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 - – increasing commodity prices, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, talent flight as more people leaving formal jobs, increasing energy prices, supply chains are disrupted by pandemic ,
wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, 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 -
Analytics focus
– Grocery Hul 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 Sandeep Puri, Manjusha Subramanian, Abhinav Grandhi 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
– Grocery Hul 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 Mulls Over E-grocery Market Option HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
Successful track record of launching new products
– Grocery Hul has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Grocery Hul 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
– 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.
High switching costs
– The high switching costs that Grocery Hul 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.
Innovation driven organization
– Grocery Hul is one of the most innovative firm in sector. Manager in Hindustan Unilever Mulls Over E-grocery Market Option Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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.
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 -
High bargaining power of channel partners
– Because of the regulatory requirements, Sandeep Puri, Manjusha Subramanian, Abhinav Grandhi suggests that, Grocery Hul 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hindustan Unilever Mulls Over E-grocery Market Option, is just above the industry average. Grocery Hul 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.
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.
Interest costs
– Compare to the competition, Grocery Hul 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Hindustan Unilever Mulls Over E-grocery Market Option 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 Grocery Hul 's lucrative customers.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hindustan Unilever Mulls Over E-grocery Market Option, in the dynamic environment Grocery Hul has struggled to respond to the nimble upstart competition. Grocery Hul has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Grocery Hul is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hindustan Unilever Mulls Over E-grocery Market Option 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 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.
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.
Products dominated business model
– Even though Grocery Hul 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 Unilever Mulls Over E-grocery Market Option should strive to include more intangible value offerings along with its core products and services.
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 -
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.
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.
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 Grocery Hul 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Grocery Hul is facing challenges because of the dominance of functional experts in the organization. Hindustan Unilever Mulls Over E-grocery Market Option 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.
Loyalty marketing
– Grocery Hul 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.
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.
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.
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.
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.
Using analytics as competitive advantage
– Grocery Hul 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 Unilever Mulls Over E-grocery Market Option - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Grocery Hul to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Grocery Hul in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Grocery Hul to increase its market reach. Grocery Hul 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Grocery Hul 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 Grocery Hul to hire the very best people irrespective of their geographical location.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Grocery Hul in the Global Business industry. The Global Business 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
– 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.
Increasing wage structure of Grocery Hul
– 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 Grocery Hul.
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 .
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. Grocery Hul 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.
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.
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.
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.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Grocery Hul is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.