Case Study Of HINDUSTAN UNILEVER LIMITED

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INTRODUCTION :

Case Study Of HINDUSTAN UNILEVER LIMITED - It is India’s largest fast-moving consumer goods company, touching the lives of two out of three Indians with over 20 distinct categories in home & personal care products and food & beverages. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of over Rs. 13,000 crores. HUL is also one of the country’s largest exporters; it has been recognized as a Golden Super Star Trading House by the Government of India. The Anglo-Dutch company Uni lever owns a majority stake (52%) in Hindustan Unilever Limited.
Lever Brothers started its actual operations in India in the summer of 1888, when crates full of Sunlight soap bars, embossed with the words “Made in England by Lever Brothers” were shipped to the Kolkata harbor and it began an era of marketing branded Fast Moving Consumer Goods (FMCG).
Hindustan Lever Limited 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, 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 to ³Hindustan Unilever Limited´. The objective of carrying out case studies was to critically analyze various facets of working of these organizations in general and the processes followed for achieving strategic flexibility. These case studies were conducted in a phased manner starting from the evolution of the need for achieving strategic flexibility with the help of dynamic capabilities in different manufacturing organizations. The present status, performance and financial indicators, and the process of dynamic capabilities achieved have also been studied. A detailed analysis of the case studies has been carried out and their results have depicted the industrial scenario regarding the research objective.

Business Strategy :

Our nutrition strategy focuses on better products, better diets, and better lives. a long heritage of quality products. We have a long heritage of contributing positively to people’s diets. Our brands such as Knorr and Lipton have offered wholesome and great-tasting products for over 100 years. We have set ambitious nutrition targets that are embedded into our business and R&D strategy.

HUL Approach :

We ensure our program on nutrition responds to people’s concerns and is aligned with guidance from public health authorities, such as the WHO Global Action Plan for the Prevention of Non-Communicable Diseases 2013–20.

HUL nutrition strategy encompasses :

Better products: We continually improve the nutritional quality of our products while not compromising on taste. Our tea brands Brooke Bond Red Label and Lipton are tasty, healthy beverages that are refreshing and hydrating. Our children’s Edible Ice/Frozen Dessert products meet strict nutrition standards. We are also gradually reducing the sodium content of Knorr Soups and Kissan ketchup/sauces portfolio to meet the sodium benchmarks in line with Unilever’s Highest Nutrition standards.

Better diets: Through our marketing communication, we encourage more nutritious cooking. We promote healthy recipes on the product pack and online. We have always supported and continue to lend our support to mothers in making delicious yet wholesome meals for their children.

Better lives: Our campaigns encourage people to adopt more healthy diets and lifestyles, for instance, the Lipton Green Tea ‘Home to Home, The Facts of Fat’ campaign.

Company Facilities :

Hindustan Unilever owns 45 main units and has over 50 third-party units in India with a range of 65 brands spanning 20 distinct categories such as food and healthcare, soaps, detergents, shampoos, skin care, toothpaste, deodorants, cosmetics, tea, coffee, and water purifiers, etc. Its main portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Walls and Pureit. The Company has over 16,000 employees and has an annual turnover of around Rs. 21,736 crores (financial year 2011 – 2012). HUL is a subsidiary of Unilever, one of the world’s leading suppliers of fast-moving consumer goods with strong local roots in more than 100 countries across the globe with annual sales of about €46.5 billion in 2011. Unilever has about 52% shareholding in HUL.

Business Performance of HUL :

For the year 2017-2018, the domestic consumer business of the company grew by 20% with 11% underlying volume growth. Profit Before Interest and Tax (PBIT) grew by 27% with the PBIT margin improving 146 basis points. Profit After Tax but before exceptional items, PAT (bei), grew by 24% to Rs.2,790 crore with Net Profit at Rs.2,891 crore growing 21%. About 63% of the total portfolios of the company were touched by innovations during last year. About one million new stores were added by the company, and the coverage doubled during last year. The company’s net profit grew by 19%.

Human Resources :

The Company has a very large employee base with over 16,000 employees working for the organization. The company gives special emphasis on organizing various programs for imparting training and knowledge to the employees to enhance their skill level. One such management trainee program is the Unilever Future Leaders Programme (UFLP) which has trained managers who have later occupied leadership positions across Unilever globally.

HUL Leadership management :

The company also gives special emphasis on providing multiple forums for learning. These forums include quarterly webcasts, continuous guest sessions with industry leaders, and learning portals to ensure an informal flow of best practice sharing among employees. The employees are encouraged to work anytime or from anywhere as long as business needs are fully met and performance is determined by results, not ‘time’ or ‘attendance’. Many initiatives to support the personal vitality and work-life balance of the employees have been taken by the company. These include a daycare center for children of the employees at head office, options for games and physical fitness on campus, and a platform called ‘My Clubs’ which helps employees form collaborative interest groups. These interest groups include a food club and a dance club.
The company’s Human Resource agenda for the year was focused on strengthening four key areas: building a robust and diverse talent pipeline, enhancing individual and organizational capabilities for future readiness, driving greater employee engagement, and strengthening employee relations further through progressive people practices at the shop floor.

R&D, Innovation, and technology :

Hindustan Unilever Limited has a very strong R&D base with R&D labs in Mumbai and Bangalore. These labs are significantly aligned to the company’s global R&D. The R&D programs of the company are focused on the development of breakthrough and proprietary technologies with innovative consumer propositions. The R&D team of over 750 people includes highly qualified scientists and technologists working in the areas of Health and Hygiene, Laundry, Household Care, Skin Care, Water Purification, Beverages, Frozen Dessert, and Naturals. The R&D group also comprises critical functional capability teams in the areas of Regulatory, Clinicals, Patents, Information Technology, Safety, and Open Innovation functions.
> Some of the major innovations during 2011-2012 include :
•Launching of Fair & Lovely Spot Corrector Pen, Pond’s White Beauty daily spot-less lightening cream with proprietary photoprotection technology delivering SPF 20 PA++ and Fair & Lovely Anti-Marks
•In Skin Cleansing, the company has launched Lux and Hamam soaps, including a new variant on Lux, Lux liquid hand wash and body wash along with a range of facial cleansing products from Pond’s, Fair & Lovely, Vaseline, and Dove.
•New variants of the Dove hair care range, including shampoo, and conditioner were launched. Clear shampoo was re-launched with a superior formula and a separate range for men and women.
•Pepsodent Germicheck was re-launched with an improved formulation last year. Fire-Freeze, the new dual-sensation extra-freshness variant of Closeup was introduced during the year.
•Food R&D of the company made a significant contribution in 2011-12 by delivering several innovations in the market. Among them was an exciting range of instant soups under Knorr with the great taste of soups and crunch of croutons.
•In the Instant Coffee segment, R&D delivered two major products and packaging innovations – Bru Gold, a premium agglomerated 100% instant coffee, and Bru Exotica, a range of single-origin freeze-dried coffee, both packed in an innovative triangular glass bottle design. R&D contributed towards the re-launched formulation and packaging of Kissan tomato ketchup and Jams.
•In the frozen dessert segment, the company’s flagship brand Fruttare made with real fruits was launched. A premium range of Selection Tubs was launched with a global packaging design and 3 new flavors.
•R&D made a significant contribution in developing a premium range of flavored tea bags under the Taj Mahal brand and a range of ready-to-drink and ready-to-prepare ice tea under the Lipton brand.
The detailed study of HUL reveals that the company has its main focus on R & D for the improvement of its products. The company does not develop technology on its own but it buys or outsources the technology. The company has recently imported packing machines from Germany. The use of oil-fired boilers has been completely stopped and now the use of biomass boilers has been started. The company is very much clear about the technological issues like what technology to buy, where to buy, and when to buy.

Alliance :

The company has recently formed joint marketing plans with leading customers like Walmart, Metro, and Tesco. The company created an alliance with Tata Teleservices Limited (TTSL) for the distribution of telecom products, leveraging its rural distribution footprint. The Company has enhanced the distribution alliance with TTSL to four states covering over 150 channel partners. This distribution arrangement is aimed at accelerating rural growth by enabling the Company to go deeper into rural India due to improved viability for channel partners.

Strategic Flexibility of HUL :

The company has high flexibility as far as the launching of new products is concerned. HUL has launched many new products as per the customer’s requirements in the recent past. In the Skin Care category, the company launched the vaseline men range of products with improved features and benefits with distinctive packaging and formats. In the beauty and skincare segment, the company introduced new products like Fair & Lovely Spot Corrector Pen, and Pond’s White Beauty daily spot-less lightening cream.

Action :

The business initiatives taken by HUL depict their success story against competitors. The reduction of market share is unavoidable due to tough competition, but still, HUL has been able to be a market leader in the areas like Health and Hygiene, Laundry, Household Care, Skin Care, Water Purification, and Beverages. The strong in-house R&D base, implementation of information and communication technology in a phased manner, and strong support of vendors and suppliers have helped the company to achieve different dimensions of strategic flexibility, quality, productivity, cost-cutting, and achieving a short delivery time of new or modified products. The company needs to further enhance its technological competence and continually employ VA/VE techniques in-house and at vendors’ places to further improve the various business performances.

Performance :

Major factors of importance for achieving strategic flexibility that needs to be closely monitored in the case of HUL with equal importance are enhancing technological capabilities, strengthening human resources, expanding the vendor network, and encouraging in-house R & D.

The snapshot of the achieved milestone at HUL :

1888 •Sunlight soap Bar was introduced in India.
1895 •Lifebuoy soap launched; Lever Brothers appoints agents in Mumbai, Chennai, Kolkata, and Karachi.
1902 •Pears soap introduced in India 1903 •Brooke Bond Red Label tea launched 1905 •Lux flakes introduced.
1913 •Vim scouring powder introduced
1914 •Vinolia soap launched in India.
1918 •Vanaspati was introduced by Dutch margarine manufacturers like Van den Berghs, Jurgens, Verschure Creameries, and Hartogs.
1922 •Rinso soap powder was introduced.
1925 •Lever Brothers get full control of North West Soap Company.
1926 •Hartogs registers Dalda Trademark.
1930 •Unilever is formed on January 1.
1931 •Hindustan Vanaspati Manufacturing Company registered on November 27
•Sewri factory site bought.
1932 •Vanaspati manufacture starts at Sewri.
1933 •Application made for setting up soap factory next to the Vanaspati factory at Sewri; Lever Brothers India Limited incorporated on October 17.
1934 •Soap manufacture begins at Sewri factory in October; North West Soap Company’s Garden Reach Factory, Kolkata rented and expanded to produce Lever brands.
1935 •United Traders incorporated on May 11 to market Personal Products.
1939 •Garden Reach Factory purchased outright; concentration on building up Dalda Vanaspati as a brand.
1941 •Agencies in Mumbai, Chennai, Kolkata, and Karachi took over.
1943 •Personal Products manufacture begins in India at Garden Reach Factory.
1947 •Pond’s Cold Cream launched.
1951 •Shamnagar, Tiruchy, and Ghaziabad Vanaspati factories were bought.
1956 •Three companies merge to form Hindustan Unilever Limited, with 10% Indian equity participation.
1957 •Unilever Special Committee approves research activity by Hindustan Unilever.
1958 •Research Unit starts functioning at Mumbai Factory.
1959 •Surf launched.
1962 •Formal Exports Department starts.
1963 •Head Office building at Backbay Reclamation, Mumbai opened.
1964 •Etah dairy set up, Anik ghee launched; Animal feeds plant at Ghaziabad; Sunsilk shampoo launched.
1965 •Signal toothpaste launched; Indian shareholding increases to 14%.
1966 •Lever’s baby food, more new foods introduced; Nickel catalyst production begins; Indian shareholding increases to 15%. Statutory price control on Vanaspati; Taj Mahal tea launched.
1967 •Hindustan Unilever Research Centre opens in Mumbai.
1968 •Fine Chemicals Unit commissioned at Andheri; informal price control on soap begins.
1969 •Rin bar launched; Fine Chemicals Unit starts production; Bru coffee launched
1971 •Clinic shampoo launched.
1974 •Pilot plant for industrial chemicals at Taloja; informal price control on soaps withdrawn; Liril marketed.
1975 •Ten-year modernization plan for soaps and detergent plants; Jammu project work begins; Close-up toothpaste launched.
1976 •Construction work of Haldia chemicals complex begins; Taloja chemicals unit begins functioning.
1977 •Jammu synthetic Detergents plant inaugurated; Indian shareholding increases to 18.57%.
1978 •Fair & Lovely skin cream launched.
1979 •Sodium Tripolyphosphate plant at Haldia commissioned.
1982 •Government allows 51% Unilever shareholding.
1984 •Foods, Animal Feeds businesses transferred to Lipton.
1986 •Agri-products unit at Hyderabad starts functioning – first range of hybrid seeds comes out; Khamgaon Soaps unit and Yavatmal Personal Products unit start production.
1988 •Launch of Lipton Taaza tea.
1991 •Surf Ultra detergent launched.
1992 •HUL was recognized by the Government of India as a Star Trading House in Exports.
1993 •The erstwhile Brooke Bond India acquires the Kissan brand from the United Breweries Group, giving HUL an entry into the foods business.
1994 •HUL’s largest competitor, Tata Oil Mills Company (TOMCO), merges with the company, the biggest such in the Indian industry till that time.
1995 •HUL forms Unilever Nepal Limited, HUL and US-based Kimberley-Clark Corporation form a 50:50 joint venture – Kimberley-Clark Lever Ltd. – to market Huggies diapers and Kotex feminine care products. Factory set up at Pune in 1995; HUL acquires Kwality and Milkfood 100% brand names and distribution assets. HUL introduces Walls.
1996 •HUL and Indian cosmetics major, Lakme Ltd., form 50:50 joint ventures – Lakme Lever Ltd.; HUL enters branded staples business with salt; HUL recognized as Super Star Trading House.
1996 •Merger of Group company, Brooke Bond Lipton India Limited, with HUL, with effect from January 1; HUL introduces branded atta; Surf Excel launched.
1997 •Unilever sets up International Research Laboratory in Bangalore; new Regional Innovation Centres also come up.
1998 •Group Company, Pond’s India Ltd., merges with HUL with effect from January 1, 1998. HUL acquires Lakme brand, factories, and Lakme Ltd.’s 50% equity in Lakme Lever Ltd.
2000 •HUL acquires 74% stake in Modern Food Industries Ltd., the first public sector company to be disinvested by the Government of India.
2002 •HUL enters the Ayurvedic health & beauty center category with the Ayush range and Ayush Therapy Centres.
2003 •Launch of Hindustan Lever Network; acquisition of the Amalgam Group
2004 •Launch of “Pureit” water purifiers
2006 •Brookefields food operations moved to Mumbai
2007 •Company name formally changed to Hindustan Unilever Limited after receiving the approval of shareholders during the 74th AGM on 18 May 2007
2010 •HUL head office shifted from the landmark Lever House, at Backbay Reclamation, Mumbai to the new campus in Andheri (E), Mumbai.
2012 •HUL’s state-of-the-art Learning Centre was inaugurated at the Hindustan Unilever campus at Andheri, Mumbai.
•Customer Insight & Innovation Centre (CiCi) was inaugurated at the Hindustan Unilever campus at Andheri, Mumbai.
•Won the Golden Peacock Occupational Health and Safety Award for 2012 in the FMCG category for its safety and health initiatives and continuous improvement on key metrics

“Empowering women in rural India. Project ‘Shakti’ is a program that wholly embraces the Unilever philosophy of doing well by doing good.”
– Hindustan Unilever Limited (HUL).