69280204 Final Ppt of HUL vs ITC

8/12/2019 69280204 Final Ppt of HUL vs ITC

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COMPETATIVE STRATEGY OFHUL V/S ITC

Group IV

Jiten Shah

Rahul Kumar

Alok Birewar

Darshan Patil

Sumit Tomar

Suman Shekhavat

By:


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INTRODUCTION

Competitive Strategy consists of move of

companies in order to attract customers. With stand

competitive pressures and strengthen an

organizations market position. The main objective of Competitive Strategy is to

generate a competitive advantage, increase the

loyalty of customers and to beat competitors.


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FIVE MAIN COMPETITIVE STRATEGIES ARE:

Overall low cost leadership strategy

Best cost providers strategy

Broad differentiation strategy

Focused low cost strategy Focused differentiation strategy

Here competitive strategy varies from sector to sector and

company to company. Thus, it is not easy to predict a single or

tofind a single strategy for the whole sector. When we come on

to

FMCG Sector main strategies lay behind market strategies,

cost,


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WHAT ARE HUL AND ITC LTD.?

HUL (Hindustan Unilever Ltd.) This Company is earlier known as Hindustan

Lever Ltd. This is Indians largest FMCG sector

company with all type of household products

available with it. It has Home & Personal Care

products, and also food and Water Purifier

available with it. According to Brand Equity,

HUL has largest no. of brands in most trustedbrands list.


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ITC LIMITED

This Company was earlier known as Imperial Tobacco

Company of India Ltd.

It is Currently headed by Yogesh Chander

Deveshwar.

Company mainly operates in the industry like

Tobacco, Foods, Hotels, Stationary and Greeting

Cards with the major products constitutes Cigarettes,

packed foods, hotels, and apparels.

For the entire year ending Mar-2011 the turnover of

company is at Rs. 15388 Crore which is 10.3% higher

than previous years Rs. 13947.53 Crore, driven

mainly by robust 20% growth in non cigarette FMCG

business with net profit stood at Rs. 3324 Crore.


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ANALYSIS OF BOTH COMPANIES

HUL & ITC are major companies in FMCG market in India.

When we compare both companies on the basis of their

strategies i.e. , their competitive strategies in the present

market.

When we look at the present segment breakup for both of

the companies then we came to know that their different

products vary too much in the market.


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HUL SEGMENT BREAKUP ITC SEGMENT BREAKUP


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COMPARATIVE ANALYSIS OF BOTH THE

COMPANIES UNDER SOME HEADS:

HUL ITC

Hindustan Unilever (HUL) is

the largest pure-play FMCG

company in the country and

has one of the widest portfolioof products sold via a strong

distribution channel.

It owns and markets some of

the most popular brands in

the country across variouscategories, including soaps,

detergents, shampoos, tea

and face creams.

ITC is not a pure-play

FMCG company, since

cigarettes is its primarybusiness.

It is diversifying into non-

tobacco.

FMCG segments like

foods, personal care, paperproducts, hotels and agri-

business to reduce its

exposure to cigarettes.


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PERFORMANCE

After stagnating between 1999 and 04, thecompany is back on the growth track. In thepast three years, till 2010 HULs net sales

have witnessed a CAGR of 11%, while netprofit has posted a CAGR of 17%.

Despite diversification, ITCs reliance oncigarettes is still huge. The tobacco business

contributes 40% to its revenues, andaccounts for over 80% of its profit. This cash-generating business has enabled it to takeambitious, but expensive bets in newsegments and deliver modest profit growth.


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RISK FOR BOTH THE COMPANIESHUL IT

Being an MNC operating in

India, HUL is moreconservative in its strategiesthan its Indian counterparts.Moreover, given increasingcompetition, it faces the riskof being overtaken by

domestic players in variouscategories. Prolongedinflation may lead to margincontraction, in case HUL isnot able to pass on thisburden to consumers. The

company's large size alsoposes a problem, since itdoes not give HUL the agilityto address the competition itfaces from national andregional players

Increased regulatory clamps

on tobacco, along with risingtax burden, pose a business

risk for ITC. So, it has started

an ambitious diversification

plan, which has its own set of

risks. With its foray into the

conventional FMCG space,

ITC has entered the high-

clutter branded products

market. This will burden its

resources in terms of ad spend

and brand-building. Creatingbrand recall and building

market share in new products

are ITCs key challenges.

Export ban and rising crop

prices pose a threat for its agri-business, taxing its margins.


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OVERALL STRATEGY

HUL IT

HUL always believes in

customer friendly products

with major emphasis on low

cost overall without

compromising on the quality

of the product.

They are leveraging the

capabilities and scale of the

parent company and focusing

on the value of execution.

The entire product portfolio

is also being tweaked to

include premium offerings

such as Ponds Age Miracle

and dove shampoo in skin

and hair care.

ITC is focusing ondelivering value atcompetitive prices. Itstremendous reach throughextensive distribution chain

has been a competitiveadvantage.

Additionally, the company'se-choupal model for directprocurement is well knownunder which ITC partnerswith over 100,000 farmersfor spices and wheatprocurement and an evenlarger number for oilseeds.This kind of rural pedigree

is hard to beat


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GROWTH DRIVERS

HUL IT

The Company has beenlaunching new productsand brand extensions,with investments beingmade towards brand-

building and increasingits market share. HUL isalso streamlining itsvarious businessoperations, in line withthe One Unileverphilosophy adopted bythe Unilever groupworldwide. Introductionof premium products andaddition of new

consumers via marketex ansion will be HULs

ITCs backwardintegration to ensurethat its products passefficiently from the farmsto consumers hashelped it to cut down

supply and procurementcosts. ITCs non-cigarette FMCGbusiness leverages thelarge distributionnetwork the company

has developed by sellingcigarettes over theyears. A rich productmix, along with ramp-upof investments in its newsectors, will be

instrumental in chartingITCs growth path.


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FINDINGS

ITC works in the market with the qualitative style. In the Bhopalcity ITC have 2800 out lets. In these, outlets are cover by theSales man according to his beat. Compare to HUL, ITC has lessdemand but promotional activities of ITC, above the land andbelow the land day by day aware to customer about ITCspersonal care product.

ITC dont have any schemes like HUL (Vijeta, Super Value Soap,Smart Scheme, Beat the heat). ITC should have provided thistype of scheme which is help to increase the sale. Only consumerschemes are not enough.

HUL also give seasonal Schemes to retailers. HUL make scheme

broachers for whole sellers and retailers and provide them. HULorganize Vijeta Meet at the end year and give prizes to winnerand provide certificate for their achievement.

HUL also give the certification to the shop keeper ExcellentAward on the bases of sale performance.


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SUGGESTIONS

We want to suggest few scheme to the ITC for ModernTrade, for wholesaler, for the retailer. This can behelpful to increase the sales of ITC.

For modern trade scheme is ITC ZONE.

Why this scheme? In the market most of the customers are not aware

about to ITC & ITCs entire personal care product andvisibility problem and also customer aware about theconsumer scheme.

ITC ZONE scheme all MTs are included under thescheme select a visible place in the shop and put allITCs personal care product and give shop keeper thequarterly sale target and give him to incentives orprizes or cash prize.


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SUGGESTIONS (CONT)

For wholeseller scheme is Rocket Singh

Why this scheme?

Wholesalers are totally interested in the margin orfull demanded products in market right now ITCs

personal care products are in the growth stage if

we are give margins to sale quantity then sale will

be increased by wholeseller.


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SUGGESTIONS (CONT)

For the retailer scheme is ITCS PARTNERS

Why this scheme?

ITCs personal care products are in good quality butthe ITCs personal care product need a push by the

shop keeper.

ITCS PARTNERS in this we give certificate ofexcellence to the shopkeeper with margin. This

scheme is based on also quantitative sale.


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CONCLUSION

HULs up-and-running business model is a treat forinvestors seeking exposure in the FMCG segment.

The company has delivered in the past and has the

potential to do better in future. In the small and

medium term. ITCs growth story is still evolving.

ITC is eyeing the pie which HUL and other FMCG

players currently enjoy. Though risky, the

companies business model will pay off in the longrun. ITC has proved its expertise in the cigarettes,

hotels, paper and agri-businesses. Investors who

want to bank on its execution ability in FMCG can

consider the stock with a long-term horizon.


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69280204 Final Ppt of HUL vs ITC

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