Q.
What are the key features of Shakti? What are its positive aspects and what are its drawbacks? The Shakti was a rural marketing initiative of HLL, the largest FMCG Company in India. This initiative was majorly based upon network of entrepreneurs who were based out of rural areas. The idea was to build brands based upon number of sales and distribution initiatives. Shakti would have created sustainable livelihood opportunities for rural women and not only that it would improve the living standard and would have enhanced the affluence among the rural masses of India that constitutes a major % of total population of India. The most important positive aspect of Shakti is that it not only contributes in scaling the sales of HLL but also to the community it is part of. The drawback is that there was a limitation in making money by Shakti entrepreneur.
Ans
Q.2 Ans
What was the motivation for the Shakti initiative? Was it a CSR initiative? The motivation behind Shakti was twofold, one is to grow with the people especially the rural masses which constitutes about 72% of the 1.2 billion Indian population and that offers a great opportunity in retailing and the kind of products that HLL produces. The second is why not help the community to improve on livelihood and have sustenance in living standard if that come as a byproduct of the business objectives. So I would say it is not a social project but like any other business venture with added benefit of social upliftment. CSR is corporate social responsibility where in different type of social camps being organized to train regarding improvement to health and Hygiene and improvising the educational level that will empower rural underprivileged women. So it was not completely a CSR initiative but that was the byproduct of the business venture.
Q.3 Ans.
How can Shakti make a contribution to HLL's bottom line? HLL plans to tap the rural industry directly through a strong network of local Entrepreneurs, who are part of Shakti. This would help them to bypass the syatem of multi-layers of mediators and facilitators. As a result, a lean management system would be created directly linking the central core to the local rural industry, leading to better results and better profit margins to everyone.
Q.4 Ans.
What is the Economic Value created by Shakti? What is the social value? To launch Shakti, HLL would partner with recipients of micro credit by offering them opportunities for micro enterprise. It has been observes that the lack of funds was not the only impediment to economic progress in rural India, because even when there were funds, the rural population often faced a shortage of investment opportunities. HLL initiative of Shakti would not only make great business model, but will also have significant social impact by involving & offering opportunities to the local community, underprivileged rural women and entrepreneurs and offering them good opportunity to create business. This will further lead to development of a self-sustainable model at local level in rural sector.
Q.5 What are the critical challenges facing HLL in making Shakti work? What should Shakti's managers do? Ans. In the previous model for rural sector, HLL performed its functions in partnership with three federations of SHGs, known as MACTS. HLL would market its products through these federations who would sell the products at local outlets of the villages after purchasing them from HLL. The MACTS model definitely succeeded in getting HLL products into untapped markets, but with low generation of the incomes. Further, the federations, being community level associations lacked the sense of ownership which resulted into lesser initiatives to market its products. By developing the Shakti Model, the feeling of ownership was created at individual level. To further strengthen the model, the Shakti Managers should undertake the following activities: 1. To secure the support of the district administration and arrange for government permission; 2. To create their identity and seal partnership with NGOs well established in the Region; 3. Interact with mainstream HLL sales force to identify markets that were not under HLLs coverage; 4. To identify existing SHGs and also create more SHGs and involve them to participate in the Project Shakti; 5. Appoint the local rural women as enterprises as members of Project Shakti; and 6. Ensure adequate supply of products to keep up the pace with the growing demand
Q.6
If Shakti cannot become profitable, should HLL continue the program? Why?
Ans. Even if the model of Shakti cannot become profitable, it has a very strong element to support & empower the local community, especially the women. This project of HLL would not only serve the local community but also help in brand building of HLL in rural area. Therefore, even if HLL has to provide some financial support for running this project, they should continue with the project as one of its corporate social responsibilities projects.