Competitive Strategies Followed by FMCG Sector in India Related to Two Companies HUL & ITC

Competitive Strategy consists of move of companies in order to attract customers. With stand competitive pressures and strengthen an organization’s market position. The main objective of Competitive Strategy is to generate a competitive advantage, increase the loyalty of customers and to beat competitors.

Five main competitive strategies are:

· Overall low cost leadership strategy

· Best cost provider’s strategy

· Broad differentiation strategy

· Focused low cost strategy

· Focused differentiation strategy

Competitive strategy varies from sector to sector and company to company. Thus, it is not easy to predict a single or to find a single strategy for the whole sector. When we come on to FMCG Sector main strategies lay behind market strategies, cost, and quality strategies.

Analysis of Both Companies

HUL & ITC are major companies in FMCG market in India. When we look at the present segment breakup for both of the companies then we cme to know that their different products vary too much in the market. Now let us take a comparative analysis of both the companies on the basis of their strategies i.e their competitive strategies in the present market:

	HUL	ITC
	Hindustan Unilever (HUL) is the largest pure-play FMCG company in the country and has one of the widest portfolio of products sold via a strong distribution channel. It owns and markets some of the most popular brands in the country across various categories, including soaps, detergents, shampoos, tea and face creams.	ITC is not a pure-play FMCG company, since cigarettes is its primary business. It is diversifying into non-tobacco. FMCG segments like foods, personal care, paper products, hotels and agri-business to reduce its exposure to cigarettes.
	Overall Strategy	Overall Strategy
	HUL always believes in customer friendly products with major emphasis on low cost overall without compromising on the quality of the product. They are leveraging the capabilities and scale of the parent company and focusing on the value of execution. The entire product product portfolio is also being tweaked to include premium offerings such as Pond’s Age Miracle and dove shampoo in skin and hair care.	ITC is focusing on delivering value at competitive prices. Its tremendous reach through extensive distribution chain has been a competitive advantage. Additionally, the company’s e-choupal model for direct procurement is well known under which ITC partners with over 100,000 farmers for spices and wheat procurement and an even larger number for oilseeds. This kind of rural pedigree is hard to beat.
	Growth Drivers	Growth Drivers
	The Company has been launching new products and brand extensions, with investments being made towards brand-building and increasing its market share. HUL is also streamlining its various business operations, in line with the One Unilever philosophy adopted by the Unilever group worldwide. Introduction of premium products and addition of new consumers via market expansion will be HUL’s growth drivers.	ITC’s backward integration to ensure that its products pass efficiently from the farms to consumers has helped it to cut down supply and procurement costs. ITC’s non-cigarette FMCG business leverages the large distribution network the company has developed by selling cigarettes over the years. A rich product mix, along with ramp-up of investments in its new sectors, will be instrumental in charting ITC’s growth path.