Case Study Description of Hindustan Unilever's 'Pureit' Water Purifier
To maximize their effectiveness, color cases should be printed in color.The case asks students to formulate a strategy to respond to various competitive threats to its Pureit Water purifier, launched in 2008, targeted at millions of low-income Indian consumers who did not have access to safe drinking water. The case describes in detail the product development and launch process that required HUL, the $3.5 billion Indian subsidiary, to innovate on many different fronts. It details competitive actions since the launch to set the stage for what the company should do next.
Swot Analysis of "Hindustan Unilever's 'Pureit' Water Purifier" written by V. Kasturi Rangan, Mona Sinha includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pureit Purifier facing as an external strategic factors. Some of the topics covered in Hindustan Unilever's 'Pureit' Water Purifier case study are - Strategic Management Strategies, Marketing, Product development, Social enterprise and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Hindustan Unilever's 'Pureit' Water Purifier casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, technology disruption, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing commodity prices,
supply chains are disrupted by pandemic , increasing energy prices, etc
Introduction to SWOT Analysis of Hindustan Unilever's 'Pureit' Water Purifier
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hindustan Unilever's 'Pureit' Water Purifier case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pureit Purifier, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pureit Purifier 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's 'Pureit' Water Purifier can be done for the following purposes –
1. Strategic planning using facts provided in Hindustan Unilever's 'Pureit' Water Purifier case study
2. Improving business portfolio management of Pureit Purifier
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pureit Purifier
Strengths Hindustan Unilever's 'Pureit' Water Purifier | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pureit Purifier in Hindustan Unilever's 'Pureit' Water Purifier Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Pureit Purifier 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Hindustan Unilever's 'Pureit' Water Purifier firm has clearly differentiated products in the market place. This has enabled Pureit Purifier to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Pureit Purifier to invest into research and development (R&D) and innovation.
Organizational Resilience of Pureit Purifier
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pureit Purifier does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Sales & Marketing field
– Pureit Purifier 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 Pureit Purifier in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Pureit Purifier is present in almost all the verticals within the industry. This has provided firm in Hindustan Unilever's 'Pureit' Water Purifier 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.
Learning organization
- Pureit Purifier 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 Pureit Purifier is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hindustan Unilever's 'Pureit' Water Purifier Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Pureit Purifier is one of the leading recruiters in the industry. Managers in the Hindustan Unilever's 'Pureit' Water Purifier are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Pureit Purifier in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Pureit Purifier is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by V. Kasturi Rangan, Mona Sinha can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Highly skilled collaborators
– Pureit Purifier 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's 'Pureit' Water Purifier HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Hindustan Unilever's 'Pureit' Water Purifier Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Successful track record of launching new products
– Pureit Purifier has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pureit Purifier 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.
Weaknesses Hindustan Unilever's 'Pureit' Water Purifier | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hindustan Unilever's 'Pureit' Water Purifier are -
High bargaining power of channel partners
– Because of the regulatory requirements, V. Kasturi Rangan, Mona Sinha suggests that, Pureit Purifier is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Workers concerns about automation
– As automation is fast increasing in the segment, Pureit Purifier 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hindustan Unilever's 'Pureit' Water Purifier 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 Pureit Purifier has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hindustan Unilever's 'Pureit' Water Purifier, is just above the industry average. Pureit Purifier 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 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 Pureit Purifier supply chain. Even after few cautionary changes mentioned in the HBR case study - Hindustan Unilever's 'Pureit' Water Purifier, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pureit Purifier vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Pureit Purifier has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Lack of clear differentiation of Pureit Purifier products
– To increase the profitability and margins on the products, Pureit Purifier needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Pureit Purifier is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Pureit Purifier needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pureit Purifier to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Pureit Purifier, firm in the HBR case study Hindustan Unilever's 'Pureit' Water Purifier needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hindustan Unilever's 'Pureit' Water Purifier, in the dynamic environment Pureit Purifier has struggled to respond to the nimble upstart competition. Pureit Purifier has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Hindustan Unilever's 'Pureit' Water Purifier HBR case study mentions - Pureit Purifier 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.
Opportunities Hindustan Unilever's 'Pureit' Water Purifier | 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's 'Pureit' Water Purifier are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Pureit Purifier 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.
Leveraging digital technologies
– Pureit Purifier 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pureit Purifier is facing challenges because of the dominance of functional experts in the organization. Hindustan Unilever's 'Pureit' Water Purifier 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.
Developing new processes and practices
– Pureit Purifier can develop new processes and procedures in Sales & Marketing 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Pureit Purifier 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
– Pureit Purifier can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hindustan Unilever's 'Pureit' Water Purifier 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.
Creating value in data economy
– The success of analytics program of Pureit Purifier has opened avenues for new revenue streams for the organization in the industry. This can help Pureit Purifier to build a more holistic ecosystem as suggested in the Hindustan Unilever's 'Pureit' Water Purifier case study. Pureit Purifier can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Pureit Purifier to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pureit Purifier in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Pureit Purifier to increase its market reach. Pureit Purifier will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Learning at scale
– Online learning technologies has now opened space for Pureit Purifier to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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 Pureit Purifier in the consumer business. Now Pureit Purifier can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pureit Purifier 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. Pureit Purifier 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's 'Pureit' Water Purifier 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's 'Pureit' Water Purifier are -
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Pureit Purifier business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Pureit Purifier has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Pureit Purifier needs to keep up with the evolution of technology in the Sales & Marketing 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pureit Purifier in the Sales & Marketing industry. The Sales & Marketing 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.
Environmental challenges
– Pureit Purifier needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Pureit Purifier can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pureit Purifier with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Pureit Purifier in the Sales & Marketing sector and impact the bottomline of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Pureit Purifier needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Pureit Purifier is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Pureit Purifier 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 Sales & Marketing industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pureit Purifier can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Hindustan Unilever's 'Pureit' Water Purifier .
Increasing wage structure of Pureit Purifier
– 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 Pureit Purifier.
Weighted SWOT Analysis of Hindustan Unilever's 'Pureit' Water Purifier 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's 'Pureit' Water Purifier 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's 'Pureit' Water Purifier 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's 'Pureit' Water Purifier 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's 'Pureit' Water Purifier 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 Pureit Purifier needs to make to build a sustainable competitive advantage.