HINDUSTAN LEVER CASE STUDY

Presented By:

Ashish DubeyAzam Abdul AzeezKrishna ChaitanyaVivek Balakrishnan

SYNOPSIS

• Established in 1956• Soap & Vanaspathi• Diversification -- Modernization of existing plants -- Market research – Steep decrease in demand -- Accumulated reserves = equity capital

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SYNOPSIS (Contd.)

• Concepts of the company business.• Focus on the distribution channel -- Food productions. -- Soaps.• Transportation• Research & Development.• Management view for company & its

environment.

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SYNOPSIS (Contd.)

-- Govt. attitude towards industry. -- Image of the company in the public. -- Internal environment of the company.• Opportunities for the company.

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1956

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Threat of New Entrants

• Government policy• Economies of scale• Capital / investment requirements• Customer switching costs• Access to industry distribution channels• Retaliation from existing industry players

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Competitors

• Small Scale Industries• Un- organized Sector• Tata , Godrej

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Substitute Products

• Consumer goods – easily duplicated• Marketing research and Advertisement• Setup Large distribution network -

Wholesaler based (local)• Emphasis on R&D

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Suppliers

• There are many buyers and few dominant suppliers

• Suppliers threaten to integrate forward into the industry

• Local Suppliers – Farmers• Self - Sufficiency

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Customers

• Extension of customers • Acceptable to rich and poor• Product line – Household necessities• Animal feeds and Milk products - Farmers (new TG)• Growing Economy

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INCOME STATEMENTYEAR ’56 ’57 ’58 ’59 ’60 ’61 ’62 ’63 ’64 ’65 ’66 67 ’68 ‘69

REVENUE AFTER DEDUCTING EXPENSES FROM SALES

2554

3098

3371

3764

4154

4574

4908

5525

5813

6711

7945

8854

8702

10251

PROFIT AFTER PAYING TAX

90 74 128 208 250 225 145 146 170 171 234 218 238 297

PROFIT AFTER PAYING DIVIDEND

20 (4) 45 74 105 80 46 33 55 48 86 56 76 112

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Financial Analysis

ADVERTISING EXPENDITURE : From HIGH TO LOW

YEAR 1956 - 57 - 58 - 59 - 60 - 61 - 62 - 63 - 64 - 65

ADV. EXP.(IN LAKHS.)

71 99 105 113 131 157 154 129 118 104

SALES 27.8 33.3 36.8 41.9 46.0 50.0 54.0 59.7 61.8 71.0

ADV.EXP.(AS%OF SALES)

2.5 3.0 2.9 2.7 2.8 3.1 2.9 2.9 1.9 1.0

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Ratio Analysis

Equity Share Data

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Interpretation

• Diversification• Distribution Channels• Advertisment• R & D

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THANK YOU17