Uniliver Case Study

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Unilever in India Case

Problem Definition:

As a massive provider of consumer goods in India, Hindustan Lever Limited (HLL), is attempting to penetrate the rural markets where there is a massive opportunity for growth. HLL’s current operating sectors are becoming increasingly competitive and crowded. Their best opportunities now lie in developing new markets and rising to the top of that market. They are attempting to do this with a program for developing entrepreneurs, named Shaktis. Met with initial success the program now needs to grow without increasing costs.

Situational Analysis

-----External Analysis

They have penetrated the deepest into the rural markets at around 16%

Competitors are beginning to enter market but are well behind

Also compete with local retailers

One Shakti for every for every 5 villages, large room for growth

Government barriers, different for every region

Language barriers, many different dialects

Compete across a large variety of product lines (HLL),

In contrast Have smaller product variety (Shaktis)

Very rural Area

Bad infrastructure

Differing social norms with relation to Women and their role in society

Micro Credit

Different based on location

-----Internal Analysis

• HHL

o Need to develop Shaktis market

• Shaktis

o Higher turnover of entrepreneurs in last year of data,

o Need to create higher level of entrepreneur confidence and knowledge

o Have high level of brand(s) equity….. ie Vani program, ect

o Provide high level of service

o Have large network of people working – in places that are remote

 Possibly underutilized

o Low knowledge of modern hygiene and medicine

Alternative Courses of Action

1. Develop Existing Networks and Communication

• Advantages

i. Sharing of knowledge between existing between entrepreneurs

1. Develop Best Practices

2. Show the success of the system to people who are discouraged

ii. Use existing networks to create some of the expansion

1. Rewards for recruiting friends & associates

iii. Retain entrepreneurs

iv. Relatively inexpensive

v. Develop iShakti and Vani

• Disadvantages

i. High levels of work can go into keeping very developed networks

ii. Can’t solve all a company’s problems

iii. Need good marketing and advertising to communicate and develop those relationships

1A. Develop level of Shakti Marketing and Advertising

• Advantages

o Using local connections make people aware of HLL’s good nature

o What’s good for HLL is good for Shaktis is also good for rural areas and Indian People

• Disadvantages

o Possible backlash from rural area

 Very conservative views

o Trying to get people to do to much?

 Shaktis are not advisers per say but entrepreneurs are

2. Enter markets where there are good existing circumstances for success

(Not states where regulations are stringent and culture is unsupportive.)

• Advantages

i. Reduced expenditure trying to develop all markets

ii. Play to strength, as done with initial Shakti program

iii. Best locations for making the highest profits

• Disadvantages

i. Exclusion of possibly successful areas to operate in

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