HINDUSTAN LEVER

One of the most respected MNC operating in India

Core brands were maturing HLL’s Strategy: Focus on innovation Prioritized opportunities which built upon existing assets

and capabilities Avoided Management talent to work on too many projects Entered rural market through Breeze 2 in 1 In 1995, launched Kissan Annapurna iodized salt Strong competencies in marketing and R&D Partnership with manufacturers Cost competitiveness due to competition from local

marketers Encapsulation technique to retain iodine in the salt Monthly review of financial results at corporate

level 2

DESCRIBE AND EVALUATE THE STRATEGY EMPLOYED BY HINDUSTAN LEVER DURING 1995-2002 TO GROW THEIR “TOP-LINE”

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Focus on Innovation

Entered rural markets

Prioritized opportunities which built upon existing assets and capabilities

Avoided Management talent to work on too many projects

Partnership with the manufacturers 4

EVALUATE THE CONTROLS AND ORGANIZATION USED BY HINDUSTAN LEVER TO IMPLEMENT ITS GROWTH INITIATIVES IN KISSAN ANNAPURNA IODIZED SALT

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Extensive research and development

Partnership with the manufacturers

Used rural marketing network of soaps and shampoo

First emphasized on purity, then on health and finally on encapsulation technique

Demonstration vans, health charts in schools, Annapurna scholarships

Monthly review of financial results at corporate level 6

WHAT CRITERIA WOULD YOU USE TO SELECT FROM THE MANY GROWTH PROPOSALS THAT HAVE BEEN SUBMITTED TO THE CHAIRMAN, MR. BANGA? WHY DO YOU CHOOSE THESE CRITERIA?

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1) BLEND OF FINANCIAL & NON-FINANCIAL MEASURES IS REQUIRED2) NON-FINANCIAL MEASURES ARE USED AT LOW LEVELS FOR TASK CONTROL3) FINANCIAL MEASURES ARE USED AT HIGH LEVELS FOR MANAGEMENT CONTROL

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Sales (value) Expenses Budget compared to actual value

of sales Sales (quantity) Net income Contribution margin Budget compared to actual net

income Budget compared to actual

expenses Return on sales Return on equity

o Customer satisfaction

o Product quality

o Employee development

o Productivity improvement

o Implementation of new products / services

o Environmental compliance

FINANCIAL MEASURES NON FINANCIAL MEASURES

GIVEN YOU DECISIONS, WHAT PRACTICES AND PROCESSES SHOULD HLL RETAIN?

WHAT NEW PRACTICES AND PROCESSES WILL HAVE TO BE DEVELOPED?

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Retain: Focus on Innovation Continuous R&D Marketing strategies Encouragement to all the levels of management

for new ideas

New processes and practices to be developed:

Better forward integration Logistics management Joint ventures

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THANK YOU