into bottle
usage.
Recently, HLL launched a mega promotion which offers prizes ranging from 2.5
kg of gold to gold coins to those who collect sachets of shampoos.
Growing consumer base due to increasing income levels and new consumers
from lower strata of the society
Growing consumption in Out of Home categories.
Leveraging the latest IT technology
Untapped market in branded Ayurvedic medicines and other such consumer
products.
Opportunity in Food sector: changing consumer tastes- Expansion of horizons
towards more and more countries
SWOT Analysis
Threats