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SWOT ANALYSIS OF Hindustan Unilever (HUL): Detailed study material

SWOT ANALYSIS OF Hindustan Unilever (HUL): Detailed study material

SWOT ANALYSIS OF Hindustan Unilever HUL

 

Hindustan Unilever Limited (HUL) is India’s largest FMCG Company with a heritage of over 80 years.HUL was established in 1933 as Lever Brothers and, in 1956, became known as Hindustan Lever Limited, as a result of a merger among Lever Brothers, The Company was renamed in June 2007 as "Hindustan Unilever Limited".

HUL has more than 20 products in Consumers Categories. More than 700 million consumer using its Products in various Forms.

They have established their brand in various categories. Some of these Categories are:

  1. Food
  2. Home care Brands
  3. Personal Care Brands
  4. Water Purifier

The Institute of Competitiveness, India, has recognized Hindustan Unilever Limited’s Project Shakti for ‘Creating Shared Value’ and bestowed upon the company the Porter Prize for 2014. It ranked number one on the Forbes list of ‘Most Innovative Companies’ across the globe for 2014 and was ranked number three on Fortune India’s list of India’s most admired companies in a list compiled with the help of a global management consultancy Hay Group

 

Strengths in the SWOT analysis of Hindustan Unilever ( HUL )

 

  1. Brand Visibility:From soap to mineral water, HUL is shaping the life of 1.3 billion people Being in consumer goodsmarket with its 20 consumer categories such as soap, tea, detergents, shampoo etc. & each having large assortments, helped HUL in occupying the large shelf space of Grocery /departmental stores which itself explains the acceptance/demand of their products in the market.
  1. Market Leader in consumer goods:According to Nielsen data 2 out of three Indian consumers use HUL products. HUL used selective targeting strategy to emerge as a market leader in the Indian market.
  2. Innovative FMCG Company: Hindustan Unilever Research center (HURC),Mumbai & Unilever Research India, Bangalore ,both research facilities were bought together in a single site in Bangalore in 2006.Employees in this facility continuously  work & develop innovations in products & manufacturing processes which is helping the HUL to set it as front-runner in the consumer goods market.
  3. High Brand awareness:By signing popular celebrities for the advertisements of their products HUL has created positive word of mouth over the ages which helped them in social acceptance of their products intelligently targeted & meant for different income groups.
  4. Product line:It offers product categories namely oral care, personal care, household surface, fabric care and pet nutrition etc. having deep assortments across the product categories.
  5. Financial position:Having more than 80 years of experience in the consumer goods market & backed by Unilever who owns 67% controlling share in HUL, It is financially strong.

Threats in the SWOT analysis of Hindustan Unilever ( HUL )

1.     Competition in the market: With increasing number of local & national players it’s becoming very hard for the companies to differentiate themselves from others. There is also threat from counterfeit products destroying its brand image in the market.

2.     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.

3.     Buyer’s power:With 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 into brand switching where consumer got power to select a brand based on several factors  like availability, reference group recommendation, preference & price.

 

Opportunities in the SWOT analysis of Hindustan Unilever ( HUL )

1.     Expanding market: By penetrating more in the rural markets through its project Shakti AMMA and transition of unorganized business to organized one will lead to further expansion of the consumer goods market.

2.     Awareness in usage rate of consumer goods: People getting more aware and conscious about the usage may be through advertising /word of mouth /doctor prescription ,is resulting in increase in usage rate of the these products.

3.      Increasing Income levels: Due to stable political scenario, improved literacy rate & controlled inflation, disposable income of the people is increasing thereby resulting into upsurge in demand & changing their lifestyle.

4.     Premiumisation and Market Development: With changing population demographics, higher spending capacity of consumers and wider reach of products, there is increasing scope of Premiumisation of our products. We constantly innovate to meet needs of all our consumers. Most of the categories in which your Company operates in are under-penetrated and therefore your Company continuously invests in market development.

5.     Winning in Channels of future:Winning in traditional trade and ‘route-to-market’ continues to be important for your Company. However, winning in emerging channels like e-commerce and modern trade will be the differentiator for your Company. Investments in strengthening our capabilities in the channels of the future while digitalising our distribution in the traditional trade would be the key thrusts.

Weaknesses in the SWOT analysis of Hindustan Unilever ( HUL )

 

  1. Decreasing Market share:Competitors focusing on a particular product & eating up HUL’s share, like Ghadi & Nirma detergent eating up HUL’s wheel detergent market share.
  2. Large number of brands in different product categories:Sometimes having broad brand portfolio can lead to confused positioning. Price positioning in some categories allows for low price competition like AMUL captured like AMUL captured Kwality’s market share.

 

 

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