ASSIGNMENT ON SHAKTI PROJECT OF UNILEVER
1) What are the key features of Shakti? What are its positive aspects and what are its
Key Features of Shakti:
• This project was started in 2001 with the aim of increasing the company’s rural distribution reach as well as providing rural women with income-generating opportunities.
• Villages with a population of about 2000-3000 are selected.
• Personnel from HUL approach SHGs.
• Selection of the Shakti Amma.
• HUL vouches for Shakti Ammas with banks from credit.
• One Shakti entrepreneur is appointed for one village & villages that are about 2 kilometers apart from her village.
• The Shakti dealer places initial orders ...view middle of the document...
• Low margins
• Difficulty in acquiring finance
• Low disposable income (dependence on monsoon)
2) What was the motivation for the Shakti initiative? Was it a CSR initiative?
• To take people aware
• To increase the consumption.
• To increase the income.
• To increase behavior in – Awareness & living standard Lifestyle Self consciousness.
• Indeed it was a CSR initiative.
• It helps women in rural India set up small businesses as direct-to-consumer retailers.
• The scheme equips women with business skills and a way out of poverty as well as creating a crucial new distribution channel for Unilever products in the large and fast-growing global market of low-spending consumers.
3) How can Shakti make a contribution to HLL’s bottom line? Make an economic case?
• It was soon felt that HUL's sales and distribution system which had protected it from competitors would be soon replicated by its rivals and to maintain its edge, the company had to increase its reach beyond the urban markets
• Carrying and forwarding agents(CFA)
• More than 70% of India's population lived in villages and made a big market for the FMCG industry
The distribution was a combination of the 3 ways:
• Door to door selling (11% margin on sales)
• Sells from own home (11% margin on sales)
• Retailers (3% margin)
• Averages sales : Rs. 10,000 - Rs. 15,000/month,
• Profit - Rs.1,000 per month
4) What is the Economic Value created by Shakti? What is the social value?