Description
This is project shakti done by Hindustan unilever.
1. What are the key features of project Shakti ?
Project Shakti is the HLL’s new venture to enter into the rural market in India. It had proposed that HLL to partner with self help groups (SHG) to extend its rural reach. It was born in December 2000 in Nalgonda district in Andhra Pradesh. Its business objectives were:
1)To extend HLL’s reach to untapped markets. 2) To develop its brands through local influencers.
Its social objective was to provide sustainable livelihood opportunities for underprivileged rural women. A member of a SHG in each of the earlier chosen 50 villages was appointed as Shakti entrepreneur. The SHG then sold the products to local retailers and also to direct consumers for better reach and margins. Women were the target customers for the bulk of HLL’s products. Shakti team decided that Rs. 10,000 had to be the minimum investment made by the new entrepreneurs. To address the issue among the discontent women the RSP(rural sales promoter) system was introduced to coach Shakti entrepreneurs and help them create and grow viable businesses. An implementation was also appointed to carry out major tasks, some of their main objectives were :
1)Arrange government permissions and secure the support of district administration. 2) Identify and seal partnerships with NGOs well established in the region. 3) Interact with the mainstream HLL sales force to identify markets that were not under HLL’s coverage and therefore not available for roillout of project Shakti. 4) Locate SHGs and convince them that Project Shakti was a reliable, sustainable source of income for their members. 5) Appoint the right women as entrepreneurs. 6) Ensure a steady supply of products for the local distributors.
I addition to this a ‘Shakti Vani’ program was also launched where a local woman was appointed as Vani trained and positioned as an expert on matters relating to personal and community health and hygiene. Also I-Shakti program was launched which as an internet rural community portal to educate the rural people through internet through their vernacular languages.
2.
How can Shakti make a contribution for HLL bottom line taking into account scenario?
Considering the 2004 scenario Project Shakti is already contributing 15% to the HLL’s rural turnover. A typical HLL stockiest made a 5% margin, and a typical retailer 8%. This was offered to Shakti entrepreneurs as well. As most
of the revenue collected was in cash ,an additional 1% discount was also offered. Though overheads were on the higher side upto 10-15% of shakti revenues, this would not continue as the project would pick up the momentum in the villages , taking into account huge growth prospects in the unorganized rural market in India. A target of 250 million additional consumers through 100,000 entrepreneurs by 2010 would certainly increase the Project Shakti’s total contribution to 10-15% of the company revenues, which would make it stronger than any other HLL brand.
3. What is the economic and social value created by Shakti?
The basic social value that Project shakti created was to provide sustainable livelihood opportunities for under privileged women. These women were also likely to value the additional income to their household more than the affluent women. By addressing women ,there was a greater impact on the entire household leading to improvements in health and hygiene and education levels. Basically Project Shakti provided rural women the self sustaining power and ability in the male predominant society. Also wider exposure to the markets and increased consumer spending increased the economic activities not only for HLL but also across many villages in India.
4. Do you think project Shakti is profitable ? If yes why? If not, should HLL continue the program?
Yes , I think the Project Shakti is very much successful, though not as profitable as it meant to be. It broke even in 2004 with a four and half times turnover than 2003. It even achieved the targeted figure of 1-3% of the company revenues in 1-3 years of the launch. Though the company is concerned with the rising overhead and HR costs, still considering the growth prospects in the relatively untapped rural market in India and positive response in many villages, HLL should continue the project. Introduction of
Vani and I-Shakti programs is a good step to keep the pace with technological penetration in the rural market considering the future growth prospects.
doc_412460020.doc
This is project shakti done by Hindustan unilever.
1. What are the key features of project Shakti ?
Project Shakti is the HLL’s new venture to enter into the rural market in India. It had proposed that HLL to partner with self help groups (SHG) to extend its rural reach. It was born in December 2000 in Nalgonda district in Andhra Pradesh. Its business objectives were:
1)To extend HLL’s reach to untapped markets. 2) To develop its brands through local influencers.
Its social objective was to provide sustainable livelihood opportunities for underprivileged rural women. A member of a SHG in each of the earlier chosen 50 villages was appointed as Shakti entrepreneur. The SHG then sold the products to local retailers and also to direct consumers for better reach and margins. Women were the target customers for the bulk of HLL’s products. Shakti team decided that Rs. 10,000 had to be the minimum investment made by the new entrepreneurs. To address the issue among the discontent women the RSP(rural sales promoter) system was introduced to coach Shakti entrepreneurs and help them create and grow viable businesses. An implementation was also appointed to carry out major tasks, some of their main objectives were :
1)Arrange government permissions and secure the support of district administration. 2) Identify and seal partnerships with NGOs well established in the region. 3) Interact with the mainstream HLL sales force to identify markets that were not under HLL’s coverage and therefore not available for roillout of project Shakti. 4) Locate SHGs and convince them that Project Shakti was a reliable, sustainable source of income for their members. 5) Appoint the right women as entrepreneurs. 6) Ensure a steady supply of products for the local distributors.
I addition to this a ‘Shakti Vani’ program was also launched where a local woman was appointed as Vani trained and positioned as an expert on matters relating to personal and community health and hygiene. Also I-Shakti program was launched which as an internet rural community portal to educate the rural people through internet through their vernacular languages.
2.
How can Shakti make a contribution for HLL bottom line taking into account scenario?
Considering the 2004 scenario Project Shakti is already contributing 15% to the HLL’s rural turnover. A typical HLL stockiest made a 5% margin, and a typical retailer 8%. This was offered to Shakti entrepreneurs as well. As most
of the revenue collected was in cash ,an additional 1% discount was also offered. Though overheads were on the higher side upto 10-15% of shakti revenues, this would not continue as the project would pick up the momentum in the villages , taking into account huge growth prospects in the unorganized rural market in India. A target of 250 million additional consumers through 100,000 entrepreneurs by 2010 would certainly increase the Project Shakti’s total contribution to 10-15% of the company revenues, which would make it stronger than any other HLL brand.
3. What is the economic and social value created by Shakti?
The basic social value that Project shakti created was to provide sustainable livelihood opportunities for under privileged women. These women were also likely to value the additional income to their household more than the affluent women. By addressing women ,there was a greater impact on the entire household leading to improvements in health and hygiene and education levels. Basically Project Shakti provided rural women the self sustaining power and ability in the male predominant society. Also wider exposure to the markets and increased consumer spending increased the economic activities not only for HLL but also across many villages in India.
4. Do you think project Shakti is profitable ? If yes why? If not, should HLL continue the program?
Yes , I think the Project Shakti is very much successful, though not as profitable as it meant to be. It broke even in 2004 with a four and half times turnover than 2003. It even achieved the targeted figure of 1-3% of the company revenues in 1-3 years of the launch. Though the company is concerned with the rising overhead and HR costs, still considering the growth prospects in the relatively untapped rural market in India and positive response in many villages, HLL should continue the project. Introduction of
Vani and I-Shakti programs is a good step to keep the pace with technological penetration in the rural market considering the future growth prospects.
doc_412460020.doc