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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[6] Kripalani, Majeet & Egnardio, Pete. The Rise Of India. Business Week Online. December 8, 2003. http://www.businessweek.com/magazine/content/03_49/b3861001_mz001.htm
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