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Group-10 Unilever in India: Project Shakti. Mohammad Sanjid Parvez 08104061 Arpita Bhattacharzee 08104004 S.M. Khurram Khabir 08204011. Q-1: What are the key features of Shakti ? What are its positive aspects and what are its drawbacks?.
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Group-10Unilever in India: Project Shakti • Mohammad Sanjid Parvez 08104061 • Arpita Bhattacharzee 08104004 • S.M. Khurram Khabir 08204011
Q-1: What are the key features of Shakti? What are its positive aspects and what are its drawbacks? • The business objective was to extend HLL’s reach into untapped markets and to develop its brands through local influencers • The social objective was to provide sustainable livelihood opportunities for underprivileged rural women • Shakti entrepreneurs borrowed money from their respective SHGs group and with that capital purchased HLL’s products. • The entrepreneur’s job was to sell these products in their village.
Advantages: • Since an individual was the entrepreneur, responsibility shared among many people • Created a communication channel which could build brand • Contributed to improve the standard of life • Disadvantages: • It was too difficult to manage the large numbers of entrepreneurs • As groups selected an entrepreneur, there was a chance to appoint wrong people which cause decreasing in sales
Q-2: What was the motivation for the Shakti initiative? Was it a CSR initiative? • Increase the wealth and well being of India’s rural population and in turn increase the wealth of HLL • If the wealth of rural Indians increases, as a company HLL will be benefited too • Business growth or increasing sales is not an objective of CSR activities. Though there was a business objective, through this HLL wanted to develop the living standard of the rural people. So it was a CSR initiative
Q-3: How can Shakti make a contribution to HLL’s bottom line? Make an economic case? • Gives a large conglomerate the ability to tap into a rural market so that no other company in their field can enter • Gives the individual or remote community the opportunity to make money and develop wealth • Relies on the entrepreneur to build relationships with customers and provide them the products that they require. • Allows people to make a sizable wage that will increase their standard of living • Has created health education programs and access to the internet for many.
Q-4: What are critical challenges facing HLLin making Shakti work? What should Shakti’s Managers do? • Competitive Pricing: In India some companies invested almost nothing in brand building but offered higher trade margins, and sold to consumers at prices lower than those of HLL’s brands. • Distribution System: Even though HLL had greater access to rural markets than its competitors, its direct reach was restricted to a mere 16% of rural markets. • Unsupportive behave of NGOs: A number of NGOs and governmental agencies were hesitant to support Shakti project, viewing it as a potentially explorative attempt of a large multinational.
Illiteracy: In rural areas most of the people are illiterate and it was difficult for HLL to educate them properly through contemporary method so that they become more brand conscious. • Cost: It was costly to run iShakti project and also to involve huge human resources with Shakti project. • Brand Manager’s decision: The brand managers didn’t want to spend huge amount of money for making people aware about the products.
Q-5: What is the economic value created by Shakti? What is the social value? • Shakti project is creating job opportunities in rural areas and by engaging with this project, the rural people on an average can earn up-to 700 Rupees per months. It helps them to develop their economic condition. • Computers have been given in the rural community so that the people can gain access to information. Initiatives have been taken to educate the rural people to upload their living standards. All of these are creating social value.
Appendix: • Unilever: Operating in FMCG Sector • Founded: 1930 • CEO: Paul Polman • Has operations in 152 countries • Corporate Mission: “We meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life.”
Shkati means strength and empowerment. Project Shakti empowers unprivileged women in rural areas. • HLL distribute their product to Shakti entrepreneur at discount rate. • License Raj: An economic system by which any major investment in the organizational sector had to be granted a government license which was not easy to obtain. • Shakti Vani: A local woman was appointed as vani, trained and positioned as an expert on matters relating to personal and community health and hygiene.
iShakti was a new project Shakti initiative that sought to extend the benefits of information technology to rural India. • The objective of iShakti was to empower the rural community by creating access to information. • Sachets an innovative packaging solution targeted at low income consumers. • Reason behind for chosen women for Shakti • Underprivileged women were more likely to be committed • Women were likely to have greater access into the homes of potential consumers
Managers’ Actions: • Managers should reduce the price of some selected products that would be sold under Shakti project. • The manages should focus highly in developing a strong distribution channel to the rural areas. • The managers should convince governmental and other agencies of the benefits of partnering with project Shakti and supporting it. • The managers should take initiatives to develop pictorial literature that could be understood by illiterate people and interactive games that would interest the audience while driving home the message.
