Case Study Description of Hindustan Unilever Limited
This case illustrates HUL's conflict resolution and people development policies using a 'Leading from the middle' example. The story centers around the challenges faced by an HR manager at a factory who must meet organizational objectives, while handling multiple trade unions that are resisting change as well as having conflicts amongst themselves.
Swot Analysis of "Hindustan Unilever Limited" written by Thomas J. DeLong, Mona Sinha includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hul's Resisting facing as an external strategic factors. Some of the topics covered in Hindustan Unilever Limited case study are - Strategic Management Strategies, Conflict, Human resource management, Leadership, Organizational culture and Organizational Development.
Some of the macro environment factors that can be used to understand the Hindustan Unilever Limited casestudy better are - – increasing commodity prices, there is backlash against globalization, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, supply chains are disrupted by pandemic ,
central banks are concerned over increasing inflation, geopolitical disruptions, etc
Introduction to SWOT Analysis of Hindustan Unilever Limited
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hindustan Unilever Limited case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hul's Resisting, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hul's Resisting operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Hindustan Unilever Limited can be done for the following purposes –
1. Strategic planning using facts provided in Hindustan Unilever Limited case study
2. Improving business portfolio management of Hul's Resisting
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hul's Resisting
Strengths Hindustan Unilever Limited | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hul's Resisting in Hindustan Unilever Limited Harvard Business Review case study are -
Effective Research and Development (R&D)
– Hul's Resisting has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Hindustan Unilever Limited - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Hul's Resisting has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Sustainable margins compare to other players in Organizational Development industry
– Hindustan Unilever Limited firm has clearly differentiated products in the market place. This has enabled Hul's Resisting to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Hul's Resisting to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Hul's Resisting has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Hindustan Unilever Limited HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Hul's Resisting are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to lead change in Organizational Development field
– Hul's Resisting is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Hul's Resisting in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Hul's Resisting has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hul's Resisting has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management
– Hul's Resisting is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Hul's Resisting digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hul's Resisting has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Learning organization
- Hul's Resisting is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Hul's Resisting is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hindustan Unilever Limited Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Hul's Resisting is present in almost all the verticals within the industry. This has provided firm in Hindustan Unilever Limited case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Hul's Resisting in the sector have low bargaining power. Hindustan Unilever Limited has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hul's Resisting to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Hindustan Unilever Limited | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hindustan Unilever Limited are -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Hul's Resisting supply chain. Even after few cautionary changes mentioned in the HBR case study - Hindustan Unilever Limited, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hul's Resisting vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hindustan Unilever Limited HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Hul's Resisting has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Hindustan Unilever Limited HBR case study mentions - Hul's Resisting takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Workers concerns about automation
– As automation is fast increasing in the segment, Hul's Resisting needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Increasing silos among functional specialists
– The organizational structure of Hul's Resisting is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Hul's Resisting needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hul's Resisting to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Hindustan Unilever Limited, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Low market penetration in new markets
– Outside its home market of Hul's Resisting, firm in the HBR case study Hindustan Unilever Limited needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Hul's Resisting has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Hul's Resisting even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hindustan Unilever Limited, is just above the industry average. Hul's Resisting needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Hindustan Unilever Limited has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hul's Resisting 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Hul's Resisting has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities Hindustan Unilever Limited | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Hindustan Unilever Limited are -
Manufacturing automation
– Hul's Resisting can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Creating value in data economy
– The success of analytics program of Hul's Resisting has opened avenues for new revenue streams for the organization in the industry. This can help Hul's Resisting to build a more holistic ecosystem as suggested in the Hindustan Unilever Limited case study. Hul's Resisting can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Hul's Resisting can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hul's Resisting to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Hul's Resisting to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Hul's Resisting can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hul's Resisting in the consumer business. Now Hul's Resisting can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Hul's Resisting can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Hul's Resisting can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hindustan Unilever Limited suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Leveraging digital technologies
– Hul's Resisting can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Loyalty marketing
– Hul's Resisting has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hul's Resisting is facing challenges because of the dominance of functional experts in the organization. Hindustan Unilever Limited case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hul's Resisting can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hul's Resisting can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Hul's Resisting can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Threats Hindustan Unilever Limited External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hindustan Unilever Limited are -
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hul's Resisting can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Hul's Resisting.
Technology acceleration in Forth Industrial Revolution
– Hul's Resisting has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Hul's Resisting needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing wage structure of Hul's Resisting
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Hul's Resisting.
Consumer confidence and its impact on Hul's Resisting demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Hul's Resisting is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hul's Resisting in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Hul's Resisting needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
High dependence on third party suppliers
– Hul's Resisting high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hindustan Unilever Limited, Hul's Resisting may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Hul's Resisting will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Stagnating economy with rate increase
– Hul's Resisting can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Weighted SWOT Analysis of Hindustan Unilever Limited Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Hindustan Unilever Limited needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Hindustan Unilever Limited is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Hindustan Unilever Limited is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Hindustan Unilever Limited is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Hul's Resisting needs to make to build a sustainable competitive advantage.
