Case Study Description of Hindustan Unilever Mulls Over E-grocery Market Option
The prospect of online grocery (e-grocery) shopping has generated a substantial amount of interest. Many fast-moving consumer goods companies have entered this potential market, and Hindustan Unilever Limited (HUL) is contemplating building its own e-grocery platform. However, e-grocery firms have yet to develop a business model that can consistently deliver profits while also creating value for customers. HUL needs to assess the potential barriers to success, including challenges such as inadequate infrastructure and customer skepticism. If the company decides to launch its e-grocery store, which model should it follow? Should HUL enter the e-grocery arena with a full range of products or only a select few? What technical and physical capabilities would the company need to succeed in the online retailing business? HUL has always been at the forefront of using technology to reach consumers, but is e-commerce the best way forward? Sandeep Puri is affiliated with Institute of Management Technology, Ghaziabad. Manjusha Subramanian is affiliated with Institute of Management Technology, Ghaziabad. Abhinav Grandhi is affiliated with Institute of Management Technology, Ghaziabad.
Swot Analysis of "Hindustan Unilever Mulls Over E-grocery Market Option" written by Sandeep Puri, Manjusha Subramanian, Abhinav Grandhi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Grocery Hul facing as an external strategic factors. Some of the topics covered in Hindustan Unilever Mulls Over E-grocery Market Option case study are - Strategic Management Strategies, Marketing, Organizational structure, Strategy and Global Business.
Some of the macro environment factors that can be used to understand the Hindustan Unilever Mulls Over E-grocery Market Option casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, there is backlash against globalization, central banks are concerned over increasing inflation, increasing transportation and logistics costs, there is increasing trade war between United States & China, increasing household debt because of falling income levels,
geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Hindustan Unilever Mulls Over E-grocery Market Option
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hindustan Unilever Mulls Over E-grocery Market Option case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Grocery Hul, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Grocery Hul 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 Mulls Over E-grocery Market Option can be done for the following purposes –
1. Strategic planning using facts provided in Hindustan Unilever Mulls Over E-grocery Market Option case study
2. Improving business portfolio management of Grocery Hul
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Grocery Hul
Strengths Hindustan Unilever Mulls Over E-grocery Market Option | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Grocery Hul in Hindustan Unilever Mulls Over E-grocery Market Option Harvard Business Review case study are -
Effective Research and Development (R&D)
– Grocery Hul 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 Mulls Over E-grocery Market Option - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Grocery Hul in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Grocery Hul is present in almost all the verticals within the industry. This has provided firm in Hindustan Unilever Mulls Over E-grocery Market Option 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 Grocery Hul in the sector have low bargaining power. Hindustan Unilever Mulls Over E-grocery Market Option has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Grocery Hul to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Global Business industry
– Hindustan Unilever Mulls Over E-grocery Market Option firm has clearly differentiated products in the market place. This has enabled Grocery Hul to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Grocery Hul to invest into research and development (R&D) and innovation.
High brand equity
– Grocery Hul has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Grocery Hul to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Grocery Hul 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 Grocery Hul is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hindustan Unilever Mulls Over E-grocery Market Option Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Grocery Hul is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Grocery Hul 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 Global Business segment
- digital transformation varies from industry to industry. For Grocery Hul digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Grocery Hul 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.
Training and development
– Grocery Hul has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hindustan Unilever Mulls Over E-grocery Market Option 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.
Organizational Resilience of Grocery Hul
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Grocery Hul does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Hindustan Unilever Mulls Over E-grocery Market Option | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hindustan Unilever Mulls Over E-grocery Market Option are -
Workers concerns about automation
– As automation is fast increasing in the segment, Grocery Hul 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 Mulls Over E-grocery Market Option 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 Grocery Hul has relatively successful track record of launching new products.
High cash cycle compare to competitors
Grocery Hul 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 Grocery Hul products
– To increase the profitability and margins on the products, Grocery Hul needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Grocery Hul supply chain. Even after few cautionary changes mentioned in the HBR case study - Hindustan Unilever Mulls Over E-grocery Market Option, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Grocery Hul vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Hindustan Unilever Mulls Over E-grocery Market Option, it seems that company is thinking about the frontier risks that can impact Global Business 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.
Slow decision making process
– As mentioned earlier in the report, Grocery Hul 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. Grocery Hul 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.
Low market penetration in new markets
– Outside its home market of Grocery Hul, firm in the HBR case study Hindustan Unilever Mulls Over E-grocery Market Option needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hindustan Unilever Mulls Over E-grocery Market Option, it seems that the employees of Grocery Hul 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.
Need for greater diversity
– Grocery Hul has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to strategic competitive environment developments
– As Hindustan Unilever Mulls Over E-grocery Market Option HBR case study mentions - Grocery Hul 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 Mulls Over E-grocery Market Option | 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 Mulls Over E-grocery Market Option are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Grocery Hul can use these opportunities to build new business models that can help the communities that Grocery Hul operates in. Secondly it can use opportunities from government spending in Global Business sector.
Manufacturing automation
– Grocery Hul can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Grocery Hul can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Grocery Hul 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Grocery Hul 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. Grocery Hul 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.
Creating value in data economy
– The success of analytics program of Grocery Hul has opened avenues for new revenue streams for the organization in the industry. This can help Grocery Hul to build a more holistic ecosystem as suggested in the Hindustan Unilever Mulls Over E-grocery Market Option case study. Grocery Hul can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Grocery Hul 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Grocery Hul 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 Unilever Mulls Over E-grocery Market Option, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Grocery Hul can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Grocery Hul 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 Global Business segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Grocery Hul can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Grocery Hul can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hindustan Unilever Mulls Over E-grocery Market Option 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.
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 Grocery Hul in the consumer business. Now Grocery Hul can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Hindustan Unilever Mulls Over E-grocery Market Option 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 Mulls Over E-grocery Market Option are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Grocery Hul with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Grocery Hul 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. Grocery Hul can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Regulatory challenges
– Grocery Hul 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 Global Business industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Grocery Hul 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 Mulls Over E-grocery Market Option .
Stagnating economy with rate increase
– Grocery Hul 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.
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. Grocery Hul needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Grocery Hul has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Grocery Hul needs to keep up with the evolution of technology in the Global Business 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.
High dependence on third party suppliers
– Grocery Hul 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Grocery Hul can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Grocery Hul 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.
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 Grocery Hul business can come under increasing regulations regarding data privacy, data security, etc.
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 Grocery Hul.
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 Grocery Hul in the Global Business sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Hindustan Unilever Mulls Over E-grocery Market Option 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 Mulls Over E-grocery Market Option 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 Mulls Over E-grocery Market Option 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 Mulls Over E-grocery Market Option 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 Mulls Over E-grocery Market Option 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 Grocery Hul needs to make to build a sustainable competitive advantage.
