Professional Documents
Culture Documents
SUBMITTED BY, Yogesh Kumar Sharma MBA III A Roll No. 49 School Of business mgmt.
Beverages Culinary Products Ice Creams Popular Foods ( Annapurna / Modern Foods ) Oils and Fats
HUL meets every day needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life.
HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality Wall's are household names across the country and span many categories - soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary products. They are manufactured over 40 factories across India. HUL has traditionally been a company, which incorporates latest technology in all its operations.
Corporate Purpose
Like its parent, Unilever, HLL's Corporate Purpose is "to meet the everyday needs of people everywhere". The general guidelines for the conduct of business transactions have been defined under the Unilever Code of Business Principles.
Hindustan Unilever New Project:SHAKTI PROJECT IN INDIA (HUL) For Rural Development:-
INTRODUCTION:Hul starts Shakti is our initiative that combines social responsibility, sustainability, and business strategy. India has more than 6, 30,000 villages, most of these are 'hard to reach' and offer relatively lower business potential. Hence, reaching them through the conventional distribution system is a challenge. In 2000, we collaborated with Self-Help Groups (SHG) to extend our rural reach. We partnered with the SHGs by offering them opportunities for business. By promoting micro-enterprises, our initiative not only makes great business sense, but also has a deep social impact. The business objective is to extend our direct reach into untapped markets and to build brands through local influencers. The social objective is to provide sustainable livelihood opportunities for underprivileged rural women. On an average, a Shakti entrepreneur earns INR 700 - 1000 a month, and since most of them live below the poverty line, this earning is significant, often doubling the household income. Shakti started with 17 women in two states. Today, it provides livelihood enhancing opportunities to about 45,000 women in 15 Indian states and provides access to quality products across 100,000+ villages and over 3 million households every month. Project Shakti contributes to 10% of rural turnover nationally. In most Shakti markets, we are dominant and enjoy a market share which is qualitatively better as compared to non-Shakti markets. Shakti is not only a channel for increasing our reach, the Shakti entrepreneurs are also brand ambassadors for all HUL brands in rural India. Their relationship with consumers is forged by their home-to-home contacts, and goes a long way in building brand loyalty.
PROJECT SHAKTI
Project Shakti was launched in the year 2001 in the Nalgonda district situated in Andhra
Pradesh.
OBJECTIVE :
To create income-generating capabilities for underprivileged rural women, by providing a sustainable micro enterprise opportunity, and to improve rural living standards through health and hygiene awareness 4, 00,000 VILLAGES.
Distribution
It is the combination of the 3 ways: Door to door selling (11% margin on sales) Sells from own home (11% margin on sales) Retailers (3% margin)
Averages sales:
Rs. 10,000 - Rs. 15,000/month, profit - Rs.1, 000 per month
Future plans
Project Shakti plans to extend to the states of West Bengal, Punjab and Rajasthan. Partnership with other non-competitor companies to sell their products through The Shakti network. Nippo, TVS Motor for mopeds, insurance companies for LIC policies
Unilever took full advantage and became the market leader for SHAKTI PROJECT. They always concentrate on different Culture, lifestyles, tastes, preferences budgets & economic development of the country. This strategy helped Unilever to be the number one For Rural Initiatives. Unilever depends heavily on advertising this Project and continued product innovation to maintain And expand their market position.
MATURITY STAGE:
Competitor brands from both HULitself (e.g. Lifebuoy, Liril, Hamam, Breeze, and Dove) & other Manufacturers offered the competition & this slowed down sales. Price of these products is also very low in comparison to Shakti Project thats why customers move towards these products.
DECLINE STAGE:
HUL has use many strategy & done many campaigns for the sales promotion of the Project but the Sales are still decreasing. Currency fluctuation can often disrupt the best-laid business plans Of companies. Unilever products are in over 100 countries worldwide. As a result, it is exposed to adverse currency fluctuations. For instance, in 2004, a 5.9% decline in turnover was primarily attributed to a 4% appreciation of the average Euro exchange rate against other currencies. Cash equivalent in fiscal 2005 was reduced by 188 million as result ofadverse currency fluctuations. Any adverse currency fluctuations in the future would affect the group's bottom line growth. .
DEVELOPMENT STAGE:
An employed at in England developed a technology that allowed production of a very thin sheet of soap that then could be flaked. The company began selling what they first named "Sunlight Flakes" in England in 1899, though the name was changed to SHAKTI which is associated with luxury. Life flakes began to be imported to the U.S. in 1910 and manufactured at a new Lever Brothers plant in Cambridge & than in 1924 launched for poor persons.
GROWTH STAGE:
In the growth stage, their sales rapidly started rising. In the growth stage, they have expanded Their market. World market for soap is obviously market for Lux soap too. This figure shows the maximum market opportunity is in Asia, Europe, North America and Latin America.
Are these instrumental freedoms relevant to the needs of the poor already identified in the project? Identification phase?
Project formulation
PRODUCT FEASIBILITY OF SHAKTI PROJECT: Shakti Amma (empowered mothers)- Project For Empowered Mothers Project Shakti is unleashing the potential of rural India and thus changing lives. It is ushering in prosperity and more importantly, self-respect. (HUL 2008) One of the best and sustainable ways Unilever can help to address global social and environmental concerns is through the very business in a socially aware and responsible manner. (Unilever 2008) Everybody wants brands. And there are a lot more poor people in the world than rich people. To be a global business and to have a global market share you have to participate in all segments. (Keki Dadiseth, Former Chairman HUL, 2004)
FEASIBILITY ANALYSIS OF PROJECT SHAKTI:Feasibility literally means whether some idea will work or not. It knows beforehand whether there exists a sizeable market for the proposed product/service, what would be the investment requirements and where to get the funding from, whether and wherefrom the necessary technical know-how to convert the idea into a tangible product may be available, and so on. In other words, feasibility study involves an Examination of the operations, financial, HR and marketing aspects of a business on (Before the venture comes into existence) basis. Thus, you may simultaneously read this lesson and the lessons on marketing, finance etc. to have a better idea of the issues involved. What we present hereunder is a brief outline of the issues impinging upon the various aspects of the feasibility of the proposed project. ESTIMATION OF CAPITAL COST THIS PROJECT:
One of the largest consumer goods companies in the world Global, regional and local brands 223 000 employees world-wide Brands on sale in 151 countries 65.3 million spent on community projects in 2003 (1.7% pre-tax profits).in HUL Shakti Project
The capital cost for a construction project includes the expenses related to the initial establishment of the facility:
Land acquisition, including assembly, holding and improvement Planning and feasibility studies Architectural and engineering design Construction, including materials, equipment and labor Field supervision of construction Construction financing Insurance and taxes during construction Owner's general office overhead Equipment and furnishings not included in construction. Inspection and testing.
Social Cost Benefit Analysis of HUL Shakti Project:With pure private goods, the costs carried by the individuals involved are the only economically meaningful costs. The choice to purchase for anyone other than the seller or the buyer. The costs involved in this economic activity are the costs of These Project Products that are ingredients to the lemonade, the opportunity cost of the labor to combine them into Shakti Project, as well as any transaction costs, such as walking to the stand. Social Cost Benefits Analysis means to analyze the social cost and total social benefits if we accept any project. We all know that for completing the big project, we need big investment. In social cost benefit analysis (SCBA), we see whether return or benefits on this project are more than its cost from point of view of society in which we are living. (HUL Says)
HLL's approach: can you get these groups as your brand ambassadors, who can buy the products and sell them in their villages? HLL would supply them the stocks, but the groups would decide who would do the enterprising. The group could nominate one or two people to sell the products. They could sell the products to other members in the group, consume within the family or sell to others in the village. Every time a women sells, she makes a margin (10 per cent; retailers make 8 per cent). If a group nominates a person to do the selling, the profits are ploughed back into the group's kitty. But if the individual borrows from the group to start the enterprise, the individual can retain the profits. Both models exist, but HLL is increasingly realizing that it's the individual model, and not the group model, that works in reality. Banks lend the groups at an interest rate of 12 per cent per annum or 1 per cent per month; the groups in turn, lend it internally to their members at 24 per cent per annum or 2 per cent per month. The potential: consider a village with a population of 1,000 people, and an average spend of Rs 4 per head per month on personal products; now, if everybody buys from this group, HLL's share of the rural consumer's spend would be Rs 4,000 (Rs 4 X 1000). If half the people buy, HLL's share of the consumer's spend would be Rs 2,000.
These provide rural women a platform to save money---they keep pooling money, save in a bank, and by the end of the year, they get a matching loan from the same bank. This way, the group's corpus doubles, and individual members can borrow internally from the group and start a business.
Technical analysis is a financial term used to denote a security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis incorporate technical analysis, which being an aspect of active management stands in contradiction to much of modern portfolio theory. The efficacy of both technical and fundamental analysis is disputed by efficient-market hypothesis which states that stock market prices are essentially unpredictable. SHAKTI PROJECT
Fundamental analysis involves analyzing the characteristics of this project in order to estimate its value. Technical analysis takes a completely different approach; it doesn't care one bit about the "value" of a company or a commodity for Rural Development. Technicians (sometimes called chartists are only interested in the price movements in the market.
Chart Patterns Candlestick Patterns Price Action Moving Averages Indicators Money Management Trading Systems and more...
Operating Expenses - use of your assets & services to produce revenue. Some specific,
common examples are:
Cost of Goods Sold (non-cash expense) Rent (cash expense) Prepaid Insurance (non-cash expense) Wages & Salaries (cash expense)
determine total dollar amount needed to start your business determine appropriate type of financing assess risk, feasibility, and personal investment have better information to help make decisions set appropriate price manage controllable expenses assure profitability manage cash flow
Selling Expenses - may vary with demand; often thought of variable expenses. General & Administrative Expenses - likely constant; often referred to as fixed costs or overhead. Operating Ratio = [(Cost of goods sold + Operating expenses) / Net sales] 100
Financial Appraisal Process:Identify RequirementIdentify Potential Options Economic Assessments Financial Assessments Risk Assessments Report Results
Qualitative Assessment
2. INTERNAL RATE OF RETURN:- The discount rate often used in capital budgeting that makes the net present value of all cash flows from a particular project equal to zero. Generally speaking, the higher a project's internal rate of return, the more desirable it is to undertake the project SHAKTI.
IRR = Annual average net earnings after taxes X 100 Average investment over the life of the project IRR = Annual average net earnings after taxes X 100 Original Investment
3. PAY BACK PERIOD: - Payback period in capital budgeting refers to the period of time required for the return on an investment to "repay" the sum of the original investment. HUl, a $1000 investment which returned $500 per year would have a two year payback period of this project. The time value of money is not taken into account. HUL Project intuitively measures how long something takes to "pay for itself."
Sensitivity Analysis
Those in project SHAKTI must be aware of the means of modeling risks to their project. Sensitivity analysis is one such method. It is implemented to analyze the various risks to the project by looking at all aspects of the project and their potential impact on the overall goal. This facilitates comparisons between the HUL various elements to quickly discern which risks are worth taking. Project management can use the sensitivity analysis to create priorities in dealing with elemental risks to this project.
SOCIAL RESPONSIBILITY OF SHAKTI PROJECT:Shakti is our initiative that combines social responsibility, sustainability, and business strategy. India has more than 6, 30,000 villages, most of these are 'hard to reach' and offer relatively lower business potential. Hence, reaching them through the conventional distribution system is a challenge. In 2000, we collaborated with Self-Help Groups (SHG) to extend our rural reach. We partnered with the SHGs by offering them opportunities for business. By promoting micro-enterprises, our initiative not only makes great business sense, but also has a deep social impact. The business objective is to extend our direct reach into untapped markets and to build brands through local influencers. The social objective is to provide sustainable livelihood opportunities for underprivileged rural women. On an average, a Shakti entrepreneur earns INR 700 - 1000 a month, and since most of them live below the poverty line, this earning is significant, often doubling the household income. Shakti started with 17 women in two states.
CORPORATE RESPONSIBILITY OF SHAKTI PROJECT:HULs Corporate Responsibility (CR) philosophy is embedded in its corporate purpose and Vitality mission. The company firmly believes that it has commitment to all its stakeholders - consumers, employees and the community in which it operates. It can fulfil this commitment only by sustainable growth. The Vitality mission of the company aims to improve quality of life through our products and through our interventions in the community. On this background, HUL's key CR initiatives are undertaken with a long-term view. Initiatives that are sustainable, that have long-term benefits and that have business linkage are accorded priority. Some initiatives are brand driven, some are driven by our people and some are driven by our processes.
Project Shakti is our initiative towards changing lives of women in rural India. Similarly, to commemorate our 75th year in India, we had decided to undertake some key initiatives. We have enhanced livelihoods of 75,000 women in a sustainable manner. We intend to partner with NGOs to augment their efforts by bringing in technical and managerial expertise in this area. For Enhancing Livelihood, HUL in partnership with Aide et Action India Private Limited has established the Livelihood Education and Skill Development project called Samruddhi (meaning prosperity) for the youth through Institute for Livelihood Education and Development (ILEAD) Centre in Silvassa.
It Is a model of distribution has attracted a lot of attention both from the company as well as media. The model makes use of existing Self Help Groups working in villages and appoints them as sales persons called shakti amma to sell HUL products in villages. The idea is to be able to reach those villages which do not very good road connectivity and penetration of media is also poor. By appointing the lady as a distributor for the company is able to get a direct reach in villages where it had no presence earlier and the lady would be able to get additional source of revenue. A win-win situation if one were to describe it. The lady- Shakti Amma would be supplied the at her door-step and she would be selling it to the nearby cluster of 3-6 villages. The initiative has three components, one being the distribution component, second being the use of lady for communicating health and hygiene messages in the villages. The third component is IT, wherein a kiosk - ishakti is set up in the village, which could be used as information kiosk in the village.
OBJECTIVE THIS PROJECT: To Provide the Women Jobs. As a whole remains to create livelihood opportunities for underprivileged rural women. Recruites village women as sales persons called shakti amma and trains them to communicate and sell HUL products in villages. To be able to reach those villages which do not have good road connectivity. Shakti MMA also includes awareness programmers on health and hygiene, education, etc.Shakti now covers 15 states in India with over 45,000 women entrepreneurs in 135,000 villages.