Pob stage 1 seminar 10 sbd
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Seminar: Unilever’s Project Shakti
Topic Number: 10
Principles of Business
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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.
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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
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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
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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’!
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Provide an overview for why Unilever
started Project Shakti
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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:
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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
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Explaining Project Shakti: Vijay Sharma
View video: http://www.youtube.com/watch?v=XIUydDLvvoo
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A huge opportunity at the BOP
http://www.wri.org/sites/default/files/pdf/n4b_full_text_lowrez.pdf
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An evolutionary path to Project Shakti
Source: Rohithari and Rajan, 2006
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An untapped opportunity
Source: Rohithari and Rajan, 2006
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Infrastructure/Business Potential Matrix
Source: Rohithari and Rajan, 2006
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Illustrate how the Project Shakti
business model works
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The Business Model Explained
Source: Rohithari and Rajan, 2006
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Implications on sustainability and rural development
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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
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Helping to build skills
Source: Slideshare, 2014
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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
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Recommend ways to Unilever can grow
Project Shakti internationally
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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
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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
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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
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Best practise from other industries
Source: M-Pesa,2014
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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
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Over 5 million customers registered Average of 10,000 new registrations per day
Kenya growth
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End of Seminar
Note: This recording is for your personal use only and not for further distribution or wider review.
© Pearson College 2013
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