Answer to Question #263412 in Management for hritik

Question

can you do a SWOT Analysis of any 1 India an company of your choice dealing in FMCG?

Answer 1

Discussion

People’s lives depend on FMCG (Fast Moving Consumer Goods) products that satisfy their basic needs. FMCG products are those that have a short shelf life that is produced in high volumes with low cost and are made for rapid consumption. Hindustan Unilever Limited(HUL) is one of India’s oldest FMCG companies. It is a subsidiary of Unilever, a British-dutch company. The company was established in 1933 and has headquarters in Mumbai. It has served over 2 billion customers for over 87 years. HUL has over 35 brands across 20 categories such as soaps, detergent, skincare, cosmetics, tea, toothpaste. The brand includes famous names like Surf, Excel, Dove, Lux, Lifebuoy, Clinic Plus, Wheel, Sunsilk, Knorr, Axe, etc. Below are some HUL Strengths in the SWOT analysis;

Brand visibility – HUL being in consumer market with its 20 consumer categories such as soap, tea, detergents, shampoo etc. & each having large assortments, this has helped HUL in occupying the large shelf space of Grocery /departmental stores which itself explains the acceptance/demand of their products in the market.

Innovative FMCG Company- Employees in this facility are continuously working & developing innovations in products & manufacturing processes which is helping the HUL to set it as front-runner in the consumer goods market.

Financial position- Having more than 80 years of experience in the consumer goods market & backed by Unilever who owns 67% controlling share in HUL, it’s financially strong.

Share of Wallet- HUL strategy to offer different products for different income groups (selective targeting) has been successful in having share of wallet of a consumer.

Some HUL Weaknesses in the SWOT analysis;

Decreasing Market share- Competitors focusing on a particular product & eating up HUL’s share, like Ghadi & Nirma detergent eating up HUL’s wheel detergent market share.

Large number of brands in different product categories- Sometimes having broad brand can lead to confused positioning. Price positioning in some categories allows for low price competition.

Some HUL Opportunities in the SWOT analysis;

Expanding market- By penetrating more in the rural markets through its project Shakti AMMA and transition of unorganized business to organized one will lead to further expansion of the consumer goods market.

Awareness in usage rate of consumer goods- People getting more aware and conscious about the usage may be through advertising/word of mouth /doctor prescription, this can result in increase in usage rate of these products.

Increasing Income levels- Due to stable political scenario, improved literacy rate & controlled inflation, disposable income of the people is increasing thereby resulting into upsurge in demand & changing their lifestyle.

Some HUL Threats in the SWOT analysis;

Price of commodities- Increasing price of commodities will result in further increase in the price. Further increase in price will result in decrease in sales, margins & brand switching.

Buyers power- With highly diversified consumer goods market where there are lots of brands claiming different sorts of benefits, it’s very difficult for consumers to stick to a particular brand & hence results into brand switching where consumer got power to select a brand based on several factors like availability, recommendation, preference & price.

Reference

Amsaveni, R., & Gomathi, S. (2013). Fundamental analysis of selected FMCG companies in India. Asia-Pacific Finance and Accounting Review, 1(3), 37.