Seminar: Unilever applying Jugaad Innovation principles in rural India

Topic Number: 8

Industry Studies 1

Overview

In this seminar we will examine a form of innovation that is of particular importance in the East and gaining traction in the West.

Jugaad Innovation uses a variety of tools and techniques to help organisations innovate in a more frugal manner. We will take the case of Unilever’s Project Shakti and explore how they managed to implement a strategy, perhaps unconsciously using the principles of Jugaad Innovation.

We will initially look at how Project Shakti started and then in groups explore how the principles of Jugaad may apply to different aspects of their approach.

3

• Be able to determine the key principles of Jugaad Innovation

• Apply these principles in the live case of Project Shakti

• Determine and describe the key challenges Unilever faces

• Demonstrate an understanding of the context and environment that facilitate innovation of this nature

Learning outcomes of this seminar

4

Analysing Project Shakti through Jugaad Principles

Seek opportunity in Adversity

Do More with Less

Think and Act Flexibly

Keep it simpleInclude the

marginsFollow your heart

5

Seminar structure

Get into groups of 4 & choose one of

the 6 Jugaad Innovation principles (cant be the same as

anyone elses)

Each group will have 20 minutes to research

How their principle applies to

Project Shakti

Groups will have 10 minutes

to present your findings &

5 minutes of Q&A

Why did Unilever started Project Shakti

?

Project Shakti: The OriginsIn 1990s HUL wanted to expand its reach in rural India. It had a choice to adopt the traditional distribution model which could have set the cash registers ringing. But HUL adopted an approach which was rooted in its belief of ‘Doing Well by Doing Good’. It created a unique micro-entrepreneurship model with the aim of integrating business interests with societal need.

This model has been guided by the belief that the private sector can help create solutions to social challenges through innovative strategies that meet both business and social objectives. By promoting micro-enterprise, Project Shakti not only made great business sense but also had deep social impact.

Sustainable investment

opportunity for village

community/rural women.

Increase in the household income of poor families

of Shakti Entrepreneurs

Empowerment to

rural women

Better standards of living though

access to health and hygiene

products.

Benefits of Project Shakti:

Project Shakti: Objectives

• HUL’s New Venture Division identified rural India as a key source of growth and competitive advantage

• HUL argued that access to rural markets would be the big differentiator among FMCG companies

• Business objectives: extent HUL’s reach into untapped markets and to develop its brands through local influencers

• Social objectives: provide sustainable livelihood opportunities for underprivileged rural women

An evolutionary path to Project Shakti

Source: Rohithari and Rajan, 2006

Group 1:Include the

margins

Including the margins: PS Target Audience

A huge opportunity at the BOP

http://www.wri.org/sites/default/files/pdf/n4b_full_text_lowrez.pdf

Progressive customer base

Source: Unilever.com

Group 2: Seeking Opportunity in Adversity

Adversity: Infrastructure/Business Potential Matrix

Source: Rohithari and Rajan, 2006

Key Characteristics: Adversity

Poor infrastructure to reach these villages

Low market potential

No existing distribution network

Low awareness

A significant opportunity; an untapped market

Source: Rohithari and Rajan, 2006

Key Characteristics: Opportunity

c600k villages untapped villages

Strong peer to peer network

Growing awareness of brands

Social need for better quality products

Explaining Project Shakti: Vijay Sharma

View video: http://www.youtube.com/watch?v=XIUydDLvvoo

Group 3: Following their hearts (and

heads)?

Following their head and HEART to rural India…Market Creating and CSR?

Source: Unilever.com

Following their head and HEART to rural India…Market Creating and CSR?

Source: Unilever.com

View video: https://www.youtube.com/watch?v=utSYAkQi5hY#t=31

Following their head and HEART to rural India…Market Creating and CSR?

Source: Unilever.com

A Path Set for Growth

The project is being customized and adapted in several South-East Asian, African and Latin American markets

like Bangladesh, Sri Lanka and Vietnam. In Bangladesh and Sri

Lanka, it is being promoted as project Joyeeta and Saubaghya respectively.

Source: Unilever, 2014

Group 4: Do more with less

Getting the price point right: Creating Affordability

Overcoming poor distribution: Peer to peer selling

Using technology as an enabler to deepen relationship

i-Shakti is an IT-based rural information service network that has been developed to provide

information and services to meet rural needs in

medical health and hygiene, agriculture, animal husbandry,

education, vocational training and employment

and women's empowerment.

Group 5: Keep it simple

Easy distribution model

Source: Rohithari and Rajan, 2006

Group 6:Think and Act Flexibly

Acting to overcome challenges

Source: Slideshare, 2014

Choosing their sales team; a women initiative

• Women are the target consumers for most of HUL products

• Rural women constituted the most marginalised group in society

• Rural women were more likely to appreciate the additional income than affluent ones in urban areas

• Women were more likely to access into homes of potential consumers in villages

• Focus on women would have greater impact on the entire household – leads to improvements in health, hygiene and education levels

• Most men would be occupied with other employment and would not devote as much time to the activity

However now also include men; Shaktimaans

The programme was extended in 2010 to include ‘Shaktimaans’

who are typically the husbands or brothers of the Shakti ammas. Shaktimaans complement our Shakti ammas. They sell our

products on bicycles to surrounding villages, covering a larger area than Shakti ammas can do on foot. There are over

50,000 Shaktimaans across India. Each shaktimaan covers around 3

villages in his own village’s vicinity which is a larger area than

a woman, Shakti amma, can cover on foot.

Any questions?