Monday, 4 February 2013


Deboshree Banerjee,*
Student, Batch of 2012-14 writes...

The MD and CEO (till March-end, 2008) Douglas Baille headed for London April, 2008 to assume charge of Unilever’s Western European Region as President. It was then that Nitin Paranjpe took over as HUL’s youngest ever CEO from April 1, 2008.

Dhaval Buch(Executive Director, Supply Chain), Leena Nair ( Executive Director, HR) and Nitin Paranjpe formed the perfect embodiments of a changing HUL and now more dynamic eight member management committee.

HUL was now finally able to strike up growth embers, improve profitability, region market shares, and grow fledging markets.
The business success of HUL can be attributed to two main reasons:
  1. ‘One Unilever’ exercise, &
  1. Comprehensive organizational makeover.
HUL was able to gain back its reckoning amongst various stakeholders. It wasn’t that way between 2001-2004, where the company’s topline just refused to budge, as consumers shied away from HUL’s product, often preferring the cheaper alternatives in the market.

“Other new formed expenses- homeland installments and mobile phone bills ate into the consumer’s wallet. Also, a haughty HUL, accustomed as it was to a decade of robust double-digit growth and high profitability, was finding it difficult to accept that it wasn’t innovating fast enough, and was thereby drift6ing away from consumer.” Paranpje, ED, HPC (home and personal care), which is easily the largest portfolio at HUL.

In 2001-2004, the consumer had a lot of things to spend on, as interest rates were low. There was a competing demand on her funds. So, she compromised on things that did not really improve the quality of her life. Therefore, erosion of HUL’s market share in key categories- detergents soaps and, shampoos.

Therefore, in 2006 € 40 billion consumer goods major, Unilever, adopted a new structure- a single top executive team into which the foods and home and personal care business were integrated, called One Unilever, the programme also simplified the global business into 3 broad regions- Asia-Africa, Europe and the Americas. Then a new region of Central and Eastern Europe (CEE) was carved out as a part of Unilever’s sharp focus on the high-growing, developing and emerging markets.
Harish Manwani, (the then) Chairman HUL, and President (Asia-Africa), Unilever said, “We were required to play our global scale with our regional might.”
HUL’s supply was organized on a regional and global basis which helped it derive efficiencies in buying and sourcing in the following ways:
1. Helped improve execution at the front end.
2. It now had two sales teams in the market (HPC and foods) as against 5 earlier.
3. It was now able to generate scale at the distributor end through a common channel programme across the companies.
4. There was little room for duplication as HUL did not have separate teams for foods, beverages, detergents, ice-creams etc. today, it was all one team.
In the tenure of Baille (CEO HUL), profitability could not be compromised at the altar of market share. So, despite an increase in advertising & promotional (A&P) expenditure- up by 32.3% in the 4th quarter of 2007 over the previous year’s corresponding period & higher by 11.8% in 2007 over 2006- HUL was been able to up its margins.

The competitive battle that began a few years ago called for unblinking defense. The defense was against global competition- P&G in detergents and shampoos, ITC in foods (& now in soaps) and; local rivals- Tata, Marico, Godrej, Cavin Kare etc.

ITC got into an already crowded personal care business. HUL’s approach had always been to provide consumers with an exciting portfolio of world class products. Thus, the trick of battling competition was to make a tradeoff between profitability and market share. It was now time to claw market share by market development and penetration and conversion. HUL earlier built the detergents and soap market & now, did the same with packaged foods. Here, it was now a fight for market share conversion from home-made foods to ready-to-cook. Therefore, maintaining market share by doubling or trebling the sizes of some markets. Knorr, Kisan Chatak Daar Ketchup, Amaze milkfood & snack food, etc were the new products to achieve the new purpose.

Leena Nair said, “What was going against the company on campus was its fuddy-duddy, traditional and hierarchical perception.” It was time to break the perception. HUL’s rah-rah growth in the ‘90s did bring with it some problems. The success HUL enjoyed for 10-12 years did breed arrogance. It had to pay the price for it, and the tough years between 2001-2004 taught the giant virtues of humanity.

Today, ‘Flexibility’ is a key mantra at HUL- be it in terms of sabbaticals, working out of home, or compensation. “It now believes to motivate, attract and retain people; excite people about the future”, said Nair.

Therefore, HUL has witnessed a drastic revival over the years by switching from an evasive to a defensive strategy; but the marathon is far from over.

* About Deboshree:

Hello everyone, this is Deboshree Banerjee and you can call me ‘Debo’. Yeah you would hear the abbreviated version more often than the original, in my Institution: NIILM-CMS and amongst friends. Well, I guess by this time you must have got a fair idea that I am a very energetic and amiable kind of a person. But then that does not mean that I am not sincere with my work, contrarily it helps me enjoy any work at hand and manage stress. My interests are marketing and human resources management. Though I am a greenhorn at NIILM, just stepped in the IInd semester, but my journey here till date has been a learning experience and full of fun, and hope will continue the same way. I am a progressive learner, and optimistic about first getting a job as marketing/ HR executive at the end of my tenure here, and after gathering experience would establish my own venture in the long run. And in the pursuit would also brush up my hobbies of dance and casual photography.

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