Punjab College of Technical Education
MBA- 2C
Corporate Strategy
Project Assignment
Hindustan Unilever Limited
(HUL)
Submitted To:
Dr. Gautam Bansal, Director, PCTE Group of Institutes, Ludhiana
Submitted By:
Abdullah Alishangi
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The majority part of this project is based on the secondary data from internet, but
here tried to change the web language in to more simple and meaningful language.
Also, here the information’s related to HUL collected from the different resources
based on the requirement of Corporate Strategy Project.
Project Contents:
This project assignment is based on the Hindustan Unilever Limited (HUL);
1) HUL introduction
2) Strategic Diamond of HUL
3) HUL Strategies
4) HUL Business Modal
5) HUL Environmental Analysis
6) & Other Facts of HUL
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Hindustan Unilever Limited (HUL)
HUL is a consumer goods company headquartered in Mumbai, India. It is a
subsidiary of Unilever, a British company.
HUL was established in 1931 as Hindustan Vanaspati Manufacturing Co. and
following a merger of constituent groups in 1956, it was renamed Hindustan Lever
Limited. The company was renamed in June 2007 as Hindustan Unilever Limited.
As of 2019, Hindustan Unilever's portfolio had 44 product brands in 14 categories.
The company has 18,000 employees and clocked sales of ₹34,619 crores in
FY2017–18.
In December 2018, HUL announced its acquisition of GlaxoSmithkline's India's
consumer business for $3.8 billion in an all equity merger deal with a 1:4.39
ratio. However the integration of GSK's 3,800 employees remained uncertain as
HUL stated there was no clause for retention of employees in the deal.
In April 2020, HUL completed its merger with GlaxoSmithKline Consumer
Healthcare (GSKCH India) after completing all legal procedures.
HUL Products
Its products include:
 Foods,
 Beverages,
 Cleaning agents,
 Personal care products,
 Water purifiers
 & other fast-moving consumer goods.
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HUL STP & USP
Segment: Products and services for daily needs
Target Group: Every Indian household especially the middle class
Positioning: Being the largest FMCG company, HUL’s little efforts make a huge
difference in the lives of people
HUL USP
HUL ( Hindustan Unilever Limited ) is India’s largest fast-growing consumer goods
company.
HUL and FMCG
HUL Company Analysis is an interesting one if you are studying India’s FMCG
Sector. India’s USD 70 Bn FMCG market is the major contributor to India’s GDP.
The household and personal care segment is the primary driver and accounts for 50%
of India’s FMCG sales.
HUL and India
With 44+ brands across 14 distinct categories, HUL dominates the FMCG market in
India.
90% of households in India use one or more HUL brands. It has also entered the top
15 global consumer staple stocks list with a current market cap of USD 75Bn.
How Does HUL Position Itself as a Brand
HUL markets itself as a multi-local multinational. It is the Indian subsidiary of
Unilever PLC that holds ~62% of the share in the company and offers international
expertise to the service of local consumers in the broad spectrum of product
categories defined in its mission statement.
HUL offers its products according to the taste and preference of the local consumers
as India is not a homogeneous market. It includes customers from various clusters
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based on their socio-economic attributes and it provides value to customers in terms
of price and quality.
It has a robust competitive performance, with ~85% of its business is gaining
penetration and >90% of business is winning a share of the market. Hence, Forbes
ranked HUL as the most innovative company in India and 8th globally.
HUL Strategic Diamond
Popularly known as the Theory of National Competitive Advantage of Industries is a
strategic tool used by HUL for determining and developing the basis of competitive
advantage needed for international growth and expansion.
1. HUL strategic diamond elements
The HUL strategic diamond elements within the framework are interconnected, and
also interactive, and include HUL Strategy, Structure and Rivalry; Factor
Conditions; Demand Conditions; and Related and Supporting Industries.
For Hindustan Unilever Limited, these conditions and elements have been
particularly favorable in helping the firm boost its growth internationally with
continuous innovation and up-gradation. As a result, by focusing on these elements
and their refinement, Hindustan Unilever Limited has been able to become one of
the eluding beverage brands across the globe in different countries.
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2. HUL Factor conditions
Factor conditions are elements and aspects that provide a competitive advantage to
the industry and its firms. However, unlike natural resources, factor conditions are
usually developed by the country at large. For Hindustan Unilever Limited, the
factor conditions include the following:
 No Plagiarism
 Quality Assurance
 Specialized Writers
 On Time Delivery
a. Natural resources
These are the natural resources available to Hindustan Unilever Limited in its home
country, as well as in the countries where it has set up operational and production
plants. These include, for example, the presence of natural resources such as water
channels. These natural resources are available to a firm because of its location and
are relatively cheaper for the firm to access. They do not need to be developed or
created but refined for usage generally.
b. Capital resources
These include the financial resources that are available to Hindustan Unilever
Limited. For Hindustan Unilever Limited, these are available through equity capital
resources and debt financial resources. Equity-based capital is largely generated
within the company, using internal resources and channels only. Debt-based capital,
on the other hand, involves debt taking from external sources and organizations.
c. Human resources
This includes the skill levels, and performance of the human resources at the
Hindustan Unilever Limited. It also involves the training programs and all other
investment programs undertaken by Hindustan Unilever Limited in relation to its
human resources and employees across the globe. It also includes all human resource
functions from recruitment to performance management which work towards
employee development and growth.
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d. Scientific knowledge
This involves the scientific and technical knowledge available to a firm and its
knowledge base. This may be acquired through countrywide resources, industrywide resource, or resources specific toe firm. Scientific knowledge is important for a
firm in developing a competitive advantage that helps it stand out from its competing
players.
e. Technological innovation
The presence of scientific knowledge will also lead to frequent innovations –
technologically s well as otherwise. Technological innovations are important in
helping firms achieve economies of scale and reduce overhead costs and other
operational costs to be able to expand into other markets with profit maximizations.
f. Infrastructure
The infrastructure is also an important factor condition for Hindustan Unilever
Limited which has helped it grow and expand- not only locally but also globally. The
infrastructure includes the physical as well as the technological network that has
allowed Hindustan Unilever Limited to successfully complete and carry out
operations in other countries and markets.
This infrastructure is largely developed by the country itself based on internal
resources. However, in cases of firm need and market potential, firms such as
Hindustan Unilever Limited have also engaged in developing the local infrastructure
– which has not only helped the firm in the development but has also led to the
growth and development of the society and market where it has expanded to.
3. Related and supporting industries for HUL
The presence of supporting and competing players in the industry provide positive
pressure and encourage mantra to players in the industry towards excelling and
expanding through innovation and internationalization. For Hindustan Unilever
Limited, the supporting and related industries have also been particularly helpful in
leading the brand into achieving new heights with every passing year.
a. Presence of related industries
The presence of related industries in domestic and international markets has also
been a source of growth and development in terms of expansion and
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internationalization for Hindustan Unilever Limited. This is because related
industries have helped Hindustan Unilever Limited in the business operations by
providing support materials needed for successful operational excellence. Hindustan
Unilever Limited, for example, has been able to source packaging materials, and raw
materials locally in different consumer markets, which have helped it control costs
and expenses, and achieve economies of scale.
b. Presence of supporting industries
The presence of supporting industries is a facilitator for Hindustan Unilever Limited
in growing and expanding its business. This is true for the presence of supporting
industries in domestic as well as international markets. In domestic markets,
supporting industries have helped the development of the overall industry, which in
turn has also allowed firms like Hindustan Unilever Limited in progressing and
developing in business operations and attracting consumers and creating awareness
in customer markets for product awareness and recognition.
c. Presence of rival industries
The presence of rival industries is also an important factor for the growth and
development of business operations and growth for Hindustan Unilever Limited
internationally. This is because rival industries have pressured the firm’s own
industry into developing, and advancing to be able to perform better and maintain its
share of the consumer pie in the market. In pressuring Hindustan Unilever Limited’s
industry and related firms towards excelling and efficiency, rival firms also pave the
path for growth. This is either done by pressuring the firm’s industry to explore new
markets, or by expanding first and allowing the firm’s industry to copy the
expansion prices. For Hindustan Unilever Limited, rival industries have pressured
the company to not only perform better but explore new markets for increasing
revenue streams.
d. Presence of strong global suppliers
The presence of strong global suppliers is one of the most important and basic
sources of developing competitive advantage for international markets, and for
ensuring product availability across different consumer markets. Hindustan Unilever
Limited has a strong network of global suppliers which help it distribute its products
to different consumer markets, and make them easily visible and accessible for
consumers. These global suppliers are selected against defined criteria and
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benchmarks to ensure quality consistency and effective processes throughout the
markets.
4. HUL Strategy, Structure, and Rivalry
This refers to the company’s strategic focus and its managerial and organizational
structure and architecture. The organizational leadership and set up is important for
determining the international expansion of the company and firm. For Hindustan
Unilever Limited the organizational structure, and set up as well as the strategic
vision and decisions have been important in facilitating the company’s international
growth and expansion.
a. Company strategy
Hindustan Unilever Limited’s strategy is to focus on customers to provide them with
high-quality products that offer continually consistent quality and taste in the
offering. Hindustan Unilever Limited promises value for money and satisfaction to
customers and designs its strategic focus and decisions in the same manner – to
allow maximization of value for money to customers through efficient processes that
also lead to cost-saving for the company.
b. Structure of the organizations
Hindustan Unilever Limited is a flatter organization that supports open and free
communication. The company offers easy and quick access to managers and
supervisors, and thus allows a creative and trusting organizational culture that helps
in the growth and progress of the company. Moreover, the flatter organization also
allows employees at Hindustan Unilever Limited to easily approach and discuss
matters with the leadership at Hindustan Unilever Limited.
c. Managerial system
The managerial system at Hindustan Unilever Limited is supportive that works
towards employee growth and development. Supervisors and managers work
continually with employees to help them develop personally and professionally.
Hindustan Unilever Limited has designed a number of different training programs
for the same purpose, and employees have suggested these programs based on their
skill gaps, and performance levels.
d. Intense competition between local rivals
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Competition with local rivals influences its strategic development and focus. The
company is often pressured into creatively exploring novice ways and technology to
incorporate these into its routine operations. In this way, intense competition with
local and domestic players has allowed Hindustan Unilever Limited to introduce
novice processes and technologies to develop unique competitive and cost
advantages for Hindustan Unilever Limited to help it attract a greater number of
consumers.
e. Competition with global players
With global competition, Hindustan Unilever Limited has gained an understanding
of different regional and international business practices and cultures which have
helped it develop more intricate, and region-specific products and offerings. The
global competition has also allowed Hindustan Unilever Limited to predict global
trends and consumer behavior patterns which in turn have allowed the firm to
maintain a competitive advantage internationally.
5. Government
This refers to how governments can influence firm performance and its growth plan
through its various policies as well as border relations with other countries one
global front. For Hindustan Unilever Limited, government policies and structures
across different countries have been particularly favorable.
a. Government policies
Government policies have supported Hindustan Unilever Limited in its expansion
and growth plans and opportunities. Hindustan Unilever Limited has received
support from its home country for expanding production capacities, and also from
foreign governments in setting up plants and gaining access to import and export
quotas for different regions. Moreover, the government trade policies between
different countries have also benefited Hindustan Unilever Limited in expanding its
business internationally.
b. Industry regulations
The industry regulations for Hindustan Unilever Limited have also been supportive
of the firm in maintaining and developing its competitive advantage towards
sustainability. Industry regulations for Hindustan Unilever Limited also ensure the
consistent maintenance of quality in Hindustan Unilever Limited products.
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Moreover, industry regulations have also allowed Hindustan Unilever Limited to
develop efficiency in its products through technological advancement, and the
development of scientific and technological knowledge for supporting business
advancement.
c. Government as a catalysts
The government has acted as a catalyst for Hindustan Unilever Limited on a number
of occasions. By being a catalyst, the government has supported Hindustan Unilever
Limited’s business operations and developmental plans. This has been done by
providing the company with infrastructural capacities and benefits for example. The
government has also been a catalyst in facilitating the business meet its demand, and
with its various internal consume related policies and regulations which have
allowed Hindustan Unilever Limited to design marketing programs and develop
products that meet the needs of consumers locally as well as in other markets.
d. Government as a challenger
The government has also been a challenger for Hindustan Unilever Limited. This has
also helped the business in its growth strategy. The government has been a
challenger especially in its relation with other countries which in turn have had an
impact on the business relations that Hindustan Unilever Limited has with foreign
consumers and markets, as well as foreign agents and distributors. However, these
challenges that have sprouted from the governments and its relations with other
countries and regions, have helped Hindustan Unilever Limited develop contingency
plans and have helped it develop strategies to be able to use strengths to ward off
potential threats and weaknesses successfully.
6. Chance events
Chance events in the model refer to those events and conditions in potential markets
that are not likely to occur with surety but instead, will provide opportunities, or
threats to firms on their occurrence – depending on the risks taken by the firms. For
Hindustan Unilever Limited, chance events have included:
a. Random events
Random events may affect the Hindustan Unilever Limited business positively or
negatively – depending on the nature and timeliness of occurrence. Random events
have influenced Hindustan Unilever Limited in different manners, depending on how
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they impact the business operations and marketing communications of the company
at large. Random events are important for Hindustan Unilever Limited for its
business growth and operations internationally in search of new opportunities, as
well as to overcome threats and problems in existing markets.
b. Natural disasters
Natural disasters block the business for Hindustan Unilever Limited in their
occurrence. Business activities and operations for routine are disrupted and often
halted because of natural disasters. Additionally, consumer markets and activities are
also halted and disrupted – and often channeled towards other behavior and activities
which lead to disturbing the product activities, and business operations for Hindustan
Unilever Limited.
c. Scientific breakthroughs
Scientific breakthroughs support the operations and activities of Hindustan Unilever
Limited by providing it with support and advancement opportunities technologically
s well as for operational processes. Hindustan Unilever Limited has benefitted from
scientific breakthroughs in its internationalization processes and plans by having the
technological knowledge and advancement that supports its production capacities
and other business operations and activities.
d. Terrorist activities
These hamper business operations and activities for Hindustan Unilever Limited by
blocking its access to specific consumer markets and regions. The company is unable
to carry out the operation in regions targeted with terrorist activities with respect to
not only production but also import quotas. Moreover, terrorist activities also
influence sales and marketing campaigns of the com0any in specific regions –
depending on the political friction of the government with other governments and
markets.
7. Demand conditions
Demand conditions are those events and conditions that lead to the success of a firm
in any given market Local, and home demand is important in not only exposing a
firm to the challenges of a bigger market, but are also important I pushing the firm
towards expansion, and possibilities of expansion.
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a. Size of the domestic market
The size of the domestic market has been important for Hindustan Unilever Limited
in its internationalization and expansion measures. This is because of two primary
reasons. Firstly, the increased size of the local markets and domestic consumers is
important for companies to understand the dynamics at play with larger markets, and
helps them strategize, and plan operations accordingly. This increased market size
and domestic players have allowed Hindustan Unilever Limited to measure and
identify its own strengths and weaknesses with respect to growth, and contain them
accordingly. Secondly, larger market size is also important for pushing the firm, and
brand into exploring the possibility of expansions and new markets.
b. Sophisticated and demanding domestic customers
Sophisticated and demanding domestic sounders for Hindustan Unilever Limited
have pushed the firm into utilizing its resources towards innovation, and have led the
firm into developing unique products for the customers. With demanding domestic
consumers firms such as Hindustan Unilever Limited have been able to realize their
crate and innovative capabilities, and have put them into use to develop new
products, or processes to help the business grow.
c. Customer needs that anticipate those elsewhere
Domestic consumers and consumer behaviour patterns are also important for
predicting and anticipating the behaviour and demands of consumers in other
markets. For consumers with the same profile, companies can often predict behavior
of market-specific consumers in relation to the behaviour displayed by the same
profile consumers in other markets.
Firms like Hindustan Unilever Limited can also influence the behaviour of the
consumers in one market based on the response they have received in another
market. This is important for strategic development within the firm for global
strategies as well as global expansion and development in other countries and
markets.
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HUL Strategic Business Divisions
HUL has classified its business into four broad divisions. Given below is the division
wise revenue contribution.
 Home care ~35%
 Beauty & personal care (BPC) ~45%
 Food and refreshment ~19%
 Others ~1%
Total revenue for HUL in FY 2020 was Rs. 38,785 with YoY growth of ~3%. BPC
segment is discretionary, and its demand is more affected by macro-economic
factors; still, it continues to be a significant driver and generates ~45% of revenue
for the company.
HUL continues to strengthen its market position in the BPC segment by driving
penetration in core brands, such as Dove, Ponds, Sunsilk, and dominate the hair care
and skincare category market.
Specific Growth of HUL Strategic Division Units
If we look at the growth of these segments over the last 5 years, we can see that the
Foods and refreshment segment and Homecare are growing at par. The foods and
refreshment segment is expected to show signs of significant growth because of its
recent acquisition of GlaxoSmithKline Consumer Healthcare (GSKCH).
Growth in other segments, including infant and feminine care, is declining
significantly. HUL is trying to improve its market position in these segments by
adding new products in this category after its recent acquisition from Glenmark
Pharmaceutical.
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Profitability of HUL Operational Strategy
HUL operates at a gross margin of ~70%, PBT of ~23%, and a net margin of
18%.
The beauty and personal care segment is the major contributor and accounts for
2/3rd of the profitability for HUL.
FMCG business operates on reasonably low margins, as you can see that net margins
for HUL over the last five years is in the range of 12-17%. But the efficiency of the
business depends on churn rate and inventory management.
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HUL Expends on Advertisement strategy
implementations
The interesting thing to note over here is, they spend just over 12% on Advertising
and Promotions.
Principles of HUL Business Model
Hindustan Unilever Limited identified its purpose as making sustainable living a
commonplace. It, though, was further accentuated by their 2009 tag‘Our strategy for sustainable growth.’ They believed profoundly in sustainable
living. The principles are however as follows A better future for children
 A more confident future
 A healthier future
 A better future for the planet
 A better future for the farming and farmers of India
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HUL Business Model History
Around the 19th century, a renowned social reformer called William Hesketh Lever
was the main propagator of measures for employee welfare like health benefits,
savings plans, etc. imbibed Unilver with a strong sense of corporate responsibility
and leadership. It became the most inbuilt culture of Unilever, passing on to
Hindustan Unilever Limited inevitably.
Unilever first came in a country like India, which had a nascent market too large
with an immense number of possibilities and opportunities. They established three
companies between the years 1931 to 1935- the Hindustan Vanaspati Manufacturing
Company, which created edible oil, Lever Brother India Limited that created soap,
and United Traders who specialized in personal products.
These three companies were then put under a single unit in 1956 to form the
Hindustan Lever Limited. In the coming four decades, Hindustan Lever Limited
represented the entire business of Unilever in India.
Hindustan Lever Limited gained a reputation for being an Indian company and not a
multinational company. Thus, HUL went on to contribute to the rural segment of
India with projects to improve their quality of living, and
sustainable development became the primary motive.
By 2010, HUL became India’s one of the largest exporters and the biggest FMCG
company that leads the market with its personal and home products with its reach
over 600000 villages and counting.
The core competency of HUL
The network of Hindustan Unilever Limited is about 7000 redistribution stockists
that are covering about 1 million direct outlets. It leads to total coverage of 7 million.
Hindustan Unilever Limited has over 2000 suppliers as well as over 7500
distributors who serve Hindustan Unilever limited’s hundreds of decentralized
factories.
The point of purchase for Hindustan Unilever’s products is at a higher level of direct
constant through in-store facilitators, education, experiences, and sampling.
Their supply chain capabilities are such that it leads to self-service stores and
supermarkets.
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Key partners of HUL
The key partners of Hindustan Unilever Limited are as follows Investors
 Acquisitions
 Retailers and distribution network
 Providers along with the supply chain
 Farmers
 Regulators
 Advertising Agencies and Media.
HUL Business Model Patterns
Hindustan Unilever Limited has several business model patterns that can be analyzed
and individually dissected as prime examples of business strategies that enable the
world as well as gain profit.
1. Reverse innovation
This technique, implemented by Hindustan Unilever Limited, has been an excellent
example for other big brands. The famous HUL product ‘Knorr Stock Pot’ was a
creation leading to the renowned approach of reverse innovation.
They took inspiration from other big brands that created products being purchased at
a high rate. The first nation to launch in 2007 was China’s ‘Dense Soup treasure,’
where soup consumption is at its peak. Chinese people loved the way the convenient
process of cooking soup enabled them to save time and consume something
delicious at the same time.
The simple and affordable products were made within and for several
emerging markets and sold in Industrial countries. The term ‘reverse’ itself means
that the process of creating new products for industrial countries and then adapt it to
fit the emerging needs of the market.
2. Target the poor
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Hindustan Unilever Limited has made products preferably to suit the needs of the
majority of Indian consumers. In the 1990s, Hindustan Unilever came up with a
laundry detergent called Wheel, which was developed from the Indian market.
The detergent had lower oil-to-water ratio, making it suitable to wash textiles in
rivers solely with hands as the majority of Indians use this method in India. The
product has been distributed in a manner that it was available in several local corner
shops as well as sold from door-to-door by sales representatives.
3. Triple Bottom Line
Hindustan Unilever Limited has a new take on the triple bottom line that truly
defines the actions of a business that cares to not only gain profit but to also care for
its people and the planet.
The new movement by the rebranding of the product ‘Fair and Lovely’ to ‘Glow and
Lovely’ was more of a cultural issue that they rectified in the wake of the All Black
Lives Matter movement. This way, Hindustan Unilever Limited portrays itself as a
multinational company that cares for its consumers’ opinions.
4. Massive Distribution Strategy
They focus on hypermarkets, wholesalers, and cash and carry, small convenience
stores, other fast-growing channels like e-commerce, and out-of-home and direct-toconsumer to distribute their products to. Consumer insights are given high
importance.
5. Project Shakti Amma
This project has enabled several rural women in villages across India to
become entrepreneurs and get nurtured through their financial independence. The
women entrepreneurs are called Shakti Ammas, who are trained in basic principles
of distribution and management familiarization with the products of Hindustan
Unilever Limited.
The Rural Sales promoters coach these Shakti ammas by familiarizing them with the
products of HUL to manage their businesses better. Rural India got more exposure to
HUL products as well as enabled them to be successful and independent
entrepreneurs.
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6. HUL Direct-to-Consumer Business Model Concept
Thus, Hindustan Unilever leverages on a direct-to-consumer business model
generating a high amount of revenue.
With a large assortment of products achieving high income as well as building
relations with customers, Hindustan Unilever Limited made its success through
innovative distribution models like Shakti Amma and other such methods.
How inspiring do you find the business model of HUL? Do you have some pros or
cons of the Hul business model that you would like to share in the comments? Feel
free to share your views in the comment section.
Internal & External Factors that Affecting HUL
1. HUL Strengths ( Internal Factor )
a. Leader in FMCG Market
Two out of three Indian consumers use HUL products, according to Nielsen Study.
To establish itself as a market leader in the Indian market, HUL has adopted a
targeted approach in the supply chain & other things.
b. Most Preferred Brand
From soap to mineral water, HUL shapes the lives of 1.3 billion people every day.
HUL’s presence in the consumer market with its 20 categories such as soap, tea,
detergent, shampoo, etc., and its wide range of products has helped it occupy a large
share of shelf space in grocery and department stores, which explains the
acceptance/demand for its products in the market.
c. Innovations
Hindustan Unilever Research Center (HURC), Mumbai, and Unilever Research
India, Bangalore, both research facilities were merged at one location in Bangalore
in 2006. The people at this facility are continuously working on developing
innovations in products and manufacturing processes that will help HUL establish
itself as a frontrunner in the consumer goods market.
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d. High Brand Awareness
HUL generated positive word of mouth over the years by enlisting celebrities to
promote their brands. This allowed them to socially anchor their brands, which were
intelligently tailored to different income brackets.
e. Wide Range of Products
It offers product categories, namely, oral care, personal care, household surface
care, textile care, and pet food, etc., and has a wide range of products in all product
categories.
f. Strong Promoter
With more than 80 years of experience in the consumer goods market and backed by
Unilever, which owns 67% of HUL, the company is financially strong.
g. Huge Market Share
Due to high market penetration, HUL has managed to maintain its high market share
in various product categories.
h. j. Comprehensive and automated supply chain
HUL products are now a household name thanks only to the four-tier distribution
system.
1. Direct coverage within a city of fewer than 50,000 people through a popular
speciality retailer.
2. Indirect coverage: targets were villages closer to broader commercial markets.
3. Streamline Use of the rural wholesale market to access markets that are not
accessible by road.
4. the Shakti Project targets existing SHGs (self-help groups) for women in small
villages. Based on their accessibility and business opportunities, the markets have
been segmented.
i. Social Media
HUL has a strong social media presence with millions of followers on the three
most popular social networking platforms: Facebook, Twitter and Instagram. The
company has a high level of customer engagement with a low response time on these
channels.
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j. Most Reputed Brand
The brand has always been recognized as a leading FMCG company and enjoys an
excellent reputation.
k. Marketing
HUL products have good visibility thanks to strong advertising via TV ads, print ads,
online ads, social media engagement and digital marketing.
2. HUL Weaknesses ( Internal Factor )
a. Declining Market Share
competitors focusing on a particular product eating up HUL’s share, such as Ghadi
& Nirma detergents eating up HUL’s market share in wheel washes.
b. Large selection of brands in various product categories
A large portfolio of brands often leads to incorrect positioning. Price placement in
some segments ensures low price competition, such as the market share gained by
Amul from Kwality.
c. Limited Market Share
The market share of HUL is limited due to the presence of other strong FMCG
brands.
Also, Read The SWOT Analysis of Nestle ( One of the Largest Competitors Of
HUL ( Hindustan Unilever Limited ) ).
3. HUL Opportunities ( External Factor )
a. Expanding the market
Greater penetration of rural markets through Project Shakti AMMA and the
transition from unorganized to organized enterprises will lead to further expansion of
the consumer market.
b. Awareness of the use of consumer products
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advertising, word of mouth and medical prescribing raise people’s awareness of the
use of consumer products, leading to an increase in the rate of use of these products.
c. Growing income level
due to a stable political situation, higher literacy rate and regulated inflation,
people’s disposable income is increasing, leading to higher demand and changing
lifestyles.
d. Ayurvedic products
May start manufacturing or marketing Ayurvedic products under the brand name of
HUL.
e. Partnerships
Mergers and acquisitions can further strengthen the brand in a long run.
4. HUL Threats ( External Factor )
a. Market competition
with the increasing number of local and national suppliers, it is becoming very
difficult for businesses to differentiate themselves from others. There is also a risk of
counterfeit products destroying the brand image in the market.
b. Price of raw materials
Rising prices of raw materials will lead to further increases in prices. The further
price increase will lead to a decrease in sales, profit margins and brand switching.
c. Buyer Power
In a highly diversified consumer goods market, where many brands are promising
different benefits, it is very difficult for consumers to get loyal to a particular brand.
This leads to brand switching where consumers have the power to choose a brand
based on various factors such as availability, recommendations from reference
groups, preferences and price.
d. Government regulations
Changing government norms and regulations can also directly affect business
policies and practices.
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References
Main Resource:
HUL website and google articles, research papers, Graphs, fact tables related to
HUL.
Other Resources:
Bakan, I. and Doğan, İ.F., 2012. Competitiveness of the industries based on the
Porter’s diamond model: An empirical study. International Journal of Research and
Reviews in Applied Sciences, 11(3), pp.441-455.
Dagnino, G.B. ed., 2012. Handbook of research on competitive strategy. Edward
Elgar Publishing.
Eickelpasch, A., Lejpras, A. and Stephan, A., 2010. Locational and internal sources
of firm competitive advantage: Applying Porter’s diamond model at the firm level.
Fainshmidt, S., Smith, A. and Judge, W.Q., 2016. National competitiveness and
Porter's diamond model: The role of MNE penetration and governance quality.
Global Strategy Journal, 6(2), pp.81-104.
Harding, S., 2017. MBA management models. Routledge.
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Márkus, G., 2008. Measuring company level competitiveness in Porter's Diamond
model framework. In FIKUSZ 2008 Business Sciences-Symposium for Young
Researchers: Proceedings (pp. 149-158).
Ozgen, E., 2011. Porter's diamond model and opportunity recognition: a cognitive
perspective. Academy of Entrepreneurship Journal, 17(2), p.61.
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