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Abstract
Unilever is one of the worlds leading suppliers of fast-moving consumer goods aimed to
make sustainable living a commonplace. Past strategies focus such as winning with brand
and innovation, the market place and continuous improvement are contrasted with the
new sustainable living plan. Core values such as integrity, respect, responsibility and
pioneering are compared to competitors financially. A SWOT analysis, IFE, EFE and
growth matrix are displayed for better strategies in future. Unilever financial position and
Billions dollar brand are also emphasised.
Contents
Contents................................................................................................................................4
Introduction......................................................................................................................... 5
Unilevers Global Strategy..................................................................................................6
IFE and EFE Matrix............................................................................................................. 8
Sustaining Research and Development...............................................................................9
Emerging Market.............................................................................................................. 10
Unilevers marketing strategy for competing in foreign market........................................11
Proctor and Gamble...................................................................................................... 12
Competitor comparison.....................................................................................................13
Major Financial Analysis for Unilever during the past 5 years........................................ 14
Supply chain.......................................................................................................................15
Controversies-.................................................................................................................... 15
Axe vs Dove.................................................................................................................... 15
Hindustan Unilever Mercury fever................................................................................ 16
SumOfUs against deforestation of free palm oil production.......................................... 16
Unilevers Growth Matrix in the future............................................................................ 17
Conclusion..........................................................................................................................18
Reference............................................................................................................................19
Introduction
Unilever is an Anglo-Dutch multinational corporation created in 1930 from a merger
between the British soap maker Lever Brothers and Margarine Unie. The company
sustainable plan include 3 key aspect namely: Improve health and well beings of billions
of people, reduce environmental impact and enhance livelihood. Values which are
instilled and ingrained in the core process of the business are underpinned under
(Pioneering, Integrity, Respect and Responsibility). Rivaling competitors like Proctor &
Gamble, Unilever must acknowledge the management of the smaller brands slowed down
its growth though it has 400 master brand under four divisions: Foods and refreshment
and Home & Personal care.
The company historically grew through acquisition where the main strategic style focused
on Research & Innovation (1 billion yearly), diversification into a broad category
worldwide and penetrating emerging markets. This lead to severe economic and political
exposure beyond control which is mitigated by the diversity of their portfolio and
geographic reach to eradicate specific risk. Their biggest asset is brand which also
represent a risk if they do not maintain value and relevance to customers.
Did you know- Two bi l l i on times a day, in 170 countries, people use Unilever products.
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Unilever is striving to unify its operations and efforts to build on its long-established local
root in both the traditional and modern retail outlets to suit local markets and predict
growth in these countries.
Did you know- Unilever produces 155m pot noodle for first-year university students in UK.
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The IFE Matrix together with the EFE matrix is a strategy-formulation tool that can be
utilized to evaluate how a company is performing in regards to identified internal
strengths and weaknesses of a company (Maxi- Pedia). Both score are above the
transgressed 2.5 (average) which show that Unilever is adept to exploiting opportunities
and defending against threats whilst maintaining market leader in target segment, earning
billions of turnover and spending billions on R&D.
Unilever combine global strength in R&D with local knowledge to create unique products
with proven benefits:
On process level, (Discover, Design and Deploy) it was found that Margarine can be
produced with 80% less animal-sourced fat (discover), at a 30 degrees Celsius
(design) thus rendering gas emission 30% lower (deploy).
R&D scientists re-engineered the spray system in Axe to reduce the flow rate to
deliver 75ml of protection and fragrance in the same spray time as the full sized can.
Also by reducing its size, less aluminum carbon footprint per can is reduced by
around 25% and more can can be transported resulting in a 35% reduction in
transport and logistics.
Did you know- 35 million cups of PG tips are drunk every day - enough to fill six Olympic-sized
swimming pools
Lipton Yellow Label was being smuggled through the Black Market causing
disruptive blow to the brand. So Unilever R&D has pioneered a process that extracts
natural essence from pressed leaves to enhance the flavor of Lipton Yellow Label.
A pact with Rainforest Alliance Certified tea eradicated this growing phobia in
Pakistan.
Emerging Market
Strategic commitment to emerging market involved significant investments in brand
launches new production facilities such as Lifebuoy into China and Omo into Saudi
Arabia. A low cost based strategy is focused in emerging-country market where low-cost
local competitors are not administered justice unless they offer better product at lower
prices. Why focus on emerging market? The Boston Consulting Group estimates that
the growing middle class in China and India will spend $10 trillion by 2020. Also
Emerging markets represent 57% of turnover for Unilever.
Did you know- Project Sunlight pledged to help 2 million children providing school meals
through the World Food Programme.
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Close up are Fair and reasonable while being influenced by positive review from local
media.
Unilever partnered with Brazilian supermarket Pao de Acucar in Brazil which employed
not only 300 people in a local recycling co-operative, but also boost Unilevers Rexona
by having their logos on point-of-sale information thus raising their profile and projecting
greater in- store prominence.
Competitor comparison
Top Segment
Personal Care
Fabric Care
Food
and Home Care
Health and
Hygiene
Top Brand
Revenues
Revenue
Growth
Employees
Market Place
Dove
48.4 billion
2.9%
Tide
$83.6 billion
3%
Milo
$88.6 billion
4.9%
Detol
$13.82 billion
4%
172,000
57% in
Emerging
market
118,000
39% in
Emerging
Market
339,000
Europe- 28%
Americas-43%
Asia-29%
37,200
7% in
Emerging
market. North
America,
Russia and
Australia
accounts for
the rest
Strategy
Positive social
impact, Double
the business &
environmental
impact
Investing in
developing
market and
strengthening
core categories
like baby care.
Innovation and
renovation,
emphasis on
unmatched
geographic
presence
Profit
7,020 million
Earnings Per
Share
Cash Flow
1.61
$11,643
million
4.22 ($)
$14,456
million
3.44
$5,039.6
million
2.70
3.1 billion
$14.1 billion
$14.9 billion
$1.96 billion
Did you know- Unilever was honored as one of the 'Top Companies' for LGBT Equality in 2012.
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2011
2012
2013
2014
Turnover was 48.4 billion, down 2.7% with a negative impact from foreign
exchange of 4.6%, accompanied with an Underlying sales growth 2.9%.
Statement to purchase all palm oil from certified sustainable sources by
2015.
Around 7.2 billion invested in brand and marketing
New packaging technology for Dove Body Wash bottles that uses 15% less
plastic reported cost saving of 50 million.
Did you know- Did you know- Around 48% of Unilevers agricultural raw materials were
sourced sustainably by the end of 2013.
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Supply chain
The Design Once and Deploy Everywhere philosophy is guiding global supply chain
network towards environmentally responsible factories. Every new factory produce 50%
less waste by reusing, recovering or recycling waste to reach 0-waste to landfill . The
achievement is shown below for various Unilever affiliated countries.
Russia
France
Leeds, UK
Effluent Treatment Plant for use as fertiliser for professional football pitch
turf saving over 35,000.
Argentina
Australia
Distance barriers led suppliers to collect waste materials for reblending and
shifting to recycled cardboard. This is same as taking off 10,000 cars
off-road.
ControversiesAxe vs Dove.
Unilever has been plagued by controversies where Axe and Dove are hugely in contrast in
their advertising campaigns. Doves uplifting campaign portrayed a positive message of
embracing the womens natural beauty whilst Axe adverts consisted of scantily dressed
women inferring to The Cleaner you are, the Dirtier you get.
Did you know- Unilever delivered 16 million meals to 76 000 children in 2008.
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The above diagrams highlights positive growth sales of both product until the
contradictory adverts based on misleading interpretations. Axe faced -10% sales to -0.2
till the year end. Dove the brand leader only highlighted + 1.7 at year end and a mere
+2.4 in contrast to +5.5 in 2012.
from workers was no protective equipment or information about the disastrous impact of
mercury was given. Death toll of 45 workers led Tamil Nadu Alliance to force a close
down after discovering a heavy concentration 20mg/kg of mercury in the soil. Health
specialist from Bangalore came to the conclusion that the health of the workers as well as
of their children were affected by mercury poisoning.
Did you know- At the end of 2014 70,000 micro-entrepreneur woman were trained to sell
Unilever product in rural India
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Did you know- Around 397 million people reached by end 2014 through the programmes on
handwashing, safe drinking water, sanitation, oral health and self-esteem
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Conclusion
Unilever doesn't retail under its own name but with individual brand names where
management of the smaller brands slowed down its growth thus compelling them to
narrow their focus on the attractive areas, and their core strengths in competition.
Downsizing brand portfolio and stream line the business portfolio will reflect vitality
concept against P&G which accounts 36% sales in emerging market. Unilever should
eradicate the misbelief that marketing needs big budgets but rather deliver innovative
products that capitalizes on changing consumer preferences.
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