INDUSTRY REVIEW PROJECT

● Trained labor force: HUL invests heavily in its workforce training, which results in it hiring a significant number of professional and motivated workers. ● Product line: It includes a wide range of product categories, such as oral care , personal care, household surface, fabric care, etc. ● Market share: HUL has continued to maintain its high market share in various product segments by high market penetration and constantly acquiring new companies. ● Financial position: Having more than 80 years of experience in the consumer goods market and backed by Unilever who owns 67% controlling share in HUL, It is financially strong and stable. ● Share of Wallet: Whether one buys surf /wheel /Rin detergent it will go to HUL’s pockets. HUL's strategy to offer different products for different income groups (selective targeting) has been successful in having a share of the wallet of a consumer irrespective of their economic class. ● Dealer Community: HUL has a good partnership with its dealers which not only supplies them but also focuses on promoting the products and training of the company. ● Relationships: HUL develops strategic partnerships with its manufacturers , distributors, retailers and other interested parties. This helps it to use them in the future if needed. ● Brand Extensions: HUL is using brand extensions to give identity to its new products. Like Dove Soap, Dove Shampoo, Dove Moisturizer etc. ● Entering new markets: Creative teams from HUL have helped it to come up with new products and reach new markets. In the past it was successful, in most of the initiatives it took in new markets. ● HUL has many intellectual property rights including trademarks and patents. This makes their products exclusive and competitors cannot copy or reverse engineer it. ● Automation: has enabled more effective resource utilization and cost reduction from various stages of production. It also enables its goods to be consistent in quality, and offers the flexibility to scale up and scale down production as per market demand. Weakness ● Large number of brands in different product categories: Sometimes having a broad brand portfolio can lead to confused positioning. Price positioning in some categories allows for low price competition like AMUL captured Kwality’s market share. ● Hindustan Unilever faced controversies like skin lightening creams, pollution etc ● Declining market share: rivals concentrating on a single product & eating up HUL ‘s share, eating up HUL ‘s wheel detergent market share, such as Ghadi & Nirma detergent. ● No Ayurvedic Products is marketed by Hindustan Unilever Limited. ● Hindustan Unilever faced controversies like skin lightening creams, pollution etc ● HUL products have strong competition from big domestic and international players. Opportunities

● Growing income levels: Because of increased literacy rate and regulated inflation, people’s discretionary income rises, resulting in increased demand and lifestyle changes. ● Expanding market: By penetrating more in the rural markets through its Shakti Project and transition of unorganized business to organized business, which will lead to further expansion of the consumer goods market. ● Awareness in usage rate of consumer goods: People getting more aware and conscious about the usage of HUL's products. It can be achieved through advertising /word of mouth /doctor prescription ,resulting in an increase in usage rate of these products. ● Can Start Manufacturing or Marketing Ayurvedic Products under the brand name of HUL ● Can increase Mergers and acquisitions to strengthen the brand ● Increasing departmental stores concept ● Increasing Globalization. Threat ● Market competition: With the rising number of local and national competitors, it is becoming increasingly difficult for businesses to separate themselves from others. There is also a concern that counterfeit goods will kill the market’s brand name. ● Price of commodities: Increasing price of commodities will result in further increase in the price. Further increase in price will result in decrease in sales, margins & brand switching. ● Buyers power: With a highly diversified consumer goods market where there are lots of brands claiming different sorts of benefits, it’s very difficult for consumers to stick to a particular brand & hence results in brand switching where consumers get power to select a brand based on several factors like availability, reference group recommendation, preference & price. ● Changing Norms and Regulations by the Government can also directly affect company policies and practices. ● Competition from unbranded and local products can hurt Hindustan Unilever's market ● HUL’s tea business has declined marginally; reason is that- cost pressure is likely due to rising crude and freight costs. ● Tax and regulatory structure. ● Mimic of brands. ● Removal of import restrictions resulting in replacing domestic brands. McKinsey 7s model: Hindustan Unilever Limited makes use of the McKinsey 7s model to frequently appraise and enhance its performance, and implement successful change management processes.

1. Strategy a. Guiding behavior for goal attainment The strategic path for Hindustan Unilever Limited is critical in supporting the business to guide their employee, staff, and stakeholder behavior toward attaining goals. SMART Goals are set with short and long-term deadlines which are in line with the business strategy. The business strategy helps the managers and employees decide their tactics and behaviors for attaining the set goals and targets to assist the business to grow. b. Clearly defined The strategic path and the overall business strategy for Hindustan Unilever Limited are clearly defined and communicated to all the employees and stakeholders.This facilitates the organization to manage performance, guide actions, and devise different tactics that are aligned with the business strategy. The way the business strategy is defined and communicated make operations for Hindustan Unilever Limited align it's responsibilities and actions towards the goals of the company. c. Competitive pressures Hindustan Unilever Limited’s strategy also takes into consideration the competitive pressures and activities of their competitors. The strategy adopted by them addresses these competitive pressures through suggestive measures and actions via strategic tactics and activities that ensure sustainability to Hindustan Unilever Limited. d. Changing consumer demands A critical aspect of the strategy at Hindustan Unilever Limited is that it takes into consideration the changes in consumer trends and demands, as well as the evolving consumer market patterns and consumption behavior. This is a critical part of the strategic path at Hindustan Unilever Limited because it allows the company to stay in the competition and be relevant to its target consumer groups, and also allows the company to identify demand gaps in the consumer market. e. Flexibility and adaptability Rigidity in strategy leads a company to often become stagnant, obstruct advancement, and slow down progression with evolving changes in the consumer markets. With flexibility and adaptability, HUL is not only able to react quickly and respond to the changing consumer demands globally, but is also able to adapt its products via localization for different countries and regions. With the help of the large database, the company is able to predict consumer market changes, and formulate strategic changes accordingly to meet the market trends.

2. Structure a. Organizational hierarchy Hindustan Unilever Limited practices a flatter organizational hierarchy. The employees feel more secure and confident, as there are lesser managerial levels in between and the employees have easier access to the senior management and leadership. As a result, the flatter hierarchy allows quicker decision-making processes for HUL and increases organizational commitment in the employees. b. Inter-Departmental coordination HUL has high coordination between different departments. The company’s departments often form interdepartmental teams for projects and tasks that require multiple expertise. All coordination between different departments enables effective and organized workflow. HUL has a systematic process for initiating and monitoring coordination between departments to ensure smooth work operations, processes and goal attainment. c. Internal team dynamics [department specific] HUL encourages teamwork and team-oriented tasks, although jobs require individual attention and scope, the company also assigns individual responsibilities and job tasks. However, all employees at Hindustan Unilever Limited are expected to provide their individual contributions and also be team players who are able to work well with other members. The teams at Hindustan Unilever Limited are supportive of all members and work towards achieving the broader team objectives and goals under the Hindustan Unilever Limited designed strategy and values. d. Centralization vs. decentralization HUL has a hybrid structure between centralization and decentralization. Like many progressive organizations, HUL supports decentralized decision making and the job roles at the organization required to be carried out with responsibility. Employees usually set their goals with mutual coordination and understanding with the supervisors. However, Hindustan Unilever Limited is centralized as it makes sure that the supervisors monitor, and approve of the tactics and methods that employees choose to ensure that they are aligned with the organizational strategy and values. e. Communication Hindustan Unilever Limited has developed an intricate system for ensuring communication between employees and different managerial levels. The defined, systematic and organized communication allows an easy flow of information among the employees and guarantees that no organizational tasks and goals are missed or compromised due to lack of communication or misunderstandings.

3. Systems a. Organizational systems in place Hindustan Unilever Limited has defined well-demarcated systems in place to ensure that the business operations are managed effectively. The systems at Hindustan Unilever Limited are largely departmental in nature and include the following: ● Human resource management ● Finance ● Marketing ● Operations ● Sales ● Supply chain management ● Public Relation Management ● Strategic leadership b. Defined controls for systems Every system at HUL has specially designed tools and methods of control for the evaluation of performance and goal attainment. Each department designs specific controls for members for performance evaluation, as well as for inter-departmental tasks and responsibilities. c. Monitoring and evaluating controls HUL often evaluates its systems through the control systems designed by them. They monitoring of the performance continual and ongoing. This is done through observing and informal discussions. Employees' feedback is informally given on a regular basis and whenever required. Based on the need and the urgency of the projects and assigned tasks, formal evaluation of performance of employees and managers are conducted semi-annually or quarterly . This formal process is undertaken by supervisors and managers to ensure the identification of performance lags and to suggest means of improvement. d. Internal processes for organizational alignment HUL has specific methods to ensure that all departments and systems within the organization are in line and working in harmony towards the broader business goals and targets. 4. Shared values a. Core values The core values at HUL are defined and communicated to develop a creative and supportive organizational structure which will allow employees to perform optimally, and enhance their motivation and organizational commitment. The core values at Hindustan Unilever Limited include, but are not limited to: - Creativity

- Honesty - Transparency - Accountability - Trust - Quality - Heritage The Hindustan Unilever Limited business also ensures that all its activities and operations are conducted with high ethical and moral standards that are redefined and benchmarked against international criteria. b. Corporate culture HUL encourages an inclusive culture that celebrates diversity. The company has an international presence. Company’s production units are spread across different countries. Hindustan Unilever Limited ensures that its organizational culture is supportive of diversity, and has internal policies to reduce incidences of discrimination. The corporate culture at Hindustan Unilever Limited also encourages innovation and creativity by allowing independence for growth to individuals and teams. Thus helping them refine their careers as well as personalities. Lastly, the corporate culture at HUL also has a supportive leadership which works towards increasing employee motivation and job satisfaction by providing visibility and accessibility. c. Task alignment with values HUL ensures that all its job tasks and roles are in line with the core values that the company propagates. If there is an organizational change, HUL will change management processes and methods incorporating the core values making sure that the organizational culture is consistently maintained, and systematically changed if need be. 5. Style a. Management/leadership style HUL has a participative leadership style. Through participative leadership style, the organization is able to engage and involve its employees in decision-making processes and managerial decisions. This allows the leaders to regularly interact with the employees and different managerial groups to identify any potential conflicts for resolution, and provide feedback regarding strategic tactics and operations. HUL is able to enhance employee motivation, and increase organizational commitment and ownership amongst employees as well as other stakeholders b. Leadership style Efficiency Participative leadership style is very effective in achieving the business goals of the organization. Employees feel the need to be active members of the organization who are valued for their suggestions, feedback and input. Through this method leaders and managers are able to identify current and potential conflicts within the HUL organization, and actively work to resolve them as soon as possible. c. Cooperation vs competition – internally

HUL gives way to internal collaboration and cooperation between employees, systems, teams and departments. This cooperation and collaboration is very crucial since its operations are spread internationally, and also because tasks and responsibilities inside the organization often require inter-departmental feedback and input. With increased expansion the business regularly forms project teams which function effectively. 6.Staff a. Employee skill level vs business goals HUL has a sufficient number of employees working across its global operations. Employees are hired internally as well as externally for different job roles and positions, depending on the urgency and the skill levels required. Based on this, it is seen that Hindustan Unilever Limited has employees who are skilled as per the needs of their job roles and positions. All the employees are given in house training to familiarize them with the company and its values. External training along with in-house training is given for overall skill level enhancement. All the job roles are designed to facilitate the achievement of business goals, and as such, employee skill level at Hindustan Unilever Limited is sufficient to achieve the business goals of the company. b. Number of employees HUL has a huge number of employees. The number of employees varies from nation to nation as per the requirements and needs of the business and operations. The global team of HUL accepts, and encourages diversity, and works in synchronization with members to ensure attainment of business goals. c. Gaps in required capabilities and capacities HUL has a well-defined system for identifying needs for capabilities and capacities of the organization. The human resource of the business has a defined process that aligns all other departments to identify potential vacancies and skill gaps. Based on the type of need, the human resource department recruis resources which may be permanent or temporary in nature, as well as arranges training sessions for the current workforce. 7. Skills a. Employee skills Hindustan Unilever Limited has an incredible workforce, with high skills and capacities. All employees are hired based on their merit and qualifications. Hindustan Unilever Limited prides itself on hiring the best professionals and grooming them further to facilitate growth and development. b. Employee skills vs task requirements Hindustan Unilever Limited has specific tasks and job roles. The company hires and trains employees for skill levels accordingly with respect to needs. The organization ensures that all its job requirements are met and that employees have the sufficient skills

to perform their respective jobs while being in-line with the values and culture as well as the business goals and strategy of Hindustan Unilever Limited. c. Skill management Hindustan Unilever Limited pays attention to enhancing the skills and capacities of its employees. It organises regular training and workshops, to provide growth and development opportunities for its employees. Hindustan Unilever Limited focuses on personal as well as professional growth for its employees and works accordingly with them. d. Company’s Moat The human resource is the core competitive advantage for the company. Employee skills are developed specifically for job roles and requirements at HUL and provide a competitive benefit to the company where competitors cannot imitate employee skills or training. This enables a unique competency for Hindustan Unilever Limited. Chapter 5: Conclusion By analysing the industry’s history and individual companies’ history, we realize that the personal care industry has been adapting over time and has been catering to the public demand from time to time. This continuous upgradation has helped the personal care industry to thrive over the years and will help them stay active in the market. The companies studied in this project have a wide product range with few common products. They are the major players in their industry. By Analysing the market shares of the three companies, we can infer that there is a lot of demand in the market and these companies cater to the major chunk of the customers. All the 3 companies have received several awards and recognitions indicating the strong competition in the industry. Financial sheets of the 3 companies are stable, strong and growing continuously, hence we can infer that these companies are fundamentally doing well and they are able to cope up with changing demands of the consumers and stay relevant in the market. The 3 companies have excellent future strategies indicating their preparedness for the future. The future goals set by these companies will help them stay competent.

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