HINDUSTAN LEVER

CASE STUDY
Presented By:
Ashish Dubey
Azam Abdul Azeez
Krishna Chaitanya
Vivek Balakrishnan

SYNOPSIS
Established in 1956
Soap & Vanaspathi
Diversification
-- Modernization of existing plants
-- Market research Steep decrease in
demand
-- Accumulated reserves = equity
capital
2

SYNOPSIS (Contd.)
Concepts of the company business.
Focus on the distribution channel
-- Food productions.
-- Soaps.
Transportation
Research & Development.
Management view for company & its
environment.
3

SYNOPSIS (Contd.)
-- Govt. attitude towards
industry.
-- Image of the company in
the public.
-- Internal environment of the
company.
Opportunities for the company.

1956
5

Threat of New Entrants

Government policy
Economies of scale
Capital / investment requirements
Customer switching costs
Access to industry distribution
channels
Retaliation from existing industry
players
7

Competitors
Small Scale Industries
Un- organized Sector
Tata , Godrej

Substitute Products
Consumer goods easily duplicated
Marketing research and
Advertisement
Setup Large distribution network Wholesaler based (local)
Emphasis on R&D

Suppliers
There are many buyers and few
dominant suppliers
Suppliers threaten to integrate
forward into the industry
Local Suppliers Farmers
Self - Sufficiency

10

Customers

Extension of customers
Acceptable to rich and poor
Product line Household necessities
Animal feeds and Milk products
- Farmers (new TG)
Growing Economy

11

YEAR

5
6

5
7

REVEN
UE
AFTER
DEDUC
TING
EXPEN
SES
FROM
SALES

25
54

PROFIT
AFTER
PAYING
TAX
PROFIT
AFTER
PAYING
DIVIDE
ND

INCOME
5STATEMENT
5 6 6 6 6 6
8

6
5

6
6

67

6
8

6
9

30
98

33
71

37
64

41
54

45
74

49
08

55
25

58
13

67
11

79
45

88
54

87
02

10
25
1

90

74

12
8

20
8

25
0

22
5

14
5

14
6

17
0

17
1

23
4

21
8

23
8

29
7

20

(4)

45

74

10
5

80

46

33

55

48

86

56

76

11
2
12

Financial Analysis
ADVERTISING EXPENDITURE : From HIGH TO LOW
YEAR

1956

- 57

- 58

- 59

- 60

- 61

- 62

- 63

- 64

- 65

ADV.
EXP.(IN
LAKHS.)

71

99

105

113

131

157

154

129

118

104

SALES

27.8

33.3

36.8

41.9

46.0

50.0

54.0

59.7

61.8

71.0

3.0

2.9

2.7

2.8

3.1

2.9

2.9

1.9

1.0

ADV.EXP. 2.5
(AS%OF
SALES)

13

Ratio Analysis

Equity Share Data

15

Interpretation

Diversification
Distribution Channels
Advertisment
R&D

16

THANK YOU
17