Synopsis

A Comparative Analysis of Unilever, Procter & Gamble and

Nestle
(6th Trimester)

Submitted by:
Manisha Tripathy
PGDM-IB (2013-15)
Roll No. - 55

Consumer Products Industry

Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG) are products that are sold
quickly and at relatively low cost. These have short shelf life, either as a result of high consumer demand
or because the product deteriorates rapidly. Though the profit margin made on FMCG products is
relatively small (more so for retailers than the producers/suppliers), they are generally sold in large
quantities; thus, the cumulative profit on such products can be substantial. FMCG is probably the most
classic case of low margin and high volume business. The Consumer Products Industry is the biggest
industry in the world at the moment, with total revenues amounting to about 50% of all goods sold. It is
comparable to the GDP of the 4th biggest economy in the world, and entails most of the products we
use in our everyday lives.
For several years, consumer packaged goods (CPG) companies have relied upon the strength of
developing markets to compensate for sluggish economic growth in more mature economies. However,
recent economic headwinds in major developing countries like China, Brazil, and India are forcing
companies throughout the consumer products industry to work harder just to maintain profitable
growth.
Complex consumer habits, new cultural influences of global markets and rapidly changing technological
preferences are reshaping products and business models in the Consumer Goods industry. Organizations
in this space are busy reaching out to the Millennial and the Baby Boomers while grappling with a world
of changing brand loyalties, cross-channel conflicts and digital influences.
Current Scenario and Challenges
The consumer products industry had been witnessing robust growth in the past few years backed by
strong economic growth and rising rural income. Factors such as rapid urbanization, evolving consumer
lifestyles and emergence of modern trade were driving its growth. It is mostly urban-centric, especially
in developing or under developed countries.
The confluence of eroding brand loyalty, enduring recessionary consumer attitudes, rising digital
influence on the shopping path to purchase, and cross-channel conflict create a challenging
environment for CPG companies.
Company Overview

Unilever It is a is a BritishDutch multinational consumer goods company co-headquartered in

Rotterdam, The Netherlands and London, United Kingdom. It is the world's third-largest
consumer goods company measured by 2012 revenue, after Procter & Gamble and Nestl.
Unilever owns over 400 brands, but focuses on 14 brands with sales of over 1 billion Euros.
Founded in 1929, the company increasingly diversified from being a maker of products made of
oils and fats, and expanded its operations worldwide. One of the oldest multinational
companies, its products are available in around 190 countries. Company has annual revenue of
49.8 billion Euros (2013).

P&G - Procter & Gamble Co., also known as P&G, is an American multinational consumer goods
company headquartered in downtown Cincinnati, Ohio, United States. Founded in 1837, P&G is
a much simpler, much less complex company of leading brands that's easier to manage and
operate. In 2014, the company dropped around 100 brands and decided to concentrate around
80 core brands, which produced 95 percent of the company's profits. Company has annual
revenue of USD 84.17 billion (2013)
Nestle It is a Swiss multinational food and beverage company headquartered in Vevey,
Switzerland. It is the largest food company in the world measured by revenues. Nestl has 447
factories, operates in 194 countries, and employs around 333,000 people. Founded in 1905, the
company grew significantly during the First World War and again following the Second World
War, expanding its offerings beyond its early condensed milk and infant formula products. The
company has made a number of corporate acquisitions. In 2011, Nestl was listed No. 1 in the
Fortune Global 500 as the worlds most profitable corporation. Company has annual revenue of
CHF 92.16 billion (2013).

Objective
The main objective of this project is:

To perform a comparative analysis of the three global giants in the FMCG industry space,
Unilever, P&G and Nestle

The sub objectives include:

Understanding the FMCG industry as a whole and the competitive landscape

Understanding and analyzing the business models and strategies implemented by each of the
companies
Comparing the company performances across various parameters and benchmarking against
industry standards (last 5 years)
Finding and analyzing reasons for success/failure in the terms of management policy framework
and its execution levels

Methodology
The methodology would mainly entail understanding and comparison of the business models, strategies
and major challenges faced by the three companies as well as their reflective actions through secondary
data analysis in the form of scholarly articles, financial reports, news reports, interviews and press
releases, etc.
Various strategic tools and frameworks would be applied as relevant to the analysis of information
gathered.

Expected Outcomes
The expected outcomes include:

A better understanding of current opportunities and challenges in the FMCG industry

A greater insight into each of the companies current strategies and measures taken to meet
performance benchmarks
An understanding of the future prospects of each of the firms in terms of overall growth in the
industry

References:
1. https://www.equitymaster.com/detail.asp?date=07/04/2013&story=12&title=Unilever-vsProcter--Gamble-War-of-the-Worlds http://businesstoday.intoday.in/story/infosys-q4-earningsresults-up-revenue-growth-2012-13/1/23976.html
2. http://www.socialphy.com/posts/off-topic/11574/The-10-Companies-that-Control-YourConsumption.html
3. http://deloitte.wsj.com/cio/2014/01/03/2014-consumer-products-industry-outlook/
4. http://www.wipro.com/industries/consumer-goods/