Unilever is a multinational company that specializes in making of the best known brands across the world. Some of the brands the company sells across every country includes Lux, Omo, Lipton, Rexona, Magnum, Sunsilk, and Signal (Unilever, 2018). In overall, Unilever specializes in manufacturing, marketing, and delivery of foods, beverages, personal care products, and cleaning agents that all fall Fast Moving Consumer Goods (FMCG). The company has succeeded in creating sustainable competitive advantage because of internal capabilities and competencies from marketing and advertising, strong research and development, strong relationship with communities where it serves, relationship with local farmers and suppliers of raw materials, as well as international distribution network.
Key Performance Indicators
Unilever organizes its key performance indicators around; durable and effectiveness quality products, production of environmentally friendly products, increasing wider accessibility around the world, manufacturing healthy products (see figure 1 below), and achieving longevity of all product brands.
Key competitors
Univeler operates in a competitive markets where other multinational companies manufacture, market and distribute FCMG such as Coca cola, Procter & Gamble, Kinberly—clerk, Colgage Palmolive, Herry Group, Kraft, and Nestle (Craft, 2018).
Unilever’s vision: “to double the size of business while reducing its footprint towards the environment and ensuring an increased impact to society” (Unilever, 2018).
Unilever mission: “to meet the everyday needs of people of people all around the world for nutrition, hygiene and personal care. We do this with products that make people feel good, look good and get more out of life” (Unilever, 2018).
The company current mission involves meeting everyday needs of people across the world through delivery of nutrition, hygiene, and personal care products. The company does this by ensuring that it continues to deliver products that mske people feel good, look good, and get more out of life. The company balanced scorecard offers a strategic planning and management system that helps to align Unilever activities to its vision and overall strategy. According to Singh and Sethi (2017), a company can do this when it monitors its performance against strategic goals. As indicated in figure 2 below, the balanced scorecard of Unilever financial perspectives shows the revenue growth, cost reduction, and asset utilization. Currently, the company continues to performs well in returns on invested capital.
According to figure 3 below, it is clear that Unilever has succeeded in efficiency allocation of capital to achieve profitable investment from 2015 to 2017. Similalry, the company returns on equity (ROI) remains higher at 40.38%.
Unilever headquarters is situated in London in a British political system. The United Kingdom is a member of European Union, which enables trade among member states by harmonization of specific rules relating to business and removal of trade barriers. Household consumption has gone down drastically all of Europe due to the recession. Unemployment and stagnation of wages is a significant issue in economies where Unilever Company supplies consumers. The drop in salaries brings about a decline in consumer demand for Unilever products. In the UK there, has there been a high level of life expectancy. There is a significant ramification of the business like Unilever. It might change the structure of demand since the older people have special needs that Unilever will meet. Today individuals rely so much on the social media, mobile and retailing websites to get information.
Table 1: SWOT Analysis
|
Strengths · Strong brand portfolio · Strong innovation and launch of new products · Strong strategic acquisition |
Weakness · Product recalls · Revocation of product-line licenses |
|
Opportunity · Growth in emerging economies · Increased opportunitis in consumption of health and wellness space · Growth in home and personal care |
Threats · Ever increasing labor wages · Risk from fluctuation in foreign currencies · Growth in counterfeit goods |
Corporate Governance
Unilever acknowledges the significance of adopting good corporate governance and behaviour. The company has succeeded in designing the code of business principles as the standard guiding rules for employees working in all departments (Kalsoom, 2013). Unilever is guided by six tenets of corporate governance (legal and regulatory framework, organizational hierarchy, monitoring and internal controls, transparency & accountability, policies & procedures, and the board of directors and committees). Management ensures that all employees do the right thing that applies to legislation. All the principles are as extension to its values as well as a reflection of its commitment to regulatory compliance and ethical practices (Unilever, 2018). Employees working in different departments believe that they need high levels of standards and behaviour to work with everyone in the community. Unilever is committed to communicate its performance in a regular manner and in a transparent manner. The company has continued to report on its sustainability performance since 1996 (Unilever, 2018. Besides, Unilever conducts its operations according to internationally accepted principles of good governance and best practices.
Social Responsibility & Ethics
Unilever applies Sustainable Living Plan to set out decouple growth from the environmental footprint while ensuring that it achieves positive impact in a society. The plan outlines three goals to achieve: social, environment, and economic performance across its value chain. The company uses ethical principle of working with others to focus on major areas that management use to create biggest impact and support sustainable development goals established in United Nation goals. For instance, the three goals of social responsibility includes improving health and well-being of over 1 billion people, reducing environmental impact, and enhancing the livelihoods of millions (as indicated in the figure below).
Strategic management plays an important role in driving the objectives of the organization. Unilever Company is a well-known organization in Europe, which deals with various consumer products, detergents, and foodstuff (Winston, 2014.)
In deaing with horizontal strategic management policies, Unilever has an advantage over its competitors because of its flexible pricing policy and a well-organized distribution channel. The strategy has proved critical for the business because it has edged out Proctor and Gamble in the industry. Unilever has also gained a competitive advantage over new entrants in the company by leveraging its economies of scale, which arise from its operations. Thus, its strategies have worked well with its potential customer across the globe (Thompson, 2005.). Moreover, its distinct nature of their products provides a unique flavor from its customers who prefer to come for their products each time they need them. (Goffin, 2005).
On the vertical threats from the competitors, Unilever provides a flexible pricing strategy, which allows its customers to bargain with their customers and arrive at a fair price without making losses. Similarly, the company has friendly suppliers who subsidize products, and their prices are flexible for the business. The company works by combining local execution and global thinking hence winning the trust of many customers across the world.
Culture And Its Organisational Past
Unilever corporate culture revolves around principles, shared values, and traditions. Management designs all these to influence employees. Currently, the head office acknowledges the need to develop common cultures across all units in different countries. For instance, the company establishes formal training programs to “Unileverize” all managers (Maljers, 2018). Unilever’s past shows how the company has come to manage different business units to start sharing common culture. Over a period of time for instance, the company has succeeded in weathering numerous changes. Over a period of three decades, the foods business has undergone two important reorganizations. Such a past reorganization shows how the company focuses on culture of flexibility and formality. Most importantly, the culture of innovation and risk taking encourages employees remain innovative and take risks of adopting new products that add value to customers. The company has transformed itself from selling margarine to a global fast food company that now specializes in production of three categories of brands; food & drink, home case, and personal care. Besides, management has achieved all these by making decisions that take into account the effects on people in the organization.
Strategic Drift
This refers to the tendency for which strategies designed by the company to start developing incrementally because of influence from historical as well as cultural impacts but fails to keep pace with an every changing market competitions (Johnson, Scholes and Whittington, 2008). Unilever has ensured that it remains the market leader in FCMG by designing and implementing its strategies. The company utilizes its strategies to achieve improvement in health and targets to achieve this 2020. The company seeks to continue helping more that 1 billion people to take action in the best way that they could improve their well-being as well as health status. The company has also established strategies that helps the company compete by reducing the impact by 2020. It now seeks to half the environmental footprint and use the products as it grows. The company future strategy also involve enhancing the livelihood of hundreds of thousands of people as it grows the business.
Unilever systems covers the use of a workday as the leading provider of enterprise cloud applications to support its finance and human resource. The company can now manage its finances, human resources, human capital, and other assoiated activities designed to achieve competitive advantage. Furthermore,the Workday HCM allows Unilever to standardize all its processes globally. It now operaes through a streamlined operations while at the sane time, ensuring that there are reduced complexities to achieve a high level of productivity and efficiency. Unilever uses structures of a four-tier hierarchical structure. This helps the company in funneling all the information through the business and senior teams to come up with decisions from from the available information.
Unilever’s scientists are developing the next generation oral care, Household care products, and Deodorants. In addition, there is significant microbiology facility, Unilever Global Fragrance Centre with a unique kind of expertise as well as the pilot plant that allows the company to manufacture prototype shampoos, laundry liquids, and deodorants, tubes of toothpaste and fabric conditioners. Unilever Company has excellent scientific strength furthermore expertise in substrate, processing, materials, and formulation of products. The company is pioneering high throughput experimentation.
The company has staff that range from neuroscientists, physical chemists, sociologists, biologists, sociologists and chemical engineers. The Unilever company groups of the scientist in the UK work hand in hand on a daily basis with external partners through company’s innovation program. The company’s local strategic partners include; the University of Liverpool, Daresbury Laboratory, and Manchester University. Consumer connection is an essential aspect of Unilever Company. The company’s consumer understanding helps it deliver quality products and satisfy them in return.
Unilever consumers are now more demanding than ever. There is an increased urgency to produce new products when inclinations change which subsequently implies an expanding shorter product lifecycles. This results to complexity in product improvement, sourcing, satisfaction, production and higher transportation expenses to take care of demand (Dhawan, 2010). This likewise adds to the pressure for the company to better oversee stock. Moreover, the company is expected to meet the needs of consumers globally which increases complexities in producing variety for all the customers.
There is also increased pressure to create agility in the supply chain. The supply chain ought to respond to any adjustments in consumer inclinations so that the vital changes can be organized across the end-to-end supply chain (Singh and Sethi, 2017). Consumer demand is also fragile due to the increased competition from other companies mentioned above such as Nestle, Kraft, P&G, Mars, and Coca-Cola that operate in the fast moving consumer goods industry (FMCG). Volume development has also slowed further in the business sectors in which the company operates, with weak market growth in emerging markets, which is evident in North America and Europe. Consumers keep on seeking out bargains before purchasing goods and Unilever shares have fell as well (Sanna, Quatrebarbes and Probert, 2015).
Unilever has made a strategic move towards sustainability. The move presents Unilever with a key challenge given that Unilever’s biggest opportunities in sustainability are in the extension in emerging and developing markets and the development of socially cognizant consumers. Developing nations confront a plenty of issues including major environmental change issues, poverty, and mal-nutrition, which may appear to be overwhelming for the organization to respond to. This will require the company to use most of its resources in the sustainability of the developing nations (Dhawan, 2010). The company is also expected to create products that meet the utilitarian needs of the developing nations while factoring in the social and environmental issues, which is additionally complex.
Unilever’s sense of duty regarding sustainability also displays a major challenge in maintaining the sustainability from the sourcing of their raw materials, to production, and the distribution , to the customer use and disposing of items (Lingard, 2013). Unilever’s biggest sustainability challenges originate from the places it has minimum controls over, in the sourcing of raw materials and disposal of items by consumers (Dhawan, 2010). Unilever must choose where and how to begin the prioritization procedure, while guaranteeing alignment with a large number of suppliers.
Today, individuals anticipate that brands will have a considerably more extensive comprehension of the effect business can have on the world. Organizations can make positive change, both through doing ‘less bad’ and by doing ‘more great’. The Unilever declaration appears, however, that as far as what may be examined, the activity of the custodians of organizations’ motivation, or moral guide is becoming complex (Dhawan, 2010). Customers judge brands on basis of ethical conduct and integrity. For a brand, for example, Unilever, whose desire and more extensive reason for existing is to improve the world, it is more complex to guarantee and manage the ethical high ground.
Following the advancement in front end marketing, interests in internet business and the client encounter, it is no big surprise that digital change has ascended to the highest point in Unilever.The company is however facing issues in keeping up with transformations that occur interchangeably in different nations. The infrastructure of supply chain is further making it hard for the company to manage the transformation. This is affecting the company sales given that in the present globalized world, an organization’s prosperity is no longer subject to its own endeavors alone but depends to a great extent on how viably it can coordinate an immense, worldwide, supply chain network accomplices to deliver merchandise and services that address the issues of individual buyers.
As discussed in the above section under challenges, Unilever experiences major challenges of maintaining sustainability across all its operations. This owns to the fact that currently, the company operates in almost every country across the world with more than 400 brands (Unilever, 2018). The company continues to experience the challenge of ensuring that it produces high quality FMCG while at the same time, keeping with the depends of every country to achieve sustainability policies.
Confino (2018), the correspondence with the Guardian magazine, a blog that specializes in pointing out issues on sustainability, brings into light some of the sustainability issues that continue to face Unilever. He points out that while consumer multinational strives to make some process through its operations, management has come out calling for cooperation across all the societies. It is through this that the company acknowledges, it could achieve transformational change. In one of the recently published report – the second annual sustainability progress report, the company points out that changing consumer behaviors through marketing remain one of the uphill struggle that the company continues to grapple with every day. Besides, the company is also finding some of the effective ways to encourage consumers towards taking sustainability more seriously. For instance, despite the evident of environmental advantages, Uniliver explains that many of the consumers are still shy from buying refillable pouches for its products. Furthermore, the company also continues to have trouble of convincing consumers to start accepting lower salt used in its food products. According to the correspondence, is that a majority of the people are more hooked into the taste and any slight mistake of reducing the content of the taste, consumers end up adding salt.
Baker (2017) notes in the Marketing Week that coupled with the issue of sustainability, sustainability marketing remains one of the biggest challenge that the company management has failed to tackle. Most importantly, the company finds it hard to persuade its customers to start changing their sustainability behaviors. According to the company chief marketing officer, Keith Weed, Unilever has failed to make the needed progress in this area as expected during the first year of its strategy. The company introduced the Sustainable Living Plan in 2017 integrate sustainability into all operation areas. However, Weed points out that even though sustainable marketing remain at the forefront of the company’s marketing sustainability, some of the products such as Persil’s Small & Mighty products focusing on environmental benefits have failed to attract the needed appeal from customers. Furthermore, companies have ended up taking long to adopt some of its new products such as the newly developed Comfort One Rinse laundry detergent.
This section reminds that Unilever adopts the use a sustainable marketing strategies as the best strategic option. Pramudita (2016) explains in his paper that marketing strategy for any company should be a reflection of the company strategy, its mission, values, and objectives. Currently, the markets where Unilever operates tend to influence the company as well as other integrations that come up between Unilever and major stakeholder. As we have summarized in the rest of the report, the company microenvironment covers other competitors, customers, intermediaries, and suppliers. Furthermore, the company is always in interaction with financial institutions and investor’s m government, media, and above all, the communities where it operates to deliver manufactured products. Jeppesen, et al. (2017) reiterate that customers of a company whether they act as individual households, service providers, retailers, or other businesses, they determine the strategic approach that a company adopts towards sustainable marketing. Potential customers of Unilever that are spread across different markets that expect the company to continue manufacturing and delivering sustainable products to them.
The company should pursue its sustainability marketing strategy through strategic acquisition of specific companies specializing in marketing strategies. Hrebiniak and Joyce (2011) refer to acquisition as the process where a company takes ownership of another company. Therefore, acquisition involves the management of one-company uses their strategic influence towards another company. Besides, there are different motives that would make Unilever company to acquire to other companies. Ungerer, Ungerer and Herholdt (2016) categorises such motives into the speed of entry, the competitive situation, opportunities to consolidate, financial market, exploit strategic capabilities, achieve cost efficiency, and the need to obtain new capabilities.
The suitability of above selected strategic option to increase sustainable marketing strategy depends on its capability to address a number of issues such as low purchases among customers. Hence, the strategic option to gain acceptance from customers will maintain a high level of market share. The needed capability involves building strengths through continued investment and innovation in sustainable practices (Sato, 2017). While on the other hand, stakeholders will also benefit in the manner in which customers will see the reason to stick with the company products.
The advantage of a strategy will depend on what Anderson (2000) explains as speed of supply and increase performance ratio. The company will gain the capability to acquire competences (Roger, 2016). Currently, Uniliver has several stakeholders that are likely to benefit from increased returns. This will be in terms of growth or share value.
The strategic option of conducting sustainable marketing through product positioning, timing, and segmentation is also acceptable. The newly acquired company will play central role when marketing. Customers of Unilever are always price conscious in demanding low priced products that have high value. Furthermore, they also value high quality products and premium brands. The acquired company will segment the market into different sub-segments and niches. For instance, the quality segment in FMCG provided by the company will give the company a greenlight to supply convenient goods, organic and fair food products. In explaining how market polarization assists in achieving sustainable products, Stalk and Iyer (2017) indicate that positioning must depend on several factors such as rand assortment, competitive offers, and consumer preferences.
The above strategic choice is also acceptable because of the expected performance outcomes in terms of increased sales volume and consequently, financial returns. As indicate in the figure below, it is apparent that the use of acquisition will ensure that Unilever reports high returns to dividends as well as normalized earnings. Consequently, the strategy will increase overall revenue.
The above types of returns are the benefits that stakeholders will expect to receive out of the company. However, apart from the above financial returns, the company will also benefit from non-financial returns that will continue to accrue from sustainability marketing.
Unilever has made a strategic move towards sustainability. The move presents Unilever with a key challenge given that Unilever’s biggest opportunities in sustainability are in the extension in emerging and developing markets and the development of socially cognizant consumers.
Doyle (2010) explains three approaches for measuring traditional financial analysis includes forecasting of returns on capital employed (ROCE), payback period, and discounted cash flow. The company has continued to record an increasing return on invested capital starting from 2008 to 2017. The positive increase in ROCE is a clear indication that the company will continue having a stronger earning power from the resources that management uses to implement strategic options.
Risk is also another imperative measure that determines the acceptability of a strategy to pursue suatainability marketing through segmentation. The strategic will involve selecting the right segments as well as the target groups. The newly acquired company will segment the market into socio-econoligally passives, the socio-ecologically activated, and the socio-ecologically actives.
Developing nations confront a plenty of issues including major environmental change issues, poverty, and mal-nutrition, which may appear to be overwhelming for the organization to respond to. The company will use most of its resources in the sustainability of the developing nations (Dhawan, 2010). The company is also expected to create products that meet the utilitarian needs of the developing nations while factoring in the social and environmental issues, which is additionally complex.
References
Anderson, T. J. (2000) Real Options Analysis in Strategic Decision Making: an applied approach in a dual options framework. Journal Of Applied Management Studies, 9(2), 235-255.
Back, A. E. (2007) Knowledge Networks for Business Growth. . New York: Springer,
Baker, R. (2018) Unilever: ‘Sustainability marketing is biggest challenge’ [Online]. Available at https://www.marketingweek.com/2012/04/24/unilever-sustainability-marketing-is-biggest-challenge/?ct_5ae93ca654ddd=5ae93ca654e80 [accessed on 2nd May 2, 2018]
Craft. (2018) Unilever’s competitors [Online]. Available at https://craft.co/unilever/competitors [ accessed on 4th May, 2018]
Dhawan, E., Goodman, E., Harris, S., & Mitchell, C. (2010) Unilever and its Supply Chain: Embracing Radical Transparency to Implement Sustainability.
Doyle, P. (2010) Building Successful Brands: The Strategic Options. Journal Of Marketing Management, 5(1), 77-95.
Goffin, K. (2005) Innovation management in Unilever Company. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan.
Hrebiniak, L. G., & Joyce, W. F. (2011) Organizational Adaptation: Strategic Choice and Environmental Determinism. Administrative Science Quarterly, 30(3), 336-349.
Jeppesen, K. K., Carrington, T., Catasús, B., Johnsen, Å., Reichborn-Kjennerud, K., & Vakkuri, J. (2017) The Strategic Options of Supreme Audit Institutions: The Case of Four Nordic Countries. Financial Accountability & Management, 33(2), 146-170.
Johnson, G., Scholes, K., & Whittington, R. (2008) Exploring corporate strategy (8th ed). Prentice Hall
Kalsoom, K., (2013) corporate governance of Unilever [Online]. Available at https://worldofyourchoice.blogspot.co.ke/2013/04/corporate-governance-of-unilever.html [accessed 5 May, 2018]
Lingard, T. (2013) Creating a Corporate Responsibility Culture: the Approach of Unilever UK. Corporate Social Responsibility, 217-230.
Maljers, A. F., (2018) Inside Unilever: The evolving transnational company [Online]. Available at https://hbr.org/1992/09/inside-unilever-the-evolving-transnational-company [accessed 5 May, 2018]
Pendrous, R. (2017) Unilever boss calls for takeover review. Food Manufacture, 11.
Pramudita, C. D. (2016) The Balanced Scorecard As Strategic Controlling Instrument. Introducing the Indicators-based BSC for Implementation of a Corporate Strategy From Four Different Perspectives. Hamburg: Anchor Academic Publishing.
Roger, C. (2016) Management Competencies Development Program. Sydney: Mac Graw-Hill Boo Company.
Sanna, A., Quatrebarbes, A. d., & Probert, C. (2015) The Balanced Scorecard : Turn Your Data Into a Roadmap to Success. Namur: 50Minutes.com.
Sato, C. E. (2017) Developing Organisational Capabilities through Customer-Led Systems Integration Projects: The Case of the Major Project BT 21st Century Network in the UK. Revista de Gestão e Projetos, 8(02), 36-57.
Singh, R. K., & Sethi, S. (2017) The Balanced Scorecard: Churning the Existing Literature. Amity Global Business Review, 12(2), 20-31.
Stalk Jr., G., & Iyer, A. (2017) How to hedge your strategic bets. Business Today, 26(6), 116-121.
Thompson, A. A. (2005.) Constructing and Executing Strategy. . New York: McGraw-Hill/Irwin,
Ungerer, M., Ungerer, G., & Herholdt, J. (2016) Navigating Strategic Possibilities : Strategy Formulation and Execution Practices to Flourish. Randburg: KR Publishing.
Unilever. (2018) Unilever brands [Online]. Available at https://www.unilever.com/brands/. [accessed at 02 May 2018]
Unilever., (2018) our approach to reporting [Online]. Available at https://www.unilever.com/sustainable-living/our-approach-to-reporting/ [accessed 5 May, 2018]
Unilever., (2018) Our corporate governance [Online]. Available at https://www.unilever.com/investor-relations/agm-and-corporate-governance/our-corporate-governance/. [accessed 5 May, 2018]
Winston, A. S. (2014) The Big Pivot. Harvard: Harvard Business Review Press.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download