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Hindustan Lever

Case 15-4

One of the most respected MNC operating in

India Core brands were maturing HLLs Strategy:


Focus on innovation Prioritized opportunities which built upon existing assets

and capabilities Avoided Management talent to work on too many projects

Entered rural market through Breeze 2 in 1 In 1995, launched Kissan Annapurna iodized salt
Strong competencies in marketing and R&D

Partnership with manufacturers


Cost competitiveness due to competition from local

marketers Encapsulation technique to retain iodine in the salt

Describe and evaluate the Strategy employed by Hindustan Lever during 1995-2002 to grow their Top-Line

Focus on Innovation

Entered rural markets


Prioritized opportunities which built upon

existing assets and capabilities


Avoided Management talent to work on too

many projects
Partnership with the manufacturers
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Evaluate the controls and organization used by Hindustan Lever to implement its growth initiatives in Kissan Annapurna Iodized Salt

Extensive research and development


Partnership with the manufacturers Used rural marketing network of soaps and

shampoo
First emphasized on purity, then on health and

finally on encapsulation technique


Demonstration vans, health charts in schools,

Annapurna scholarships
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Monthly review of financial results at corporate

What criteria would you use to select from the many growth proposals that have been submitted to the chairman, Mr. Banga? Why do you choose these criteria?

1) Blend of financial & non-financial measures is required 2) Non-financial measures are used at low levels for task control 3) Financial measures are used at high levels for management control

FINANCIAL MEASURES
Sales (value) Expenses Budget compared to actual value 8

NON FINANCIAL MEASURES


o Customer satisfaction o Product quality o Employee development o Productivity improvement o Implementation of new

of sales Sales (quantity) Net income Contribution margin Budget compared to actual net income Budget compared to actual expenses Return on sales Return on equity

products / services
o Environmental compliance

Given you decisions, what practices and processes should HLL retain?

What new practices and processes will have to be developed?

Retain:

Focus on Innovation
Continuous R&D Marketing strategies Encouragement to all the levels of management for

new ideas
New processes and practices to be developed: Better forward integration Logistics management Joint ventures
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Thank You

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