1. Industry Studies 1
Seminar:
Unilever applying Jugaad Innovation
principles in rural India
Topic Number: 8
2. 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. 3
Learning outcomes of this seminar
• 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
4. 4
Analysing Project Shakti
through Jugaad Principles
Seek opportunity
in Adversity
Do More
with Less
Think and
Act Flexibly
Keep it simple
Include the
margins
Follow your heart
5. 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
7. Project Shakti: The Origins
In 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:
8. 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
We can see that they have been in the region for a long time however had not achieved the scale that they desired and only had a tiny amount of the population covered through other strategies that they deployed.
Direct Coverage: HUL appointed a common stockist to service all outlets within a town and sell a limited selection of the brand portfolio. Towns consisted of populations of under 50,000 people.
Indirect Coverage: HUL targeted retailers in accessible villages close to larger urban markets. Retail stockists were assigned a permanent route to ensure that all accessible villages in the vicinity were served at least once a fortnight.
Streamline: Streamline leveraged the rural wholesale channel to reach markets inaccessible by road. Star Sellers were appointed among wholesalers in a particular village. Star Sellers would purchase stock from a local distributor and then distribute stock to retailers in smaller villages using local means of transport (e.g. motorcycles, rickshaws).
Project Shakti: Project Shakti targeted the very small villages (<2,000) and tapped into pre-existing women’s self help groups (SHG). Underprivileged rural women were invited to become direct-to-consumer sales distributors for HUL products. Termed Shakti Ammas (literally “strength mothers”), these women represent HUL and sell its home-care, health, and hygiene products in their villages.
