This company is known as a pure Indian company by the name of Hindustan Unilever Company, but if we see the share holding of its promoters, then it is a British company, which Unilever considers to be a subsidiary company of this international company. From the point of view of the stock market, it is a company selling Fast Moving Consumer Goods (FMCG), in which the customers are from the top to the bottom of the society in terms of its origin. Talking about the margin of profit, this sector runs on a very low margin, so skill is very important in this sector.
In India’s stock market, Hindustan Unilever, this company has become the fifth largest company in the Indian stock market with a market capital of Rs 5.86 lakh crore by July 2022. Due to Uniiever being a subsidiary company of this international company, this 62% investment of Unilever is seen in this company. This company has been in India for 80 years and 9 out of 10 families use some brand of Hindustan Unilever. For a few days, the company’s brand has been accused of being a chemical brand, due to which herbal products like Patanjali are competing with the company.
Therefore, through this article, we will understand the business strategy of Hindustan Unilever Company and try to know how the company manages so many products. Hindustan Unilever will try to understand the history of the company, in which we will see how the company’s journey from the beginning till date. Will try to know what are the positive points of the company and the negative points of the company. Will try to know how such a huge structure of Hindustan Unilever Company is run.
Business Profile of HUL Company / Business Profile of HUL Company –
- Company Name – Hindustan Unilever Limited
- Main company – Unilever PLC (United Kingdom)
- Industry – Consumer Goods
- Company founded – 1933
- Market capital of the company – Rs 5.86 lakh crore (July 2022)
- Share market price – Rs 2489
- CEO – Sanjeev Mehta
- Products – Foods, Skin Care ,Personal Care, Home Care , Refreshment
- Net worth – 20153 crores
- Total Employees – 21000
- Total Factory – 31
History of HUL Company / History of HUL Company –
- Hindustan Vanaspati Manufacturing Company -1931
- Lever Brothers Limited Company 1933
- United Traders Limited -1935
These three companies were established by the British company Unilever, which was merged in 1956 to form a company named Hindustan Lever Limited Company. Today we are seeing Hindustan Unilever Limited, this company was renamed in 2007. Sunlight This soap brand was first manufactured by the British company Unilever, today more than 50 brands of products are sold all over the world. India’s Hindustan Unilever This company plays an important role in the sales of the main company.
- 1888-Sunlight soap of Unilever Company was brought to the Indian market.
- 1885 – Life Buoy, the company’s famous brand, was launched through agents in Mumbai, Chennai, Kolkata and Karachi.
- 1902 – Pears soap was launched in the market.
- 1922 – Rinso powder was launched in the market.
- 1931-Hindustan Vegetable Manufacturing Company was registered.
- 1937 – Prakash Tandon was the first Indian appointed as the manager of the company.
- 1947 – Pond’s Cold Cream was launched in the market.
- 1955 – 65% of Indian people were appointed on the post of manager.
- 1956 – Hindustan Liver Limited was established by amalgamation of three companies, in which 10% Indian share holder was added.
- 1961 – Prakash Tandon became the first Indian chairman of the company and out of total 205 managers of the company, 191 managers were appointed Indians.
- 1968 – VC State President was made the chairman.
- 1971 – To diversify the company’s production process, the Clinic shampoo product was brought into the market by the chairman.
- 1978 – Indian shareholding was increased to 34% and the famous brand Fair & Lovely this product was brought to the market.
- 1982 – 51% share holding was approved by the Government of India which was done by Unilever British Company.
- 2007 – Company changed from Hindustan Liver Limited to Hindustan Unilever Limited.
- 2016 – The sales of the company’s main 6 brands crossed 2000 crores, which are Surf Excel, Brook Bond, Wheel, Lifebuoy, Rin and Fair & Lovely, in which Surf Excel was a brand with a sales figure of 3000 crores.
- 2020 – GSK company was merged with HUL so that Horlicks and Boost were launched in the market under this energy drink company.
- 2022 – The company’s turnover crossed 50000 crores.
Business Model of HUL Company –
In terms of population, India is considered to be the second largest country in the world, in which the population of India is more than 100 crores in the population of 700 crores. This means that it is easy for any international company to sell its products or services in India to sell its products in the rest of the country. Hindustan Unilever Company spends Rs 4607 crores on the marketing of its products, which is 12 percent of all expenditure. From this we can get an idea that how much importance the company gives to establish its brand.
When the company started its production in India, they were selling a limited number of products and that too meant for the elite segment of the market. Ordinary people could not buy these products, so the company started increasing the product by targeting the low-income customer of India and started producing on a small scale. In which brands like shampoo, which earlier could not be bought by the common people, the company has done the work of taking them in small sachets and taking them to the common people. The products in which the company is working in the FMCG sector come in the essential things of the society and they are sold in a very low margin.
Hindustan Unilever Company has invested US$ 5 billion in 2013 by promoters and increased their stake mainly because of the company’s chemical-rich products created problems through herbal products through Indian brands like Patanjali. That’s why the company has invested a lot of capital in the market to secure its brand, as a result of which the company spends a lot more money on marketing than its competitors.
Hindustan Unilever Company’s variety of products and selling its products to all the customers from village to city has created an excellent system, which is a subject of revision from distributors to production and sales.
Share market and HUL Company –
Hindustan Unilever Company is one of the top five companies in India’s stock market by market capitalization and today’s share price is Rs.2496. That’s why this company is still a great stock in the stock market from the point of view of the future, in which we are investing, despite being priced higher than its fundamentals. In the FMCG sector, Hindustan Unilever may be a foreign company, but out of every 10 families in India, 9 families use the company’s products.
In 1990, India welcomed foreign companies by changing the economic policy, but Hindustan Unilever Company was working in India from British India. But the change of economic policy after 1990 allowed the company to increase investment, which enabled the company to increase its structure by 4 billion US dollars in 2013, which was a huge amount at that time. The company has been continuously giving about five percent profit every year and this profit has been increasing every year.
Hindustan Unilever company has taken its products from cities to small villages of India, due to which the company works in the area, it is a continuous thing, so the growth of the company is expected to increase further in the future because even today people in India Income is increasing. The company’s brands like Nestle are competitors in the stock market and Indian brands like Patanjali have made a significant impact on the company’s sales. Nevertheless, the fundamentals of the company are so good that the company sells its products in diversity, which reduces the risk factor.
Success Formula of HUL Company –
Most important in the success of the company is the market capital of the company, which makes the company the largest FMCG company in India, due to which the company spends the most money for marketing each of its products. In India, Hindustan Unilever Company launched its products as a luxury product in British India, which went ahead and reached all the ordinary people of India at a small scale at an affordable price. The most important brands in the company’s success have been Surf Excel, Fair & Lovely, Wheel, Rin, Brooke Bond and Life Buoy, accounting for half of the company’s sales.
The competitors of Hindustan Unilever company in the Indian market are brands like ITC, Nestle and Patanjali, which compete very well, to counter which the company focuses on the affordable price of the company along with the marketing strategy. The company has been doing business in India for 80 years, under which it has taken its business from cities to villages and successfully does the work of selling its products to people at an affordable price.
The company has diversified its products into four parts, in which the company sells its products like personal care, food, refreshment and home care. Company’s Business Structure This 31 factory distributes its products to its customers through 1150 suppliers and 8 million outlets. The company spends the most money on its brand, due to which its distributors have to sell products only in the name of the company and invest money. In the FMCG sector, the profit margin is less than five percent, so the management skills of the company play a very important role.
HUL Company’s competitors –
In terms of income, ITC earns more than Hindustan Unilever Company, but in terms of market capital, Hindustan Unilever Company is much bigger than ITC Company. Hindustan Unilever Company, being a subsidiary of this international company, it is spread over 190 countries and small brands in the FMCG sector in India have been a cause of competition for the company, which affects the company’s profits. 9 out of 10 families in India use the products of Hindustan Unilever, so that we can guess how much influence the company has on the FMCG market in India.
CCI in India, through this law, the work of controlling market dominance is done by the government, but many times prices are controlled through cartels. There are many allegations of dominating the FMCG market on Hindustan Unilever, but the company has always denied it. Companies like ITC and Nestle are competing companies of Hindustan Unilever Company in India, due to which they have to be very alert. For this, the company spends a lot of money on its brand on the strength of market capital, which is a difficult task for other companies.
The company has done the work of buying small competing companies to counter the competition in the Indian market, through which it has been successful in making India’s number one FMCG company. Inflation and taxes, the company has done the work of preparing a team of experts to earn good profits in India, so that due to the smallness of the competing companies, it can sell them in the market by focusing on some major products, but Hindustan Unilever Company has to sell all its products. But keeping in mind the competitor of each product has to be amended.
Features of HUL Company –
- Unilever PLC Hindustan Unilever Company was established in India in 1933 as a subsidiary of this British company.
- Hindustan Unilever’s 6 products Fair and Lovely, Wheel, Surf Excel, Lifebuoy, Brook Bond and Rin generate 50 percent income out of more than 50 products of the company.
- 9 out of 10 families in India use the products of Hindustan Unilever and the company’s market capital is Rs 5.86 lakh crore, which is one of the five major companies of the Indian stock market.
- The name of the company is Hindustan Unilever Limited, due to which this company is considered to be a completely Indian company, but 62% of the share holing is of Unilever PLC, this British company.
- Hindustan Unilever Company spends 12 percent of its expenditure on the marketing of its brand, which is approximately 4607 rupees.
- The brands of Hindustan Unilever company are chemical-rich, so Patanjali, this Indian brand, has started competing with the company through herbal products.
- Hindustan Unilever Company brought its first brand on Sunlight soap before 1933 which was sold as a luxury product.
- Moving out of luxury brands through Hindustan Unilever company started selling cheap products through small shampoo packets looking at ordinary Indian customers.
- Hindustan Unilever This company sells more than 50 of its products in the FMCG sector and companies like ITC and Nestle are its main competitors.
- The main reason for the success of the company has been its capital and branding strategy, due to which it has reached from the cities to the villages of India.
- Hindustan Unilever Company has been awarded the World’s Best Inventive Company by the prestigious Forbes.
- Through the Shakti project, the company is working to provide employment to the people in the villages of India and many social programs are done.
- Hindustan Liver Limited Company was established in 1956 by merging three companies, which was renamed Hindustan Unilever in 2007.
- In 2013, Unilever promoters infused around US$4 billion into the company, making the company one of the top five companies in the Indian stock market.
HUL Company and Critical Analysis –
Hindustan Unilever This company is so big that when a policy company is determined and it is implemented then it is difficult to change it. That’s why before implementing any strategy, it has to take a lot of thought and decision. The company runs its business on more than 50 brands, which have thousands of products, which is a very difficult task to manage from any competing company. A competing company like ITC has been able to earn more profit despite having a market capitalization of HUL.
Hindustan Unilever Company has been accused of creating dominance in the FMCG market and has been accused of harming nature in countries like Africa and Malaysia in terms of pollution. The company is accused of controlling prices, which is called a cartel. Being a foreign company, the company has to face a lot of opposition in India, under which companies like Patanjali are competing with the company through indigenous means. Hindustan Unilever Company has 62% investment in this British parent company Unilever, so the profit goes abroad.
The products of Hindustan Unilever Company, ranging from oil to soap, contain these chemicals, causing harm to the body, there have been allegations and a movement to use herbal products is being run in the society. There have been allegations of nepotism on Fair and Lovely products because the marketing of this brand has been the cause of great controversy. Although the company is running many social programs as a social responsibility, but how far they are reaching the people has been a matter of revision. Many acquisitions of Hindustan Unilever Company have become the cause of controversy.
In this way, we have seen how the company’s journey from Hindustan Liver Limited to Hindustan Unilever Limited has been for the last 90 years, in which it has been very important to survive in the FMCG market of India. The company runs its business through distributors in India whose main sales base is spent on branding. Through which this company guarantees the sale by taking a huge amount as deposit from its distributor.
By the name of Hindustan Unilever Company, all the customers think it is their Indian company but it is basically a foreign promoters company. After 1990, many facilities have been provided by the Government of India to attract foreign companies in India, which has benefited the company. The company sells itself through different FMCG products, in which some major brands play a very important role. After the establishment of the company for the first time in 1933, the appointments of Indian officers in the management of the company have been done by the company from time to time.
Due to being the fifth largest company in terms of market capital in the stock market, there have been allegations of dominance several times and the company has been opposed through the Swadeshi movement. For which the company continues to do social service through social programs for the problems of India. Criticism has to be faced on the chemical-rich products of the company through herbal products, but the company has been successful in controlling all the opposition till date. So we have seen how Hindustan Unilever Company runs its business and earns profit.