The report focuses on the trading activities and operations of Unilever which has been selected in the report. Unilever is one of the largest companies in the food and beverage industry in the world. It deals with various food and personal care products in the market. Further, the report outlines the several strategies which are used by Unilever in order to eliminate the cultural differences within the organization. The strategies also help to increase revenue and profit of the firm. It explains that how the firm is using strategies to maintain a balance between globalization and localization. Unilever uses corporate-level strategies, business level strategies and growth strategies in order to overcome the competitors in foreign countries.
Unilever is a Dutch British transnational consumer’s products corporation with its headquartered is located in London, United Kingdom. The company renders various food, beverages and personal care products. It is the biggest manufacturer of the food spreads like margarine. It is one of the largest corporations measured by revenue and profit. The company was founded in 1930. It is the seventh most valuable company in Europe. Unilever offers its products in more than 190 countries with employed approx 169,000 employees in the organization. The firm manages and operates its trading activities and operations in China, India, Netherlands and the United States. The main aim of the company is to provide unique and delicious food and beverage products to the consumers with maintaining sustainability in the organization (Unilever, 2017). The firm is delivering its products in the global market with reducing environmental footprint. The company works with a large number of suppliers in order to attain the long-term goals and objectives of the firm. In today’s era, the company is increasing its revenue and profits globally. It is the dual listed company in the UK.
(Source: https://www.statista.com/statistics/269190/global-revenue-of-the-unilever-group-since-2007/)
The above diagram shows that Unilever is maximizing its revenue day by day. In this way, the current performance and strategies of the organization have been improved. The operating profit of the company has increased by approx 1,922 million to 7,167 with including a higher level of profit within the organization. The net profit is 28% higher than the previous year and net cash flow from operations has also increased. The company follows a four-step approach for outsourcing in order to attain the growth and success of the organization. In addition outsourcing increases and maximizes the organizational success and growth worldwide. The four-step approach includes prioritizing, trust, monitor, and select. The functioning areas of the organization divided into four departments such as consultation, maintenance, distribution, and operation department. Unilever uses licensing, alliances, franchising and foreign direct investment strategies in order to expand and flourish its business globally. Further, the company maintains records of advancement in every field of operations. Now it is assumed that financial position of the company is very strong and dynamic. The financial objective of the company is to increase the profit of the firm with improving capital and tax efficiency. The company is able to attract more consumers worldwide by rendering delicious and high quality of the food and beverage products. The firm maintains a sustainable human resource management to run the business activities and operations smoothly. The top management and managers also focus on the needs and requirements of the employees in order to increase the efficiency and effectiveness within the organization. Apart from this, effective and dynamic leadership styles are used by Unilever maintain a control over the subordinates. The leaders motivate and encourage employees for doing work effectively and efficiently. Now it can be said that the company is successfully exploring its business activities worldwide (Sim, King, and Price, 2016).
The company uses various types of strategies in order to attain the long-term mission and vision of the firm. Therefore, various business level strategies and corporate level strategies are used by the company. Along with this, the company uses direct exporting strategy, franchising, licensing, corporate level strategy and joint venture strategy. The generic strategies are used by the company to overcome the competitors in the global market. The strategies of Unilever have been discussed below (Spry & Lukas, 2016).
Unilever generic strategy: The Company uses generic strategy to beat the competitors in the global market. The firm focuses on the products to stand out against the competitors in the world. Further, it also focuses on the needs, requirements, and expectations of the consumers in order to accomplish the goals of the organization. Further, the generic strategy also helps to grow and increase Unilever revenue and profit in developing countries. The company also uses pestle analysis to evaluate and identify the strengths and weaknesses of the competitors globally. The generic strategy also helps to improve and enhance the financial performance of the company globally (Merchant, 2014).
Intensive growth strategies: Unilever uses several types of the intensive growth strategies to gain the competitive benefits in the market. The intensive growth strategies have been discussed below.
Corporate level strategy: The corporate level strategy is used by the company in order to gain the long-term success and growth in the market. The human resource management, financial performance, mergers, and acquisitions are the important part of the corporate level strategy. Unilever also monitors on internal development and enhancement in order to provide the best quality to the consumers. The company has various research and development centers which located around the world. These R&D centers help to identify and evaluate the needs, trends, and tastes of the customers (Hrebiniak, 2013).
Business level strategy: The business level strategy helps the company to achieve the core competencies of the company and it also helps to fulfill the needs and preferences of the customers. It also helps to gain the competitive position in the company by utilizing the core values and competencies within the organization. The business level strategy is developed by the Michael Porter in order to hit the competitors globally. This strategy also helps to improve the overall market performance as well as business performance. The business level strategies include cost leadership, differentiation and focus strategy (Campbell, Edgar, and Stonehouse, 2011).
The cultural difference management is the important and essential management in a cross-cultural context. Unilever provides cross-cultural training to the employees to eliminate the cross-cultural differences within the organization. Such type of training is essential to expand the trading activities and operations in various countries. None of the company can survive its business globally without providing cross-cultural training to the employees. The cultural difference management evaluates and examines the human behavior to understand the culture of other countries. Unilever uses corporate level strategies to overcome the cultural issues within the organization. The cross-cultural management is implemented by the company to reduce and eliminate the cross-cultural barriers in the organization. It also helps to build and develop effective and dynamic communication with customers in the market. The cross-cultural management helps to maintain coordination and cooperation in the organization (Rosinski, 2010).
Apart from this, the company needs to promote and enhance the open communication within the organization. It also maintains strong and effective relationship with customers in order to increase the sales of the food and beverage products in the global market. The corporate level strategies provide knowledge of the foreign culture. By using cross-cultural management, the company is able to carry its business activities and operations in US, China, India, Canada and some other countries (Barak, 2016). Apart from this, managers need to deal with complex cross-cultural issues and barriers in order to gain the competitive benefits in the market. In addition, top management and leaders manage the cultural difference by using corporate level strategies within the organization. It helps to motivate and encourage workers to do work in foreign countries with more efficiently and effectively. Now it is assumed that Unilever can use various strategies to reduce and prevent the cross-cultural differences within the organization. It also helps to make a good and dynamic financial position in the foreign country (De Mooij and Hofstede, 2011).
Corporate social responsibility is the business approach and strategy which contributes to sustainable development by rendering social, environmental and economic benefits for all the stakeholders. It helps to maintain sustainability in the environment as well as the organization. Unilever implements a systematic strategy in order to fulfill the corporate social responsibility (Galpin, Whitttington, and Bell, 2015). It also helps to satisfy the needs and requirements of the consumers in the market. The company uses several strategies in order to carry the CSR and sustainability within the organization. CSR address the interest of the stakeholders such as suppliers, communities, employees, investors, and consumers (Peloza & Shang, 2011). Various strategies are used by the company in order to conduct CSR activities globally. Unilever uses business-level strategies to enhance and increase the CSR activities in the organization. Thus, the company is able to fulfill the corporate social responsibilities by improving and enhancing productivity and efficiency of the employees (Urip, 2010). If the company wants to explore its business in several countries then it should maintain a strong and effective relationship with suppliers, business partners, and consumers. Along with this, the firm can use strong and effective brand image to increase consumer’s awareness in the organization (Ditlev-Simonsen, & Wenstop, 2013). CSR is one of the significant parts of the Unilever. The company uses growth strategies to find out the CSR activities of the company in the world.
The company uses various types of strategies to enter into a foreign market. The company uses direct marketing strategy for entering a new market and it is more appropriate and unique strategy to attract more customers in the global market. Further, the company needs to set up a joint venture to enter into a foreign market. But there are numerous factors which affect the entry mode strategy within the organization. The company uses the following strategies for entering new markets which have been discussed below (Nielsen and Nielsen, 2011).
Direct marketing: It is the important strategy to enter into the new market. The companies establish sales programs under this strategy to gain the competitive advantages in the market. The distributors and agents work together with the company to increase the revenue of the firm. Thus, agents and distributors monitor and identify the needs and desires of the customers in the global market (Peter, and Donnelly, 2011).
Licensing: It is the complicated option where a company transfers the rights to the use of products and services to other company in the foreign country. For example, Hindustan Unilever operates and manages its trading activities and operations in India as the same name of Unilever. The company uses this strategy to expand its business globally.
Franchising: It is the North American process to expand the business operations in foreign marker. Under this strategy, the company uses various types of business model to enter into a new market. It also helps to build and develop a good image in other country.
Joint venture: The firm uses joint ventures for entering a foreign market. Under this strategy, two companies agree to work together in a specific market in order to gain the long-term mission and vision of the firm. It is very effective and dynamic strategy to set a new business in a foreign country (Ripollés, Blesa, and Monferrer, 2012).
Turnkey projects: Turnkey projects are important for providing services such as environmental consulting, engineering, architecture and construction. The government provides support to implement the turnkey projects in the foreign country.
Greenfield investment: Greenfield investment is done by the company to enter into an international market. A Greenfield investment is an option where the company buys land and operates the trading activities and operations in the foreign country. It helps to reduce the risks and key challenges of the market. Now it is assumed that Unilever uses various types of strategies to enter into the foreign market. It also helps to maximize and increase the revenue of the company with maintaining sustainability within the organization (Meyer et al, 2009).
Globalization may be defined as a process to increase the interaction of the people through the growth and success of the international flow of money, culture, and idea. It is the economic procedure of integration which has cultural as well as social aspects. It also includes goods, services, technology, data and economic resources. It is the free movement of the goods, products, services, and people across the world. On the other hand, localization is the practice and process of adjusting a product’s functional assets and characteristics to accommodate the cultural, political, language and legal differences of a foreign country or market. Unilever uses business level strategy and corporate level strategy to reduce the negative impact of the globalization and localization. By using corporate-level strategies, the company is able to maintain corporation and collaboration within the organization. Thus, various strategies are used by the company in order to reduce the risk and challenges of the firm. Localization helps to increase and enhance the market share of the company in the global market. Further, the company is able to stand out against the competitors globally by maintaining a balance between globalization and localization (Kraidy, 2017).
The main advantage of the localization is to avoid the cultural and caste taboos in the foreign countries. Further, it also improves the ranking and position of the company by using effective and unique globalization as well as localization strategies. Along with this, it helps to popularize the brand of the company globally. On the other hand, globalization promotes and encourages the internal cooperation in the global market. It also reduces the international poverty and helps to spread and expand the technology and innovation. It increases the profitability and revenue of the company. Unilever uses various strategies to reduce the adverse impact of the localization and globalization within the organization. There is a close relationship between localization and globalization in the market. The corporate level strategies help to maintain a balance between globalization and localization (Mishkin, 2009). The company also uses standardization strategy to eliminate and reduce the negative impact of the localization and globalization.
Sustainable development is essential for every company in order to increase and enhance the goals and objectives of the firm. Thus, it is recommended that environmental law must be implemented to enhance and increase the sustainable development of the organization. It also reduces the negative impact of the toxic chemicals and materials in the global market. Along with this, the government should initiate the programs and plans to create public awareness and to enhance the sustainable development (Epstein and Buhovac, 2014). Along with this, effective and dynamic strategies must be used by the company to maintain sustainability at the workplace. Unilever must conduct programs and campaigns to increase and enhance the awareness of the people in the global market. In addition, the environmental objectives must be kept in mind while improving and enhancing the sustainable development in the foreign market. Further, leadership styles should be used and implemented by the company in order to build and enhance the sustainability of the organization. The sustainable development helps to utilize the natural resources in the organization. Along with this, economic growth can be achieved by enhancing and improving the sustainable development (Bass and Dalal-Clayton, 2012.). In addition, the company should focus the advertisement and distribution strategies in order to increase and enhance the sale of the company. It should build and develop effective and dynamic human resource management in order to build and enhance sustainable development.
Conclusion
On the above aforesaid information, it has been concluded that Unilever is one of the significant brands in the international market. The company uses several strategies and approaches to address and reduce the various key issues and challenges in the organization. CSR and sustainability are maintained by Unilever to provide satisfaction to the shareholders in the global market. The firm maintains a balance between localization and globalization and it also manages the cultural difference by using effective and dynamic strategies in the global market. Along with this, recommendations and suggestions have been given in order to improve and enhance the sustainable development in the foreign country as well as the home country. In this way, the company is becoming a global leader in the market.
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