Unilever Business Strategy

Unilever Business Strategy Jump to: SWOT Analysis of Unilever | Unilever BCG Matrix  |  Unilever PESTEL  | Unilever Financial Analysis | Unilever Competitors This is a case study on Unilever business strategy. It would seek to analyze the strategic position of the group with the help of SWOT, PEST and BCG Matrix models. The paper would critically assess the competitive situation of the company in relation to other major product based companies in the market and companys financial performance and key issues. In the end it would submit few recommendations. The case study is my first effort towards analyzing the business strategy of Unilever and its success in the market. Since Unilever is so famous and its products so widely used all over the world, it is of great interest for me to carry out a case study on its business strategy. The paper would greatly help me and the readers to understand some key issues concerning Unilever in todays business world. Introduction 2.1. About Unilever Unilever is a multi-national corporation, formed of Anglo-Dutch parentage that owns many of the worlds consumer product brands in foods, beverages, cleaning agents and personal care products. Unilever employs nearly 180,000 people and had worldwide revenue of almost à ¢Ã¢â‚¬Å¡Ã‚ ¬40 billion in 2005. Unilever is a dual-listed company consisting of Unilever NV in Rotterdam, Netherlands and Unilever PLC in London, England. This arrangement is similar to that of Reed Elsevier and that of Royal Dutch Shell prior to their unified structure. Both Unilever companies have the same directors and effectively operate as a single business. The current non-executive Chairman of Unilever N.V. and PLC is Michael Treschow while P Mr Paul Polman is the Group Chief Executive. The company is widely listed on the worlds stock exchanges (About Unilever: 2008). 2.2. History Unilever was founded in 1930 through merger by the British, Lever Brother; and the Dutch, Margarine Unie; now Unilever PLC in London, U.K and Unilever N.V in Rotterdam, Netherlands respectively. In 1872 before the merger, Jurgens and Van den Bergh, the Dutch, built factory in Netherlands for the production of Margarine made from milk and fact. In 1927, they formed Margarine Unie (margarine Union) together with two European Businesses, Centre and Schicht. Lever Co on the other hand was founded in 1884 by British William Hesketh Lever and his brother, James, and was producing soap Sunlight soap for people in England especially for women. William Lever wrote: to make cleanliness commonplace; to lessen work for women; to foster health and contribute to personal attractiveness, that life may be more enjoyable and rewarding for the people who use our products. In 1890, Lever Co become limited company known as Lever Brothers (Uhomhoabhi, Fredrick Albert: 2008) Unilever, Unilever N.V and Unilever PLC comprise Unilever group. Both companies have the same directors. Its annual turnover in 2005 was à ¢Ã¢â‚¬Å¡Ã‚ ¬39.672 billion and employs206, 000 employees around the world.1 Unilever brands consist of Food, Beverage, and Home and Personal Care. Some of these products are Knorr, Breyers and Magnum, Lipton, Omo (detergent) etc. Knorr has the biggest sales of à ¢Ã¢â‚¬Å¡Ã‚ ¬2.3 billon in 2005.In May 2007 it became the first tea company to commit to sourcing all its tea in a sustainable manner, asking the Rainforest Alliance, an international environmental NGO, to start certifying its tea estates in East Africa. It declared its aim to have all Lipton Yellow Label and PG Tips tea bags sold in Western Europe certified by 2010, followed by all Lipton tea bags globally by 2015. Covalence, an ethical reputation ranking agency, placed Unilever at the top of its ranking based on positive versus negative news coverage for 2007. In 2008 Unilever was honor ed at the 59th Annual Technology Engineering Emmy Awards for Outstanding Achievement in Advanced Media Technology for Creation and Distribution of Interactive Commercial Advertising Delivered through Digital Set Top Boxes for its program Axe. Strategic position of the company The strategic position of the company shall be analyzed through following techniques: 3.1. S.W.O.T Analysis The overall evaluation of a companys strengths, weaknesses, opportunities, and threats is called SWOT analysis. In general, a business unit has to monitor key macro environment forces (demographic-economic, technological, political-legal, and social-cultural) and significant microenvironment actors (customers, competitors, distributors, suppliers) that affect its ability to earn profits. The business unit should set up a marketing intelligence system to track tends and important developments. For each trend or development, management needs to identify the associated opportunities and threats. (S)trengths Recognized as a global company. Strong brand portfolio. Strong relationship with retailers Economies of scale. Corporate social behavior Variety of products (W)eaknesses Dual leadership Limited costumer connection Inefficient management of brands Inability to maximize acquisitions Lack of control in the market Reduced spending on RD (O)pportunities Changing consumer preferences Increasing need for healthy products Low income consumers Rapid increase in population (T)hreats Decrease in revenue Strong competition(PG) Tougher business climate Exchange rates Economic crisis Increase in production and labor cost 3.2. BCG Matrix Stars(High market growth share) Lux Sunsilk Walls ice cream Fair lovely Rafhan Energile AXE Vasline PG tips Dogs(Low market growth share) Wheel detergent Supreme tea Lifebuoy shampoo Cash cows(Low growth High share) Surf excel Ponds Lipton Close up Blue band Dove soap Rexona Knorr Question marks(High growth low share) Clear shampoo Rin Comfort Ben Jerrys Persil 3.3. PESTEL Analysis 3.3.1. (P)olitical/Legal environment Unilever, as a matter of policy, set a standard as to the way of tackling political issues. Unilever has its tactical way of handling political issues. First, in the 1960s, many countries began to nationalize foreign firms which also affected Unilever. This was a call for local equity participation in foreign firms. Thus, so many companies were subject to local control on prices, imports, employment of expatriates and so on. As a result of the adverse effect of nationalization policy, in the 1970, many US companies e.g. IBM and coca cola left India. There was fear by foreign companies uncertain issues such as knowledge leakage, loss of trademark etc. this was also hazardous for Unilever as its control over operation in the market was reduced. For example UAC, a subsidiary of Unilever, whose operation was in many African countries (Cameroon, Ghana, Ivory Coast, Nigeria, etc.), was focused on as its profit margin and rate of easy remittance of profit to its Anglo-Dutch parent was enorm ous. Nationalizing UA Chambered Unilevers control over the market where UAC operates. However, Unilever uses its experience and goodwill to make contacts in many countries to bargain with government so as to modify their regulations. In central and south America, Unilever only engaged in lobbying rather than active politicking. In other words, Unilever never get involved in sponsoring political parties. Today, Unilever has gained political ground using its tactical strategy and experience. Unilever is a member of many organizations all over the world. The aim is to create favorable business environment, and also facilitate corporate reputation management. 3.3.2. (E)conomic environment Unilever market environment is becoming highly competitive especially in the Western Europe. Procter Gamble (PG) is one of the major competitors in the European market. More so, there are so many discounters in the European market resulting from EU free trade policy. This has had adverse effect on Unilevers profit potentials. Retailers are pressurizing FMCG producers to reduce prices of their products. Consumers on the other hand would not want to buy expensive product or brands due to current economic tide. Competition in EU has grown so strong that Unilever is facing difficulties in places like France, Netherlands. In the developing countries and the emerging economies (Asia and Africa), where there are political instability, Unilever has adopted its company strategy to ensure that its profitability drive is sustained. Some Products are packaged in small size for low or regular income earner, for affordability. In some developing countries, Nigeria to be precise, there was uncertainty about duties to be paid by companies due to inflation and fluctuation of currency. The effect on Unilever was a decrease in profit in 2005 compared to 2004, though there was increase in turnover. 3.3.3. (S)ocio-cultural environment Unilever has continued to maintain momentum in its socio-cultural environment in line with its sustainability drive. The company is working relentlessly to bring improve hygiene and better nutrition to people in Asia, Africa and Latin America, especially the poor and obesity. Over 30% of Africa population lives on less than $1 per day. By this, Unilever strengthens it goodwill. However, the low literacy of consumers affects marketing vehicles such as advertisement in print media. This therefore requires employment of more resources, for instance to enhance face-to-face communication. Besides, Unilever employs about 100 nationalities. It ensures that diversity works for everybody both employees and consumer alike. In order to achieve and ensure that diversity works amongst employees, Unilever employed the strategy of so as to manage and leverage diversity. Unilever is focused on building an exclusive culture and embracing difference, which resulted in high demand of its products in th e developing and emerging markets. 3.3.4. (T)echnological environment Right in the 1930s, Unilever continue to diversify. Business continue to boom in the1950s with new technology being invented to boast production and enhance quality products for consumer, competitors improving their products using new inventions. Unilever did not give up its effort in RD. Since 2000, Unilever has been spending on IT to improve its business especially in the area of e-business so as to improve brands communication and market through internet, making transaction simple along chain. Today, Unilever is trying to minimize cost through IT efficiencies at global level. In addition, Unilever Technology Venture works in collaboration with Unilever RD group to help Unilever meet consumers needs. Area of concern is genomics, advanced bioscience, advanced materials science and nanotechnology. In 2003, Unilever installed and commissioned pallet live storage system from Bitto Storage System Ltd. This was meant to store its frozen products. The facilities include: pallet live storage systems, carton live storage systems, pallet racking, boltless shelving, plastic bins and containers, wide span and heavy load shelving, cantilever racking, and multi-tier shelving systems. 3.3.5. (E)nvironment In recognition of local legislation and to keep its corporate responsibilities, Unilever designed management system. Unilever has respect for consumer health and safety. This policy is to ensure all Unilever operators establish a formal environmental management system. Training programs are being arranged in various regions/business groups to ensure compliance with the company Standard for Occupational Health and Safety Environmental Care (SHE). This framework is based on the ISO 14001 management standard. Unilever had also worked in conjunction with government of countries of its operation as regards waste management. For instance in Ghana, 2004, over 21 tones of wastes were supplied to small and medium size recycling businesses in Accra, Ghana, by Unilever to reduce the amount of plastic waste sent to landfill. Financial performance Underlying sales growth of 7.4% was partly offset by movements in exchange rates (4.8%) and the net impact of disposals and acquisitions (1.4%). Including these effects, turnover was 40,523 million for the full year, increasing by 0.8%. Operating profit increased by 1,922 million to 7,167 million, including a higher level of profits on business disposals. These generated a pre-tax profit of 2,190 million in 2008, compared  with 297 million in 2007. Net profit was 28% higher than last year, boosted by the profits on disposals. Earnings per share were à ¢Ã¢â‚¬Å¡Ã‚ ¬1.79, including a net gain of 0.36 from  RDIs. This compared with 1.35 last year, which included a net loss of 0.07 from RDIs. Net cash flow from operations at 3.9 billion was in line with last year. Total cash returns to shareholders in the year were 3.6 billion, made up of 2.1 billion of dividends and 1.5 billion of share buy-backs. 4.4. Financial Objectives Unilevers ambition is to top Third Total Shareholder Return, over a 3 year rolling period out of peer group of 20 other companies. Its outlook for year 2010 is: Un-geared free cash flow in the period 2005-2010 to be 25-30bn. Improvement in Return on Invested Capital. Underlying sales growth of 3-5% p.a. Operating margin of over 15% by 2010 after normal restructuring. Improved capital and tax efficiency. Market share and competition 5.3. Category position in the market Strategic Issues Following are some of the key strategic issues which Unilever faces today: 6.1. Leadership Unilever maintains two business entities i.e. Unilever PLC and Unilever N.V. Due to dual chairperson approach; it faces following problems in their business strategy: List stock separately Shared board of directors Typical management; wear two, three hats Conflict in Board and Business responsibilities Company remains fragmented Reduced effectiveness Slow decision making process( Bureaucracy) Unilever believer (believe in Unilever) Unilever should create a sense of belief amongst its consumers. It should try and focus on program that focuses on brand initiative to the consumers. Use advertising that connects with consumer needs: Consumers demand high quality products that are both convenient and delicious Consumers look for new ways to use the product Large population of single parent house hold More females are working full-time jobs Increase consumer focus on health and nutrition Strategy Justification 7.1. Recommendation 1 Make an initiative to create an overall umbrella brand across all Unilevers brands that will eventually consolidate various businesses under one name. Unilever Plc Unilever NV One Unilever Provides a greater clarity of leadership, responsibility, and accountability Allows Unilever to focus on the needs of their customers and consumers thus reigniting growth and increasing sales potential Provides the ability to leverage scale of operations Create a strategic platform for brand management Recommendation 2 It should implement Unilever Believer product and brand extensions. The related example in this case is of Lipton tea. It should try and create an extension to this famous brand by focusing on energy drinks. Justifications are: Energy drinks jumped 56% in sales last year Market has exceed $100 million in the recent years Main Competitor: Red Bull Positioning Statement: A Healthier Alternative to Energy Drinks Unilever should cash in this opportunity by: Target Market: Young adults 18-32 Uses: stay up all night and/or start a night out Main Ingredients: Caffeine, Vitamin B, Guarana Advertisements: Highlight healthier ingredients of the product while showcasing its ability to give energy and revitalize body

Bombardier Aerospace Essay

After acquiring a few companies, Bombardier Aerospace was now faced with the challenge of how to align the operations of these companies who all had different sets of data, processes and systems. Major areas of concern were process delays, low inventory turn, inconsistent pricing and billing of materials among others. Bombardier introduced the Enterprise Resource Planning (ERP) into its aerospace division with a vision to achieve higher efficiency in manufacturing and also to significantly save cost. To assess the performance of this IT project, Bombardier Aerospace needs to consider the following six variables which are interdependent as far as success or failure is concerned. System Quality examines the desirable characteristics of an information system. These may include ease of use, system flexibility, system variability and ease of learning. If we take a look at the first phase of the project which was carried out at the Mirabel Plant, we realize that this element of system quality is not very solid. There were complaints from users with regards to the IT system. Problems were encountered after the Go Live and as a result, several users were still using legacy systems for some aspects of their work. In the second phase at the Saint-Laurent plant, we realize that after robust measures were put in place, they achieved data accuracy of 97 percent. The second variable to consider is Information Quality. This examines the desirable qualities of the system output such as its relevance, understandability, currency, timeliness and usability. The methods employees encountered delays in modifying bills of materials. Also, it took some time before they could understand what information the newly formed Master Data group required of them. This tells us that Information Quality was poor in the first phase of ERP implementation. As far as the Use of the IT project is concerned, Bombardier Aerospace needs to look at the degree and manner in which staff and users utilize the capabilities of the system. For instance, the amount of use, frequency of use, appropriateness of use or the purpose of the use. In the phase two, most users of the new system reacted positively to it but the project at the Mirabel plant was quite different. Sourcing agents could not approve a purchase order for a part if its contract did not contain a price or if the current price was different from that stated in the contract. This was a flaw in the system as far as its use was concerned. Another way to assess the IT project’s success or failure is by measuring the User Satisfaction. Not until after about one year after Go live, user satisfaction at the Mirabel plant was not good enough. Users from various functions complained about significant delays in getting answers to their queries. At the Saint-Laurent plant on the hand, most users felt that the new system made their job easier. The ERP implementation had different impacts on individuals. Employees in finance at the Mirabel plant were frustrated by the system. They had to make manual corrections to the general ledger if materials were issued incorrectly. At the Mirabel plant, the majority of users thought that the new system had impacted them positively. They thought that their inputs were taken into consideration and they virtually used the system in all instances. In terms of organizational impact, we are able to tell from the case that the project was a successful one. One of the primary goals of implementing this system was improve visibility and reduce the value of inventory held by Bombardier Aerospace. The BMIS contributed to reducing inventories by $1.2 billion in just less than a year after Go Live. Also Procurement became more efficient and integrated due to the implementation.

Alzheimer’s Disease Research Paper Essay

â€Å"Five million people in America have been diagnosed with Alzheimer’s disease, and one in three seniors will die because of this disease of another form of dementia† ( Lawrence Robinson). Alzheimer’s is a disease that gradually worsens with time, and is incurable. This horrible disease is also hereditary and can cause a family much pain. I’ve experienced Alzheimer’s first hand. My grandfather was diagnosed in April of 2007 and passed away April of 2012. It was a long a winding journey and I remember all the stages of his illness really well. The first sign of Alzheimer’s is memory loss, especially forgetting recently learned information. I remember like it was yesterday. The first time my grandpa did something strange that raised a red flag. Me and my brother were staying with our grandparents one weekend I was 11 and my brother 15. One night me maw told us guys (me, my brother and granddad) to get some food she had ordered from a place called Abe’s that we were oh so familiar with. We got in the truck and headed down the road, carrying on conversation we didn’t even realize that we had passed our destination. The truck stopped at Poppies, puzzled I asked what we are doing here. My grandpa looked back at me and explained that we were picking up dinner. I laughed and said we are supposed to go to Abe’s. He gave me a real dumbfounded look and said lets go inside. He proceeded to go to the counter and asked for our order that me maw had placed we begged him to get in the car we looked so stupid. Finally my brother got my grandmother on the phone and handed it to him. She chewed him out, like a dog with his tail between his legs he walked out we followed suite. At that time in my life I had not the slightest clue of any mental illness such Alzheimer’s but I’m pretty sure my brother did. He stared out the window, not saying a word the whole way back as me and grandpa laughed and giggled about the incident. Throughout my research I have found that â€Å"Alzheimer’s is hereditary and in some studies say it skips a generation†( Mayo Clinic staff). In my case could be me that inherits this disease. Knowing what I know now I’ll have check-ups annually, not because I’m scared of dying but for the quality of life I may live. â€Å"Alzheimer’s attacks four of the 23 chromosomes in a human’s body. It is similar to Down syndrome just happening in a later age†( Jon Glass). In the play we are talking about, in my opinion Willy has this disease and can be important because one of his sons could inherit it. I find it strange that no one in Willy’s family is concerned or wants to take him to a doctor to find out what’s going on. Alzheimer’s disease is a very cruel illness and I wouldn’t wish it upon my worst enemy. I’ve seen the things that monster of a thing can do to the sick, and the loved ones caring for the victim. I’ve learned the best thing to do is to get help, be patient and love the ill unconditionally.

Address Customer Needs - 2195 Words

ADDRESS CUSTOMER NEEDS Task 1: The first customer contact transaction discussed in the Task 1 is when the customer drops in the shop to buy a particular commodity amp; fetches help from the sales personnel. This is an incident which happened in one of the leading clothing store i.e. Marks amp; Spencer’s. The customer contact was in person. The duration of the entire transaction was 15 minutes. The customer was unable to fetch a product which suits her requirement. Her need was to buy a pair of navy blue jeans with size 28 inches (Ramsey amp; Sohi, 1997). She was unable to locate the counter where in the jeans were placed. The person who was doing the customer contact was responsible to handle sales within the store. The line of work†¦show more content†¦The expert providing the information over the phone would be referred to as the sales amp; support team who will push the levels of sales. The line of work or industry they are in is the banking industry that provides the financial services to its c lients. Yes, there is evidence that the salesperson had prepared for the transaction. The way with which the sales person has been talking to the client portrays the way he has been handling such situations in the past (Ramsey amp; Sohi, 1997). The listening skills of the sales person were quite empathetic. The sales person cross questioned the client amp; tried to judge the requirements of the client. The sales personnel used the possible information to tell about the services being offered by him amp; its usefulness to the client in the near future. Since, it was a sales call carried over phone non verbal communication techniques could not be observed. The language used by the sales person was a bit complex. The client asked for reconfirmations amp; clarifications in terms of the meaning of the words, etc. The sales person used the RATER Model to identify the needs of the customer (Martin, 2006). The needs of the customer were divided amongst various categories such as reliability , assurance, tangibles, empathy amp; responsiveness. There was an agreement amongst the salesperson amp; the customer. 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