A review of the strategic plans of Unilever PLC would reveal the following types of plans in which the transnational company engages:
The first strategic plan of Unilever is its robust capital acquisition plan, which supports all the subsequent strategic plan. The analysis of the operations of Unilever would show that the public limited company owns some of the world’s top consumer brands and operates in more than a hundred countries. Quality is one of the main attributes of the products Unilever manufactures and the company employs more than a lakh employees globally. This clearly points out that Unilever requires immense capital to support its massive business operations. The company has its primary listing on the London Stock Exchange since its headquarters is in London (Figure 1). The company is present in several host countries like the United States and Germany through subsidiary companies which are also public limited companies. These public limited subsidiary companies are listed on the top exchanges which enables them to source capital from the host markets as well. This capital acquisition strategy enables Unilever to source immense capital and also provides basis for financial risk diversification. Unilever through its subsidiaries is able to source capital from markets. Thus, if the stock prices of one subsidiary falls and the company generates less capital from that market, Unilever can diversify this shortage of capital by sourcing capital from other host markets. Moreover, since the subsidiaries are listed on the top stock exchanges in their respective countries and are able to sources capital from their respective securities markets, they become financially sustainable. This immense capital structure of the company is proved by the analysis of its consolidated balance sheet. Unilever’s total assets stood at EU 60285 million in 2017 against EU 56429 million in 2016 (unilever.com, 2018). This shows that the company is able to source immense capital which it invests in acquisitions of assets which it uses to operate. Thus, an evaluation of the capital acquisition strategy of Unilever reveals several salient strong points. First, Unilever is able to source immense capital from the market using this strategy. Second, the capital acquisition strategy paves way for diversification of economic risks and third, it enables Unilever in making each of its host markets almost financially self-dependent.
The strategy of merger and acquisitions is one of the most deadly strategic plans of Unilever which has attributed it with a formidable competitive advantage in the global consumer market. It can be evaluated that this acquisition and merger strategy is aligned with the next strategy of Unilever, the product line strategy. The British multinational company offer four categories of products namely, home care products, personal care products, food products and water purifier. Unilever acquires firms in different countries which in turn attributes it with the vast product line. The company has acquired firms like Lakme and Breyers which are among the top brands in the world in terms of high end beauty products and ice cream respectively. As per one of the latest news releases of Unilever, the company has acquired 75 percent stake of Equilibra, an Italian beauty and wellness brand.
Strategic plan 4: Marketing strategy:
The third powerful strategy of Unilever is its powerful product line strategy which has attributed it with top position in the global consumer market. The marketing strategy of Unilever stands on four pillars namely, its products, pricing, place and promotion. An analysis of the product umbrella strategy of Unilever shows that the company markets four types of products namely, home care, personal care, food and refreshments and water purifier. Dove, Lux, Breyer and Cif are some of the brands owned by Unilever (unilever.com, 2018). The company also offers products in packages of different sizes according to the needs of the consumers. Unilever products are available in different variants which maximize the value of the consumers’ purchase. For example, Surf Excel, one of the biggest detergent brands Unilever owns is available in packages of different sizes and in different forms like powder, liquid and bar soap. The company promotes itself using various communication channels like audio-visual and digital media (Solomon et al, 2014). As far this place strategy is concerned, Unilever products are able in high-end shopping malls small retail shops. One can evaluate that this place strategy enables Unilever to market its products before a huge consumer base. This allows the firm to generate immense revenue, a part of is paid to investors as dividends and bonus, which in turn enables Unilever to attract further investments. This analysis clearly shows that marketing strategy in fact supports the capital acquisition strategy of the company. Thus, it can be inferred that marketing strategy is the base of all the above strategies (Rezaei, S. (2015).
Unilever holds one of the top positions in the global consumer market and holds some of the costliest brands in the world. The company lags behind P&G, the largest consumer goods manufacturer and Nestle AG, which is the largest food marketing company (chinadaily.com.cn, 2018). Unilever is the largest manufacturer of antiperspirant and holds brands like Axe. As per as beauty products are concerned, the company faces tough competition from French beauty brand L’Oreal, the largest cosmetic company. The British multinational company lock horns with names like Samsung and LG in water purifier segments. An analysis of the global position of Unilever in all its four product segments would reveal that in none of the segments Unilever holds leading position. However, the company holds the top position in the market by the virtue of its unique product umbrella which prevents any one of its competitors from competing totally. For example, Nestle, the leader in the food market beats Unilever in the food segments but cannot compete with in the cleaning segments (nestle.com, 2018). Similarly, P&G can compete in the beauty segments but not in the food segment (us.pg.com, 2018). Thus, the unique product umbrella enables Unilever to counteract competition from these companies, thus allowing it to hold leading position in the market.
|
Unilever product umbrella |
Food and refreshments |
Home care |
Personal care |
Water purifier |
|
Brands of Unilever |
Knorr, Magnum, Bru, Lipton etc |
OMO, Domex, Cif |
Dove, Lux, Axe, Lakme |
Pureit |
|
Nestle |
Nescafe, Maggi |
NA |
NA |
NA |
|
L’Oreal |
NA |
NA |
L’Oreal products |
NA |
|
P&G |
NA |
Tide, Ambi Pur,, Ariel |
Pentene, Head & shoulders, Olay, Gillette |
NA |
|
Samsung, LG |
NA |
NA |
NA |
Water purifier |
The capital acquisition plan of Unilever has several positive influences on the company. Unilever along through its subsidiaries in charge of the respective host markets is listed on several top stock exchanges. The company, thus is able to float shares in the stock market to raise colossal amount of capital. First, this capital attributes Unilever with a strong financial base and enable it to carry on business operations in the international market. The immense capital base enables Unilever to conduct continuous research and development which is the second positive influence of the immense capital base (Chinazzi & Fagiolo, 2015). Unilever is thus able to bring about innovations in its existing product and develop new products to cater to the evolving needs of the consumers. The third effect of the formidable capital acquisition strategy of Unilever is that the company is able to diversify the losses it incur due to changes in economic factors like fall in the exchange rate of GBP (Gaudecker, 2017).
Influence of acquisition and merger strategy on Unilever:
The acquisitions and merger strategies of Unilever have several influences on the company. The first influence of acquisition and mergers have on the company is, they boost its asset value. This is because by acquiring firms, Unilever also acquires their intellectual property rights which also boosts value of intangible assets with the company. This is evident from the financial report of Unilever which shows that in 2016, the value of goodwill and intangible assets with the company stood at EU 27433 million (Lohrey, DiGabriele & Nicholson, 2017). The amount increased to EU 28401 million in 2017 which was also reflected in the increase of total asset value. The second influence of acquisition and mergers on Unilever is, the latter gets access to the resources of its subsidiaries. This access to the resources of the subsidiaries increases the resources at the exposure of Unilever, thus boosting its operations like manufacturing of goods. The third influence of acquisition and merger strategy is the illustrious product line. This is because, upon acquisition, Unilever gets the right to market the products of its subsidiaries and generate revenue. For Lipton which was acquired in 1972 forms an important component in the food segment of Unilever. Thus, it can be reiterated that merger and acquisitions boost the product line and ultimately the business the company earns by selling the product.
The first positive influence of marketing strategy of Unilever is that the company is able to create immense demand for its products in the market. The company as a result is able to generate huge sale from the sale of these products. This in turn generates immense revenue for the Unilever and enables it to reinvest a portion of the revenue earned towards operations like manufacturing of goods. Thus, it can be inferred from this analysis that the marketing strategy of Unilever provides the company with a strong financial base. The third influence of the aggressive marketing strategy of Unilever on the company itself is that, it renders Unilever with the strong competitive strength. It can be pointed out that it this competitive strength which enables Unilever to compete with more superior companies like P&G and Nestle. This the analysis clearly points out that the marketing strategy of Unilever attributes it with the power to sustain in the face of this strong competition in the global consumer goods market.
The following are the strategic options which can be proposed for Unilever to strengthen its global positions:
Unilever should expand its product umbrella and enter markets where none of its competitors have strong presence. For example, the company can acquire a firm which provides payment gateways to other companies. This means that Unilever would be able to monitor the inflow and outflow of funds. Unilever should also provide gateway services to other firms and earn extra revenue. It is evident that this product umbrella expansion would boost the competitive strength of Unilever against its more powerful competitors by multiple times.
Unilever in order to increase its controlling power over the consumer goods market, supply raw materials to other firms, especially its competitors like Nestle. This would enable the company to earn huge amount of revenue. Moreover, Unilever can control their production of goods by regulation the supply of raw materials to them. Thus, by becoming a supplier of raw materials to the other companies, Unilever can control the production of its competitors. Moreover, by analyzing their nature of order of raw materials, the Unilever would be able to gain idea about their production. The company as a result would be able to form more formidable business strategies which would contribute towards strengthening its competitive advantage
Grayson and Hodges (2017) point out that corporate, business and operational strategies are interrelated. For example, as far as Unilever in concerned, the apex management forms the corporate strategies. They corporate strategies in turn contribute towards formation of strong business strategies which in turn results in adoption of strong operational strategy. This analysis shows that the three strategies are dependent on each other.
Strategic models and tools would enable Unilever to implement the two strategic options discussed above and establish itself in them. The first strategic option is that Unilever must enter new product markets. The second option is that Unilever should establish itself as a significant supplier of raw materials to its competitors. It can be pointed out that both the markets are new to the company and extremely competitive. Moreover, Unilever would have to allocate immense funds in these two markets. This means that failure to establish itself in these markets would lead to immense financial loss, thus effecting practically all the significant operations. Thus, in order to prevent or minimize the risks which Unilever may face on implementing the two strategic options, the company must use strategic tools and models. The tools can include PESTEL, SWOT, balanced score card and strategy. The company can use tools like surveys to get more in depth knowledge about the market. Application of these tools would enable the company to enter the two new markets suggested above namely, payment gateways and raw materials.
The vision of Unilever is make the lives of the consumers more sustainable by offering them high quality products. The mission of Unilever is to exhibit highest standards of corporate behavior and stakeholder benefits. The goals of Unilever is to working with stakeholders like suppliers, agents and customers. The British transnational consumer goods manufacturer seeks tio ensure mutual benefit of all its stakeholders and itself.
Unilever being a dynamic company fits into the two strategic plans namely, entering a new market like payment gateway and turn initiate its own supply chain. The company lays emphasis on empowering its employees to enable them take more accurate decisions. Secondly, the Unilever acquires raw materials from the respective host countries to operate in those countries. The company has thus achieved a great deal of self-sustainability among its subsidiaries. The apex management of Unilever encourage participation of its employees in decision making. Thus, structure of Unilever is fit to be adapted according to the needs of the two strategic options discussed.
The organizational change model of Lewin has three processes, namely, unfreeze, change and refreeze. The first step of change is unfreeze which is the phase when an organization prepares itself for the change. The change is actually the outcome of several factors which force the organization undergo the change. The management initiates the process by directing the subordinates work in the new ways which challenge their prevalent conventions and beliefs. For example, Unilever received a warning from the Government of Australia to remove its skin care products containing plastic beads (abc.net.au, 2018). The British-Dutch consumer goods conglomerate released an entire range of organic skincare products of Indian under the name of Lever Ayush. This means the employees involved in production of skincare products with plastic beads had to adapt to manufacturing of Ayush which is totally organic (dailymail.co.uk, 2018). It is evident from this analysis that sudden change in the product would create resentment among the staff involved in production of those inorganic skincare products. Secondly, the branches of Unilever in the west would view this change as increasing influence of the HUL, the Indian subsidiary of Unilever. Thus, it can be evaluated that change may face opposition both from the lower level employees as well as from regional managers. The apex managers of Unilever can hold meeting with the regional heads to clear their doubts and insecurities.
The second phase of Lewin’s change management model is change. The management here deals with the insecurities of the employees and provide them the support to embrace the change. The employees receive counselling, training and mentoring which boosts their confidence in the positive outcome of the change. As far as Unilever is concerned, the human resource department offer trainings to the employees deployed in the western branches. The employees gain knowledge about Lever Ayush and its future importance in case of the company. The experts from Hindustan Unilever would train the western employees. These efforts from the side of the management enables the employees to embrace the new ways of operation (manufacture and marketing of Ayush in this case) which paves way for the next step, refreeze.
Refreeze is the phase when the employees have accepted the change and it adopts as a part of their daily operations. For example, the branches of Unilever in the western markets too start manufacturing and marketing Lever Ayush. They become sustainable in the marketing the brand in the west and exhibit high level of responsibility towards the environment.
Force field analysis is a strategic tool which business organizations analyze the factors which are driving the change and which are opposing it. For example, as far as Unilever is concerned, the factors driving the change towards marketing of organic products are government decisions, environmental concerns, future profits, competitive strength enhancement and goodwill fortification. Similarly, the factors which are opposing the change to organic products are immense initial investment, lack of knowledge among employees, feeling of insecurities among managers and wastage of materials already acquired. The apex management that plots the drivers on the left and the restraining forces on the right. The tool helps in management of change and steering of the business organization into change successfully.
The second model which the research would take into account for evaluation against the model by Kurt Lewin is the McKinsey 7S model. The model stands on three hard elements and three soft elements.
The first hard element is the strategy which consist of the purpose and methods of business operations. The second hard element, structure consists of the organizational structures on which organizations stand. The systems, the last soft element refers to the modus operandi of the business organizations.
The shared values make up the first soft element. They consist of the organizational values which the employees share. The second soft component, skills consists of the talent of the employees of organizations. The next element in the soft category are the staffs which make up the base of all operations of the organizations. The key groups of organisations like teams of employees and their managers make up the last element of the change model called style.
The model by Lewin takes in consideration three steps namely, unfreeze, change and freeze. The unfreeze phase refers to introducing the change which the followed by proper training of employees in the next step, change. The final step consist of the employees embracing the change successfully. However, in reality the process is not so straight forward and several elements within the organization have to consider. The 7S model by McKinsey takes into account these seven elements like staff, style and strategy. It can be pointed out that the apex management bodies of organizations need consider the staff they have and the skills of their present staff members. They also need to take into account organizational culture and structures into order to form an appropriate change management strategy. The MCKinsey deals with these internal factors in detail which companies should consider while implementing changes. The model by Lewin does not speaks about these factors. Lewin’s model, in comparison to McKinsey’s model lays more emphasis on the process of change rather considering the internal factors like staffs and their skills.
The second point of comparison between the change management models by Lewin and McKinsey is strategic human resource management. The model by McKinsey considers factors like staff members and their skills. The model by Lewin remains silent in these respects and emphasizes more than enforcing the change. This analysis shows the model by Lewin does not give priority to strategic human resource management methods like training of employees to enable them to embrace the changes. The 7S model speaks clearly about the management of the organizations should consider factors like staff members and their skills while implementing changes.
The analysis between the 7S model and the model by Lewin points out that the former is far more appropriate in management of organizational changes successfully. Thus, it can inferred that the 7S model is the more appropriate model for managing changes at multinational companies like Unilever.
The managers leading important departments like finance and marketing should lead their subordinates towards embracing the change. They must train and mentor their subordinates.
The multinational companies like Unilever should evaluate the implementation of strategic plans. The above discussion takes into account two strategic plans which Unilever can consider. The first plan is entering a new product market like payment gateway and the second plan is embarking on a supplier of raw materials business. The outcomes of the implementation of these two plans should show their success rates. For example, the outcome of entering new product marker would lead to increase in profits. Thus, if Unilever experiences profit, it means the strategic is successful. However, if the entering a new product market like payment shows that Unilever is incurring losses, it means the company should considering changing the plan (Gaudecker, 2015).
References:
Act on microbeads or I’ll ban them, Greg Hunt warns cosmetic companies. (2018). Retrieved from https://www.abc.net.au/news/2016-02-29/microbeads-ban-voluntary-environment-greg-hunt/7207482
Chinazzi, M., & Fagiolo, G. (2015). Systemic risk, contagion, and financial networks: A survey. Institute of Economics, Scuola Superiore Sant’Anna, Laboratory of Economics and Management (LEM) Working Paper Series, (2013/08).
Gaudecker, H. M. V. (2015). How does household portfolio diversification vary with financial literacy and financial advice?. The Journal of Finance, 70(2), 489-507.
Grayson, D., & Hodges, A. (2017). Corporate social opportunity!: Seven steps to make corporate social responsibility work for your business. Routledge.
Ice Cream. (2018). Retrieved from https://www.nestle.com/brands/ice-cream
Lohrey, P. L., DiGabriele, J. A., & Nicholson, J. R. (2017). A Risk Assessment of Intangible Asset Valuation: The Post-Hoc Association between Goodwill Impairments and Risk Hazards in Mergers and Acquisitions.
Marmitegate is OVER! Unilever and Tesco agree a peace deal. (2018). Retrieved from https://www.dailymail.co.uk/news/article-3835034/Major-brands-axed-Tesco-shelves-row-supplier-Unilever-demanded-10-cent-price-rise-falling-pound.html
Our Brands | P&G. (2018). Retrieved from https://us.pg.com/our-brands?filterdata=Beauty
Rahman, O., Wong, K. K. K., & Yu, H. (2016). The effects of mall personality and fashion orientation on shopping value and mall patronage intension. Journal of Retailing and Consumer Services, 28, 155-164.
Rezaei, S. (2015). Segmenting consumer decision-making styles (CDMS) toward marketing practice: A partial least squares (PLS) path modeling approach. Journal of Retailing and Consumer Services, 22, 1-15.
Solomon, M. R., Dahl, D. W., White, K., Zaichkowsky, J. L., & Polegato, R. (2014). Consumer behavior: Buying, having, and being (Vol. 10). London: Pearson.
Top 10 largest consumer goods companies worldwide[10]- Chinadaily.com.cn. (2018). Retrieved from https://www.chinadaily.com.cn/business/2016-07/20/content_26150033_10.htm
Unilever Annual Report and Accounts 2017. (2018). Retrieved from https://www.unilever.com/Images/unilever-annual-report-and-accounts-2017_tcm244-516456_en.pdf
Unilever CVA Stock | A0JMZB | NL0000009355 | UNI3 | Overview | boerse-stuttgart.de. (2018). Retrieved from https://www.boerse-stuttgart.de/en/Unilever-CVA-stock-NL0000009355
Unilever PLC Stock Chart. (2018). Retrieved from https://www.nasdaq.com/symbol/ul/stock-chart?intraday=off&timeframe=5y&splits=off&earnings=off&movingaverage=None&lowerstudy=volume&comparison=off&index=&drilldown=off
UNILEVER share interactive chart (ULVR) – London Stock Exchange. (2018). Retrieved from https://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary-chart.html?fourWayKey=GB00B10RZP78GBGBXSET1
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