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 household debt because of falling income levels, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, there is backlash against globalization, increasing government debt because of Covid-19 spendings,
increasing commodity prices, 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 -
Operational resilience
– The operational resilience strategy in the Hindustan Unilever Mulls Over E-grocery Market Option 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.
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.
Ability to recruit top talent
– Grocery Hul is one of the leading recruiters in the industry. Managers in the Hindustan Unilever Mulls Over E-grocery Market Option are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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.
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.
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.
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.
Ability to lead change in Global Business field
– Grocery Hul 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 Grocery Hul in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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 -
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.
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 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.
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.
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.
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.
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 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.
Aligning sales with marketing
– It come across in the case study Hindustan Unilever Mulls Over E-grocery Market Option 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 Unilever Mulls Over E-grocery Market Option can leverage the sales team experience to cultivate customer relationships as Grocery Hul is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Grocery Hul has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
Developing new processes and practices
– Grocery Hul can develop new processes and procedures in Global Business 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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hindustan Unilever Mulls Over E-grocery Market Option, Grocery Hul may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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.
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.
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.
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.