A PROJECT REPORT ON HINDUSTAN UNILEVER LIMETED

Submitted in the partial fulfillment of the requirement for the award of the Degree of Bachelors of Business Administration {BBA}

SUBMITTED BY:
Uday jain

UNDER GUIDANCE OF:

Shradha Vernekar

BBA (4TH SEMESTER)

BHARATI VIDYAPEETH INSTITUTE OF MANAGEMENT & RESEARCH, NEW DELHI

ACKNOWLEDGEMENT
The present work is an effort to throw some light on HINDUSTAN UNILEVER LIMITED. The work would not have been possible to come to the present shape without the able guidance, supervision and help to me by number of people. With deep sense of gratitude I acknowledge the encouragement and guidance received by my project guide _____________and other staff members of Hindustan unilever limited I convey my heartful affection to all those people who helped and supported me during the course, for completion of my Project Report.

PREFACE

A hallmark of any premier business school is its willingness and ability to constantly explore and implement new ideas and practices in the field of management education. Institute constantly reorients their programs in order to keep abreast of changing development. The initial interaction between school students and industry takes place when the students undergo project is usually for knowing the process for recruitment, selection, industrial relations & training of that institution. It is often the exposure to corporate culture that a student receives, particularly true for students without prior work experience. During my training at Hindustan unilever limited, I was taken project on recruitment, selection & training policy of Hindustan unilever limited The main purpose of the study is to know the policies of the bank regarding recruitment, selection & training, which helped me in gaining knowledge about the different working pattern of different departments of the company.

CONTENTS Chapter 1: 1. 2. 3. 4. 5. Introduction to Company

Nature of Business Type & ownership Pattern Organizational Structure Production Lay out Organizational Policies Industrial Analysis

Chapter 2:

1. Industry Overview (Growth rate of Industry, Contribution to GDP) 2. Current Issues (From Newspaper, Journals For Company and Industry) 3. Key Competitors 4. Environmental Scanning Political environment, Economic environment, Socio-Cultural Environment, technological environment, environmental issues (Green environment) and Legal environment. 5. Porters five forces model of competition Michael Porter Chapter 3: 1. 2. 3. 4. 5. Marketing Strategies

Products of Company 4 Ps (Product: Price, Place & Promotion) STP (Segmentation, Targeting and Positioning) Distribution Channels Promotion Strategies

Chapter 4: Financial Analysis 1. 2. 3. Sources of Finance Ratio Analysis Any 5 Net Profit/ Balance sheet (from annual report) -Analyse Key Learnings from the Company and Recommendations

Chapter 5: 1. 2. 3. 4. 5.

Performance Analysis of the Company Reasons for the expansion/contraction/diversification of Company Comment on Organizational Leadership Market share/growth rate of Company SWOT Analysis of the Company Findings Conclusions and Suggestions

Chapter 6: Chapter 7: Bibliography

Chapter 1:

Introduction to Company

Nature of Business Type & ownership Pattern Organizational Structure Production Lay out Organizational Policies

Chapter-1 Introduction to HUL

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company with a heritage of over 75 years in India and touches the lives of two out of three Indians. HUL works to create a better future every day and helps people feel good, look good and get more out of life with brands and services that are good for them and good for others. With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers, the Company is a part of the everyday life of millions of consumers across India. Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Ponds, Vaseline, Lakm, 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.19, 401 crores (financial year 2010 - 2011). 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 44 billion in 2011. Unilever has about 52% shareholding in HUL.

Our vision
Unilever products touch the lives of over 2 billion people every day whether that's through feeling great because they've got shiny hair and a brilliant smile, keeping their homes fresh and clean, or by enjoying a great cup of tea, satisfying meal or healthy snack.

A clear direction The four pillars of vision set out the long term direction for the company where we want to go and how we are going to get there:

We work to create a better future every day We 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. We will inspire people to take small everyday actions that can add up to a big difference for the world. We will develop new ways of doing business with the aim of doubling the size of our company while reducing our environmental impact. We've always believed in the power of our brands to improve the quality of peoples lives and in doing the right thing. As our business grows, so do our responsibilities. We recognise that global challenges such as climate change concern us all. Considering the wider impact of our actions is embedded in our values and is a fundamental part of who we are.

Our Mission
Company work to create a better future every day. We 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. We will inspire people to take small, everyday actions that can add up to a big difference for the world. We will develop new ways of doing business with the aim of doubling the size of our Company while reducing our environmental impact.

Our history
In the summer of 1888, visitors to the Kolkata harbour noticed crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers". With it, began an era of marketing branded Fast Moving Consumer Goods (FMCG).

Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937. In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three companies merged to form HUL in November 1956; HUL offered 10% of its equity to the Indian public, being the first among the foreign subsidiaries to do so. Unilever now holds 52.10% equity in the company. The rest of the shareholding is distributed among about 360,675 individual shareholders and financial institutions. The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed. Brooke Bond joined the Unilever fold in 1984 through an international acquisition. The erstwhile Lipton's links with India were forged in 1898. Unilever acquired Lipton in 1972, and in 1977 Lipton Tea (India) Limited was incorporated.

Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold through an international acquisition of Chesebrough Pond's USA in 1986. Since the very early years, HUL has vigorously responded to the stimulus of economic growth. The growth process has been accompanied by judicious diversification, always in line with Indian opinions and aspirations. Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the most visible and talked about events of India's corporate history, the erstwhile Tata Oil Mills Company (TOMCO) merged with HUL, effective from April 1, 1993. In 1996, HUL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Unilever Limited, to market Lakme's market-leading cosmetics and other appropriate products of both the companies. Subsequently in 1998, Lakme Limited sold its brands to HUL and divested its 50% stake in the joint venture to the company. HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads. HUL has also set up a subsidiary in Nepal, Unilever Nepal Limited (UNL), and its factory represents the largest manufacturing investment in the Himalayan kingdom. The UNL factory manufactures HUL's products like Soaps, Detergents and Personal Products both for the domestic market and exports to India. The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General Foods, with significant interests in Instant Coffee. In 1993, it acquired the Kissan business from the UB Group and the Dollops Icecream business from Cadbury India. As a measure of backward integration, Tea Estates and Doom Dooma, two plantation companies of Unilever, were merged with Brooke Bond. Then in 1994, Brooke Bond India and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL), enabling greater focus and ensuring synergy in the traditional Beverages business. 1994 witnessed BBLIL launching the Wall's range of Frozen Desserts. By the end of the year, the company entered into a strategic alliance with the Kwality Icecream Group families and in 1995 the Milkfood 100% Icecream marketing and distribution rights too were acquired. Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal restructuring culminated in the merger of Pond's (India) Limited (PIL) with HUL in 1998. The two companies had significant overlaps in Personal Products, Speciality Chemicals and Exports businesses, besides a common distribution system since 1993 for Personal Products. The two also had a common management pool and a technology base. The amalgamation was done to ensure for the Group, benefits from scale economies both in domestic and export markets and enable it to fund investments required for aggressively building new categories. In January 2000, in a historic step, the government decided to award 74 per cent equity in Modern Foods to HUL, thereby beginning the divestment of government equity in public sector undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic extension of the company's wheat business. In 2002, HUL acquired the government's remaining stake in Modern Foods. HUL launched a slew of new business initiatives in the earl y part of 2000s. Project Shakti was started in 2001. It is a rural initiative that targets small villages populated by less than 5000 individuals. It is a unique win-win initiative that catalyses rural affluence even as it benefits business. Currently, there are over 45,000 Shakti entrepreneurs covering over 100,000 villages across 15 states and reaching to over 3 million homes. In 2007, the Company name was formally changed to Hindustan Unilever Limited after receiving the approval of share holders during the 74th AGM on 18 May 2007. Brooke Bond and Surf Excel breached the the Rs 1,000 crore sales mark the same year followed by Wheel which crossed the Rs.2,000 crore sales milestone in 2008. On 17th October 2008 , HUL completed 75 years of corporate existence in India.

Hyderabad, Oct. 28 Hindustan Unilever Ltd is planning to double the strength of its rural women entrepreneurship promotion programme - Shakti - in India over next two years, according to Mr Douglas Baillie, Chief Executive Officer, Hindustan Unilever Ltd. In his keynote address on a seminar on 'Beyond Rich India - Lower Income Segments - A Marketing Opportunity' at Indian School of Business (ISB) here on Saturday, Mr Baillie said, "Currently, there are 42,000 women entrepreneurs who sell our products directly to household and retailers in villages. We will increase their number to over 1,00,000 by 2010." Observing that the market opportunity in lower income segments in India was huge, he said poor household consumption in rural India would equal urban levels within 10 years. "More and more companies are targeting the bottom of the pyramid in markets and we need to the change market paradigm to tap the opportunity," he said. New mantra The new marketing 'mantra' would consist of principles such as "deep dialogue, putting the last first, building of capacities, leapfrogging of technology, and understanding the ecosystem of local partners," he observed. Mr Rajiv Sabharwal, Head of Retail Assets, Rural & Micro Banking Group, ICICI Bank , said the bank would leverage technology to tap the rural retail credit demand. "We are working on a smart card that can combine 16 product offerings from our bank to be used in the rural markets," he said.

Share Holding Pattern in (%)

View details
SEP' 11 JUN' 11 DEC' 10 SEP' 10

Promoter FII DII Others Total

52.52 17.68 12.10 17.70 100.00

52.52 18.35 11.79 17.34 100.00

52.01 17.47 12.72 17.80 100.00

52.01 17.19 12.92 17.88 100.00

Mutual Funds Holding

SCHEME NO. OF SHARES

DSP Blackrock Top 100 Equity Fund - Regular Plan (G) HDFC Top 200 Fund (G) SBI Magnum Tax Gain Scheme (G) DSP Blackrock Equity Fund -

6,390,459

4,754,338 3,158,163 2,780,195

Regular Plan (G)

More Fund A

Hindustan Unilever Limited (HUL) (BSE: 500696) is India's largest fast-moving consumer goods company based in Mumbai, Maharashtra. It is owned by the British-Dutch company Unilever which controls 52% majority stake in HUL. HUL 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 and has an employee strength of over 16,500 employees and contributes to indirect employment of over 65,000 people. The company was renamed in June 2007 as 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 harbour and it began an era of marketing branded Fast Moving Consumer Goods (FMCG) Hindustan Unilever's distribution covers over 2 million retail outlets across India directly and its products are available in over 6.4 million outlets in the country. As per Nielsen market research data, two out of three Indians use HUL products.

Hindustan Unilever Ltd

Type

Public

Traded as

BSE: 500696 BSE SENSEX Constituent

Industry

Fast-moving consumer goods

Founded

1933

Headquarters Mumbai, Maharashtra, India

Key people

Harish Manwani (Chairman),Nitin

Paranjpe (CEO and Managing Director)

Products

Home & Personal Care, Food & Beverages

Revenue

19,401 crore (US$4.27 billion)(2010-2011)[1]

Net income

2,305 crore (US$507.1 million)

Employees

16,500 (2011)

Parent

Unilever Plc (52%)

Layout decisions entail determining the placement of departments, work groups within the Departments , workstations, machines, and stock-holding points within a production facility. The objective is to arrange these elements in a way that ensures a smooth work flow (in a factory) or a particular traffic pattern (in a service organization). In general, the inputs to the layout decision are as follows: 1. Specification of the objectives and corresponding criteria to be used to evaluate the design. The amount of space required, and the distance that must be traveled between elements in the layout, are common basic criteria. 2. Estimates of product or service demand on the system. 3. Processing requirements in terms of number of operations and amount of flow between the elements in the layout. 4. Space requirements for the elements in the layout. 5. Space availability within the facility itself, or if this is a new facility, possible building configurations. In our treatment of layout, we examine how layouts are developed under various formats (or work-flow structures). Our emphasis is on quantitative techniques, but we also show examples of how qualitative factors are important in the design of the layout. Both manufacturing and service facilities are covered in this technical note.

PLANET EARTH ORBITING THE ASSEMBLY LINE IN A GLOBE FACTORY. THE GLOBES ARE MOVING THROUGH THE FACTORY USING A TRANSPORT SYSTEM SUSPENDED FROM THE CEILING OF THE FACTORY.

B A S I C P RO D U C T I O N L AYO U T F O R M AT S
The formats by which departments are arranged in a facility are defined by the general pattern of work flow; there are three basic types (process layout, product layout, and fixed-position layout) and one hybrid type (group technology or cellular layout). A process layout (also called a job-shop or functional layout) is a format in which similar equipment or functions are grouped together, such as all lathes in one area and all stamping machines in another. A part being worked on then travels, according to the established sequence of operations, from area to area, where the proper machines are located for each operation. This type of layout is typical of hospitals, for example, where areas are dedicated to particular types of medical care, such as maternity wards and intensive care units. A product layout (also called a flow-shop layout) is one in which equipment or work processes are arranged according to the progressive steps by which the product is made. The path for each part is, in effect, a straight line. Production lines for shoes, chemical plants, and car washes are all product layouts

P RO C E SS L AYOUT
The most common approach to developing a process layout is to arrange departments consisting of like processes in a way that optimizes their relative placement. For example, the departments in a low-volume toy factory might consist of the shipping and receiving department, the plastic molding and stamping department, the metal forming department, the sewing department, and the painting department. Parts for the toys are fabricated in these departments and then sent to assembly departments where they are put together. In many installations, optimal placement often means placing departments with large amounts of interdepartmental traffic adjacent to one another. Suppose that we want to arrange the eight departments of a toy factory to minimize the interdepartmental material handling cost. Initially, let us make the simplifying assumption that all departments have the same amount of space (say, 40 feet by 40 feet) and that the building is 80 feet wide and 160 feet long (and thus compatible with the department dimensions). The first things we would want to know are the nature of the flow between departments and how the material is transported. If the company has another factory that makes similar products, information about flow patterns might be abstracted from the records. On the other hand, if this is a new product line, such information would have to come from routing sheets or from estimates by knowledgeable personnel such as process or industrial engineers. Of course, these data, regardless of their source, will have to be modified to reflect the nature of future orders over the projected life of the proposed layout. The expected loads between departments for the first year of operation are tabulated in Exhibit TN5.1; available plant space is depicted in Exhibit TN5.2. Note that in our example, diagonal moves are permitted so that departments 2 and 3, and 3 and 6, are considered adjacent.

The second step is to determine the cost of this layout by multiplying the material handling cost by the number of loads moved between each pair of departments. Exhibit TN5.4 presents this information, which is derived as follows: The annual material handling cost between Departments 1 and 2 is $175 ($1 175 moves), $60 between Departments 1 and 5 ($2 30 moves), $60 between Departments 1 and 7 ($3 20 moves), $240 between diagonal Departments 2 and 7 ($3 80), and so forth. (The distances are taken from Exhibit TN5.2 or TN5.3, not Exhibit TN5.4.)

The third step is a search for departmental changes that will reduce costs. On the basis of the graph and the cost matrix, it seems desirable to place Departments 1 and 6 closer together to reduce their high move-distance costs. However, this requires shifting several other departments, thereby affecting their move-distance costs and the total cost of the second solution. Exhibit TN5.5 shows the revised layout resulting from relocating Department 6 and an adjacent department. (Department 4 is arbitrarily selected for this purpose.) The revised cost matrix for the exchange, showing the cost changes, is given in Exhibit TN5.6. Note the total cost is $262 greater than in the initial solution. Clearly, doubling the distance between Departments 6 and 7 accounted for the major part of the cost increase. This points out the fact that, even in a small problem, it is rarely easy to decide the correct obvious move on the basis of casual inspection. Suppose that we do arrive at a good solution solely on the basis of material handling cost, such as that shown in Exhibit TN5.7 (whose total cost is $3,550). We would note, first of all, that our shipping and receiving department is near the center of the factoryan arrangement that probably would not be acceptable. The sewing department is next to the painting department, introducing the hazard that lint, thread, and cloth particles might drift onto painted items.

Company structure
Hindustan Unilever Limited is India's largest Fast Moving Consumer Goods (FMCG) company. It is present in Home & Personal Care and Foods & Beverages categories. HUL has about 15,000 employees, including over 1400 managers The fundamental principle determining the organisation structure is to infuse speed and flexibility in decisionmaking and implementation, with empowered managers across the companys nationwide operations.

Board of Directors The Board of Directors of the Company represents an optimum mix of professionalism, knowledge and experience. The total strength of the Board of Directors of the Company is nine Directors, comprising NonExecutive Chairman, four Executive Directors and four Non-Executive Independent Directors.

Management Committee The day-to-day management of affairs of the Company is vested with the Management Committee which is subjected to the overall superintendence and control of the Board.

Executive directors
The Executive directors are members of the HUL Management Committee as well as the Board of HUL.

Mr. Nitin Paranjpe - CEO and Managing Director

Mr. Nitin Paranjpe (48) joined the Company as a Management Trainee in 1987. In his early years in the Company, Mr. Paranjpe worked as Area Sales Manager - Detergents and then Product Manager - Detergents.

Mr. R. Sridhar - Chief Financial Officer

Mr. Sridhar Ramamurthy (47) is a Chartered Accountant (Gold Medallist) as well as a Cost Accountant and Company Secretary.

Mr. Gopal Vittal - Executive Director, Home & Personal Care

Mr. Gopal Vittal (44) has 21 years experience in Marketing & Sales in the FMCG market, including Skin Care, Soaps and Laundry.

Mr Pradeep Banerjee - Executive Director, Supply Chain

Mr. Pradeep Banerjee (51) joined HUL as a Management Trainee in 1980.

Non-executive directors
The Company has Non-Executive Chairman and four Non-Executive Independent Directors

Mr. Harish Manwani - Chairman

Mr. Harish Manwani (57) assumed charge as the Non-Executive Chairman of the Company with effect from 1st July, 2005.

Mr. A. Narayan - Independent Director

Mr. A. Narayan (59) began his career as a Management Trainee with ICI India Limited (now AkzoNobel India Limited) in 1973.

Mr. S. Ramadorai - Independent Director

Mr. S. Ramadorai (66) is the Vice - Chairman of Tata Consultancy Services Limited. Mr. Ramadorai was conferred the esteemed Padma Bhushan by the President of India in recognition of his contributions to IT industry of the Country.

Dr. R. A. Mashelkar - Independent Director

Dr. R. A. Mashelkar (68), CSIR Bhatnagar Fellow, is presently also the President of Global Research Alliance, a network of publicly funded R&D institutes from Asia - Pacific, Europe and USA.

Mr. O. P. Bhatt - Independent Director

Mr. O. P. Bhatt (60) is the former Chairman of S.B.I. (State Bank of India)

Management Committee
The day-to-day management of affairs of the Company is vested with the Management Committee which is subjected to the overall superintendence and control of the Board.
The Management Committee is headed by Mr. Nitin Paranjpe and has functional heads as its members representing various functions of the Company

Mr. Nitin Paranjpe - CEO and Managing Director

Mr. Nitin Paranjpe (48) joined the Company as a Management Trainee in 1987. In his early years in the Company, Mr. Paranjpe worked as Area Sales Manager - Detergents and then Product Manager - Detergents.

Mr. R. Sridhar - Chief Financial Officer

Mr. Sridhar Ramamurthy (47) is a Chartered Accountant (Gold Medallist) as well as a Cost Accountant and Company Secretary.

Mr. Gopal Vittal - Executive Director, Home & Personal Care

Mr. Gopal Vittal (44) has 21 years experience in Marketing & Sales in the FMCG market, including Skin Care, Soaps and Laundry.

Ms. Geetu Verma, Executive Director, Foods

Ms. Geetu Verma (45), has over twenty two years of marketing, business and innovation experience in leading FMCG firms P&G, Seagram, PepsiCo in India and Europe.

Mr. Hemant Bakshi - Executive Director, Sales and Customer Development

Mr. Hemant Bakshi (47) joined the Company in June 1989 and has worked in various sales and marketing assignments spanning across Personal Products and Home Care categories.

Mr Pradeep Banerjee - Executive Director, Supply Chain

Mr. Pradeep Banerjee (51) joined HUL as a Management Trainee in 1980.

Ms. Leena Nair - Executive Director, HR

Ms. Leena (40) is an Electronic Engineer who discovered her passion for people and HR and switched lanes. She is a gold medalist and MBA in HR from XLRI, Jamshedpur.

Mr Dev Bajpai Executive Director, Legal and Company Secretary

Mr Dev Bajpai (45) is a Fellow Member of the Institute of Company Secretaries of India and has a law degree from University of Delhi.

HUL Policies
Unilever is committed to providing the very best not only to our customers but also to the environment. Read up on some Unilever policies that aim to do just that.

Environment Policy
The aim of the Policy is to do all that is reasonably practicable to prevent or minimise, encompassing all available knowledge and information, the risk of an adverse environmental impact arising from processing of the product, its use or foreseeable misuse.

Quality Policy
Our Quality Policy describes the principles that everyone in Unilever follows, wherever they are in the world, to ensure that we are recognised and trusted for our integrity, the quality of our brands and products, and the high standards we set.

Safety & Health Policy

Hindustan Unilever Limited (HUL) supplies high quality goods and services to meet the daily needs of consumers and customers.

Affirmative Action Policy

HUL is a signatory to the CII Code of Conduct on Affirmative Action and affirms its recognition.

Environment Policy
Hindustan Unilever Limited (HUL) supplies high quality goods and services to meet the daily needs of consumers and industry. In doing so, the Company is committed to exhibit the highest standards of corporate behaviour towards its consumers, employees, the societies and the world in which we live.
Our Commitment The company recognises its joint responsibility with the Government and the Public to protect environment and is committed to regulate all its activities so as to follow best practicable means for minimising adverse environmental impact arising out of its operations. The company is committed to making its products environmentally acceptable, on a scientifically established basis, while fulfilling consumers' requirements for excellent quality, performance and safety. The aim of the Policy is to do all that is reasonably practicable to prevent or minimise, encompassing all available knowledge and information, the risk of an adverse environmental impact arising from processing of the product, its use or foreseeable misuse.

This Policy document reflects the continuing commitment of the Board for sound Environment Management of its operations. The Policy applies to development of a process, product and services, from research to full-scale operation. It is applicable to all company operations covering its plantations, manufacturing, sales and distribution, research & innovation centres and offices. This document defines the aims and scope of the Policy as well as responsibilities for the achievement of the objectives laid down.

The Vision Our vision is to continue to be an environmentally responsible organisation making continuous improvements in the management of the environmental impact of our operations. We will achieve this through an Integrated Environment Management approach, which focuses on People, Technology and Facilities, supported by Management Commitment as the prime driver. The Environment Policy Hindustan Unilever Ltd. (HUL) is committed to meeting the needs of customers and consumers in an environmentally sound manner, through continuous improvement in environmental performance in all our activities. Management at all levels, jointly with employees, is responsible and will be held accountable for company's environmental performance.

Accordingly, HUL's aims are to: Ensure safety of its products and operations for the environment by using standards of environmental safety, which are scientifically sustainable and commonly acceptable. Develop, introduce and maintain environmental management systems across the company to meet the company standards as well as statutory requirements for environment. Verify compliance with these standards through regular auditing. Involve all employees in the implementation of this Policy and provide appropriate training. Provide for dissemination of information to employees on environmental objectives and performance through suitable communication networks. Encourage suppliers and co-packers to develop and employ environmentally superior processes and ingredients and co-operate with other members of the supply chain to improve overall environmental performance. Work in partnership with external bodies and Government agencies to promote environmental care, increase understanding of environmental issues and disseminate good practice.

Corporate Responsibilities

The Board and the Management Committee of HUL is committed to conduct the company operations in an environmentally sound manner. The Management Committee will: Set mandatory standards and establish environmental improvement objectives and targets for HUL as a whole and for individual units, and ensure these are included in the annual operating plans. Formally review environment performance of the company once every quarter. Review environment performance when visiting units and recognise exemplary performance. The Management Committee, through the nominated environmental coordinator will: Ensure implementation of HUL Policy on environment and compliance with Unilever and HUL environmental standards and the standards stipulated under relevant national / local legislation. When believed to be appropriate, apply more stringent criteria than those required by law. Establish systems for appropriate training in implementation of Environment Management Systems at work. Ensure that all employees are made aware of individual and collective responsibilities towards environment. Arrange for expert advice on all aspects of environment management.

Individual Units
The overall responsibility for environment management at each unit will rest with the Unit Head, who will ensure implementation of HUL Policy on environment at unit level. Concerned line managers / heads of departments are responsible for environmental performance at department levels. In order to fulfill the requirements of the Environment Policy at each site, the Unit Head will:

Designate a unit environment coordinator who will be responsible for co-ordinating environmental activities at unit, collating environmental statistics and providing / arranging for expert advice. Agree with the Management Committee Member responsible for the unit, specific environmental improvement objectives and targets for the unit and ensure that these are incorporated in the annual objectives of the concerned managers and officers and are reviewed periodically. Ensure that the unit complies with Unilever and HUL mandatory standards and the relevant national and state regulations with respect to environment. Ensure formal environmental risk assessment to identify associated environmental aspects and take appropriate steps to control risks at acceptable levels. Ensure that all new operations are subjected to a systematic and formal analysis to assess environmental impact. Findings of such exercises should be implemented prior to commencement of the activity. Provide appropriate training to all employees. Ensure periodic audits to verify compliance with environment management systems and personally carry out sample environment audits to check efficacy of the systems. Report environmental statistics to HUL Corporate Safety & Environment Group on a monthly basis.

Research and Innovation Centres

Since most new products and processes are developed in these Units, certain additional responsibilities devolve on them to ensure implementation of the Environment Policy of the company. In addition to the Unit Head's responsibilities outlined above, the heads of these units will: Ensure that a formal and systematic risk assessment exercise is undertaken during the process/product development stage with specific reference to environmental impact. Transfer technology to the pilot plant and main production through a properly documented process specification which will clearly define environmental impact and risks associated with processes, products, raw material and finished product handling, transport and storage. Ensure that treatment techniques are developed for any wastes generated as a result of the new product/process and is incorporated into the process specifications.

Quality Policy
Unilevers mission is to meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life. And a key requirement is building in the quality expectations of our consumers into our products.
Our Commitment To win consumers confidence and loyalty, we need to consistently deliver branded products of excellent quality. We understand the different needs of our consumers and customers and strive to develop and deliver superior

brands to ensure that theyre the preferred choice. And by applying consistently high standards, were able to do things right first time, cut waste, reduce costs and drive profitability. Our Quality Policy describes the principles that everyone in Unilever follows, wherever they are in the world, to ensure that we are recognised and trusted for our integrity, the quality of our brands and products, and the high standards we set.

Principles of the Quality Policy

Putting the safety of our products and our consumers first. We have stringent mandatory quality standards in place against which compliance is verified through regular audits and self assessments. These standards ensure we design, manufacture and supply products that are safe, of excellent quality, and conform to the relevant industry and regulatory standards in the countries in which we operate. Comprehensive management procedures are in place to mitigate risks and to protect our consumers and markets. Putting consumers and customers at the heart of our business We actively engage our consumers and customers, translating their needs and requirements into our products and services, thus creating consumer value wherever we position our products. This is at the very heart of our innovation process.

Quality is a shared responsibility Quality and consumer safety is the responsibility of every Unilever employee and Unilever demonstrates visible and consistent leadership to meet this policy. The drive for quality, in all that we do, is a passion reflected in our brand development, manufacturing and customer service processes and is also expected of our business partners. We partner with stakeholders to provide leadership, promote transparency and share best practice. And weve forged effective working relationships with suppliers and contract manufacturers. Building and maintaining excellent systems to ensure the quality and safety of our products Were proactively and continuously developing our systems and processes to ensure quality and safety throughout the whole value chain, and were setting a benchmark for the business. We provide appropriate training and resources, and will ensure that we deliver our quality objectives and targets. We regularly measure and improve our performance using both internal and external measures. We actively promote our Quality Policy and have a quality assurance organisation in place to ensure consistency and visibility of quality standards, processes and performance indicators across all Unilever businesses at all levels, and to anticipate and develop future quality capability requirements.

Chapter 2:

Industrial Analysis

Industry Overview (Growth rate of Industry, Contribution to GDP) Current Issues (From Newspaper, Journals For Company and Industry) Key Competitors Environmental Scanning Political environment, Economic environment, Socio-Cultural Environment, technological environment, environmental issues (Green environment) and Legal environment. Porters five forces model of competition Michael Porter

Chapter-2
GROWTH RATE

CURRENT ISSUES;

Biomass Boilers in HUL units help reduce CO2 emissions

15-02-2012 : Biomass Boilers in HUL units help reduce CO2 emissions

Unilever has set three big goals under Sustainable Living Plan to achieve by 2020 and these are: Halve the environmental footprint of our products Help more than 1 billion people take action to improve their health and well-being Source 100% of our agricultural raw materials sustainably HUL has been continuously striving to contribute to the audacious goal by integrating these objectives into our brands, our people and our processes. The HUL Supply Chain team has come up with a number of unique initiatives across units to reduce CO2 emissions thereby reducing environmental footprint in our manufacturing operations. Biomass Boilers set up at HUL units across India

One such initiative is setting up of Biomass Boilers that help reduce CO2 emissions from factories. The biomass boilers have been set up across Chiplun, Puducherry, Goa, Nashik and Mysore. Some of the other units where it is expected to rollout shortly are Haridwar, Hosur and Kandla. Chiplun and Puducherry units that had first set up Biomass Boilers in 2008 were retrofit of the existing oil fired boilers which were low in efficiency and manual in operation. With the biomass boilers in place, the manufacturing operations at the Chiplun and Puducherry units saw a remarkable reduction of 11,000 tonnes and 10,000 tonnes per annum in the C02 emissions, respectively. This reduction in CO2 emission levels spurred further implementation of the boilers in other HUL units. The first fully integrated and automated Multimedia boiler and biomass briquettes - which could burn spent coffee waste and ETP (Effluent Treatment Plants) waste - was carried into the Goa, Mysore and Nashik factories in 2011. The Mysore factory added impetus to the project by utilizing in-house generated wet coffee and ETP sludge as fuels for the boilers. Reducing Carbon Emission With this implementation, CO2 emission is expected to reduce by 28,314 tonnes per annum, which is 7.8% of the total load, along with generating a total savings of 2.6 million euro in 2011.

HUL partners with MITTRA for water conservation project in Nashik

15-01-2012 : "I have a small piece of land, which yields two to four quintals of rice. We consume most of it and the rest is sold," says Laxman Bhangre, 38, a farmer in Sonashi village in Maharashtra's Nashik district. He earns Rs 15,000 a year that is barely sufficient to support his family. This year, as part of a water conservation project, he has adopted a four-step method of paddy cultivation and expects to harvest some extra quintals of rice.

An estimated 120 tribal families in Nashik district have, benefited from the Water conservation project initiated jointly by Hindustan Unilever Ltd (HUL) and Maharashtra Institute of Technology Transfer for Rural Areas (MITTRA), an NGO promoted by Bharatiya Agro Industries Foundation (BAIF). The farmers each contribute Rs 300 towards the project, which is a public-private partnership involving local communities, while HUL contributes Rs l,000 for every participating farmer. The project is a part of HUL's Sustainable Living Plan and aims to help tribals adopt improved agricultural practices that promote effective utilisation of water. The project is expected to deliver results over five years and benefit 900 families in the region. At the end of five years the project aims to create an additional 287 acres of cultivable land in these villages, increase crop production by 50 per cent, and generate employment. Construction of check dams for irrigation, spring development to provide drinking water for human consumption as well as animals, construction of bunds, and seeding, and planting on the bunds are some of the other activities under the project. The water harvesting and utilisation project (spring development) costs Rs 1.98 lakh while the check damn project costs Rs 8.11 lakh. A spring water facility which has been developed in Sonashi village supplies 70,000 litres a day and serves 50 families. The Spring water facility is cleaned every week by the villagers. The children in the village now fall ill less frequently. Hindustan Unilever has been working for more than a decade in the area of water conservation in partnership with NGOs and local communities across the country, in locations which face acute water shortage. The success of these projects has been driven by establishing public-private partnerships involving the local communities.

This has helped to not only sustain these projects but also to scale them. HUL has initiated projects in several states in India that will help to conserve more than 50 billion litres of water by 2015.

Bru Gold - a 100% coffee launched in India

29-12-2011 : Bru launched its new variant, Bru Gold this November. The product is a 100% coffee (non-

chicory), and has a distinct aroma and taste. Bru Gold is made of a fine blend of Robusta and Arabica beans that lend their aromatic & tasteful notes to the coffee, and provide a rich mouthful of flavour. The product is available at Rs. 10 for an 8gm pack, Rs. 48 for a 25gm jar, Rs. 90 for a 50gm jar and Rs. 169 for a 100gm jar. The packaging is stylish and trendy, and is in the form of a triangular jar. The special snap-fit cap of the jar ensures that the aroma and taste of this delectable coffee is preserved. The television campaign for the product encapsulates the idea of living life 100% by making the most of every moment with every sip of 100% coffee. The essence of the campaign is about taking every regular, mundane moment and converting it into something special and extraordinary. Bollywood stars, Shahid Kapoor and Priyanka Chopra feature in the campaign. Arun Srinivas, Vice President, Beverages, Hindustan Unilever said, "Bru Gold is our offering of a pure, undiluted cup of robust coffee for coffee lovers who enjoy life and live each moment 100%. With its special packaging created to keep the coffee fresh and aromatic, we are sure that consumers will definitely fall in love with Bru Gold. "

Second top-level exit in the last one year; Hemant Bakshi a logical choice to fill the void

n a surprise move, Gopal Vittal, executive director of the home

and personal care business and considered the second most powerful executive after CEO Nitin Paranjpe at Hindustan Unilever, one of the country's largest multinational, announced he was quitting the firm.

Insiders say the company tried to persuade Vittal to change his mind for the past several weeks, but he eventually stuck to his decision to move on. Vittal has not disclosed what he plans to do next. Speculation has it that it could even include starting up a new entrepreneurial venture.
Gopal Vittal, (executive director of the home and personal care business, HUL)

As a key member of Paranjpe's team, Vittal was responsible for consolidating and rejuvenating HUL's home and personal care business (HPC), which consists of marquee brands like Dove, Axe, Lux and Surf. Shortly after he took charge of the HPC business, HUL's mainline detergent business was facing huge competition from P&G's Tide. There were significant questions around HUL's overall performance and competitiveness. Paranjpe, Vittal and the rest of the senior team were not only able to weather the storm, the home and personal care business emerged as a powerful engine of growth. (Read what CEO Paranjpe told Forbes India about the turnaround in fortunes ). In the last one and a half years, HUL's market value has climbed 60 percent since Paranjpe took over. The three and a half year stint as executive director of Hindustan Unilever was Vittal's second stint at the company. He joined the company as a management trainee after graduating from the Indian Institute of Management, Ahmedabad in 1992. In early 2000s, he had almost been lured away by Reckitt Benckiser, but eventually persuaded to stay back by the then chairman MS 'Vindi' Banga. But in 2006, Sunil Mittal picked him out as a top-level lateral hire, appointing him as director marketing and communications at Bharti Airtel's mobile telephony business.
HUL's CEO Nitin Paranjpe

When Paranjpe took over as the CEO, he was able to get Vittal to come back to HUL. It was the first time the company had taken an ex employee directly into the board possibly superceding others in the line of succession. Seen as a maverick and fiercely entrepreneurial, the no-nonsense executive was able to take quick leadership calls, back his people and raise performance standards. It is unclear who will now take over at the helm of the largest division at HUL. If Paranjpe decides to pick an internal candidate, Hemant Bakshi could emerge as a logical choice. Bakshi is currently the executive director sales and customer development. He was responsible for leading HUL's initiative to treble rural direct distribution coverage. Our calls to HUL spokespersons were unanswered.

HUL's Nitin Paranjpe On The Capacity To Fail

HUL CEO believes that when you set your ambitions way beyond the resources available to you, you eliminate the fear of failure

Image: Mallikarjun Katakol for Forbes India

Name: Nitin Paranjpe Age: 48 Designation: Chief Executive Officer, Hindustan Unilever The Challenge: To reignite growth at Indias largest consumer goods company What He Has Achieved: Sales have grown by a third, while profits are up 17 percent. The companys market cap is up nearly 60 percent to Rs. 84,020 crore How He Did It: He got employees to focus on both short-term and long-term goals In 1999, the late C.K. Prahlad, who was on the board of Hindustan Unilever, had chosen to mentor some of us. During the course of the mentorship, he asked me the difference between an entrepreneur and a manager. I had given him the most obvious answer with which he wasnt pleased. According to him, the only difference between the two is the relationship between ambition and resources. Managers have a mindset that manages resources. So, ambition (A) equals resources (R), which is a steady state condition. There is no entrepreneur who starts off with A=R. He has virtually no resources, but he has big dreams and there is a mismatch

between ambition and resources. Ambition is substantially greater than resources. I quickly discovered that most people dont achieve much when you give them a slightly higher target because they operate out of a fear of failure. So, we came up with an ambitious plan to add 500,000 more outlets in a year. This at a time when we had been adding just 15,000-20,000 outlets a year. In hindsight, it was the most irrational decision, but look at what we achieved. When you increase the target so dramatically it becomes impossible to have a rational dialogue. The trick lies in getting people to suspend belief and judgement for a while and paint them a picture that in theory it could happen. How would it feel to do what no one has ever done before? How would it feel to get there? Most people say we either need to do short term or long term. I say we have to run the business with a bifocal lens. Part of it is looking at this week, this month and this quarter and the other part is how do I shape this business and make it future-proof five years from today. Both have to be done. We found a way to speak for the business in the short term but tangibilised it for the long term. For this, we needed to articulate in a compelling manner what we need to do for the long term and the actions that we need to do now.

Hindustan Unilevers Bharat Darshan

The new consumers in Indias villages are ambitious and demanding just like their urban counterparts. And Hindustan Unilever is responding to the change with a distribution overhaul

oon after he assumed his new role two years ago, Hemant Bakshi realised he had an

interesting problem on his hands. As Hindustan Unilevers executive director in charge of customer development, Bakshi had to find a solution that had eluded the company for nearly 25 years. It had taken more than seven decades for Hindustan Unilevers famous distribution juggernaut to directly reach a million outlets across the country. But for the next two and a half decades, Bakshis senior colleagues simply couldnt find a viable way to expand its direct distribution model. So when HUL chairman Harish Manwani announced on the sidelines of its annual general meeting in July that the company was in the midst of trebling its rural coverage over two years, it set the cat among the pigeons. This increase in rural coverage will be a big leap,

and to my mind, will be a huge driver of future growth, Manwani had said. While competitors are closing gaps, we have to continuously create new gaps. So had HUL stumbled upon a new magic formula all of a sudden that would help it crack open the large rural opportunity? That ensured that HUL distributors were able to keep costs low, rotate their stock and reach even villages with a population of 5,000 people. This way, HULs distribution machine pushed deeper into the hinterland, till the cost-benefit ratio began to work against the company. At one stage, it found it difficult to expand into villages with less than 5,000 people. It isnt as if HULs brands didnt find their way to the 637,000-odd villages in the country. Thanks to the remarkably efficient network of wholesale traders, it invariably did. But then, so did hundreds of other competitive brands. And from time to time, they used higher trade margins to snatch away HULs business. There was another issue: availability of credit. Pradeep Kashyap, CEO of rural marketing consultancy MART, says hes seen several instances of shopkeepers offering low-priced brands (other than HUL), if they knew they had to sell on credit to, say, a low income farmer. On the other hand, when a rich farmer came along, a bar of Lux soap automatically comes out of the bottom shelf. It is crucial for a company to offer credit to shopkeepers. And this can be done only by direct distribution, says Kashyap. Sales through the wholesale channel are seldom done on the basis of credit. So, heres the moot point: Just how did Bakshis team take the big leap forward? The Way It Was In the past, HUL had relied on its network of 2,700 redistribution stockists and substockists to supply products to stores in large villages. For smaller villages with a population of less than 5,000, its products were sold through wholesalers. Shopkeepers from these villages would travel to these wholesalers and to pick up their supplies as and when it suited them. Sometimes wholesalers known as star sellers would hire a van and do some distribution on their own. At best, the distribution in these villages was patchy and the company had no strategy on whom to cover and whom to leave out. In the late 1990s, HUL took its first tentative step to expand rural distribution. Through Project Streamline, it created a hub and spoke system and appointed sub-dealers who had the opportunity to serve villages in their vicinity. While the model served the company well, HUL had little or no control over the distribution chain. Starting 2001, it began expanding its reach through Project Shakti, where it used women entrepreneurs in distant villages to stock and sell its brands. Today, it has a vibrant network of 40,000 women entrepreneurs. But Project Shakti was also the last round of expansion in distribution that the company undertook.

With revenues from Project Shakti doubling every two years, Lever knew the next significant opportunity was in rural India. But to get in on the action, it had to fix distribution first.

Building a sustainable business

We see opportunities to grow our business by addressing some of the most important social and environmental challenges facing India today. We call this 'doing well by doing good'. Scoping issue areas While the issues are many, it is necessary to address them in a systematic manner to make a real difference to India. To ensure a deep impact instead of spreading thin across all issues, we have chosen three areas of impact. These have been arrived at using following three filters: - Millennium Development Goals which rank high for India. - Issues our parent company Unilever is focusing on. - Areas of capability and competence with which we can make meaningful impacts. Building a robust strategy through stakeholder engagement: Apart from the above three filters, we also spoke to external thought leaders and opinion formers about their expectation on issues that should be material to us. These expectations were then mapped with the areas in which HUL wanted to focus. STAKEHOLDER Priority Issues HUL Priority Issues Nutrition & Hygiene Water Sustainable Livelihoods Waste from Production Packaging Issues to Watch Green House Gases (GHG) Basic Issues

Issues to Watch

Education Climate change Health

Basic Issues

Corruption and Ethics Employee health and safety Labour rights Product safety

Based on the scoping process, HUL has identified: Social - Address health issues through hygiene and nutrition Economic - Enhance livelihoods of vulnerable communities Environment - Improve eco efficiency of our operations

Apart from the above three areas, the basic issues such as product safety, labour rights, employee health & safety, etc. have always been areas of focus and action for us. Changing Scope of Corporate Responsibility (CR) Historically CR in India has been mainly seen as philanthropic actions of business houses. This is a myopic view of the impact that a business can tangibly have on the society. Corporate Responsibility, today, has widened its scope to cover the social, environmental and economic impacts of a companys operations and that of its value chain. In the past doing well, which is reflection of financial results and doing good, which reflects the companies environmental & social initiatives in the communities were two different domains. The new era compels the integration of these two domains. At HUL, doing well & doing good have always been two sides of the same coin. Doing Well Grow markets Fuel Innovations Risk free Supply Chain & material security Attract and retain talent Corporate reputation Doing Good Address health issues through hygiene and nutrition Enhance livelihoods of vulnerable communities Improve eco efficiency of our operations

Competition;
Name Last Price Market Cap.
(Rs. cr.)

Sales Turnover 19,333.30 3,287.67 2,442.64 2,296.86 2,353.71 1,145.84 1,056.86 1,000.25 1,221.15 359.44 608.02 578.01 85.42 -

Net Profit

Total Assets

HUL Dabur India Godrej Consumer Colgate Marico Godrej Ind Gillette India P and G Emami Bajaj Corp Jyothy Labs Amar Remedies JHS Svendgaard GKB Ophthalmics

381.80 102.50 444.20 1,107.40 160.00 263.85 2,430.75 1,977.95 392.20 119.30 182.05 140.50 41.45 33.65

82,514.85 18,164.03 15,116.01 15,059.84 9,838.95 8,380.53 7,920.65 6,420.57 5,934.45 1,759.68 1,467.91 367.61 70.67 13.98

2,305.97 471.43 434.96 402.58 315.33 133.43 86.15 150.88 227.49 84.10 80.27 38.05 6.07 -

2,633.92 1,354.51 1,806.18 384.09 1,425.61 1,644.38 600.33 600.62 906.88 376.33 716.47 413.96 123.52 26.63

Political Taxation policy Environmental protection laws Employment laws

Economical Inflation Employment Disposable income Business cycles Energy availability and cost

Social Demographics Distribution of income Social mobility Lifestyle changes Consumerism Levels of education

Technology New discoveries and innovations Speed of technology transfer Rates of obsolescence Internet Information technology Business cycles Energy availability and cost

PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. Some analysts added Legal and rearranged the mnemonic to SLEPT; inserting Environmental factors expanded it to PESTEL or PESTLE, which is popular in the United Kingdom. The model has recently been further extended to STEEPLE and STEEPLED, adding Ethics and demographic factors. It is a part of the external analysis when conducting a strategic analysis or doing market research, and gives an overview of the different macro-environmental factors that the company has to take into consideration. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. The growing importance of environmental or ecological factors in the first decade of the 21st century have given rise to green business and encouraged widespread use of an updated version of the PEST framework. STEER analysis systematically considers Socio-cultural, Technological, Economic, Ecological, and Regulatory factors.

Political factors are how and to what degree a government intervenes in the economy. Specifically, political factors include areas such as tax, labour law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government wants to provide or be provided (merit goods) and those that the government does not want to be provided (demerit goods or merit bad).

Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy

Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. For example, an aging population may imply a smaller and less-willing workforce (thus increasing the cost of labor). Furthermore, companies may change various management strategies to adapt to these social trends (such as recruiting older workers). Technological factors include technological aspects such as R&D activity, automation, technology incentives and the rate oftechnological change. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation. Environmental factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones.

Porters five forces model of competition Michael Porter

Michael Porter (Harvard Business School Management Researcher) designed various vital frameworks for developing an organizations strategy. One of the most renowned among managers making strategic decisions is the five competitive forces model that determines industry structure. According to Porter, the nature of competition in any industry is personified in the following five forces: i. ii. iii. iv. v. Threat of new potential entrants Threat of substitute product/services Bargaining power of suppliers Bargaining power of buyers Rivalry among current competitors.

The five forces mentioned above are very significant from point of view of strategy formulation. The potential of these forces differs from industry to industry. These forces jointly determine the profitability of industry because they shape the prices which can be charged, the costs which can be borne, and the investment required to compete in the industry. Before making strategic decisions, the managers should use the five forces framework to determine the competitive structure of industry. Lets discuss the five factors of Porters model in detail: 1. Risk of entry by potential competitors: Potential competitors refer to the firms which are not currently competing in the industry but have the potential to do so if given a choice. Entry of new players increases the industry capacity, begins a competition for market share and lowers the current costs. The threat of entry by potential competitors is partially a function of extent of barriers to entry. The various barriers to entry are Economies of scale Brand loyalty Government Regulation Customer Switching Costs Absolute Cost Advantage Ease in distribution

Strong Capital base

2. Rivalry among current competitors: Rivalry refers to the competitive struggle for market share between firms in an industry. Extreme rivalry among established firms poses a strong threat to profitability. The strength of rivalry among established firms within an industry is a function of following factors: Extent of exit barriers Amount of fixed cost Competitive structure of industry Presence of global customers Absence of switching costs Growth Rate of industry Demand conditions

3. Bargaining Power of Buyers: Buyers refer to the customers who finally consume the product or the firms who distribute the industrys product to the final consumers. Bargaining power of buyers refer to the potential of buyers to bargain down the prices charged by the firms in the industry or to increase the firms cost in the industry by demanding better quality and service of product. Strong buyers can extract profits out of an industry by lowering the prices and increasing the costs. They purchase in large quantities. They have full information about the product and the market. They emphasize upon quality products. They pose credible threat of backward integration. In this way, they are regarded as a threat. 4. Bargaining Power of Suppliers: Suppliers refer to the firms that provide inputs to the industry. Bargaining power of the suppliers refer to the potential of the suppliers to increase the prices of inputs( labour, raw materials, services, etc) or the costs of industry in other ways. Strong suppliers can extract profits out of an industry by increasing costs of firms in the industry. Suppliers products have a few substitutes. Strong suppliers products are unique. They have high switching cost. Their product is an important input to buyers product. They pose credible threat of forward integration. Buyers are not significant to strong suppliers. In this way, they are regarded as a threat. 5. Threat of Substitute products: Substitute products refer to the products having ability of satisfying customers needs effectively. Substitutes pose a ceiling (upper limit) on the potential returns of an industry by putting a setting a limit on the price that firms can charge for their product in an industry. Lesser the number of close substitutes a product has, greater is the opportunity for the firms in industry to raise their product prices and earn greater profits (other things being equal). The power of Porters five forces varies from industry to industry. Whatever be the industry, these five forces influence the profitability as they affect the prices, the costs, and the capital investment essential for survival and competition in industry. This five forces model also help in making strategic decisions as it is used by the managers to determine industrys competitive structure. Porter ignored, however, a sixth significant factor- complementaries. This term refers to the reliance that develops between the companies whose products work is in combination with each other. Strong complementors might have a strong positive effect on the industry. Also, the five forces model overlooks the role of innovation as well as the significance of individual firm differences. It presents a stagnant view of competition.

Chapter 3:

Marketing Strategies

Products of Company 4 Ps (Product: Price, Place & Promotion) STP (Segmentation, Targeting and Positioning) Distribution Channels Promotion Strategies

Chapter-3 Food brands

HUL is one of Indias leading food companies. Our passion for understanding what people want and need from their food - and what they love about it - makes our brands a popular choice

Brooke Bond 3 Roses

Exquisite taste in a cup of tea that is also good for your health!

Annapurna
Partnering with the mom in nurturing her dreams, Annapurna Atta is aimed at helping her provide wholesome tasty nutrition to her family.

Red Label
Brooke Bond Red Label 'Chuskiyaan Zindagi ki'

Brooke Bond Taaza

Brooke Bond Taaza

Brooke Bond Taj Mahal

Brooke Bond Taj Mahal is an exclusive selection of teas for the discerning consumer.

Bru
Bru se hoti hain khushiyaan shuru

Kissan
Eat Happily. Grow Happily.

Knorr
Knorr helps families make meal times special, nutritious, tasty and healthy.

Kwality Walls
A good honest scoop of daily pleasure.

Lipton
Lipton has a range of vitality teas that truly encompass the goodness of tea.

Modern
Modern A Wholesome & Nourishing, Hygienically produced & Reliably Safe Bread

Brooke Bond Sehatmand

BB Sehatmand Jo Sehatmand Woh Aage Har Dum!! (One who is healthy is a step ahead. Always)

Home care brands

HUL has a diverse portfolio of brands offering home care solutions for millions of consumers across India.

Active Wheel
New Active Wheel with Power of lemons and freshness of thousands of flowers!

Cif
Cif- the best cleaner to let you shine.

Comfort
The worlds largest fabric conditioner brand.

Domex
The sheer power of Domex bleach gives you the confidence you need, eradicating all known germs.

Rin
Rin provides best in class whiteness which is demonstrable.

Sunlight
Sunlight is a color care brand

Surf Excel
Giving your kids the freedom to get dirty and experience life, safe in the knowledge that Surf Excel will remove those stains

Vim
Created in 1885, the Vim brand is still innovating and using the magic of natural ingredients to create unbeatable results over a hundred years later.

Personal care brands

Our personal care brands, including Axe, Dove, Lux, Pond's, Rexona and Sunsilk, are recognised and love by consumers across India. They help consumers to look good and feel good and in turn get more out of life.

Aviance
Aviance enables women actualize their unique potential through expert customized beauty solutions.

Axe
Axe with Best Quality Fragrance

LEVER Ayush Therapy

LEVER Ayush aims to help a new generation of Indians rediscover everyday health and vitality through customized Ayurvedic solutions.

Breeze
Breeze, with the goodness of glycerine gives soft, fragrant and smooth skin.

Clear
New CLEAR with Nutrium 10 goes 3 layers deep** into the scalp to nourish such that Dandruff Wont Come Back*!

Clinic Plus
Clinic Plus - makes hair inside strong, outside long!

Closeup
Freshness that brings you Closer

Dove
Dove stands for real beauty. All around the world, Dove is making real women feel more beautiful!

Fair & Lovely

More than 30 years ago, a unique brand was born. Wrapped within a humble lavender tube, it went on to become the Worlds No.1 Fairness cream.

Hamam
Holistic skin care experiences perfected over the ages to deliver healthy, beautiful skin

Lakme
Lakme is an ally to the Indian Woman and inspires her to express her unique beauty and sensuality. Thus, enabling her to realize the potency of her beauty.

Lifebuoy
Lifebuoy is available in multiple variants in soaps and specialist formats such as liquid handwash, catering to the entire family.

Liril 2000
Liril 2000-Now come closer to your loved ones

Lux
Lux For soft and smooth skin!

Pears
Pears the purest and most gentle way to skincare!

Pepsodent
Pepsodent India is committed to improve the overall Oral health of Indians.

Ponds
Get the expert to look after your skin

Rexona
Rexona gives you silky skin irresistible to touch that keeps the romance alive!

Sunsilk
Sunsilk has had a re-style!

Vaseline
Your skin is amazing. It deserves to be treated as such.

Water

Pureit is the worlds most advanced in-home water purifier. Pureit, a breakthrough offering of Hindustan Unilever (HUL), provides complete protection from all water-borne diseases, unmatched convenience and affordability. Pureits unique Germkill Battery technology kills all harmful viruses and bacteria and removes parasites and pesticide impurities, giving you water that is "as safe as boiled water". It assures your family 100% protection

from all water-borne diseases like jaundice, diarrhea, typhoid and cholera. Whats more, it doesnt need gas, electricity or continuous tap water supply. Pureit not only renders water micro-biologically safe, but also makes the water clear, odourless and goodtasting. Pureit does not leave any residual chlorine in the output water. The output water from Pureit meets stringent criteria for microbiologically safe drinking water, from one of the toughest regulatory agencies in the USA, EPA (Environmental Protection Agency). The performance of Pureit has also been tested by leading scientific and medical institutions in India and abroad. Pureit in-home purification system uses a 4 stage purification process to deliver as safe as boiled water without the use of electricity and pressurized tap water. Pureit purifies the input drinking water in four stages, namely; 1. Micro-fiber MeshTM - Removes visible dirt 2. Compact Carbon TrapTM - removes remaining dirt, harmful parasites & pesticide impurities 3. Germkill ProcessorTM uses 'programmed chlorine release chlorine technology' and its stored germ kill process targets and kills harmful virus and bacteria 4. PolisherTM removes residual chlorine and all disinfectant by-products, giving clear odorless and great tasting water 5. Battery Life Indicator - Ensures total safety because when the germ kill power is exhausted, the indicator turns red, warning you to replace the battery Advanced Auto-Switch off - In case, the battery is not changed when it turns fully red, as an additional assurance of safety, the advanced Auto-Switch off will automatically switch-off the flow of water.

Protect your loved ones with a Pureit today! You can ask for a free home demonstration of Pureit. A trained Pureit Water Expert will visit your home and give you a detailed demonstration of how Pureit works. For a free home demo, queries, or to purchase Call Pureit Helpline : 09223 200 200 *at a water temperature of 25 Celsius, in moderate humidity conditions

Pureit-Blue

Pureit-Maroon

Promotion the 4ps of Marketing

1 )The right PRODUCT 2) Sold at the right PRICE 3) In the right PLACE 4) Using the most suitable PROMOTION that the goods arrive when and where they are wanted is an important operation .To create the right marketing mix, businesses have to meet the following conditions: The Product: The product has to have the right features - for example, it must look good and work well. The price must be right. Consumer will need to buy in large numbers to produce a healthy profit. The goods must be in the right place at the right time. Making sureThe target group needs to be made aware of the existence and availability of the product through promotion. Successful promotion helps a firm to spread costs over a larger output. For example, a company like Kellogg's is constantly developing new breakfast cereals the product element is the new product itself, getting the price right involves examining customer perceptions and rival products as well as costs of manufacture, promotion involves engaging in a range of promotional activities e.g. competitions, product tasting etc, and place involves using the best possible channels of distribution such as leading supermarket chains.. However, it is concerned with what the product means to the customer. Marketing therefore plays a key role in determining such aspects as:

The appearance of the product - in line with the requirements of the market The function of the product - products must address the needs of customers as identified through market research. The product range and how it is used is a function of the marketing mix. The range may be broadened or a brand may be extended for tactical reasons, such as matching competition or catering for seasonal fluctuations. Alternatively, a product may be repositioned to make it more acceptable for a new group of consumers as part of a long-term plan.

The price Of all the aspects of the marketing mix, price is the one, which creates sales revenue - all the others are costs. The price of an item is clearly an important determinant of the value of sales made. In theory, price is really determined by the discovery of what customers perceive is the value of the item on sale. Researching consumers' opinions about pricing is important as it indicates how they value what they are looking for as well as what they want to pay. An organisation's pricing policy will vary according to time and circumstances. Crudely speaking, the value of water in the Lake District will be considerably different from the value of water in the desert.

The place Although figures vary widely from product to product, roughly a fifth of the cost of a product goes on getting it to the customer. 'Place' is concerned with various methods of transporting and storing goods, and then making them available for the customer. Getting the right product to the right place at the right time involves the distribution system. The choice of distribution method will depend on a variety of circumstances. It will be more convenient for some manufacturers to sell to wholesalers who then sell to retailers, while others will prefer to sell directly to retailers or customers. Promotion is the business of business activities The promotion communicating with customers. It will provide information that will assist them in making a decision to purchase a product or service. The razzmatazz, pace and creativity of some promotional activities are almost alien to normal The cost associated with promotion or advertising goods and services often represents a sizeable proportion of the overall cost of producing an item. However, successful promotion increases sales so that advertising and other costs are spread over a larger output. Though increased promotional activity is often a sign of a response to a problem such as competitive activity, it enables an organization to develop and build up a succession of messages and can be extremely cost-effective.

STP ANALYSIS OF THE COMPANY

Segmentation Hindustan unilever limited has segmented its customer in the following ways: Understanding needs and preferences of consumers Grouping customers based on their needs and preferences -- Customers with similar needs and preferences are included in this segment. Targeting the segment that the company can best meet the needs and preferences of - The Company targets the customers, of which it can meet the needs and preferences. I.e. customer needs higher- strength or low price. Branding the commodity -- Though being a commodity product, branding is important for a company. Provide required product to meet targeted customers' needs and preferences -- Delivering up to the expectations of the targeted segment.

Targeting Its customer base represents the masses of India. The company targets on the important sources like shops in the country It targets the competitive companies like P&G. It Targets all Indian customers & communities. It targets an individual (Retail Marketing)

Positioning A good brand positioning help guide marketing strategy by clarifying the brands essence but goals it help the consumer achieve and how it does so in a unique way. The result of the positioning is the successful creation of a customer focused value proposition, a cogent reason why the target market should buy the product.

Brand Positioning of Different Soaps of Hindustan Unilever Limited

Rs. 1,000.00
The project will help in understanding the brand positioning of different soaps produced and marketed by Hindustan Unilever limited. Hindustan Unilever Limited, 51.6% subsidiary of Unilever Plc, is the largest FMCG Company in the country, with a turnover of Rs118bn. The companys business sprawls from personal and household care products to foods, beverages, specialty chemicals and animal feeds. The company has a dominating market share in most categories that it operates in such as toilet soaps, detergents, skincare, hair care, color cosmetics, etc. It is also the leading player in food products such as branded packaged tea, coffee, ice cream and other culinary products. Two pillars - strong brand equity and a wide distribution network, characterize the fast moving consumer goods business. Brand equities are built over a period of time by technological innovations, consistent high quality, aggressive advertisement and marketing. Availability near the consumer through a wide distribution network is another crucial success factor, as products are of small value, frequently purchased daily use items. HUL is strong on both these fronts with 110 brands and a 1mn strong direct retail reach. Competitive Position: HUL is the market leader in the detergent and soap industry. Nirma is a close competitor in detergents and has been slowly gaining ground in toilet soaps too. The other significant competitor in detergents is P&G. Despite being the global leader in this segment, has been unable to achieve a critical mass in India due to premium pricing strategy. In oral care segment, HUL has emerged as a strong No 2 player, giving stiff competition to the market leader Colgate. In the hair care segment, HUL dominates the shampoo market and is the No 2 player in hair oils. In the skin care market, besides competition from leading global players, HUL has also been losing share to south based player Cavincare Ltd. In the foods business, Tata Tea in packet tea, Nestle in coffee and culinary products, GCMMF (Amul) in ice creams, and Godrej Pillsbury in staple food are the main competitors.

Sales and distribution network of HUL

A marketing channel performs the work of moving goods from producers to consumers. It overcomes the time, place and possession gaps that separate goods and services from those who need or want them. Members of the marketing channel perform a number of key functions like forward flow of activity from the company to the customers(goods) and backward flow from customers to company(order, payment). FMCG major HUL caters to seven million distinct outlets across India and 59% of these stores are in rural India. HUL directly services over 1 million stores and has a network of over 7000 stockists and distributors. Unilever Sales and Distribution in India Modern trade Organized retail Self-service stores General trade Wholesale Family grocer Marginal retail Rural trade Multi-purpose-retail

HULs approach to distribution: Direct-to-consumer distribution: Project Sangam Direct- a non-store home delivery retail business operates a dedicated call center with trained personnel in Mumbai. The center after procuring orders from customers passes them on for execution to a network of redistribution agents. This model, which does not call for owning a physical warehousing or selling facility, offers twin benefits of convenience and value to its customers. HUL, after understanding and analysing consumer response, wanted to take the idea across the country. Diagrammatic representation of the distribution channel Sales force behind the distribution channel: In case of HUL the sales are co-ordinate by Area Sales Manager (ASM), Activation Manager (AM), and a Territory Sales In-charge (TSI). These people act as a link between the stockist and the company. The goods move to the stockists go down by the companys truck. The stockist then appoints a Re Stockist Salesman (RSSM) who is responsible for collecting the orders and payments from the retail outlets. Evaluation and selection of channel members: The stockists are selected with a proper evaluation of the factors like the investment capacity, number of retail stores covered, appropriate sales force and infrastructure. HULs policy is to work in advance payment mode. To ensure this, the company maintains a stock of signed blank cheques of the stockist and these cheques are presented to the bank upon the receipt of order and generation of the bill. Conclusion: Hindustan Unilever, which once pioneered distribution in India, is today reinventing distribution - creating new channels, and redefining the way current channels are serviced. In the process it is converging product availability, with brand communication and brand experience. In the end it could be said that HUL's SCM is one of the best in India and it is quite difficult for any company to challenge it.

Promotion strategy
This strategy was used at village to village basis In the process of promoting vim in rural areas. Keeping into mind The dynamics of rural consumer and distribution infrastructure, the marketer had adopted a different promotion strategy to promote the vim in rural areas. The formal media used to communicate the product was T.V, radio cinema ,print proportionately depending upon their reach and their influence on rural masses. The informal promotion strategy was formulated. The steps involved to promote the product in rural areas. The first step was the usage of audio- visual publicity vans. This publicity vans were covered by beautiful banners, this banners were embossed with the product photos, the base or tagline of the product and colorful picture that can attract the rural consumer. The audible material used were a tunes of current filmy songs, which were composed with new lyrics, this lyrics gave the special features about the vim. This step was used as an introduction of the product vim in rural markets. The second step in the promotion strategy was to do Door-to-door marketing. This step was very well designed. To do Door- to- door marketing the marketer employed the young local youths who can communicate with rural people in the local language. This youth carried along with them flip charts as a substitute medium to T.V. The Door-to-door marketing step was complementary to other step that involved the participation of the rural housewives, which contained games. This games were strategically designed so as to position the product and the price of the product in the minds of consumer. The games used were Spotting the right price. Match the pairs. Turn the wheel

The fourth step in promotion was Retail contact In this step the marketers gave scratch coupons to the consumers who came to purchased vim with incentive packages (i.e. packages one for two). The price given were on the. The prizes distributed to whom so ever won was 12months soaps. Prizes were distributed on the spot so to create better perception of the company and product in the mind of the consumer. The same was made applicable for the retailers on the bulk purchase. This retailers were also given special discount on their bulk purchase. The final step was that all the people were invited to the central location. This central location was usually a place were all the village people assembled so that becomes easy to communicate at large to the masses. The activity undertaken at the central location was cleaning up the sweet makers vessels, which was the toughest to do. It was communicated as Saf kare mitaheewale ki kadai

The advantages of vim were that it relieved from the hardship of scrubbing the vessel, which was done with ease with the help of vim. The other advantage was that it would certainly save their lot of time, which can be utilized effectively for some other work. This created a clear perception about the product. The company even had to promoted the product in Haats & Melas of different villages. To promote the vim HLL planned to distribute gold as prize IN a bid to promote vim one of its leading dish wash soap, Vim Gold Bar, HLL had launched a below-theline advertisement.

Each scratch card carries an 8-digit number. Every Sunday, one such number will be announced on Sony Entertainment TV between 8-9 p.m. and this number will be valid for the entire period of the offer. Communication Vim Bar has always created an impact in the market with its path-breaking communication. The communication has been designed to powerfully communicate the tough stain removal properties of the Vim Bar. HLL created a new consumer lingo for the tough stain problem with the campaign baseline of Vim being the Khar Khar ka moh tod jawab. HLL had to completely change its communication when it entered into rural it had to completely changed its communication from the previous one that was that after cleaning the vessel with bar you can see your face(apka chehra Bhi dekha ga saf) to (khar khar ka moh tod jawab) just because the rural consumers used aluminum vessels to cook their food.

Chapter 4: Financial Analysis Sources of Finance Ratio Analysis Any 5 Net Profit/ Balance sheet (from annual report) -Analyse

Chapter-4
.

Application Of Funds
Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets 3,759.62 1,590.46 2,169.16 299.08 1,260.68 2,811.26 943.20 281.91 4,036.37 3,581.96 1,419.85 2,162.11 273.96 1,264.08 2,179.93 678.44 231.37 3,089.74 2,881.73 1,274.95 1,606.78 472.07 332.62 2,528.86 536.89 190.59 3,256.34 2,669.08 1,146.57 1,522.51 185.64 1,440.81 1,953.60 443.37 200.11 2,597.08 2,462.69 1,061.94 1,400.75 110.26 2,522.22 1,547.71 440.37 170.80 2,158.88

Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets

1,099.72 1,358.10 6,494.19 0.00 6,264.21 1,324.98 7,589.19 1,095.00 0.00 2,633.92

1,068.31 1,660.84 5,818.89 0.00 5,493.97 1,441.55 6,935.52 -1,116.63

1,196.95 1,586.76 6,040.05 0.00 4,440.08 1,527.98 5,968.06 71.99

1,083.28 0.75 3,681.11 0.00 4,028.41 1,273.90 5,302.31 -1,621.20

1,150.06 246.15 3,555.09 0.00 3,362.52 1,429.71 4,792.23 -1,237.14

Miscellaneous Expenses Total Assets

0.00 2,583.52

0.00 2,483.46

0.00 1,527.76

0.00 2,796.09

Contingent Liabilities Book Value (Rs

663.00

468.49

417.26

494.46

476.40

Key Financial Ratios of Hindustan Unilever

Mar '11 Mar '10 Mar '09 Dec '07 Dec '06

Investment Valuation Ratios Face Value Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) Bonus in Equity Capital Profitability Ratios Operating Profit Margin(%) Profit Before Interest And Tax Margin(%) Gross Profit Margin(%) Cash Profit Margin(%) Adjusted Cash Margin(%) 13.53 12.25 12.41 11.75 11.75 15.74 14.59 14.70 12.76 12.76 14.46 13.39 13.50 12.29 12.29 14.95 13.78 15.86 13.56 12.90 14.74 13.50 15.80 15.99 13.21 1.00 6.50 12.34 91.18 11.04 60.98 1.00 6.50 12.82 81.45 10.70 60.36 1.00 7.50 13.60 94.06 8.30 60.40 1.00 9.00 9.54 63.75 5.45 60.47 1.00 6.00 8.18 55.48 11.20 59.67

Net Profit Margin(%) Adjusted Net Profit Margin(%) Return On Capital Employed(%) Return On Net Worth(%) Adjusted Return on Net Worth(%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Return on Long Term Funds(%) Liquidity And Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio Debt Coverage Ratios Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio Average Raw Material Holding Average Finished Goods Held Number of Days In Working Capital Profit & Loss Account Ratios Material Cost Composition

11.56 11.56 102.47 87.57 80.67 12.19 12.20 102.47

12.29 12.29 106.78 85.25 81.40 11.84 11.84 106.78

12.09 12.09 118.59 121.34 113.85 9.45 9.46 142.88

12.58 11.91 138.72 122.97 116.49 6.61 6.61 147.26

14.94 12.16 65.89 68.14 55.43 24.45 24.45 67.65

0.86 0.43 ---

0.84 0.46 ---

0.92 0.51 0.20 --

0.68 0.25 0.06 --

0.73 0.34 0.03 --

11,243.63 -12,163.75 10,529.33

395.13 -421.50 342.84

116.28 0.20 123.99 107.47

83.09 0.06 88.52 75.81

171.62 0.03 183.74 185.99

7.91 24.28 7.91 5.63 8.31 5.63 61.54 35.15 -20.02

8.99 29.24 8.99 5.35 7.66 5.35 51.08 32.05 -22.62

9.26 41.83 9.26 7.81 9.22 7.81 72.27 34.18 1.58

7.20 31.41 8.20 9.80 10.53 5.64 84.20 29.81 -42.05

8.02 25.42 9.27 9.30 4.67 5.35 68.95 27.53 -36.37

53.29

50.67

55.50

54.34

54.61

Imported Composition of Raw Materials Consumed Selling Distribution Cost Composition Expenses as Composition of Total Sales Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio AdjustedCash Flow Times

19.20 19.35 7.25

18.61 18.35 7.31

21.65 15.98 9.47

16.67 15.56 10.68

16.89 15.75 11.72

71.20 64.98 22.71 29.99 --

75.20 69.40 21.25 27.59 --

76.47 70.93 18.50 24.77 0.17

131.80 122.23 -39.13 -28.52 0.05

81.45 76.11 -0.12 7.83 0.04

Mar '11

Mar '10

Mar '09

Dec '07

Dec '06

Earnings Per Share Book Value

10.68 12.19

10.09 11.84

11.47 9.45

8.12 6.61

8.41 12.34

Balance Sheet of Hindustan Unilever Mar '11

------------------- in Rs. Cr. ------------------Mar '10 Mar '09 Dec '07 Dec '06

12 mths

12 mths

15 mths

12 mths

12 mths

Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt 215.95 215.95 0.00 0.00 2,417.30 0.67 2,633.92 0.00 0.00 0.00 218.17 218.17 0.00 0.00 2,364.68 0.67 2,583.52 0.00 0.00 0.00 217.99 217.99 0.00 0.00 1,842.85 0.67 2,061.51 144.65 277.30 421.95 217.75 217.75 0.00 0.00 1,220.82 0.67 1,439.24 25.52 63.01 88.53 220.68 220.68 0.00 0.00 2,502.14 0.67 2,723.49 37.13 35.47 72.60

Total Liabilities

2,633.92 Mar '11

2,583.52 Mar '10

2,483.46 Mar '09

1,527.77 Dec '07

2,796.09 Dec '06

12 mths

12 mths

15 mths

12 mths

12 mths

Chapter 5:

Key Learnings from the Company and Recommendations

Performance Analysis of the Company Reasons for the expansion/contraction/diversification of Company Comment on Organizational Leadership Market share/growth rate of Company SWOT Analysis of the Company

Chapter-5
Performance Analysis of the Company
Hindustan Unilever Ltd HINDUNILVR:NSI
416.05
Close in INR

12.70 / 3.15%
Today's change

4.28m
Shares traded

53.67%
1 year change

0.2285
Beta

Comparisons

Summary
On Tuesday, Hindustan Unilever Ltd (HINDUNILVR:NSI)closed at 416.05, 1.00% below its 52-week high of 420.25, set on Dec 26, 2011. 52-week range
Today

265.90
May 05 2011

420.25
Dec 26 2011

Open

404.80

Day High

417.70

Day Low

403.00

Bid

416.05

Offer

0.00

Previous close

403.35

Average volume

2.70m

Shares outstanding

2.16bn

Free float

1.03bn

P/E (TTM)

53.86

Market cap

871.85bnINR

EPS (TTM)

7.49 INR

Annual Dividend

7.00 INR

Annual Dividend Yield

1.74%

Div ex-date

Nov 04 2011

Div pay-date

Nov 30 2011

Comparative analysis

Past 90 days

1 week

1 month

6 months

1 year

5 years

Hindustan Unilever Ltd

+5.20%

+9.49%

+22.87%

+53.67%

+107.45%

INDIA INDEX SVC S&P CNX NIFTY INDEX

-0.60%

-0.72%

+5.47%

-7.27%

+37.26%

IN/CONSUMER STAPLES

+2.64%

+6.36%

+12.72%

+20.21%

--

IN/HOUSEHOLD PRODUCTS

+4.96%

+8.65%

+18.57%

+34.79%

--

As of Mar 27 2012 11:25 BST.Data delayed by at least 15 minutes.

Reasons for expansion/contraction

Values are based on Consolidated Data as on Mar 2011.

Hindustan Lever recently hiked the prices of some of its detergents.

February 6, 2012: The 33.4 per cent growth in Hindustan Unilever's (HUL) profits before exceptional items, and its expanding margins for the latest December quarter are a demonstration of the clout that it wields in the FMCG market. Of the 16.5 per cent growth in sales, just 9 per cent came from increase in underlying volumes. PRICING POWER HUL's profits from its largest soaps and detergent segment more than doubled compared to a year ago, driven mainly by price increases on key brands. That is a sign of pricing power the company's ability to pass on raw material price increases to consumers. The continued double-digit sales growth across segments (home, personal products, beverages and foods all grew by 11-14 per cent) despite this, suggests that consumers have taken these price increases in their stride. AGGRESSIVE ADSPEND CUTS As a dominant player in soaps, detergents and personal products, HUL has been able to dictate the trend in ad spends. Most FMCG makers of soaps and detergents have also soft-pedaled on advertising spends in recent quarters. HUL's raw material costs already show a moderation relative to sales compared to three months ago. Materials consumed as a proportion of sales (included traded goods) has fallen to 52.5 per cent this quarter, from 54.4 per cent in the preceding September 2011 quarter. If raw material costs soften and the rupee begins to strengthen, HUL may manage to hold on to its price-line on key products, to keep its profits expanding strongly

Hindustan Unilever Buy

SHARE PRINT T+

With the Budget pegging up indirect taxes and inflation showing signs of returning, investors may benefit by focussing on sectors and companies with undisputed pricing power. FMCG makers fit the bill. Hindustan Unilever (HUL) appears the best bet within this space on many counts. With a vast product basket, strengths in both rural retail and modern trade and brands across price points, HUL has navigated the inflation and cost pressures of the last two years exceptionally well. At a price-earnings multiple of 33 times its trailing 12-month earnings and 28 times next year's earnings, the stock is attractive. It trades at a discount to smaller peers such as Nestle India and Procter & Gamble Hygiene. HUL's presence across many FMCG categories has given it the flexibility to tweak prices and adspend to deliver a good overall result. For instance, in soaps and detergents where raw material prices spiralled, HUL sharply reduced adspend and raised selling prices. With smaller rivals following suit, price increases balanced out lower volume growth, helping the segment deliver an 18 per cent sales growth with a 36 per cent higher profit in the first nine months. In personal products, the company kept up a hectic pace of new launches and adspends; it also reduced prices. That drove consumer upgrades to better products and helped double digit growth in personal care. The high inflation scenario also seems to have aided market share gains for HUL across categories. A high-cost scenario is usually negative for local and unorganised players in FMCGs, possibly leading to share gains by larger brands. While FMCG industry growth has been tapering down in the last two quarters (it was 10 per cent in the December quarter), HUL's growth trajectory has been improving (16.5 per cent in December).

Comment on Organizational Leadership

HUL is the No.1 Employer of Choice in India
17-01-2012 : As per the latest Nielsen Campus Track-B School Survey, Hindustan Unilever Limited (HUL) has emerged as the No. 1 employer of choice for B-School students who will graduate in 2012. In addition, HUL retains the 'Dream Employer' status for the 3rd year running and continues to be the top company considered for application by B-School students. 'Degree of independence at work and decision making', 'Compensation', 'Learning on the job' and 'Good growth prospects' are most critical factors claimed by the students that drive the choice of an employer. The Nielsen B-School Campus Track represents the views of 1100 students of the Class that will graduate in 2012, from the top 35 Business Schools in India. This is the 11th year of the Nielsen Campus Track B-school study.

Leadership Development In the list of 'Top Companies for Leaders 2011 Study Results' announced by Aon Hewitt, The RBL Group and Fortune recently, HUL was ranked sixth globally. The Global Top Companies for Leaders is the most comprehensive study of organizational leadership in the world. HUL is the only Indian company that has been ranked in the 'global top 10' consistently since the 'Top Companies for Leaders' global survey was first launched in 2007. HUL has improved its ranking in the 2011 study to sixth position globally compared to 2009 when it was ranked 10th globally. HUL is well-known for its talent pool and as a source of leadership talent. Not only does HUL have formal processes for inculcating leadership, but it also provides a culture of coaching and mentoring at every level in the organization. The approach of identifying and grooming top talent has established the company as a source of leadership talent, both for Unilever globally and the industry in general. Over 200 managers of HUL currently serve Unilever globally, which is about 13% of the HUL managerial strength. The number of managers expatriated has been increasing steadily over the last few years. There are several senior HUL managers working in leadership roles across markets and functions for Unilever globally. One of the most important factors is the line ownership for the processes and management time & commitment to developing talent. HUL encourages reverse evaluation where management trainees assess their coaches and tutors for the quality of inputs they get during their training period. The good tutors and coaches get recognized while those who don't rate well are given feedback and held accountable for grooming talent. The company also encourages reverse mentoring. Senior Management team members often have young managers mentoring them on a specific area such as digital media. Driving Performance Culture HUL performance management and reward processes are geared to building a 'Performance and Execution' focused work culture. There are a number of tools and processes that drive transparency and rigour in assessing and developing people. For example, employees are plotted on the Leadership Differentiation Tool which not only evaluates the 'What' of their performance but also he 'How' of their performance. Mechanisms like 360 degree feedback provide feedback from superiors, peer groups and subordinates to provide holistic and objective evaluation of the employees. The LDT position is communicated transparently with individual employees and career paths are shared with them.

MARKET SHARE
16 Mar 2012 | 13:35

Open / Prev. Close ( ` ) : 389.90 / 388.10

388.75
0.65 (0.17%)

High / Low ( ` ) 52 Wk High / Low ( ` )

: 391.95 / 383.15 : 420.25 / 264.45

3 Year High / Low ( ` ) : 420.25 / 218.00 5 Year High / Low ( ` ) : 420.25 / 169.00 Volume (No. of shares) : 15,38,283 MCap.( ` in Cr.) BV ( ` ) : 85,937 : 12.26 P/E (x) Div. Yield (%) : 46.60EPS ( ` ) : 8.33 : 1.64 FV ( ` ) : 1.00

Swot analysis;
Hindustan Unilever Limited - SWOT Analysis Description: The Hindustan Unilever Limited - SWOT Analysis company profile is the essential source for top level company data and information. Hindustan Unilever Limited - SWOT Analysis examines the companys key business structure and operations, history and products, and provides summary analysis of its key revenue lines and strategy. It is headquartered in Mumbai, India and employs more than 15,000 people. The company recorded revenues of INR175,238 million ($3,699.3 million) during the financial year ended March 2010 (FY2010) , a decrease of 13.4% compared to FY2009. The operating profit of the company was INR23,644.1 million ($499.1 million) in FY2010, a decrease of 3.9% compared to FY2009. The net profit was INR22,020.3 million ($464.8 million) in FY2010, a decrease of 11.8% compared to FY2009. Scope of the Report Provides all the crucial information on Hindustan Unilever Limited required for business and competitor intelligence needs .Contains a study of the major internal and external factors affecting Hindustan Unilever Limited in the form of a SWOT analysis as well as a breakdown and examination of leading product revenue streams of Hindustan Unilever Limited. SWOT COMPANY PROFILE: Hindustan Unilever Limited Key Facts: Hindustan Unilever Limited Company Overview: Hindustan Unilever Limited Business Description: Hindustan Unilever Limited Company History: Hindustan Unilever Limited Key Employees: Hindustan Unilever Limited Key Employee Biographies: Hindustan Unilever Limited Products & Services Listing: Hindustan Unilever Limited Products & Services Analysis: Hindustan Unilever Limited SWOT analysis: Hindustan Unilever Limited Strengths: Hindustan Unilever Limited Weaknesses: Hindustan Unilever Limited-Opportunities: Hindustan Unilever Limited-Threats: Hindustan Unilever Limited Company View: Hindustan Unilever Limited Top Competitors: Hindustan Unilever Limite Location and Subsidiary: Hindustan Unilever Limited-Head Office: Hindustan Unilever Limited Other Locations and Subsidiaries: Hindustan Unilever Limited

STRENGTH
1.R & D &MARKETING STRATEGY 2.PROJECT SHAKTI-CREATING BRAND AWARENESS IN RURAL INDIA. 3.FORMIDABLE DISTRIBUTION NETWORK. 4.NEW DIVISION CALLED HLL NETWORK. 5.NEW SALES ORGANIZATION CAE ONE HLL. 6.GROWTH MORE THAN THE FMCG SECTOR.

WEAKNESS
1.MARKET MYOPIA LED TO STAGNATION OF BUSINESS. 2.LOW RAW MATERIAL COST HIGH PRICED PRODUCT. 3.LACKED THE ABILITY TO CALL SHOTS & POWER PRICING. 4.INABILITY TO TRANSFORM ITS STRATEGIES AT THE RIGHT TIME

OPPURTUNITY

1.EXPANSION OF HORIZON OUTSIDE ASIA. 2.EXPORT IS LESS COMPARED TO PRODUCTION. 3.3DIVERSIFY ITS BRAND IN FOOD PRODUCTS. 4.LARGE DOMESTIC MARKET OVER A BILLION POPULATION. 5.UNTAPPED RURAL MARKET.

THREATS
1.LOOSING MARKET SHARE DUE TO NEW ENTRANTS. 2.ITC LTD.-ONE OF THE BIGGEST THREATS. 3.MIMIC OF BRANDS. 4.REMOVAL OF IMPORT RESTRICTION RESULTING IN REPLACING OF DOMESTIC BRANDS.

BIBLIOGRAPHY
Books: Philip Kotler, marketing management prentice Hall of India Pvt. Ltd. New Dehli. C. R. Kothari Research methodology, vishwa publication, New Delhi. Saxena Rajan marketing management Idea McGraw-hill publication Co. Ltd. New Delhi. H. V. Verma marketing of services Global business press, New Delhi. Business today magazine of February issue, 2008.

www.trai.gov.in

http://www.hindustanu.nilever.limited/t-aboutus-ttsl-organization.aspx http://www.rcom.co.in/webapp/Communications/rcom/Aboutus/aboutus_home.jsp http://www.hul.com/IDEA.portal?_nfpb=true&_pageLabel=IDEA_Page_AboutIdea http://www.scribd.co.in/about.htm http://www.google.co.in/service/tariff_excel_pre.htm http://www.wikipedia.in/trai/upload/PressReleases/15/pr16jan06.pdf

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