INDUSTRY REVIEW

Description

Hindustan Unilever Limited (HUL) is one of the largest fast moving consumer goods
company in India. The company, a subsidiary of Unilever, sells Foods and Home and
Personal Care brands in about 100 countries worldwide. The company, along with its
subsidiaries, is engaged in the production and distribution of soaps and detergents,
personal products, beverages, foods, ice creams, exports and others products such as
chemicals and agri products. The major brands of the company include Lux, Hamam,
lifebuoy, Dove, RIN, Surf, Wheel, Sunlight, Vim, Fair & Lovely, Clinic Plus, Sun Silk,
Close-up, Pepsodent, Lakme, Brook Bond and others.

Global Markets Direct’s Hindustan Unilever Limited - Financial and Strategic Analysis
Review is an in-depth business, strategic and financial analysis of Hindustan Unilever
Limited. The report provides a comprehensive insight into the company, including
business structure and operations, executive biographies and key competitors. The
hallmark of the report is the detailed strategic analysis of the company. This highlights its
strengths and weaknesses and the opportunities and threats it faces going forward.

Scope

• Provides key company information for business intelligence needs

• The company’s strengths and weaknesses and areas of development or decline are
analyzed. Financial, strategic and operational factors are considered.
• The opportunities open to the company are considered and its growth potential
assessed. Competitive or technological threats are highlighted.
• The report contains critical company information – business structure and
operations, the company history, major products and services, key competitors,
key employees and executive biographies, different locations and important
subsidiaries.
 • The report provides detailed financial ratios for the past five years as well as
interim ratios for the last four quarters.
• Financial ratios include profitability, margins and returns, liquidity and leverage,
financial position and efficiency ratios.

Reasons to Buy

• A quick “one-stop-shop” to understand the company.

• Enhance business/sales activities by understanding customers’ businesses better.
• Get detailed information and financial & strategic analysis on companies
operating in your industry.
• Identify prospective partners and suppliers – with key data on their businesses and
locations.
• Capitalize on competitors’ weaknesses and target the market opportunities
available to them.
• Compare your company’s financial trends with those of your peers / competitors.
• Scout for potential acquisition targets, with detailed insight into the companies’
strategic, financial and operational performance.
COMPANY PROFILE

Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods
company, with leadership in Home & Personal Care Products and Foods & Beverages.
HUL's brands, spread across 20 distinct consumer categories, touch the lives of two out
of three Indians. They endow the company with a scale of combined volumes of about 4
million tonnes and sales of nearly Rs.13,718 crores. The mission that inspires HUL's over
15,000 employees is to "add vitality to life". With 35 Power Brands, HUL meets
everyday needs for nutrition, hygiene, and personal care with brands that help people feel
good, look good and get more out of life. It is a mission HUL shares with its parent
company, Unilever, which holds 51.55% of the equity. The rest of the shareholding is
distributed among 360,675 individual shareholders and financial institutions. A Fortune
500 transnational, Unilever sells Foods and Home and Personal Care brands in about 100
countries worldwide.

HUL is also one of the country's largest exporters; it has been recognised as a Golden
Super Star Trading House by the Government of India.

Over time HUL has developed into a viable & competitive sourcing base for Unilever
world wide in Home and Personal Care & Foods & Beverages category of products. HUL
is also a global marketing arm for select licensed Unilever brands and also works on
building categories with core country advantage such as branded basmati rice.

HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's,
Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna,
Kwality Wall's – are household names across the country and span many categories -
soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary
products. They are manufactured over 40 factories across India. The operations involve
over 2,000 suppliers and associates. HUL's distribution network, comprising about 4,000
redistribution stockists, covering 6.3 million retail outlets reaching the entire urban
population, and about 250 million rural consumers.
HUL believes that an organisation's worth is also in the service it renders to the
community. HUL is focusing on health & hygiene education, women empowerment, and
water management. It is also involved in education and rehabilitation of special or
underprivileged children, care for the destitute and HIV-positive, and rural development.
HUL has also responded in case of national calamities / adversities and contributes
through various welfare measures, most recent being the village built by HUL in
earthquake affected Gujarat, and relief & rehabilitation after the Tsunami caused
devastation in South India.

In 2001, the company embarked on an ambitious programme, Shakti. Through Shakti,

HUL is creating micro-enterprise opportunities for rural women, thereby improving their
livelihood and the standard of living in rural communities. Shakti also includes health and
hygiene education through the Shakti Vani Programme, and creating access to relevant
information through the iShakti community portal. The program now covers 15 states in
India and has over 45,000 women entrepreneurs in its fold, reaching out to 100,000 plus
villages and directly reaching to 150 million rural consumers. By the end of 2010, Shakti
aims to have 100,000 Shakti entrepreneurs covering 500,000 villages, touching the lives
of over 600 million people.

HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The
programme endeavours to induce adoption of hygienic practices among rural Indians and
aims to bring down the incidence of diarrhoea. It has already touched 84.6 million people
in approximately 43890 villages of 8 states. The vision is to make a billion Indians feel
safe and secure.

If Hindustan Unilever straddles the Indian corporate world, it is because of being single-
minded in identifying itself with Indian aspirations and needs in every walk of life.
SWOT ANALYSIS
Strengths

Largest organizations
 Advanced technology
 well skilled professionals
 Good distribution network all over world
 Unilever provided creative strategies
 Strong marketing and good image creation
 Wide distribution channels in both national and internal
markets
 Decentralized decision-making

Weaknesses

 Competitors offered better alternative product

 Dual co-chair approach and dual company structure
create problems
 Lack of high volume brands
 Slow sales growth compared with the competitors.
 Low cash flow

Opportunities

 Rural areas are a large prospective market

 Employing external job applicants
 Gain high market share
 Introducing new distribution channel
 Advertising through e-commerce
 Promote its products in new geographic areas
 Customer base is increasing with effective marketing

Threats
 Product innovation is ineffective
 The high competition for market share
increases rapidly
 Changes of people’s lifestyle
 Political and Economic factors
Competitor Analysis
Competitor Comparison
Competitive Profile Matrix
(unilever)