Case Study
UNILEVER IN INDIA: HINDUSTAN LEVER’S PROJECT SHAKTI – MARKETING FMCG TO THE RURAL CONSUMER
Team: Can Do! Members: Roman Ivasyshyn Antonina Volkotrub Danylo Hauk
CONTENTS
Assumptions Current
State & Goals Solutions & Recommendations Summary
REINDEERS & SLEIGH
At first, we sought to employ flying reindeers to distribute HLL goods to inaccessible villages with low business potential, but were not able to book them due to their tight schedules and decided to stick with a Shakti project.
ASSUMPTIONS
ASSUMPTIONS
Project Shakti operates in villages with 200 to 4.999 residents (509.416 potential villages) Shakti entrepreneur purchases stocks from the nearest official distributor (with the discounts available to stockist (-5%) -2% additional percent ), transporting the goods with the locally available means of transportation Extrapolation of revenue growth rate from projects other than Shakti is 2% Total revenue in 2010 approximated at 154,8 bln Rs. (Calculated using growth rate 2% yearly for projects other than Shakti (80%TR) and adding 20% of TR, coming from Shakti) In 2010 Revenue from Shakti project should account for 20% of HLL Total Revenue (31 bln. Rs)
ASSUMPTIONS (CONTINUED)
In 2004 average revenue per consumer per year is 30Rs (120.000 Rs target revenue per entrepreneur per year /4.000 (target number of consumers per entrepreneur in 2006 )) On average 1 Shakti entrepreneur covers 4.000 consumers in 3 to 8 villages (different years, different areas) Target average revenue per consumer per year in 2010 should be 123,88 Rs (Revenue from Shakti (31 bln. Rs) / target # of consumers(250.000.000 )) Yearly average organic growth of revenue from a consumer should be 27% (2004-2010) Yearly average growth of Shakti consumers is 25,8% (starting in 2004) 48 mln consumers in 2004 (estimated from the target growth trend of number of consumers) Revenue from Shakti in 2004 estimated at 1,4 bln Rs (approximated
Team: Can Do! Members: Roman Ivasyshyn Antonina Volkotrub Danylo Hauk
CONTENTS
Assumptions Current
State & Goals Solutions & Recommendations Summary
REINDEERS & SLEIGH
At first, we sought to employ flying reindeers to distribute HLL goods to inaccessible villages with low business potential, but were not able to book them due to their tight schedules and decided to stick with a Shakti project.
ASSUMPTIONS
ASSUMPTIONS
Project Shakti operates in villages with 200 to 4.999 residents (509.416 potential villages) Shakti entrepreneur purchases stocks from the nearest official distributor (with the discounts available to stockist (-5%) -2% additional percent ), transporting the goods with the locally available means of transportation Extrapolation of revenue growth rate from projects other than Shakti is 2% Total revenue in 2010 approximated at 154,8 bln Rs. (Calculated using growth rate 2% yearly for projects other than Shakti (80%TR) and adding 20% of TR, coming from Shakti) In 2010 Revenue from Shakti project should account for 20% of HLL Total Revenue (31 bln. Rs)
ASSUMPTIONS (CONTINUED)
In 2004 average revenue per consumer per year is 30Rs (120.000 Rs target revenue per entrepreneur per year /4.000 (target number of consumers per entrepreneur in 2006 )) On average 1 Shakti entrepreneur covers 4.000 consumers in 3 to 8 villages (different years, different areas) Target average revenue per consumer per year in 2010 should be 123,88 Rs (Revenue from Shakti (31 bln. Rs) / target # of consumers(250.000.000 )) Yearly average organic growth of revenue from a consumer should be 27% (2004-2010) Yearly average growth of Shakti consumers is 25,8% (starting in 2004) 48 mln consumers in 2004 (estimated from the target growth trend of number of consumers) Revenue from Shakti in 2004 estimated at 1,4 bln Rs (approximated