INTRODUCTION

Hindustan Unilever Limited (HUL) is an Indian consumer goods company based in Mumbai,
Maharashtra. It is owned by Anglo-Dutch company Unilever which owns a 67% controlling
share in HUL as of March 2015 and is the holding company of HUL. HUL's products include
foods, beverages, cleaning agents, personal care products and water purifiers.
HUL was established in 1933 as Lever Brothers and, in 1956, became known as Hindustan Lever
Limited, as a result of a merger between Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and
United Traders Ltd. It is headquartered in Mumbai, India and employs over 16,000
workers, whilst also indirectly helping to facilitate the employment of over 65,000 people. The
company was renamed in June 2007 as "Hindustan Unilever Limited".
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.
HUL is the market leader in Indian consumer products with presence in over 20 consumer
categories such as soaps, tea, detergents and shampoos amongst others with over 700 million
Indian consumers using its products. Sixteen of HUL's brands featured in theACNielsen Brand
Equity list of 100 Most Trusted Brands Annual Survey (2014), carried out by Brand Equity, a
supplement of The Economic Times.
The "most trusted brands" from HUL in the top 100 list (their rankings in brackets) are: Lux (6),
Surf Excel (7), Clinic Plus (8), Rin (13), Lifebuoy (15), Close up (21), Pond's (22), Pepsodent
(24), Fair & Lovely (29), Dove (30), Sunsilk (34), Vim (48), Wheel (67), Vaseline (70),Pears
(78), Lakme (91)

Internal Environment
As per the latest Nielsen 'Campus Track Business School Survey', for the fifth year in a row,
Hindustan Unilever Limited (HUL) has emerged as the No. 1 Employer of Choice across all
sectors for the 2016 graduating batch of B-School students, across functions. In addition, HUL
retains the 'Dream Employer' status for the seventh year running and continues to be the top
company considered for application by B-School students. HUL has also been ranked No. 1 for
Marketing as well as No. 1 FMCG in Finance. HUL has been ranked significantly higher than
other companies on all the employment drivers. This is the 16th year of the Nielsen Campus
Track B-school study.
Mr. BP Biddappa, Executive Director, Human Resources, HUL, said "This achievement is a
recognition by students of the consistent actions HUL has taken over the years to build mutually
beneficial relationships and engagements with the student and academic community. The
company believes in a 365-day relationship with the students, investing senior leadership time
and effort in bringing alive its employer value proposition on campuses."
"We ensure that we attract the best talent and our processes help lay a strong foundation early in
their career. HUL has a clearly defined career philosophy which revolves around job rotation and
diversity of experiences in an individuals career. We also ensure that we have progressive people
policies in place for our employees to enable them to perform their best at all life stages. We
continue to review our policies and practices to keep them relevant to the changing needs of our
workforce," he added.

HUL's value proposition

The Company's strong employer value proposition is rooted in its unique positioning as a 'School
of CEOs' offering big jobs early on in career to groom for functional and leadership
responsibilities.
HUL's approach to grooming talent and leaders has been built over several decades where every
generation of leaders has left a legacy for the future through their commitment, ownership and
active participation in the talent attraction and development process.

Mission

Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene, and
personal care with brands that help people feel good, look good and get more out of life.

Values Led & Purpose Driven

Increasingly, young men and women want to work for a company that reflects their own values.
If they believe in a common vision and the larger corporate purpose, they are motivated to
deliver great performance. They are looking to join organizations that are values led and purpose
driven. Unilever has always been led by the philosophy of doing well by doing good in the
conduct of its business.
The Unilever Sustainable Living Plan launched in 2010 has further strengthened the Companys
value proposition with young talent. The Unilever Sustainable Living Plan embodies the
Companys values and purpose. The Plan underscores the Companys commitment to grow its
business responsibly. As part of the Plan, the Company has committed to doubling the size of its
business while reducing its environmental footprint and increasing its positive social impact.
What is most significant about the Plan is that it covers the entire value chain of the business
from sourcing to consumer use.

HR practices at HUL

Effective and Efficient HR practices are very much important for every organization. So, HUL
has also its HR Practices, which helps it a lot to achieve the targets. Human Resource
Management initiatives in any Organization endeavor to change, redefine, revisit, renew,
reinvent, revitalize & restructure the Organization architecture. This is effectively done with the
help of alignment & integration of HR policies & strategies with business goal & objectives

Marketing Strategies

Hindustan Unilever Ltd. (HUL) has in place a five-pronged approach to remain future-ready in
the light of a technology-driven market.
To remain future ready, first, embracing technology and inclusive innovation that meets the
needs of consumers across the socio-economic pyramid; second, committing to sustainable and
responsive growth; third, building future ready talent and capabilities; fourth, values-led and
purpose-driven leadership; and fifth, creating an agile and inclusive work culture. Unilever the
approach to developing innovations with consumer price at the starting point was at the heart of
the companys inclusive innovation strategy. HUL had institutionalised a challenge cost
mindset where the target price for consumers drives innovation

STRATEGIC ADVANTAGE PROFILE (SAP)

The purpose of HUL was to bring importance to life and to satisfy the daily needs of the
customers in areas of personal and household care. It also strived to create an awareness among
the people related to nutrition and hygiene .To grab opportunities in untapped rural and food
processing market ,HULs corporate level strategy was to shift the decision making power from
subsidiary to its headquarters .HULs strategy remained focused in creating power brands and
creating margins .One of HULs strategy is direct selling .For the rural areas , HUL started
project streamline in 1997.HUL have followed the strategy of building its distribution channels
in transitional manner .They have restructured their core business in two divisions i.e. food ,
home and personal core products .It focuses mainly for the improvement in the products already
existing in the market. HUL tries to bring a change in their job management structure by taking
the step of reducing managerial job classes and developing deep level expertise .Apart from
that ,HUL also have few pioneering strategies .These include building market and building
brands ,launching brands when innovative pipeline is full .Also they believe in having clarified
long term strategies and delivering sustainable performance.

There are various levels at which strategy is formed at HUL and these include
COORPORATE LEVEL STRATEGY
Strategic management at HUL is the responsibility of the board of directors headed by a
chairman .There are five idependent and five whole-time directors.
OPERATIONAL MANAGEMENT STRATEGY
Operational management is an area of management concerned with overseeing is looked
after by management committee which comprises of vice chairman, CEO and managing
director and executive directors of two business divisions and functional areas.
BUSINESS LEVEL STRATEGY
In HUL there is a divisional committee having the executive director and heads of
functions of sales, commercial and manufacturing looks after the business level decisionmaking.

 FUNCTIONAL LEVEL STRATEGY

Its has the responsibility of functional head. It has two type of structures
Decentralised and centralised structures
Decentralized structure: Unilever formulated a new global realignment under which it
will develop brands and stream line product offerings across the world and the
subsidiaries will sell the product. There focus changed to limited number of international
brands rather than a large range of local brand. For instance under Functional-level
management marketing manager has team of managers looking after individual brand.
Centralized structure: It comprises finance, human resource management, research,
technology and corporate and legal affairs.

External Environment
Micro Environment
To determine industry attractiveness and long-run industry profitability of the Indian FMCG
Industry, we chose to apply the Porters five forces in our analysis. Porters five forces are: (1)
Barriers to Entry and exit, (2) Threat of substitutes, (3) Buyer bargaining power, (4) supplier
bargaining power, and (5) Industry Competition.
1. Barriers to Entry and exit: The Indian FMCG Industry is characterized with modest entry and
exit barriers. Integrated business model and increasing capital requirement in the industry
restrict new entrants. Huge investments in setting up distribution networks and promoting
brands and competition from established companies.
Threat of New Entrant
Time and Cost of Entry
Specialist Knowledge
Economies of Scale
Cost Advantage
Technology Protection
Barriers to Entry
2. Threat of substitutes: Being an essential commodity the demand for consumer products is
elastic. Multiple brands positioned with narrow product differentiation. Companies entering a
category /trying to gain market share compete on pricing which increases products
substitution. Hence, threat of substitute is high in the industry.
Threat of Substitution
Substitute Performance
Cost of Change
3. Buyer bargaining power: High brand loyalty for some products, thereby discouraging
customers product shift. But low switching cost and aggressive marketing strategies under
intense competition within the FMCG companies, induce Customers to switch between
products, thereby driving value for money deals for consumers.

Buyer Power
Number of Customers
Size of Each Order
Differencebetween Competition
Price Sensitivity
Ability to Substitute
Cost of Changing
4. Supplier bargaining power: Prices are generally governed by international commodity
markets, making most FMCG companies price takers. Due to the long term relationships with
suppliers etc., FMCG companies negotiate better rates during times of high input cost inflation
Supplier Power
Number of Suppliers
Size of Suppliers
Your Ability to Change
Cost of Changing
5.Industry Competition: Competitiveness among the Indian FMCG players is high. With more
MNCs entering the country, the industry is highly fragmented. Advertising spends continue to
grow and marketing budgets as well as strategies are becoming more aggressive. Private labels
offered by retailers at a discount to mainframe brands act as competition to undifferentiated and
weak brands.
Competitive Rivalry
Number of Competitors
Quality Differences
Other Differences
Switching Costs
Customer Loyalty
Costs of Leaving Market
Macro Environment
HUL has created a great empire over years and it has gathered a lot of wealth and income
especially when it offered equity to Indian shareholders. Evidently, it has been able to offer
products such as soaps, teas, shampoos and detergents to over 700 million consumers. The
PESTLE analysis is a vital strategic tool for understanding the market growth or decline that the
HUL has relied on invariably. The mainstay aspects of PESTLE analysis include the following;

Political aspects
Political factors are known to impact companys ways of operation. Political factors can easily
build opportunities and advantages for any company. Legislation, voluntary codes, market
regulations and trade agreements are factors that have influenced operations of HUL. Tax levies
and tax breaks have controlled the market in one way or another.

Economic factors
Global interest rates and fiscal policy are all agreed around economic conditions. The climate of
the Indian economy controls how HUL consumers, suppliers and many stakeholders conduct
themselves. A growing economy will have effects on HUL operations as it will increase
unemployment, lower stakeholders confidence and high spending power.

Social factors
In the business world, it is wise for any entrepreneur or enterprise to pay attention to societies
and the media. Social factors impact consumers attitude, interests and opinions. Social factors
shape consumers, the way they behave and what they are willing to purchase. Population
changes in India have influenced the way HUL operates especially supply and demand of goods
and services within an economy.

Technological factors
Technological infrastructures like internet and other ways to share information have impacted the
operations of HUL and many other companies. It has also become easy for many companies to
manage their operations and for consumers to expect instant results. Faster exchange of
information has become the in-thing for stakeholders and consumers.

Legal factors
These factors come with both external and internal factors. Certain laws affect the business
environment while others have certain policies that any company can maintain. HUL has been
impacted by consumer laws, safety standards and labor laws among other rules.

Environmental aspects
These are factors that are determined by surrounding environment and they have influence on
other areas that go hand on hand with business environment. Factors of a business environmental
analysis like that of HUL or any other company include climate, weather, global changes in
climate and geographical location.

SWOT ANALYSIS OF HUL

STRENGTHS

Strong and well differtiated brands.

Brand portfolio includes both global Unilever brands and local brands of specific
relevance to India.
Consumer understanding and systems for building consumer insight.
Distribution structure with wide reach, high quality coverage and ability to leverage
scale.
Access to Unilever global technology

WEAKNESSES

Increased consumer spends on education consumer durable, entertainment, travel etc

resulting in lower share of wallet for FMCG.
Limited success in changing eating habits of people.
Complex supply chain configuration.
Price positioning in some categories allows for low price competition(lux, pears)

OPPORTUNITIES

Market and brand growth through increased penetration especially in rural areas.
Brand growth through increased consumption depth and frequency of usage across all
categories.
Upgrading consumers through innovation to new levels of quality and performance.
Growing consumption in Out of Home categories.

THREATS

Low priced competition now present.

Grey imports.
Spurious/counterfeit products in rural areas and small towns.
Changes in fiscal benefits Unfavourable raw material prices in oilsetc.

EFFECT OF GST ON HUL

Though investors are busy offloading HUL shares after a disappointing June quarter, few
analysts still find potential in the FMCG major.
HUL's net profit rose 9.8 percent at Rs 1174 crore in April-June quarter from Rs 1069.2 crore in
year-ago period. In its total income was below expectations, up 3.6 percent at Rs 8128.2 crore
compared to Rs 7844.5 crore year-on-year. Its volume growth was at 4 percent from 6 percent on
annual basis but unchanged on sequential basis. Ad-spends for the quarter contracted by 60 basis
points (bps). While slowdown has been across markets, the rural demand has been weaker.
Macquarie has an outperform rating with a target of Rs 940 per share betting on higher sales
volumes growth and improvement in demand scenario. The brokerage is positive as the
management expects normal monsoons and 7th pay commission payouts may revive demand
growth over medium term.
With a view that goods and service tax (GST) will be a key trigger for HUL, Credit Suisse has an
outperform rating. It has set a target price of Rs 930 per share. The brokerage firm believes that
if GST standard rate is 18-20 percent, it could be a positive for HUL and can lower the indirect
tax rate by 300-500 basis points for HUL. GST is likely to be passed in the ongoing monsoon
session of Parliament. HUL hiked prices of soaps in few months and the brokerage firm expects
deflation in soaps to end.
Credit Suisse also adds that after HUL opens a new factory in Assam with an investment of Rs
1000 crore it will have an excise exemption for 10 years and income tax exemptions. The facility
is likely to be ready by early 2017, in which case HUL's excise and income tax ratecould
gradually go down as production ramps up.
Bank of America Merill Lynch also has a buy rating with a target price of Rs 1020 per share. It is
betting on monsoon, GST and 7th Pay Commission to boost the stock. It says a likely normal
monsoon with 45 percent of the companys revenue from rural markets, HUL will be a key
beneficiary if the GST is implemented, disbursement of the 7th Pay Commission-linked wage

hikes could help urban demand/personal care and a possible buyback/special dividend will drive
it. It also adds that a strong 18 percent earnings per share (EPS) CAGR is likely to support a
premium valuation.

FUTURE GROWTH PROSPECTS AND SUGGESTIONS

Morgan Stanley has an overweight rating with a target of Rs 945 per share, positive on high
visibility of strong operating margin expansion even in a likely inflationary environment. Dabur
is the only other consumer stable stock that the house has an overweight rating.

As of Sep 02, 2016, the consensus forecast amongst 42 polled investment analysts covering
Hindustan Unilever Ltd advises investors to hold their position in the company. This has been the
consensus forecast since the sentiment of investment analysts improved on Jul 30, 2014. The
previous consensus forecast advised that the company would underperform Hindustan Unilever
Ltd.

ACKNOWLEDGEMENT
I would first like to thank to my respected Deepika maam for showing trust in me and
giving me an opportunity for representing a new and innovating project. As this
project is not only an important part for enhancing my knowledge but also gave us an
opportunity to experience of actual market and Environmental effect on HUL.

Table of Contents
Sr.no

Title

Page no.

1.

Introduction

2.

Internal Environment of HUL

3.

SAP of HUL

4.

External Environment of HUL

5.

SWOT of HUL

6.

Effect of GST on HUL

10

7.

Future Growth Prospects of HUL

11

BUSINESS ENVIRONMENT

VENIKA MALIK
BBA- 2ND YEAR
III SEMISTER
SEC- C
15021021144