This case study has been developed by Rajan Saxena Vice chancellor NMIMS University for class room discussion.
HLL – Juggernaut- The dilemma of Growth
Hindustan Lever Ltd in India is a 51.4%-owned subsidiary of its global parent Unilever Group. Formed in 1956, the company has since expanded its operations through organic growth and mergers and acquisitions to become the largest fast-moving consumer goods company in India. Hindustan Lever is one of India’s oldest consumer goods companies with brands that are household names. In line with the global revamp of its regional structure, Hindustan Lever also changed its organizational structure in India in 2005 with the setting up of a new management committee and the appointment of a new chairman. The company also appointed an expatriate CEO, Doug Baillie to take over the reigns of the company. This was the first time the company appointed a non-Indian CEO in around 50 years. In 2007, meanwhile, the company changed its name from Hindustan Lever Ltd to Hindustan Unilever Ltd. The new name reflects the right balance between the Indian heritage of the Company and the synergies of its global alignment with Unilever. The new logo symbolizes the Company’s mission of ‘Adding Vitality to Life’.
Hindustan Lever’s broad product portfolio spans soap, detergents, personal products and food. Soap, detergents and scourers generate roughly 46% of revenues, while the rest is largely accounted for by personal products (26%), beverages (11%), other products (2%) and exports (10%). Processed foods and ice cream and other products collectively contribute a miniscule 5% towards total turnover. The company has a significant share of most products in which it operates, with the exception of packaged food. It is among the leading players in cosmetics and toiletries, non-alcoholic beverages and household care in India.
Exhibit 1: Showing the contribution of the different
The vision that inspires HLL's 16,100 employees, including nearly 1,100 managers, is to "meet everyday needs of people everywhere-to anticipate the aspirations of our consumers and customers and to respond creatively and competitively with branded products and services which raise the quality of life." This objective is achieved through the 30 brands that the company markets. Its deep roots in local cultures and markets around the world are HLL' s unparalleled inheritance and the foundation for it's future growth. With this wealth of knowledge and international expertise in the service of local consumers, it is truly a multi-local multinational.
In 1888, less than four years after William Hesketh Lever's company, Lever Brothers, launched Sunlight Soap in England, William Hesketh's company also started exporting the revolutionary laundry soap to India and carved a niche for itself in the Indian market. The company merged with the Netherlands-based Margarine Unie in 1930 to form Unilever. A year later, Unilever set up the Hindustan Vanaspati Manufacturing Company, its first subsidiary in India, and further strengthened its position by establishing two more subsidiaries, Lever Brothers India Limited and United Traders Limited, soon thereafter. The three companies, which marketed soaps, vanaspati and personal products, merged in 1956 to form Hindustan Lever, in which Unilever has a 51 percent stake.
Since then, HLL has entered virtually every arena in the FMCG market through organic growth, diversification, mergers, and acquisitions. Hindustan Lever benefits from deep roots in rural India. It reaches 166 million households according to the company’s own estimates. HLL is one of the largest subsidiaries of Unilever worldwide, with several Unilever managers cutting their teeth in India and rising to senior positions within the group. The company straddles all price platforms, from economy to premium, with its product portfolio ranging from personal...