Competitive Strategy consists of move of companies in order to attract customers.

With stand
competitive pressures and strengthen an organization's market position. The main objective of
Competitive Strategy is to generate a competitive advantage, increase the loyalty of customers
and to beat competitors.
 
Five main competitive strategies are:
 Overall low cost leadership strategy
 Best cost provider's strategy
 Broad differentiation strategy
 Focused low cost strategy
 Focused differentiation strategy
Here competitive strategy varies from sector to sector and company to company. Thus, it is not
easy to predict a single or to find a single strategy for the whole sector. When we come on to
FMCG Sector main strategies lay behind market strategies, cost, and quality strategies. Here in
this report you are going to get information about such type of strategies of FMCG giants.

HUL (Hindustan Unilever Ltd.)

This Company is earlier known as Hindustan Lever Ltd. This is India's largest FMCG sector
company with all type of household products available with it. It has Home & Personal Care
products, and also food and Water Purifier available with it. According to Brand Equity, HUL has
largest no of brands in most trusted brands list.

16 of HUL's brands featured in AC-Nielson Brand Equity list of 100 most trusted brands in 2008
in an annual survey. For the entire year ending March - 2009 net turnover of company is Rs.
20'239.33 Crore which is 47.99% higher than 31st December 2007's Rs. 13675.43 Crore driven
mainly by dom estic FMCG's with net profit stood at Rs. 2'496.45 Crore.

Products of HUL are: Annapurna; Ayush; Axe; Breeze; Bru; Brooke bond; Clinic; Dove; Fair &
Lovely; Hamam; Liril; Lux; Pears; Ponds; Pepsodent; Pureit; Rexona; Rin; Sunlight; Surfexcel;
Vaseline; Wheel.

HUL & ITC are major companies in FMCG market in India. When we compare both companies on
the basis of their strategies i.e. , their competitive strategies in the present market.

HUL always believes in customer friendly products with major emphasis on low cost overall
without compromising on the quality of the product. They are leveraging the capabilities and
scale of the parent company and focusing on the value of execution. The entire product product
portfolio is also being tweaked to include premium offerings such as Pond's Age Miracle and dove
shampoo in skin and hair care.

Growth Drivers
The Company has been launching new products and brand extensions, with investments being
made towards brand-building and increasing its market share. HUL is also streamlining its
various business operations, in line with the ‘One Unilever' philosophy adopted by the Unilever
group worldwide. Introduction of premium products and addition of new consumers via market
expansion will be HUL's growth drivers.

Risk for HUL

Being an MNC operating in India, HUL is more conservative in its strategies than its Indian
counterparts. Moreover, given increasing competition, it faces the risk of being overtaken by
domestic players in various categories. Prolonged inflation may lead to margin contraction, in
case HUL is not able to pass on this burden to consumers. The company's large size also poses a
problem, since it does not give HUL the agility to address the competition it faces from national
and regional players.

HUL's up-and-running business model is a treat for investors seeking exposure in the FMCG
segment. The company has delivered in the past and has the potential to do better in future. In
the small and medium term. ITC's growth story is still evolving.

or Hindustan Unilever, the leading sponsor of popular television serials that promote its
detergent brands, 2009 was like an awakening episode in a soap opera. A larger
number of local rivals had entered its dominant laundry business, hitting both market
share and profit margins. Shaken but stirred 

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to positive action, the 75-year-old consumer goods giant, which sells everything from
shampoos and fairness creams to jam and tea, picked up its pieces and reworked its
strategy.

HUL added 500,000 stores in 2010 — that's almost 50% of what it did in 75 years. It
plans to add an equal number over the next two years, and turn its shops into what it
calls "perfect stores" that  display products to pull in more demand in their locations.

The result: volumes are up 12% in the last quarter, in line

with the 70 product launches or re-launches that it did last
year.

"The company's salespeople come and arrange all products

in an order," Mukesh P Patel, of Mehul Medico, a retailer in
Mumbai's Santacruz area told an HT reporter on a random
visit. "This catches the consumer's attention."

But HUL's challenges are far from over. Its net profit
margins shrunk to 11.9% from 16.5% in 2002-03. And net
profit plunged 11.8% in 2009-10. The company blames it on
rising input costs and a cut-throat price war by 600-odd
laundry rivals who ramped up capacities even as HUL was
sitting on inventories amid an oil price surge.
HUL's first step is to hold on to its market, while taking a hit on laundry product margins.

"There has been an irrational response in the market by people wanting to build the
business quickly and therefore the prices are being brought down to unsustainable
levels," said Harish Manwani, president Asia, Africa, Central and Eastern Europe,
Unilever. "We are quite clear that we are not here to lose market share in categories
where we took 100 years to build share."

In a sign of renewed vigour, the company is reaching directly to villages that have a
population of less than 2,000 through its project ‘Shaktiman'. While the focus is on rural
market, the company has also increased its market share in the modern retail channels,
where its market share has risen by 5-6 percentage points compared with the general
trade over the past three years.

"We have to be winning with the consumers of tomorrow, in the channels of tomorrow,
in the segments of tomorrow and in the geographies of tomorrow," said Nitin Paranjpe
CEO and managing director, HUL, explaining the fan-out. "If we are winning in them
then even if they are small today, we would be leading in those areas when they grow
big tomorrow."

As modern retail and rural areas steady the ship, HUL has been talking big in foods,
where it faces aggressive rivals. While parent Unilever gets 50% of business from foods
worldwide, for HUL, it is a humble 20%, though it is strong in coffee and tea.

"It's the state of market development that has not yet taken off in foods," Manwani said,
underlining the significance of nascent segments.

Paranjpe reasons that only 5% of India's overall food business is packaged  and the
game is wide open and its brands strong.

HUL, happy with Knorr's soupy noodles success, will soon launch Nutrismart, a health
food drink under umbrella Kissan. More products are due this year.

In personal care, in which HUL has power brands such as Fair & Lovely and Pepsodent,
it is betting on growing affluence. Paranjpe said HUL must "premiumise and
turbocharge" its products in personal care and beauty.

And that is the reason why Gopal Vittal, executive director (home and personal care),
has diverted his focus to smaller segments with growth potential, such as hair
conditioners, skin lightening, face cleansing and liquid handwash. "I spend a lot of my
personal time on the things that are smaller and have a larger opportunity for growth in
the future," Vittal said.

HUL, also focusing on health and eco-friendly lifestyles, is trying to build long-term
competitive advantage by sourcing its raw material from sustainable sources.

"If you are close to the consumer you can lead the change of market development," said
Hemant Bakshi, executive director (sales and customer development).

The knock of 2009 is still fresh in memory, but the company that has turned out many
leaders is hoping its bright minds and emerging winds to lead a bounceback.

"We lost share and it was an important milestone in our history because of the lesson
we learnt," said Vittal. "That has galvanised the organisation and made us more
determined and consumer-centric. And more humble."

For a company that has nurtured the careers of 400 CEOs in India's corporate sector,
that could be a new lesson.

ADVANTAGES:

We shall now take up one company, HUL (Hindustan Uni Lever Ltd) formerly
HLL and see how the complex task of brand management is actually handled.
This company is taken for this article as HUL is considered as one of the most
successful in Brand Management.

HLL has a large brand portfolio consisting of nearly 110 bands. In every
product line, it has built a number of brands over a period of time. Quite a few
brands have come to its fold from the parent company. It has also acquired
several ongoing brands from the market. HLL also vigorously pursues brand
extension strategy. And concurrently, HLL undertakes line pruning and brand
restructuring and consolidation, based on marketing compulsions. HLL is also
playing the rejuvenation and re-launch game. With great benefit the corporate-
level endeavors at business expansion and diversification are also throwing
new challenges on the brand strategy front. HLL lends itself for a proper
understanding of the complexity of the brand management task. We shall
examine how HLL handles the complex demands in brand management.

Such an array of brands is the outcome of a conscious corporate strategy by

HLL. As a corporate, HLL wants to be a leader in every one of its businesses
and the strategy is to fight on the strength of the competitive advantage
arising from the possession of strong brands. It is this strategy that is getting
reflected in the development of a multitude of strong brands. If we take the
business of bathing soaps, as an example, HLL has the objective of being a
national player (not a niche or a regional marketer) and the leader therein.
HLL also wants about 30 per cent of the corporate income to come from this
line.

So, HLL opted for the strategy of developing quite a few strong brands in this
line, and among them they cover different market segments and price points.
Dove, Lux, Liril, Rexona, Pears and Lifebuoy are the outcome of such a well
planned brand strategy implemented over time. Lifebuoy is 100 years old and
Liril 15 years old. In fact, HLL has about 10 brands of toilet soaps each having
good volume of sale to its credit . The point is that decisions on brand portfolio
are a fundamental expression of the company’s objectives and strategy
governing a given business.

HLL Locates Positioning Opportunities:

HLL methodically goes about the task of developing a brand portfolio across a
product category. It first identifies the various positioning opportunities across
benefits, target groups and price points. Existing brads are mapped across
these positioning opportunities, and gaps for possible new offers are explored.

The company then estimates the likely volumes for each of the possible
opportunity and the financial viability and sustainability of the propositions in
the long term. If some of these gaps look promising, HLL goes ahead with the
plans.

It examines the existing set of brands with the company, the product
technologies available, the benefits that can be provided and other
considerations that have a bearing on the company’s long term interests in the
business. Finally, if the company decides to go in for the new offer, a decision
has to be taken as to whether new brands should be created or extensions if
existing brands should be preferred or ongoing brands from the market
acquired.

HLL hires brands to capture new opportunities:

Towards the close of the 1990s, HLL found that the germicide segment of the
soap market was growing fast, with RCI’s Dettol antiseptic soap leading it.
HLL did not have suitable offer in its stable to capture a share of this segment.
Lifebuoy was not strictly meeting the particular benefit.

HLL knew that launching and developing a new brand would take a lot of time
and resources, and the company would miss the market if it chose this route.
HLL did not have the product formula either to enter this segment. It was in
this background that HLL decided to hire the Savlon brand from J&J. Savlon
was a successful antiseptic lotion, a competitor to Dettol lotion. Just as the
Dettol soap owed its origin to the success of the Dettol lotion, HLL assessed
that a Savlon antiseptic soap could be successfully extended from the Savlon
lotion.

It entered into an agreement with J&J for the use of Savlon brand name and
the product formula, and launched the Savlon antiseptic soap. HLL very deftly
managed successfully new brand launch and merged as a challenger to
Dettol soap. J&J secures a good royalty from HLL for lending the brand. It is a
potentially win-win arrangement for both companies.
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