Forecasting in Enterprenuership

ByNithin Kumar

Prof - Juris Ozols

Contents1. About the Company

2. A Brief Description of the Current Business of Unilever 3. Characterization of the process4. Characterization of the theory of the forecasting process5. Justification of the choice of forecasting method6. Analysis of HUL on different methods as follows. - Time Series analyzing & Forecasting - Linear & Polynomial Methods - Exponential Data - Data Smoothing Method - Seasonal Data Analysis -Histogram Method - Correlation Method - Pivot Table

Group Selection Slicer - Profit & Revenue Data Analysis

OVERVIEW OF THE COMPANY INCORPORATED: 1933 INDUSTRY: CONSUMER GOODS. HEADQUARTERS: MUMBAI ,MAHARASHTRA. KEY PEOPLE: HARISH MANWANI(CHARIMAN) NITIN PARANJE(MD &

CEO) TURNOVER: 25,206 CRS. PEOPLE: 16000 EMPLOYEES INCLUDING

1500 MANAGERS. PARENTAGE: PART OF 44.3 BILLION EUROS

OF UNILEVER GROUP. REACH: 6.4 MILLION RETAIL OUTLETS. R&D CENTRES: MUMBAI & BANGALORE, INDIA.

INTRODUCTION Hindustan Unilever Limited (HUL) is the largest

FMCG company in India. It is owned by the British-Dutch company “Unilever”

and has about 52% majority stake in Hindustan Unilever Limited .

Its products include foods, beverages, cleaning agents and personal care products.

It is headquartered in Mumbai, Maharashtra, India. Hindustan Unilever Limited has over 35 brands

spanning 20 distinct categories. As per Nielsen market research data, two out of

three Indians use HUL products.

Current Business of HUL HUL is the market leader in Indian consumer

products with presence in over 20 consumer categories such as soaps, tea, detergents and shampoos amongst others with over 700 million Indian consumers using its products

The company has a distribution channel of 6.4 million outlets and owns 35 major Indian brands. Its brands include:

Food and Drink brandPersonal Care brandHome Care brand

How the process go

I have collected a series of data from the Company’s website from their Annual Reports. Which could be used for detailed analysis of Revenues, Profit/Loss, Share price etc. I have taken the Total revenues figure to forecast about it in future.

Hindustan Unilever Limited – Balance Sheets

Hindustan Unilever Limited – Profit and Loss Accounts

Justification of the choice of forecasting method

I have choosen various types of forecasting methods to analyse the company data & products sales.

The above mentioned data is collected from various news papers websites.

The data shows increase & decrease in profit & loss statements.

I have used some of the forecasting methods to analyse the data with regard to sales of various products to know the feature sales of that product.

Analysis of Revenues & Forecast of HUL

Table showing past 12 years financial data

MonthTotal Net Revenue

$Billion2004 7.22005 14.82006 15.92007 24.62008 36.52009 43.82010 88.92011 110.52012 100.82013 180.22014 199.92015 298.5

Interpretation : The graph clearly explains that in 2004 it is around 7.2 billions in 2005 it is increased to 14.8 billions. From 2006 to 2015 it keep on increasing. In 2011 it is showing 110.5 billions in 2012 it is 100.8 billions there was decrease in between these years.

2002 2004 2006 2008 2010 2012 2014 20160

50

100

150

200

250

300

350

Total Net Revenue, USD

Analysis of Time Series Data of HUL

Table showing past 12 years financial data

MonthTotal Net Revenue

$Billion2004 7.22005 14.82006 15.92007 24.62008 36.52009 43.82010 88.92011 110.52012 165.52013 180.22014 199.92015 298.5 2002 2004 2006 2008 2010 2012 2014 2016

0

50

100

150

200

250

300

350

Total Net Revenue, USD

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20150.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00 Profit Increase, USD

 

54 MARKET LEADER-HINDUSTAN UNILEVER LIMITEDAs mentioned in the above graph ,hul is enjoying the leader position in the marketand is having highest market share which are followed by the market challengerslike dabur india ltd , nestle,itc etc. in different categories of fmcg products likeshampoos deos, coffee, dish wash etc.37.554.357.354.547.869.722.74467.513.69.78.77.423.714.520.839.13.401020304050607080hulcompetition market share

                                                                                                                                              

2002 2004 2006 2008 2010 2012 2014 20160.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

Linear & Exponential Growth

Total Net Revenue, $Billion Exponential (Total Net Revenue, $Billion)Model 1 (Linear) Model 2 (Expon)

Linear & Exponential Model forecasting on HUL Total Revenues

Data Smoothing Method on HUL

Period Year Quarter SalesThird -Quarter Sales

AverageFifth -Quarter Sales

Average

1 1 1 8.0    2 1 2 12.0 12.0  3 1 3 16.0 17.7 18.04 1 4 25.0 23.3 26.05 2 1 29.0 34.0 32.46 2 2 48.0 40.3 38.27 2 3 44.0 45.7 44.28 2 4 45.0 48.0 53.49 3 1 55.0 58.3 61.6

10 3 2 75.0 73.0 63.011 3 3 89.0 71.7 65.012 3 4 51.0 65.0 71.813 4 1 55.0 65.0 71.214 4 2 89.0 72.0 73.215 4 3 72.0 86.7 78.816 4 4 99.0 85.5  

0 2 4 6 8 10 12 14 16 180.0

20.0

40.0

60.0

80.0

100.0

120.0Sales

0 2 4 6 8 10 12 14 16 180.0

20.0

40.0

60.0

80.0

100.0

120.0

Sales Average in Third & Fifth Quarter (Smoothing)

Sales Three -Quarter Sales Average Five -Quarter Sales Average

Exponential Method

Days LuxINR

Lifebuoy INR

5 437.00 53615 687.00 65513 763.44 108412 789.00 10542 205.00 122210 905.00 118914 855.00 781.6415 900.66 87611 819.81 110830 999.00 99117 1 010.00 100026 1 038.00 830.9618 1 055.00 815.3122 1 422.00 902.2420 1 117.53 922.6521 1 201.00 788.211 1 354.00 943.218 1 458.00 189125 1 584.00 1013.4924 1 455.00 963.4519 1 245.00 11113 1 894.00 132328 1 639.30 1134.269 1 891.00 991.475 16 661.00 981.384 1 555.00 948.6823 1 402.36 1197.226 1 336.00 175627 1 550.47 188929 1 807.47 1991

Row LabelsCount of Lux

USD 205-605 2

605-1005 8 1005-1405 9 1405-1805 7 1805-2205 3

>2205 1 Grand Total 30

Row LabelsCount of

Lifebuoy USD636-841 5

841-1046 131046-1251 71251-1456 11661-1866 11866-2071 3Grand Total 30

205-605 605-1005 1005-1405 1405-1805 1805-2205 >22050

1

2

3

4

5

6

7

8

9

10

Total

Total

636-841 841-1046 1046-1251 1251-1456 1661-1866 1866-20710

2

4

6

8

10

12

14

Total

Total

Histogram Method on HUL

Row Labels 2006 2008 2009 2010 2011 2012 2013 2014 2015 Grand TotalBHOPAL   224.29 374.22 76.83 84.23 269.21 463.8 38.53 79.68 1610.79

OOTY         153         153KOLKATA 67.9 202.08         401.49   23.52 694.99

JHARKHAND 517.69 528.63   49.48 58.28 392.87     822.12 2369.07PONDICHERR

Y 961.66 191.04 566.77 423.82         666.96 2810.25ORISSA 39.77 444.5 84.8   93.88       178.4 841.35

LUCKNOW   360.74 244.35 35.96 94.16 97.51 139.67   24.98 997.37CHENNAI     22.76     245.51 333.46   81.91 683.64

Mumbai     123.17 24.65       105.47   253.29HARYANA 41.42   78.76   536.15       431.61 1087.94

HYDERABAD   44.08 200.01 1253.59 202.53 376.02 81.61 482.45   2640.29JAMMU & KASHMIR 81.62 119.95       373.25     274.67 849.49SHIMLA 65.49 400.91 83.75 304.71         513.82 1368.68

VIJAYAWADA   28.2 127.52 267.92 320.17 313.86 32.35   233.82 1323.84Delhi   51.82 817.6 92.44 120.39 269.59 441.73   174.59 1968.16

ANDAMAN & NICOBAR 296.29 121.5 171.97 42.37 140.06   50.83   267.91 1090.93

VIZAG 598.06 466.13 99.09 198.15 180.48 465 38.89   265.09 2310.89GOA 203.72 246.86 88.05     119.82 220.77   254.6 1133.82

KOCHI   237.34 158.4 40.02   213.82   29.46 223.81 902.85JAIPUR 22.24 165.48   74 78.66   44.56   155.31 540.25

Bangalore     402.59 62.45 145.09 253.63 149.59 20.88 178.8 1213.03Grand Total 2895.86 3833.55 3643.81 2946.39 2207.08 3390.09 2398.75 676.79 4851.6 26843.92

BHOPALOOTY

KOLKATA

JHARKHAND

PONDIC

HERRY

ORISSA

LUCKNOW

CHENNAI

Mumba

i

HARYANA

HYDERABAD

JAMMU &

KASH

MIR

SHIM

LA

VIJAYAWADA

Delhi

ANDAMAN & N

ICOBAR

VIZAG

GOA

KOCHI

JAIP

UR

Bangalo

re0

200400600800

100012001400

200620082009201020112012201320142015

PIVOT TABLE (Payment of Diff Products of HUL

Date Price DateSurf Excel

INR Surf Excel, 7Surf Excel,

1521.10.201

4 5.43 21.10.2005 7

22.10.2014 8.92

28.10.2005 8

23.10.2014 8.75 16.11.2005 10

24.10.2014 10.1 30.11.2005 15 16.000

25.10.2014 14.59

14.12.2005 20 19.286

26.10.2014 14.44

27.12.2005 25 23.143

27.10.2014 1.89

03.01.2006 27 27.571

28.10.2014 3.16

13.01.2006 30 31.429 31.200

29.10.2014 2.56

29.01.2006 35 35.000 34.667

30.10.2014 2.27

13.02.2006 41 38.857 38.133

31.10.2014 4.61

23.02.2006 42 42.857 41.733

01.11.2014 3.6306.03.200

6 45 46.571 45.333

02.11.2014 3.1217.03.200

6 52 50.000 49.067

03.11.2014 3.0818.03.200

6 55 52.714 52.667

04.11.2014 5.15 19.03.2006 56 55.857 56.533

05.11.2014 8.4326.03.200

6 59 59.286 60.467

06.11.2014 7.7102.04.200

6 60 62.714 64.400

07.11.2014 8.806.04.200

6 64 66.143 68.267

08.11.2014 12.6414.04.200

6 69 70.286 72.133

09.11.2014 12.4921.04.200

6 76 74.571 76.133

10.11.2014 1.6104.05.200

6 79 79.429 80.000

11.11.2014 2.8209.05.200

6 85 84.429 84.000

12.11.2014 2.2620.05.200

6 89 88.857 88.600

5/28/2005 10/10/2006 2/22/2008 7/6/20090

200400600800

100012001400160018002000

Surf Excel INR

5/28/2005 10/10/2006 2/22/2008 7/6/20090

200400600800

100012001400160018002000

15 Periods

Surf Excel INR Surf Excel, 7

SALES OF SURF EXCEL

0 10 20 30 40 50 60-$200,000.00

$0.00

$200,000.00

$400,000.00

$600,000.00

$800,000.00

$1,000,000.00

REVENUE COST OF ADVERTISING PROFIT

T G N REVENUECOST OF

ADVERTISING

PROFIT

0 0% 0 $0.00 $30 000.00 -$30 000.001 10% 66614 $86 597.95 $31 000.00 $55 597.952 18% 126888 $164 955.01 $32 000.00 $132 955.013 26% 181427 $235 855.42 $33 000.00 $202 855.424 33% 230776 $300 008.76 $34 000.00 $266 008.765 39% 275429 $358 057.10 $35 000.00 $323 057.106 45% 315832 $410 581.41 $36 000.00 $374 581.417 50% 352390 $458 107.37 $37 000.00 $421 107.378 55% 385470 $501 110.64 $38 000.00 $463 110.649 59% 415401 $540 021.61 $39 000.00 $501 021.6110 63% 442484 $575 229.71 $40 000.00 $535 229.7111 67% 466990 $607 087.31 $41 000.00 $566 087.3112 70% 489164 $635 913.27 $42 000.00 $593 913.2713 73% 509228 $661 996.07 $43 000.00 $618 996.0714 75% 527382 $685 596.76 $44 000.00 $641 596.7615 78% 543809 $706 951.55 $45 000.00 $661 951.55

HUL PROFIT DATA