Shakti Notes

res.-based view v.s. institutional-based view

how to create and capture comp adv

HLL

mkt

-consumer-oriented approach

-consumers->urban & semi-urban areas

-> wealthy, middle class

-mktg: extensive distribution sys.-> a source of comp adv. -> better than competitors

-> very efficient and convenient to offer products to consumers

->extensive retail network -> connected seamlessly by most sophisticated distr.

chain

-> royal retailers -> bec. a large portion of rev comprised of Unilever products

-> promotion: advertise on radios, magazine, daily press, billboards -> cost 10% of annual

turnover

product

-> philosophy: high quality, premium-priced

finances

competitor: P&G, Colgate Palmolive; Tata, Godrej

-> HLL

people:

operations

innovativeness

culture

Problems for HELL

Issue of HLL

insufficient to offer products to a majority of potential consumers living in remote villages (half of Indian population) -> they are at the base of economic pyramid

environmt

->infrastructure challenge: poor infrastructure connectivity -> lack of paved roads in 60% of villages

-> lightly scattered small pop with low volume demand -> not cost effective to distribute using traditional distr. sys & high capital and operating expenditure

-> poor literacy levels

-> limited electricity -> low reach of traditional media such as print and TV

-mktg

-> distibution

-> products were only avail. to less than 15% of villages (total 639,000 villages)

TO solve problems of HELL

Shakti

issue of Shakti NOW

-> plan to reach 100,000 villages and 30,000 entrepreneurs by the end of 2006

-> ways to dec. drop-rates of entrepreneurs by inc their income, training of earning abilities

-> will it and the base-of-pyramid mkts deliver tp HLL long term growth and b come a key source of future profitability?

-> if competitors...