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Case Study: Hindustan Lever Limited

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Case Summary:

Hindustan Lever Limited, India’s leading and fast moving consumer goods (FMCG) and services Company, had enjoyed a competitive advantage as a lone provider of personal hygiene care products until the development of India’s economy. However, with the entry of multinational FMCG companies HLL started experiencing stagnant growth and lower profit margin, and was under pressure of rising its incomes and revenues. At this point HLL’s new ventures division identified the untapped and unexplored rural India (where two-thirds of the population lived), as a key source of growth and expansion for the future. To continue on its competitive edge, HLL designed an innovative approach to penetrate these rural markets, with a project called …show more content…

Shakti scheme has an advantage of being a more personalized service than a retail store, as HLL can reach its final consumer directly through these mediums rather than depending on a third source. HLL can start giving more preference to these entrepreneurs by providing more discounts, creating a mutual network - where they can share experiences, success stories and motivate each other etc. This will in turn increase the number of entrepreneurs and make them more powerful against the direct sales channel. By doing so HLL can also save on the time spent by RSPs to reach and coach an individual entrepreneur and these RSPs can now explore the untapped rural districts to bring in more entrepreneurs.
• Exploit iShakti and Shakti Vani: HLL can continue on its competitive edge by triggering the social development of rural India. iShakti and Shakti Vani can offer access to information and social communication which would be major tools to increase health and hygiene awareness in rural India. In turn such awareness would improve HLL sales in long term.

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