Class Assignment – Unilever’s Lifebuoy in India : Implementing the sustainability plan

Submitted By – Shweta Behera

16P225

Section D

Q1) What do you think of USLP strategy?

Ans. USLP had three goals: 1) to halve the environmental footprint of making and using its products,
2) to source 100% of its agricultural raw materials sustainably and 3) to help a billion people improve
their health and wellbeing. USLP was made to be the core of the business strategy of HUL and their
CEO insisted that this was built on the core strategy of HUL to “do well by doing good” and was
totally aligned with its commercial success. Most managers’ incentive compensation was tied to
financial objectives, but USLP targets were monitored and independently audited by PwC. To achieve
this target the company also teamed up with its suppliers to reduce their footprint also. According to
me, the USLP program was a good strategy as it has been able to fulfil both its goals for sustainable
future along with benefitting the company by doubling the business. This project was not just some
CSR activity in a region, but it affected every single element across HUL’s value chain. Though the
goals are very ambitious, but they can learn from their mistakes and find solutions and opportunities
when they are interconnected and working towards a single goal.

Q2) How realistic is it to overlay USLP’s bold sustainability goals over financial objectives?

Ans. As it can be seen from the case, the USLP project was not giving returns on the invested amount
of cost. The sales of Lifebuoy was up though Singh was constantly thinking about how to implement
Polman’s USLP initiative. As can be seen from the case, though the financial goals were not met
when USLP was applied, but the response of consumers towards USLP initiative was turning out to
be good. So according to me, in the long run, the margins will also pick up and financial objectives
will also be fulfilled as using USLP the company is able to create a major awareness among the target
segment and hence increasing the number of future buyers.

Q3) What implications does it have for middle managers like Singh and frontline managers like
Sitapati?

Ans. Sitapati is not being able to do his work freely as he has to constantly think about the USLP and
financial objectives after thinking about a new plan. He knows that a huge investment in USLP
program anywhere meant a huge payback period, in some case this being round about 13.5 years.
Sitapati realises that he has to achieve. To make a plan cost effective, like that of KKD, additional
terms were being tweaked into the model which was delaying the launch of such programs which in
turn was increasing the costs of launching it. Singh was also in a spot as it was tough for him to
achieve the billion target even though Lifebuoy was doing exceptionally good. As a result of this,
Singh decided to stretch and make unrealistic goals and achieve most out of it rather than going at a
normal pace and miss out on the 2020 goal.