Post by Santosh Puthran on Oct 22, 2005 22:07:50 GMT
M S Banga : Piloting HLL to new heights
Swimming against the tide is second nature for Manvinder Singh (Vindi)
Banga. And it is this penchant for facing adversity in the face that has
made him a leader of men... a leader of the market... in short a leader of
all that he purveys at Hindustan Lever Limited (HLL), the biggest FMCG
brand in India.In fact, it is the same spirit of fighting odds that made
Banga change a key philosophy at HLL when he took over as Chairman in 2000.
Unlike his illustrious predecessors like S.M. Dutta and Keki Dadiseth who
followed an expansion through acquisition strategy, Banga made
rationalization the new mantra at HLL. This resulted in sharper focus on 30
power brands and the markets are hopeful that the picture will turn rosy
for HLL soon. Excerpts from a tete-a-tete with the HLL Head Honcho:
Q: How effective has been your power brand strategy?
Ans: We have about 110 brands of which we are focusing on 30 brands, which
enjoys a disproportionate share of resources. The brands have been selected
for the brand size, growth potential, competitive advantage and inherent
profitability. We are just pulling back the resources for certain other
brands, which we believe are incapable of financial viability.
Q: You mean you are planning to withdraw these brands?
Ans.: Yes, we have withdrawn certain unviable products. The important part
of this strategy is that the offset of the unviable business would be more
than compensated by the power brands. Having said that, I must confess that
we certainly have no intention to kill any brand.
Q: How do you plan to sustain this momentum of growth?
Ans.: We would be carrying out innovative activation programmes for these
brands. We have already relaunched our flagship brand Surf Excel, Sunsilk
hair colours and Annapurna range. However, growth would depend on the
evolving state of the economy.
Q: Which are the power brands that have really contributed to your
revenues?
Ans.: The growth of power brands is across various categories. In the skin
section, Fair & Lovely and Ponds have done well. In shampoos, all the three
shampoos (SunSilk, Clinic and Lux) have done well. In soaps, Lux and Breeze
have done exceptionally well. And in food, Taj Mahal has achieved almost
double-digit growth. I can say that one third of our power brands delivered
close to double-digit growth. At the same time, I am not pruning other
brands.
Q: You have been emphasizing on food revolution. Do you think the current
policies hamper this process?
Ans.: There is need for a clear-cut legislation, which will improve food
productivity. Most of our policies vis-a-vis food generation was made when
there was food shortage. Now there is surplus and hence there is need to
shift to policies, which provide value addition to food production. We also
have to watch how price realizations work out for the farmers. There is
need to amend the legal framework, rationalization of fiscal levies, and
slowly bring in mandatory packaging of food products.
Q: How will HLL benefit from this?
Ans.: Our interest is from two dimensions. If the country prospers, we
would benefit because our products are widely consumed and secondly, since
we are directly involved with the food sector, we could develop markets for
branded food products.
Q: What is the status of your new ventures?
Ans.: We have made a lot of progress in our new ventures. We are test
marketing our confectionery business in Tamil Nadu. We are also making
progress in our e-tailing initiatives. In Andhra Pradesh, we are working
with 50 self-help groups to advertise and distribute our products. We are
also at an advanced stage in health care and Water business. We are making
headway in our B2B connectivity.
Q: Coming on to the personal front, can you tell us about your early
career?
Ans.: As you know, I graduated from IIT, Delhi and then got a degree from
the Indian Institute of Management in Ahmedabad. I secured Gold Medals from
both these institutions as I always felt the need to excel. I joined HLL as
a Management Trainee in 1977 and have held various positions in the country
and in the parent company too. In fact, time spent at Unilever Plc. taught
me that every problem presented an opportunity. I did a business model for
mass market foods which was given the Unilever Award.
Q: What do you think are the key attributes to corporate success?
Ans.: I do not think that there is any particular formula for corporate
success. Ultimately it is team work under a good leadership. I learnt a lot
about these facets during my stay with Unilever Plc. After spending many
years in various positions, I realized that leadership can neither be
inherited nor taught nor explained. It is about emotions, morality,
character and values. And getting the correct measure of these is the first
step towards success.
Banga's brew for HLL's success
The strategy - Rationalization rather than acquisition .
Top 30 'Power Brands' to enhance HLL's bottomline .
Withdraw unviable products from the market .
Re-launch of some of the flagship brands .
Inroads into health care and water business .
Increase focus on retailing to spur growth .
Reap benefits of B2B connectivity .
Lobby for a food revolution to improve productivity .
