Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century
Hindustan Lever Limited, principally owned by Unilever, operates Shakti, a program which aims to extend the reach of HLL's products to the 742 million rural consumers in 637,000 villages in India. Critical questions the program faces: Will Shakti and the BoP markets it targets deliver to HLL much-needed long term growth and become a key source of a future sustainable competitive advantage? Is the program really making a social impact?
Authors :: Ted London
Topics :: Sales & Marketing
Tags :: Customers, Emerging markets, Social enterprise, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century" written by Ted London includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Shakti Lever facing as an external strategic factors. Some of the topics covered in Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century case study are - Strategic Management Strategies, Customers, Emerging markets, Social enterprise, Social responsibility and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century casestudy better are - – talent flight as more people leaving formal jobs, wage bills are increasing, there is backlash against globalization, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%,
central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shakti Lever, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shakti Lever 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 Lever at the Base of the Pyramid: Growth for the 21st Century can be done for the following purposes –
1. Strategic planning using facts provided in Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century case study
2. Improving business portfolio management of Shakti Lever
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 Shakti Lever
Strengths Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shakti Lever in Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Shakti Lever in the sector have low bargaining power. Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shakti Lever to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Shakti Lever in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Shakti Lever 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 Lever at the Base of the Pyramid: Growth for the 21st Century - 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 Shakti Lever 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.
Learning organization
- Shakti Lever 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 Shakti Lever is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Shakti Lever
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Shakti Lever does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Shakti Lever is one of the most innovative firm in sector. Manager in Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Shakti Lever is present in almost all the verticals within the industry. This has provided firm in Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century 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.
Cross disciplinary teams
– Horizontal connected teams at the Shakti Lever 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Shakti Lever digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shakti Lever 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.
Ability to lead change in Sales & Marketing field
– Shakti Lever 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 Shakti Lever in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Shakti Lever has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century are -
Workers concerns about automation
– As automation is fast increasing in the segment, Shakti Lever 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 cash cycle compare to competitors
Shakti Lever 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 Shakti Lever products
– To increase the profitability and margins on the products, Shakti Lever needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shakti Lever is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 Shakti Lever supply chain. Even after few cautionary changes mentioned in the HBR case study - Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shakti Lever vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Shakti Lever has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century, it seems that the employees of Shakti Lever don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Low market penetration in new markets
– Outside its home market of Shakti Lever, firm in the HBR case study Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Shakti Lever has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century, in the dynamic environment Shakti Lever has struggled to respond to the nimble upstart competition. Shakti Lever has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century can leverage the sales team experience to cultivate customer relationships as Shakti Lever is planning to shift buying processes online.
Opportunities Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century | 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 Lever at the Base of the Pyramid: Growth for the 21st Century are -
Using analytics as competitive advantage
– Shakti Lever has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shakti Lever to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shakti Lever is facing challenges because of the dominance of functional experts in the organization. Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shakti Lever 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.
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. Shakti Lever can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Shakti Lever 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.
Developing new processes and practices
– Shakti Lever 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shakti Lever 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.
Learning at scale
– Online learning technologies has now opened space for Shakti Lever 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.
Better consumer reach
– The expansion of the 5G network will help Shakti Lever to increase its market reach. Shakti Lever 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shakti Lever can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shakti Lever can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Shakti Lever can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shakti Lever can use these opportunities to build new business models that can help the communities that Shakti Lever operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Threats Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century are -
Shortening product life cycle
– it is one of the major threat that Shakti Lever is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Shakti Lever 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.
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 Lever at the Base of the Pyramid: Growth for the 21st Century, Shakti Lever may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Technology acceleration in Forth Industrial Revolution
– Shakti Lever has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Shakti Lever 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.
Stagnating economy with rate increase
– Shakti Lever 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shakti Lever 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.
High dependence on third party suppliers
– Shakti Lever 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.
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 Shakti Lever.
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 Shakti Lever business can come under increasing regulations regarding data privacy, data security, etc.
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. Shakti Lever 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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shakti Lever can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Shakti Lever in the Sales & Marketing sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Shakti Lever with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Hindustan Lever at the Base of the Pyramid: Growth for the 21st Century 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 Lever at the Base of the Pyramid: Growth for the 21st Century 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 Lever at the Base of the Pyramid: Growth for the 21st Century 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 Lever at the Base of the Pyramid: Growth for the 21st Century 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 Lever at the Base of the Pyramid: Growth for the 21st Century 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 Shakti Lever needs to make to build a sustainable competitive advantage.
