Unilever is a company from Dutch-British transnational consumer

Unilever is a company from Dutch-British transnational
consumer goods company as one of the most successful multinational companies. It
already owns 400 brands that inherent consumer products on a large scale. The
name of “Unilever” was created in 1930 and since then continued to keep growing
their business. Based on the fact that now Unilever become the world’s most
consumed product brand in home care, personal care and food.1
As times goes by every Multinational Corporations (MNCs) seeks to expanding
their business abroad. Unilever as a growing fast MNCs tend to build their
business to developing countries and in this case the writer put attention on
Unilever in India. Hindustan Vanaspati Manufacuring Company existed in 1931 as
Unilever sets up its first subsidiary in India. But years later in 1956 as
Hindustan Vanaspati Manufacuring Company, Level Brothers India Limited, and
also United Traders Limited merged to become in one form called Hindustan Lever
Limited which not long after renamed it to Hindustan Unilever Limited (HUL).2
However, a MNC will not easily expand their business as in fact many of
developing countries will find a challenge. “What actually drives MNCs to
expand?” crossed writer’s minds, for this case the needs to reach consumer with
their products might one of the reason. As a FMCG, HUL believes that their
products has brought many positives impact to the people. Known by the vision
of HUL “to serve consumers in a unique and effective way is at the heart of our
corporate purpose”, in other words HUL wants to approach the root of local
cultures and market to maintan their relationship with consumer supported by
keep creating new ideas and learn continuously.

A.    Analyzing

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Indeed to expand their
business, Unilever
has various global strategy to be implemented and India is one of a developing
country which has population around 1.345 billion. Based on UN, India has potential to dominate the growth in the
working-age population in Asia Pacific by 2050. Thus, India ranked on
second-most populous country and one of the largest economic. Compare to
other countries in Asia, India have been attract FDI better than China even
these two have distinct market. Furthermore as a democratic country, the
government finds it will gives an advantages to build a relationship with
foreign companies such MNCs also keep encouraging foreign investment and
thereby it can ease the business in a long term. India offers huge potential to
run business as it seems that India has market potential. However, the
heterogeneity in terms of economic development, income, religion, also cultural
seems to be challenging. Seen by the domestic politics, ease of doing business,
corruption index, human development index, and etc afterwards in 1931 Unilever
finds India as one of its subsidiary. India is
a democratic states with the main focus on every stage of business and the
prosperity. India’s independence has
brought revolutionary changes either in doing business, recognizing by other
states, the political aspect, etc. Hindustan Vanaspati Manufacturing Company,
followed by Lever Brothers India Limited (1933) and United Traders Limited
(1935) merged to form HUL (Hindustan Lever) in November 1956 which HUL offered
10% of its equity to the Indian public. Unilever now holds 67.25% equity in the
company. The rest of the shareholding is distributed among about three lakh
individual shareholders and financial institutions.3
HUL seems to be one of the eight Indian companies on the Forbes list of World’s
Most Reputed companies in 2017.4
From the political aspect which under the implementation by Indian national
congress, started in 1991 as how liberalisation of the Indian economy clearly marked
an inflexion in HUL’s and the Group’s growth curve. Removal of the regulatory
framework allowed the company to explore every single product and opportunity
segment, without any constraints on production capacity. Although in 1970s was
one of the biggest challenge for HUL because the government were asking HUL and
also other MNCs to divest their majority stake in India and turned out HUL
decided to ensure the government by to tread the more path of working.

According to the data from International Monetary Fund
World Economic Outlook (October 2016), GDP of India in 2016 at current prices
is $2,251 billion and India is now known as the 7th largest economy of the
world. By the end of March 2017 the growth rate of the industrial sector is
estimated to be down to 5.2% compared to the year of 2016 on March driven by the
demonetization in November 2016. India also seem
to be one of the most attractive country for foreign investment destination. Based
on the recent data from the Department of Industrial Policy and Promotion
(DIPP) showed FDI inflows in 2016 were strongest in October with $6.2 billion
inflows followed by $5.1 billion in September 2016. Based on Transparancy International, India is ranked on 79
of 176 countries as India improves their transparency index of corruption
because India is trying to minimize every possibility of corruption action as
well. Every tax that should paid by the citizen will lead to fulfill public
needs such as the public transportation, and other facilities.

B.     Strategy of Expansion

After analyzing Unilever in India, HUL certainly must
have expansion strategy seen by how HUL doing the business either by merger or
acquisitions, give an attention to the branding and maketing, also investment
of capital. Mergers
& Acquisitions (M & A) known as the most powerful relationship between
two or more than two companies. As it shown that mergers and acquisitons have been a key point for the company’s
expansion particularly in big company. Merger is legal consolidation of two
companies into one entity and for the acquisition describes as one company
takes over another company and establishes itself as the new owner.

Hindustan Unilever Limited (HUL) believes to achieve
more goals for Company in order to be successful and widen its products, it
must maintain global standards of Corporate Conduct towards all its
stakeholders. These buyer and seller have their rules as in result for
shareholders of TOMCO were divided without have to pay in cash 2 equity shares
of Rs.10 each of HL for its 15 equity shares of Rs.10 each held in TOMCO. After
the amalgamation Unilever PLC London were allotted on a preferencial basis
29,84,347 equity shares of Rs.10 each at a premium of Rs.95 per share for
maintain their share holding at 51% in the Co.5 Tata Oil Mills Company
appear as first merger of  HUL, as the
outcome not long after it followed by another merger which is Tata’s Lakme
Limited formed a 50:50 joint venture, to market Lakme’s market-leading
cosmetics and other appropriate products of both the companies. 6 Though there’s ups and
downs affected HUL, it passed through by doing business relationship which is
one of them to merger with Tata Oil Mills. For the future of both company it
will give abundance of advantages seen by how HUL doing the business and on how
rules and policies made by government in the other hands make a better path for
HUL in order to compete with other competitors.

 

The more interesting about HUL is that this company
unlike other MNCs who focuses only on the middle class but preferably low
class. As the implementation of their branding and marketing itself have caught
many attention towards people such as for laundry chem, soap, hair care, skin
care, and home care. For the branding and marketing, HUL approaches their
consumer by giving low cost of products, mini packages, provides benefits
products, and many more. More than 50% Indian People still lives in rural areas
so it showed huge opportunity. In addition, as one of the marketing strategy HUL
tried to approahing towards the villagers by attracting them by hiring dancers
and magicians while doing promotions around the countryside. Furthermore, HUL
has been training women in villages to be an entrepreneur so they will came out
as a financially independent and stronger to face the era of globalization, on
the other words to be more focused on doing business called “Project Shakti” in
2001. 7
Pioneered by Unilever, it already has a number of innovations addressing market
opportunities in India. HUL has a strategic of training local woman to be their
sales agents who sells Unilever products in rural area. Furthermore, HUL seems
to be number one in the most categories products that used by people.

 

C.     Conclusion

India become one of the developing countries for
Unilever to expand the business and marketing. In 1931 Hindustan Vanaspati
Manufacuring Company existed as Unilever sets up its first subsidiary in India.
Later on in 1956 as Hindustan Vanaspati Manufacuring Company, Level Brothers
India Limited, and also United Traders Limited merged to become in one form
called Hindustan Lever Limited which not long after renamed it to Hindustan
Unilever Limited (HUl). HUL is number one of the most products that used by
people in India known as how people react to their products either its personal
care or food & baverages because it focused on FMCG (Fast Moving Consumer
Goods). The way it understanding HUL’s customer by knowing what mostly needed
and beneficial is the key to expand their market and business. Seeing on how
MNCs like HUL depending on the host country is one of the opportunities to
expand their business. For instance, as the writer analyzing every aspect of
India that attracts Unilever to expand. Although before HUL meets the right
successful plan of marketing as doing the business, HUL knows what kind of
decision to make for the company, government, and customers.

 

1 Uk Essay.
History and Background of the Unilever Company. Retrieved on 20th
November 2017.

2 Business Standard. Hindustan Unilever Ltd. Retrieved on 24th
November 2017

3 Hindustan
Unilever Limited. Hul History.  Retrieved
on 27th November 2017.

4 UK Essay.
An Introduction to Hindustan Unilever Limited. Retrieved on 14th
December 2017.

5 The
Economic Times. Company History – Hindustan Lever Ltd. Retrieved on 25th
December 2017

6 Ibid.

7 Hindustan
Unilever Limited. Enhancing Livehoods through Project Shakti. Retrieved on 3rd
January 2018

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