Seminar: Unilever’s Project Shakti

Topic Number: 10

Principles of Business

2

Overview

Unilever has adopted a unique strategy to service untapped villages within rural India through their Project Shakti program. This can be considered a strategic CSR initiative where not only is Unilever winning in this area but also the women who are empowered to sell the products and consumers that benefit from enhanced hygiene.

This seminar will take a critical look at how the project began, its growth and how the company plans to move it forward. We will initially consider how and why Project Shakti started and take a detailed look at the distribution model that is currently deployed. Furthermore, we will look at the various stakeholders that are involved in the initiative and how they all benefit from the model.

Thereafter, we will look at the implications of the model on sustainability and strategic CSR. Finally, we will look at how Unilever can expand this program to positively impact a wider population in India and other countries.

3

Learning outcomes of this seminar

• Determine and describe how and why Unilever’s Project Shakti was started in rural India

• Be able to articulate how the distribution model works and recommend ways it can be improved

• Determine how Project Shakti contributes to the sustainability and social development of various stakeholders

• Make recommendations as to where and how Unilever can expand the program internationally

Agenda for this seminar

Illustrate how the Project Shakti business model works

What are the implications for sustainability and rural development?

Recommend ways Unilever can grow Project Shakti internationally?

Provide an overview for why Unilever started Project Shakti

Structure for the session

You will have 15 minutes to

discuss each question

We will have a de-brief at the end of each 15 minutes to hear your thoughts on each area

Feel free to ask questions but please do not have separate conversations ‘we are all in

this together’!

Provide an overview for why Unilever

started Project Shakti

Project Shakti: The OriginsIn 1990s HUL wanted to expand its reach in rural India. It had a choice to adopt the traditional distribution model which could have set the cash registers ringing. But HUL adopted an approach which was rooted in its belief of ‘Doing Well by Doing Good’. It created a unique micro-entrepreneurship model with the aim of integrating business interests with societal need.

This model has been guided by the belief that the private sector can help create solutions to social challenges through innovative strategies that meet both business and social objectives. By promoting micro-enterprise, Project Shakti not only made great business sense but also had deep social impact.

Sustainable investment

opportunity for village

community/rural women.

Increase in the household income of poor families

of Shakti Entrepreneurs

Empowerment to

rural women

Better standards of living though

access to health and hygiene

products.

Benefits of Project Shakti:

Project Shakti: Objectives

• HUL’s New Venture Division identified rural India as a key source of growth and competitive advantage

• HUL argued that access to rural markets would be the big differentiator among FMCG companies

• Business objectives: extent HUL’s reach into untapped markets and to develop its brands through local influencers

• Social objectives: provide sustainable livelihood opportunities for underprivileged rural women

Explaining Project Shakti: Vijay Sharma

View video: http://www.youtube.com/watch?v=XIUydDLvvoo

A huge opportunity at the BOP

http://www.wri.org/sites/default/files/pdf/n4b_full_text_lowrez.pdf

An evolutionary path to Project Shakti

Source: Rohithari and Rajan, 2006

An untapped opportunity

Source: Rohithari and Rajan, 2006

Infrastructure/Business Potential Matrix

Source: Rohithari and Rajan, 2006

Illustrate how the Project Shakti

business model works

The Business Model Explained

Source: Rohithari and Rajan, 2006

Implications on sustainability and rural development

A strategy focused on women; But why?

• Women are the target consumers for most of HUL products

• Rural women constituted the most marginalised group in society

• Rural women were more likely to appreciate the additional income than affluent ones in urban areas

• Women were more likely to access into homes of potential consumers in villages

• Focus on women would have greater impact on the entire household – leads to improvements in health, hygiene and education levels

• Most men would be occupied with other employment and would not devote as much time to the activity

Helping to build skills

Source: Slideshare, 2014

A win-win?

• A win-win for both sides – HUL makes money and also improves quality of lives

• Creating livelihoods for women where it did not previously exist

• Ethical issues with Project Shakti?• Educating to create demand, increase consumption• Pollution from packaging

• Issues with financing and loans

• Income is variable depending on monsoons

Recommend ways to Unilever can grow

Project Shakti internationally

A Path Set for Growth

The project is being customized and adapted in several South-East Asian, African and Latin American markets

like Bangladesh, Sri Lanka and Vietnam. In Bangladesh and Sri

Lanka, it is being promoted as project Joyeeta and Saubaghya respectively.

Source: Unilever, 2014

Adapt to the environment

Economics

Technology

Social

Political

Demographics

EVIDENCE BASED REGULATION

INCREASE IN REGULATOR

ENFORCEMENT

GLOBAL REGULATION & PRIVACY

ASSET PRICES INCREASE

UK RECOVERYROLE OF SOCIAL

FINANCE

60% LIVING IN URBAN AREAS (50% NOW)

5M MORE OVER 65’S>SINGLE PERSON HOMES AND <30S LIVING W PARENTS

ASSET PRICES INCREASE

UK RECOVERYROLE OF SOCIAL

FINANCE

Open vs Closed Mobile & Tablet Digitisation

Jugaad Innovation: A Frugal & Flexible Approach

They say that ‘necessity is the mother of all invention’ which is at the heart of the philosophy of Jugaad Innovation. Jugaad was borne in deprived locations across the emerging world by impoverished individuals that needed to come up with innovative solutions to overcome their own hardships.

Yet, far from being contained to the developing world, many multi-national companies such as Renault-Nissan and GE are embracing these techniques in order to do ‘more with less’. We will cover the key principles of Jugaad in this lecture with a number of them being:

Seek opportunity in Adversity

Do More with Less

Think and Act Flexibly

Keep in simple

Best practise from other industries

Source: M-Pesa,2014

Page 25

Person 2 Person Transfer

Airtime Top-Up

Bill Payment

Merchant Payment

ATM Withdrawals

International Transfer

Cash In Cash Out

The Proposition Is Simple

Social Payments

Page 26

Over 5 million customers registered Average of 10,000 new registrations per day

Kenya growth

End of Seminar

Note: This recording is for your personal use only and not for further distribution or wider review.

© Pearson College 2013