PROJECT TITLE – Value Chain Analysis Of Hindustan Unilever

Limited

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 UNIVERSITY OF CALCUTTA
Submitted by – Ankita Maity
Semester – 2
Course – MBA in HRD
Paper – HRC 208
Subject – Term Paper
University Roll no. - 95/ MBH/201002
Registration no. – 411-1221-0062-16

ACKNOWLEDGEMENT

I would like to express my cordial thanks to the Department of Business Management, University
of Calcutta, for providing me the opportunity to do in-depth study in order to present the entire
project.

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This term paper has been prepared by me with the help and valuable guidance of our Respected
professor, Dr. Sharmistha Banerjee and our Respected professor Mahua Bhattacharya Madam.

I am grateful to my Mother for providing me with the resources required for the study and for her
support in the completion of this project within a limited period of time.

Abstract

Value chain analysis is the process through which the activities that go into changing the inputs for a product or
service into an output that is valued by the customer evaluated. The study is conducted on Hindustan Unilever
Limited (HUL), formerly known as Hindustan Lever Limited (HLL), is the largest Fast Moving Consumer Goods
company in India. The name came into vogue in late June 2007. The Head Office of the company is located in

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Mumbai. The company has a wide range of products and brands which it very effectively and efficiently manages
and is one of the Globally recognized companies. The aim of the project is to study the value chain analysis of the
company and observe and analyse it's competitive advantage over it's competitors.

Contents

SERIAL NO. TOPIC PAGE NO.

1 Introduction 5
2 Conceptual Framework 6
3 Objective of the study 9
4 Background of the study 9
5 Knowledge of the study 10
FMCG Industry 10
Hindustan Unilever limited 12
6 HUL's approach towards the COVID 18
19 Pandemic
7 SWOT Analysis of HUL 19
8 Value Chain Analysis of HUL 20

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 9 HUL and it's competitors 24
ITC Limited 24
Dabur Limited 25
10 Research Methodology 27
11 Sample Design 27
12 Findings And Analysis 28
13 Conclusion and Recommendations 36
14 References 37

INTRODUCTION
The Industrial Revolution brought the transition to new manufacturing processes in Europe and the U.S, from 1760
to 1820. It brought the emergence of new machines, tools and equipments which resulted in the rise of a more
mechanized factory system. Textiles were the most dominant industry and also was the first to use modern
production methods.
Gradually, with the emergence of more technologies and new equipments developed numerous new industries. The
rise of these industries gave rise to increased demands and needs of the population which in turn resulted in
competition.
In this Information Age, there is a significant rise in the intensity of competition and thus numerous industries and
firms compete with each other and constantly improve themselves. Competition has always been the central
agenda of the companies. The intensity of competition in an industry is neither a matter of coincidence nor bad
luck. Rather, competition in an industry is rooted in its underlying economic structure and goes well beyond the
behaviour of current companies. Industry structure has a strong influence in determining the competitive rules of
the game as well as the strategies potentially available to the firm. Forces outside the industry are significant
primarily in a relative sense, since outside forces usually affect all the firms in the industry, the key is found in the
differing abilities of firms to deal with them. This is where Competitive advantage comes into play. Competitive
advantage is the attribute that allows an organization or firm to compete and outperform the others.
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Understanding a firm's competitive advantage is not an easy task and can certainly not be done by merely looking
at it as whole. It stems from different activities a firm performs in designing, producing, marketing, delivering, and
supporting it's product. Value Chain is a systematic and most important tool for examining all activities a firm
performs and how they interact, for analysing the sources of competitive advantage. The concept of value chain
analysis was first developed by Harvard Business School Professor MICHAEL PORTER in his book – The
Competitive Advantage : Creating and Sustaining Superior Performance.

HUMAN RESOURCE MANAGEMENT AND COMPETITIVE ADVANTAGE.

People provide an organization with a source of competitive advantage. Various studies have concluded that an
organization's Human Resources can be significant source of competitive advantage. The Human factor is the
only organizational factor that can develop a competitive advantage. Porter argues that people are becoming great
differentiating factor. Managers should select people who are smarter, better trained, more motivated and more
commited. Jeffry Pfeffer of Harvard University described the potential impact of Human Resource Management
on competitive advantage and has suggested a few HRM guidelines that contribute to the firm's competitive
advantage – Employment security, selective recruiting, employee ownership, training and development of skills,
etc.

CONCEPTUAL FRAMEWORK

I. VALUE CHAIN
A value chain is a way of conceptualizing the activities that are needed in order to provide a product or service to a
customer. It depicts the way a product gains value (and costs) as it moves along the path of design, production,
marketing, delivery, and service to the customer. The value chain model shows the particular configuration of
activities that are needed to create value in a product or service. The configuration of these activities—and the
resulting product or service—will be a unique to a specific unit or firm. Competitive advantage can result from the
way discrete activities are performed along the value chain. The value chain of different firms or industry,
reflecting their histories, strategies and success at implementation.
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 FIGURE 1 - VALUE CHAIN

UNDERSTANDING VALUE ACTIVITIES

According to Michael Porter – 'Value is the amount a buyer is willing to pay for what a firm provides them.' Value
of a firm can be measured in terms of it's revenue, a reflection of the price the firm's product commands and the
units it can sell. Value chain displays total value, and consists of value activities and a margin. Value activities are
physically and technologically distinct activities that a firm performs to create a product valuable to it's buyers.
The term Margin refers to the profit margin the company makes out of the activities of it's value chain. The
margin is correlated with the company's ability to articulate properly all the activities of the value chain. A high
margin means the company is able to sell the product or a service for much higher price than the cost of all the
activities of the value chain.
Value chain identifies 9 strategically relevant activities that create value. These value activities are divided into
two broad groups, namely – PRIMARY ACTIVITIES and SUPPORT ACTIVITIES.

A. PRIMARY ACTIVITIES
Primary activities are those activities involved in physically creating the product and it's sale and transfer to the
buyers as well as after sale assistance. Primary activities are further classified into five generic categories,
namely :-
 Inbound Logistics – Activities involved in receiving, storing and disseminating inputs to the product, such
as material handling, warehousing, inventory control, vehicle scheduling and returns to suppliers.
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  Operations – Activities involved in transforming raw materials into finished product forms, such as
machining, packaging, assembly, equipments, testing, printing and facility operations.
 Outbound Logistics – Activities involved in collecting, storing and physically distributing the final
product to buyers, such as finished goods warehousing, material handling, delivery, order processing and
scheduling.
 Marketing and Sales – Activities involved in providing a means through which the buyers can purchase
the product and inducing them to do so, such as advertising, promoting, sales force, communicating,
channel selections and channel relations and pricing.
 Service – Activities involved in providing service to enhance or maintain the value of the product, such as
installation, repair, training, parts supply and product adjustment.

B. SUPPORT ACTIVITIES

Support activities are the activities which provide the primary activities assistance and also each other by
providing technology, inputs, human resources and firm wide functions. These can further be classified into four
main categories, namely :-
 Infrastructure – It consists of a number of activities such as planning, finance, accounting, legal,
government affairs, quality management and general (strategic) management.
 Technology Development – Activities involving equipments, hardware, software, procedures and
technical knowledge brought to bear in the firm's transformation of inputs(raw materials) into outputs
(finished products).
 Human Resources Management – It consists of all the activities involved in recruiting, hiring, training,
developing and compensating of all types of personnel.
 Procurement – It refers to the function of purchasing inputs used in the firm's value chain, not to the
purchased inputs themselves. Purchased inputs include raw materials, supplies and other consumable items
as well as assets as machinery, laboratory equipments, office equipments and buildings. It includes the
activities involved in the acquisition of goods, services and works from an outside external source.

TYPES OF ACTIVITIES

The support activities are interrelated with the all the primary activities and within each category of primary and
support activities, there are three activity types that play a different role in competitive advantage :
• Direct – Activities that are directly involved in creating a value for the buyers, such as assembly, parts
machining, sales force operation, advertising, product design, recruiting, etc.

• Indirect – Activities that are involved in helping the direct activities to be performed on a continuous bais,
such as maintenance, scheduling, sales force administration, research administration, vendor record
keeping, etc.
• Quality Assurance – Activities that ensure the quality of the other activities, such as monitoring,
inspecting, testing, reviewing, checking, adjusting, etc.

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 Figure 2 – VALUE CHAIN ACTIVITIES

II. Benefits of an Effective Value Chain Analysis -

● Better product planning, research and development by creating cross-platform terms;
● Cost reduction by optimizing the value chain components or activities;
● Improved flow of materials and products through accurate forecasting of sales as well as demands;
● Improvement in after-sales services and customer support through coordinated operations;
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 ● Evaluation of differentiation strategies helps in identifying innovative ways to perform vale-creating
activities, resulting in improved overall performance and competitive advantage.

OBJECTIVE OF THE STUDY

The objective of the project is to study the value chain analysis of the company, HINDUSTAN UNILEVER
LIMITED, and observe and analyse it's competitive advantage over it's competitors. The Purpose of this
study is to understand the competitive advantage by studying the value chain analysis of a globally
recognized company from the FMCG industry - HINDUSTAN UNILEVER LIMITED (HUL). HUL is the
leader of the FMCG sector in India.

BACKGROUND OF THE STUDY

The background of the study is based on analysing the Value Chain Activities of the leader of FMCG industry and
evaluate it's competitive advantage over the other competitors in the FMCG. The purpose is to find out how the
company carries out it's actions of turning a raw material into a finished good with a reasonable price and whether
it is fully successful in doing so or that it needs to work towards more development and innovations.

KNOWLEDGE OF THE STUDY

FMCG INDUSTRY

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 Fast Moving Consumer Goods (FMCG) also known as Consumer Packaged Goods (CPG) are products that
are sold quickly and at a relatively low cost which includes beverages, packaged goods, consumable, toiletries and
many more products like detergents, soaps, cosmetics, etc.
The FMCG sector is the fourth largest sector of the Indian Economy with household and personal care accounting
for 50% of FMCG sales. It came into existence in 1888 when Sunlight soap was firstly seen at Kolkata harbour. It
was made by Lever brothers in England. It began it's journey from 1888 with such a small product and now it has
become a huge remarkable industry which contributes highly to the Indian market.
As of Financial year 2020, the FMCG sector in India has witnessed significant growth in bot rural and urban
consumption. Indian FMCG sector has therefore emerged as a fertile hotspot for foreign investments which
promises to offer sustainable growth and derive a steady profit.

Figure 3 – FMCG INDUSTRY

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Figure 4 – FMCG INDUSTRY IS THE FOURTH LARGEST SECTOR OF INDIA.

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HINDUSTAN UNILEVER LIMITED

HINDUSTAN UNILEVER LIMITED (HUL) is an Indian FMCG company with over 85 years of heritage in
India, is headquartered in Andheri, Mumbai, India.

Figure 5 – HINDUSTAN UNILEVER LIMITED FACILITY

At a Glance :-
• Type - Public
• Predecessor - Hindustan Vanaspati Manufacturing Company (1936 – 1956)
Lever Brothers India Limited (1933 – 1956
United Traders Limited (1935 – 1956)
Hindustan Lever Limited (1956 - 2007)
• Founded - 1933
• CEO - Sanjiv Mehta
• Revenue – Rs 40,415 crore (2020)
• Operating income – Rs 9,291 crore (2020)
• Net income - Rs 6,764 crore (2020)
• Total assets – Rs 20,153 crore (2020)
• Total Equity – Rs 7,998 crore (2020)

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 • Number of Employees – 21,000 (2020)
• Parent – Unilever Public Limited Company
• Website – hul.co.in
Source – Wikipedia

HISTORY OF THE COMPANY

As mentioned in the website of HUL -
“In the summer of 1888, visitors to the Kolkata Harbour noticed crates full of Sunlight soap bars, embossed with
the words ' Made in England by Lever Brothers.' With it, began an era of marketing branded Fast Moving
Consumer Goods(FMCG)”
After the emergence of the Sunlight soaps came the Lifebuoy in 1895 and the other famous brands like Pears, Lux
and Vim. Vanaspati was launched in 1918 and the famous Dalda brand was established in 1937. In 1931, Unilever
set up it’s first subsidiary, Hindustan Vanaspati Manufacturing Company, which was followed by Lever Brothers
Limited (1933) and also the United Traders Limited (1935). These three companies merged and formed HUL in
November 1956 and are also the first foreign subsidiaries to do so.
Since the early years HUL has made a rapid economic growth in this sector with the help of it's strategies and
diversification. The Liberalisation of the Indian Economy in 1991 marked a turning point in the market growth oh
the company. Removal of the regulatory framework not only helped the company to explore a number of products
and goods but also paved the way for new opportunities without any constraints. Over the years the company has
made remarkable developments and improved itself to stand out from it's competitors.

Mergers, Acquisitions and Alliances of HUL

➢ Tata Oil Mills Company (TOMCO) merged with HUL in April 1993
➢ Lakme Limited (another Tata company) formed a 50:50 joint venture with HUL. In 1998, Lakme Limited
sold it's brands to HUL and divested it's 50% stake in the joint venture to the company.
➢ In 1994, HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in 1994.
Kimberly-Clark Lever limited markets Huggies Diapers and Kotex Sanitary Pads.
➢ Brooke Bond India, Lipton India and Kwality Ice cream Group formed a strategic alliance with the
company and formed a merger which came into effect in 1996
➢ Pond's India limited merged with HUL in 1998
➢ In 2003, HUL acquired the Cooked Shrimp and Pasteurised Crabmeat business of the Amalgam Group of
Companies, a leader in value added Marine products exports.
➢ In 2015, HUL acquired Indulekha, a premium hair oil brand with strong credentials with Ayurveda
➢ In 2018, HUL acquired Vijaykant Dairy and Food Products Limited (VDFPL) for it's ice cream and frozen
deserts business with an agreement
➢ In 2020, HUL announced it's acquisition of Vwash, the market leader in female intimate hygiene category.
➢ GSK Consumer Healthcare, a Health food drink brands merged with HUL in 2020.

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THE UNILVER LOGO
The icons that are presented in the logo signify the things that shape the business of the company. It is a visual
representation of making living sustainable.

Figure 6 – THE UNILEVER LOGO.

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VISION OF THE COMPANY
To be a leader in sustainable business, they will demonstrate how their purpose-led, future-fit business model
drives superior performance delivering consistent, competitive, profitable and responsible growth.

Figure 7 – VISION, STRATEGY AND PURPOSE OF THE COMPANY.

MISSION OF THE COMPANY

HUL's mission is to add vitality to life. They meet everyday needs for nutrition, hygiene and personal care with
brands that help people feel good, look good and get more out of life.

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BRANDS AND PRODUCTS OF THE COMPANY
FOODS AND REFRESHMENT
1. Annapurna salt and Atta (formerly known as Kissan Annapurna)
1. Boost health drink
2. Bru Coffee
3. Brooke Bond (3 Roses, Taj Mahal, Taaza, Red label tea)
4. Cornetto ice cream
5. Hellman's Mayonnaise
6. Kissan squashes, ketchups, juices and jams
7. Lipton Ice tea
8. Knorr soups and meal makers and soupy noodles
9. Kwality Wall's frozen dessert
10. Magnum (ice cream)
11. Horlicks (health drinks range)

HOMECARE
1. Active Wheel detergent
1. Cif Cream Cleaner
2. Comfort fabric softeners
3. Domex disinfectant/toilet cleaner
4. Love and Care, fabric wash
5. Nature protect hygiene range
6. Rin Detergents and bleach
7. Sunlight detergent and colour care
8. Surf Excel detergent and gentle wash
9. Vim dishwash
10. Pureit water purifier

PERSONAL CARE
1. Aviance Beauty Solutions
1. Axe Deodorant and aftershaving lotion and soap
2. Lever Ayush Therapy Ayurvedic health care and personal care products
3. International Breeze
4. Brylcreem hair cream and hair gel
5. Clear anti-dandruff hair products
6. Citra skin care range
7. Clinic Plus Shampoo and oil
8. Close Up toothpaste
9. Dove skin cleansing and hair care range – bar, lotions, creams and anti-perspirant deodorants
10. Elle 18 color cosmetics
11. Glow and Lovely, skin lightening cream
12. Glow and Handsome
13. Hamam
14. Indulekha Ayurvedic hair oil
15. Lakme Beauty products and Salons
16. Lifebuoy soaps and handwash range
17. Liril 2000 soap
18. Lux soap, body wash and deodorant

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19. Love Beauty and Planet
20. Pears soap, body wash
21. Pepsodent toothpaste
22. Pond's talcs and creams
23. Pure Derm anti-dandruff shampoo
24. Rexona
25. Sunsilk shampoo
26. Sure anti-perspirant
27. Vaseline petroleum jelly, skin care lotions
28. TRESemme
29. TIGI
30. Toni and Guy, Hair meet wardrobe
31. Vwash plus, female intimate hygiene wash
Source – official website of hul brands

Figure 8 – BRANDS OF HUL

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 HULS's APPROACH TOWARDS THE COVID 19 PANDEMIC
As a responsible Company, They took several actions through product donations, supporting healthcare
infrastructure, donating food to migrant workers and promoting Covid-19 appropriate behaviour through public
awareness campaigns. The Company donated over 2 crores soaps and sanitizers, bottles of Domex and packs of
Horlicks and other products to the frontline medical professionals, police officials, sanitation workers, migrant
population, and vulnerable people of the country, in partnership with the Government and various NGOs. It
partnered medical institutions to provide almost 75,000 test kits and medical equipment including over 40
ventilators to hospitals. They had partnered Apollo Hospitals, State Bank of India and others to create isolation
facilities. They also created isolation facilities near some of our factory locations for the community. The factory
teams along with Prabhat partners, donated 2 weeks’ food ration to close to 1.2 lakh migrant workers’ families in
over 200 locations. To educate people about Covid-19 appropriate behaviour, the Company created
#VirusKiKadiTodo campaign in association with UNICEF that reached 600 million people across small towns and
rural India through television and digital platforms. In order to fight the second wave of the pandemic, the
Company is procuring medical equipments including oxygen concentrators that will be distributed in the most
affected areas across the country. They will be partnering with Portea Medical and KVN Foundation to make
oxygen concentrators available to Covid-19 patients at home through a borrow-use-return mechanism in some of
the most impacted cities. In addition to this, to augment the medical infrastructure they are making available
ventilators to various hospitals. Central to our fight against Covid-19 is vaccinating our people. The Company will
be facilitating and covering the cost of Covid-19 vaccinations for 3,00,000 people in our extended ecosystem
including suppliers, distributors, salesmen and Shakti Ammas.

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 SWOT ANALYSIS OF HUL
The term SWOT stands for Strength, Weakness, Opportunities and Threats. Strengths and Weakness are the
internal factors of the company and Opportunities and Threats are the external factors of the company. A SWOT
analysis of the company will help us identify areas of the business that are performing well. These areas are the
crtical success factors and they give the business it's competitive advantage.
Strengths of the company :-
• Market leader of the FMCG sector in India; two out of three Indian consumers use HUL, according to a
research report.
• High demand and a preferred brand as it forms the lives of 1.3 billion people daily form soap to mineral
water.
• A diverse product line which includes 20 plus products and brands including personal healthcare, hygiene,
household products, etc.
• A creative and innovative Research and Development group continuously working for the improvement of
the existing products and also manufacturing new products.
• A strong Financial position with over 84 years of experience.
• A strong social media presence with over millions of followers and celebrity brand endorsements.
• The company sells diverse goods for different income levels is effective in getting a consumer's share of
the wallet.
Weaknesses of the company
• Declining market share because of the rivals concentrating on a single product and eating up hul's share,
like Ghadi and Nirma detergent are eating up HUL's market share of Wheel detergent.
• Large range of products and brands have led to confused positioning. Price placement in some segments
mallows for low price competition, like Amul has captured Kwality Wall's market share.
• High advertising and promotion spends - 12% - 14% of it's sales.
Opportunities of the company
• Awareness in the usage rate of consumer goods through advertising or doctor prescription has resulted in
the increase in usage rate of the products.
• Stable political situation, increased literacy rate and regulated inflation resulted in rise of discretionary
income and thus led to changing lifestyles and increasing demand.
• Penetration in the rural markets through Project Shakti Amma and transition of unorganized business to
organized one will lead to further expansion of consumer goods market.
Threats of the company
• Increase in the number of local and national competitors has led to the difficulty to differentiate itself form
the others. A threat from counterfeit products destroying it's brand image in the market stays.
• With highly diversified consumer goods market with lots of brands claiming loads of other benefits, it's
very difficult for consumers to stick to a particular brand and hence resulting in brand switching where
consumer got power to select a brand based on several factors like availability, preference, price, etc.
• Increasing price of the commodities or inputs will result in increased prices of the goods or outputs which
will further result in the decrease of sales, margins and brand switching.

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• Emergence of various e-commerce channels.

VALUE CHAIN ANALYSIS OF HUL

1. PRIMARY ACTIVITIES

i. Inbound logistics - Solid ties with vendors are crucial since they need help to receive, store and sell the
commodity. Inbound logistics of HUL is very efficient in storing and maintenance of the goods. The
logistics management is very efficient with respect to rural areas. The focus of HUL is to not only make
available the goods to the shops and retail outlets but also to touch customers spread across the country. It
has tied up with Mahindra logistics with farmers and owns 19 tea estates which produces tea and is
certified by Rain Forest Alliance. Company is also working through its supplier partners with 15,000
smallholder farmers for sustainable farming. HUL collaborated with the UNICEF to support the delivery of
essential hygiene products to tea-plantation workers in those estates in the response to COVID-19. HUL
has partnered with around 1,150 suppliers to innovate their products, support mutual and sustainable
growth.

i. Operations – The importance of analysing operational activities raises when raw material arrives, and
Hindustan Unilever Limited is ready to process the raw material into the end product and launch it in the
market. The operations of HUL involve over 2000 suppliers and associates. HUL implements kaizen, Total
Quality Management (TQM) and cost-optimization. The Sumerpur factory won “National Energy
Conservation Award” for saving 567 Mwh. Through Hindustan Unilever Foundation’s initiatives, the
cumulative and collective achievements delivered in 2019-20 include a water potential of over 1.3 trillion
litres through improved supply and demand water management, over 1 million tonnes of agricultural and
biomass production, and over 30 million person-days of employment.

ii. Outbound Logistics - HUL has a large distribution network comprising over 5000 redistribution stockists
covering about one million retail outlets and total of 40 Clearing & Forwarding agents. It has partnered
with Future Group Logistics. Hindustan Lever Network is the direct selling channel that covers 50,000
villages. Project Shakti Amma provides penetration in villages with no roads for trucks. HUL is a full-scale
sales organization for supermarkets. It employs technologies like RSNet for monitoring. RS Net is a part of
Project Leap, HUL's end-to-end supply chain initiative. Project Leap begins with supplier, runs through the
factories and depots and reaches up to Rss. It also aims at reducing inventories and improving efficiencies
right through the extended supply chain. Initiatives like Project Bharat, Project Shakti and Project
Streamline has helped HUL to penetrate the rural India and increase it's reach. The Company’s programmes
currently reach 11,300 villages in 59 districts in 10 states and 2 union territories across India in partnership
with 19 NGO partners and multiple co-funders. The significant reach and livelihood impact are on account
of the Company’s support to an MGNREGS programme partnership in West Bengal with PRADAN, a
reputed non-profit organisation. This programme reaches out to over 7,000 villages across 54 blocks in 6
districts.

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 iii. Marketing and Sales - Hindustan Unilever Limited highlights the advantages and differentiation points of
the brands delivered to reassure consumers that their offerings are superior than rivals. Some examples of
Hindustan Unilever Limited's marketing and sales activities are - sales force, advertising, promotional
activities, pricing, channel selection, quoting and building relations with channel members. In order to plan
its promotion and distribution operations the organization uses a marketing funnel strategy. Dependent
upon the corporate interests of Hindustan Unilever Limited, brand name, competitive dynamics and current
position on the market, the marketing approach can either be moved or pulled in nature.
The products of HUL are sold to the extent of about four million tonnes nearly account for Rs 1,37,180crores.
Their outlet visibility programmes cover over 25,000 outlets in key cities, deploying a large number of third party
merchandisers and agencies to ensure superior display of their products. Greater interaction is key to touching the
consumers and they are using the point-of-purchase for a much higher level of direct contact. For example, Lakme
Beauty Advisors in key outlets promote sales and provide specific information and product testing, facilitating an
informed choice to women seeking beauty solutions.

Figure 9 – Advertisements through Celebrity brand endorsements.

iv. Services - Hindustan Unilever will play an important role in the growth of customer satisfaction through its
pre-sale and post-sales services. Post-sales facilities are essential to modern consumers such as marketing
and promotional events. For example, Sunsilk mobile salons at stores provide consumers an opportunity to
have a great hair wash and try the new relaunched product. Similarly, they also undertake in-store sampling
for their range of Beverages and Food products like tea, coffee and soups. Ayush Health centres have
helped in providing easy access to authentic Ayurveda treatments and products, addressing the ever-
growing concern for health among consumers.

2. SUPPORT ACTIVITIES

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i. Firm Infrastructure - The company's architecture applies to a number of operations, such as quality
control, management of regulatory affairs, accounting, finance, planning and strategic management. Apart
from having a responsible and highly qualified Chief Executive Officer and Managing Director – Sanjiv
Mehta, Hindustan Unilever Limited has Executive Directors for - Finance and IT, Supply chain, Legal and
corporate affairs, Human Resources, Research and Development and Sales and Customer Development. It
also has Five Independent Directors and also Directors for each Self-sufficient divisions – Home Care,
Beauty and Personal Care and Foods and Refreshment supported by certain central functions.

i. Human Resource Management - The company has 500+ CEOs in India and abroad. Through assessing
the recruiting and training expenses and achieving their proportional profit, the organization meets the
expense minimization goals. This value chain support operation would be enhanced by the high reliance of
the Hindustan Unilever Limited on the talent of employees. HUL’s Future Leaders Program is an example.
HUL has a goal to make executive recruits engage with local population to develop better understanding.
HUL's purpose-led and future-fit vision and culture ensured that we continue to hold our title of ‘No. 1
Employer of Choice’ for the 12th year in a row. It has also provided for crèche facilities in 19 of the
factories in India. They aim at being gender-balanced in their workforce. Another small but important step
in their diversification of employees has been the recent induction of female shop-floor employees at their
Haldia and Kidderpore factories. Their goal is to make sure that people’s experience of Unilever is fair for
everyone and that they are fully including members of LGBTQI+ communities, persons with disability and
other minority groups. HUL has always had a best-in-class medical policy that includes medical cover for
their employees and their dependents, extensive tie-ups with hospitals and doctors in all locations, and
cashless facilities. Early in the pandemic, they reviewed their medical readiness and resilience, particularly
at their factories in remote locations, and ramped up their medical infrastructure with observation and
testing facilities and engaged more doctors and medical staff. They also extended a Covid-19 medical
insurance to people in their extended value chain. Their annual employee survey ‘UniVoice’ conducted
during the year garnered a participation from 84% of our office-based employees. The survey showed
improvements across all dimensions. Overall engagement stood at 90%, pride to work in HUL at 96%, and
94% of their employees said that they believe HUL has the right strategy to win.

ii. Technology Development - Almost all supply chain operations in a new advanced technology age rely on
technical support. Hindustan Unilever Limited is expected to understand the value of technological
advancement through technology convergence in the manufacturing, delivery, marketing and human
resources industries. It can be separated into product and production phases. Examples of these include
program automation, customer care assisted by technology, research into product design and data
processing. The Hindustan Unilever Limited research and development department is categorized under
this division. More than 650 science, technology and engineering experts work in HUL across three sites in
Mumbai, Bangalore and Gurgaon, contributing their specialist skills to make best class products. To ensure
that their innovations are safe, secure and competitive they invest heavily on three strategic capabilities –
Unilever's Safety and Environmental Assurance Centre which brings safety and sustainability to the
products, Regulatory Affairs to bring the sustainable products to the market easier and faster and Digital
R&D for product superiority. HUL has been a leader in using big data and analytics as a tool to drive
sustainable growth. They continue to drive organisation wide digital transformation agenda under the
umbrella of “Reimagine HUL” to capture the digital opportunity. Pre-empting the imminent disruption,
they have established a sharp digital innovation portfolio in each Function and continue investments in
Innovation. These innovations include those around our core Enterprise Resource Planning platform using
Cloud, Artificial Intelligence and other digital technologies. Each day they build new capabilities in

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Systems, Workforce and Business Models with strong focus on external orientation and partnership across large IT
Companies/Industry Bodies. They are also invested to make sure that their talent is digitally enabled and future fit
to ride the digital transformation wave.

iii. Procurement - Processes involved in buying inputs, including machines, machinery, raw materials,
services, raw materials and other things required to manufacture the end product, can be found in the
supply chain purchase. As Hindustan Unilever Limited blends its sourcing operations with various value
chain activities, it needs to take special note in order to maximize the incoming, operational and outbound
value chain. It follows a sustainable sourcing code of conduct. It heavily invests on sustainable tea, coffee,
fruits and vegetables for their products. There are around 1,307 smallholder farmers working an area of
2,200 acres of land in North India, and nine suppliers who have benefitted with this sustainable sourcing
arrangement. It has resulted in higher yields and increase in productivity. It has also sourced 100% of their
volumes of sustainably sourced paper and board for packing their products.

3. MARGIN
Margin refers to the profit margin of the company – Hindustan Unilever Limited made out of the activities of it's
value chain. The figure below will give us a brief knowledge about the Margin of the company.

Figure 10 – FINANCIAL MARGIN OF THE COMPANY

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 HUL AND IT'S COMPETITORS

1. ITC LIMITED
Established in 1910, ITC limited is a diversified conglomerate with businesses spanning Fast Moving Consumer
Goods comprising Foods, Personal Care, Cigarettes and Cigars, Branded Apparel, Education and Stationery
products, Incense Sticks and Safety Matches; Hotels, Paperboards and Packaging, Agri Business and Information
Technology. The company was incorporated on August 24, 1910 under the name Imperial Tobacco Company of
India Limited and then changed into India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974.
The company now stands rechristened 'ITC Limited', where 'ITC' today is no longer an acronym or an initialised
form.

Figure 11 – ITC LIMITED

HUL AND ITC LIMITED

HINDUSTAN UNILEVER LIMITED ITC LIMITED

i. HUL is the largest pure-play FMCG Company in i. ITC is not a pure-play FMCG company, since it
the country and has one of the widest portfolio of has a more diversified business with Branded
products via a strong distribution channel. Apparel, Education and Stationery products,
Incense Sticks and Safety Matches; Hotels,

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 Paperboards and Packaging, Agri Business and
i. HUL always believes in customer friendly Information Technology.
products with major emphasis on low cost overall i. ITC's focus is on delivering value at competitive
without compromising with the quality of the prices. It's tremendous reach through extensive
product. distribution chain has been a competitive
ii. The company has been launching new products advantage.
and brand extensions with the help of sustainable ii. ITC ensures that i7t's products pass efficiently
resources with investments being made towards from the farms to customers has helped it to cut
brand-building and increasing it's market share. down supply and procurement costs.

2. DABUR INDIA LIMITED

Established in 1884 Dabur India Limited is an Indian Multinational Consumer goods company, founded by S.K.
Burman and headquartered in Ghaziabad, Uttar Pradesh. It manufactures Ayurvedic medicine and natural
consumer products and the fourth largest Fast Moving Consumer Goods companies in India. It has a product range
of Hair oils, Shampoos, Health Supplements, Digestives, Skin care, Foods, Oral care, Otc and ethicals and Home
Care.

Figure 12 – DABUR INDIA LIMITED

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HUL AND DABUR INDIA LIMITED

HINDUSTAN UNILEVER LIMITED DABUR INDIA LIMITED

i. Hindustan Unilever Limited focuses on i. Dabur India Limited has maintained it's natural
sustainable resources for manufacturing it's way of manufacturing products and it follows the
products. age-old tradition of producing the goods.
i. HUL has Limited Ayurvedic products and i. Dabur India Limited is the world's largest
services – Lever Ayush brand of Ayurvedic Ayurvedic and Natural Healthcare Company with
Personal Care products. a portfolio of over 250 Herbal/Ayurvedic
products.
ii. HUL has a great distribution channel for it’s rural ii. Dabur is presently aiming for it's products to
consumers. The company also has a number of reach in the rural areas. The company is
projects solely working for the purpose of rural developing it’s distribution channel. It is also
development. focussing on the development of the rural areas.

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 RESEARCH METHODOLOGY

In this project report the data is collected through secondary sources, i.e., data have already been collected by
someone else, and it is already available on internet. Both qualitative and quantitative research studies use
secondary sources as a method of data collection. In qualitative research descriptive data (historical and current)
and narrative information is usually extracted and in quantitative research, the information extracted is categorical
or numerical.
The information and secondary data of Hindustan Unilever Limited for this project is collected from:

 Earlier Research - An enormous number of research studies that have already been done by others can
provide us with the required information.

 Annual Reports of the company of Hindustan Unilever Limited, case studies, as well the company
websites.

 Mass media - Reports published in newspapers, in magazines, blogs, on the internet may be another good
source of data.

SAMPLE DESIGN

The samples used in this study are as follows :

1.Hindustan Unilever Limited
2.ITC Limited
3.Dabur India Limited

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 FINDINGS AND ANALYSIS

The value chain is a basic tool for diagnosing competitive advantage and finding ways to create and sustain it. The
array of competitor value chains is, in turn, the basis for many elements of industry structure. Scale of economies
and proprietary learning, for example, stem from the technology employed in competitor's value chains. An
analysis of the value chain rather than value added is the appropriate way to examine competitive advantage.
Comparing the value chain of competitors exposes differences that determine competitive advantages.
Given below are the findings to get a better understanding of the value chain of Hindustan Unilever Limited :-

Table 1 - FINANCIAL STATEMENT OF HUL

The financial statement of HUL suggests that it has improved itself from the past years. The above figure
shows the difference between the income and sales from the previous years as well as the current year.

Chart 1 – FINANCIAL HIGHLIGHTS AS OF YEAR 2020.

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The above chart shows the difference between the Net Sales and Net Profit from the years 2018 to 2020. The
financial highlights suggest the increase in the amount and that the company has improved it’s statistics.

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Figure 13 – TOTAL REVENUE OF HUL AS COMPARED TO THE OTHER COMPANIES
APRIL-JUNE 2020

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 Figure 14 – REVENUE OF DIFFERENT CATEGORIES OF HUL

Figure 15 – TOTAL EXPENDITURE OF HUL AS COMPARED TO THE OTHER COMAPNIES IN

INDIA APRIL – JUNE 2020
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Figure 16 – TOTAL EMPLOYEE COST OF HUL AS COMPARED TO THE OTHER COMPANIES
APRIL-JUNE 2020
8

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Figure 17 – PROFIT BEFORE TAX OF HUL AS COMPARED TO THE OTHER COMPANIES
APRIL-JUNE 2020

Figure 18 – MARKET CAPITALISATION OF HUL AS COMPARED TO OTHE COMPANIES

APRIL-JUNE 2020

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Figure 19 – HUL REVENUE AT A GLANCE

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 Figure 20 – SEGMENTAL PERFORMANCE OH HUL IN 2020-21

From the above findings it can seen that HINDUSTAN UNILEVER LIMITED is a valuable company. The
company has developed itself through years of innovation by it’s Research and Development group and the
managers have worked for the company’s overall development. The company’s has a very promising future of it’s
own. The segmental performance and the overall performance of the company shows how it has developed itself
and how it aims on working hard with the help of their employees and improve their products and improve the
accessibility of it’s brands all over India.

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 CONCLUSION AND RECOMMENDATIONS

HUL's mission says that long term success requires a total commitment to exceptional standards of performance
and productivity and willingness to embrace new ideas and learn continuously. So many product innovations have
come into existence and the company also have done the innovation in distribution as well which led to the
emergence of number of projects most prominently the Project Shakti. By focussing more on sustainable
resourcing and investing heavily in R&D the company has made it's way to the top. It has very well maintained it's
employee relations by having an effective HR department. The large range of products and brands are very well
capturing every household as it meets the needs of the consumers. It has also partnered with small and large
retailers to grow it's business. It has very effectively and efficiently contributed towards many causes including the
COVID 19 Pandemic by spreading awareness, donations and also medical coverage of their employees. Thus the
company holds a Competitive advantage over the other competitors as it has an increased profit margin and a
strong value chain.

RECOMMENDATIONS
HUL should keep up with the remarkable work of developing it's company and connecting with the consumers.
Although HUL has gained reputation of meeting consumer needs through various products in different segments. It
has a strong supply chain and distribution network meeting customer needs but as it has a very wide range of
products and brands which is a plus point but threat as well because competitors focusing on single product can eat
up the market share of a particular product of HUL This gives competitive advantage for HUL over the others.
Increasing input costs and operations cost due to rise in raw material costs, increasing imitative and spurious
products, and stiff competition from other FMCG players are the problems HUL is currently facing. Some of the
recommendations understood by me are as follows -
➢ It should lower it's investment in advertising as it greatly spends on celebrity endorsements.
➢ Reduction in the use of Plastic packaging which would show the customers a more sustainable approach.
➢ It should invest more on providing direct services of the products to the consumers.
➢ The company should introduce it's own e-commerce website which would give a competitive advantage
over it's competitors.

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 REFERENCES

• Michael E. Porter, 2004. Competitive Advantage : Creating and Sustaining superior performance
• hul-annual-report-2020-21_tcml255-561812_1_en.pdf
• www.google.com
• www.wikipedia.com
• hul-factsheet_tcml255-558558_1_en.pdf
• hul.co.in
• itcportal.com
• www.dabur.com

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