403828145 Unilever Case Analysis 2017 pdf PDF

Preview

Summary

Download 403828145 Unilever Case Analysis 2017 pdf PDF

Description

CASE ANALYSIS

Panmore Institute ©2017 All rights reserved

Unilever: Mission Statement & Vision Statement, Analysis & Recommendations UPDATED ON FEBRUARY 21, 2017 BY JUSTIN YOUNG

A Unilever building in Englewood Cliffs, New Jersey in 2010 (Photo: Public Domain) Unilever’s vision statement and mission statement guide business growth in the consumer goods industry, although some changes can enhance these corporate statements.

Unilever’s mission statement and vision statement are a basic foundation for the success of the company’s consumer goods business. The corporate mission statement indicates the strategic approaches of the company. In Unilever’s case, the mission statement determines how the business addresses the needs of its target consumers. On the other hand, the corporate vision statement provides the development direction of the organization. Unilever’s vision statement broadly presents what the company needs to do to succeed in the long term. Considering the company’s position as one of the biggest consumer goods firms in the world, Unilever’s mission statement and vision statement remain relevant and appropriate to global market conditions. Unilever’s vision statement reflects how the company grows and maintains its success in the global consumer goods market. The mission statement shows the value of Unilever’s products and how these products benefit customers.

Unilever’s Vision Statement Unilever’s corporate vision is “to make sustainable living commonplace. We believe this is the best long-term way for our business to grow.” This vision statement puts emphasis on sustainability, especially among consumers. The following components are notable in Unilever’s vision statement: 1. Commonplace sustainable living 2. Best long-term way 3. Business growth Commonplace sustainable living is a core component in Unilever’s corporate vision statement. This component shows the company’s efforts in changing its products to suit current market conditions. For example, through sustainable design for home care and personal care products, Unilever helps consumers reach their goals to integrate

sustainability in their lives. The corporate vision also states that commonplace sustainability is the best long-term way for the business. Unilever understands the importance of sustainability and other market trends shaping the industry. Moreover, the vision statement reflects the company’s view of sustainability as a way to maintain business growth. This vision statement aligns with Unilever’s corporate social responsibility strategy to address business stakeholders in the consumer goods industry.

Unilever’s Mission Statement Unilever’s corporate mission is “to add vitality to life. We meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life.” This mission statement underscores how the company satisfies customers in various aspects of their lives. The following are the significant components in Unilever’s mission statement: 1. Adding vitality to life 2. Meeting everyday needs for nutrition, hygiene, and personal care 3. Helping people feel good, look good, and get more out of life Adding vitality to life is a general indicator of business strategy in Unilever’s corporate mission statement. Such vitality is the value that consumers can expect from the company’s products. The corporate mission also specifies the aspects of life where such vitality is added. For example, Unilever’s food products address consumers’ vitality needs in terms of nutrition. Furthermore, through these products, the company attracts customers who want to feel good, look good, and get more out of life. The mission statement’s specification of the types of products provides a foundation for the product mix in Unilever’s marketing mix.

Unilever’s Vision & Mission – Recommendations Unilever’s vision statement implies the desired condition of being a leader in bringing sustainable living to customers through consumer goods. However, the statement does not specify the desired condition of the company as a business organization. A sound corporate vision statement contains details on the desired future situation of the organization. For example, it is necessary to specify the company’s market position in the future, to guide organizational development. Thus, a recommendation for Unilever’s vision statement is to improve it by including additional information about market position or a leadership role in the consumer goods industry. Unilever’s mission statement includes detailed information of what the business does and must do. For example, the company adds vitality to life through products that address consumers’ needs in nutrition, hygiene, and personal care. In this regard, the corporate mission statement satisfies standards that require specificity on general strategic approaches. However, a recommendation is to enhance Unilever’s mission statement by adding more information on how the company strategically achieves its aims in adding vitality to consumers’ lives. References • •

Unilever – Investor Relations – Annual Reports and Accounts Overview. Ekpe, E. O., Eneh, S. I., & Inyang, B. J. (2015). Leveraging Organizational Performance through Effective Mission Statement. International Business Research, 8(9), 135.

• •

King, D. L., Case, C. J., & Premo, K. M. (2014). Does Company Size Affect Mission Statement Content? Academy of Strategic Management Journal, 13(1), 21. Kirkpatrick, S. (2016). Build a Better Vision Statement: Extending Research with Practical Advice. Rowman & Littlefield.

Unilever: PESTEL Analysis & Recommendations UPDATED ON FEBRUARY 21, 2017 BY NATHANIEL SMITHSON

Unilever’s bath salts sold as Radox (Photo: Public Domain) A PESTEL analysis of Unilever shows growth opportunities based on external factors in the consumer goods remote/macro-environment.

Unilever’s ability to address external factors in its remote or macro-environment contributes to business prominence in the global consumer goods market. This PESTEL analysis identifies such external factors. The PESTEL Analysis model is a tool for managers to understand the influence of the external environment on businesses. In the case of Unilever, these external factors vary significantly, considering the international scope of the business. Nonetheless, the company must focus on maximizing business performance. Unilever can achieve higher business performance through strategies that overcome the most significant threats and exploit the biggest opportunities shown in this PESTEL analysis. This PESTEL analysis of Unilever outlines growth opportunities in the international consumer goods market. While the company faces threats in its remote or macroenvironment, growth is achievable by focusing on product innovation, among other approaches.

Political Factors Affecting Unilever’s Business The political landscape affects Unilever’s performance. This section of the PESTEL analysis identifies the impact of governments on firms’ remote or macro-environment. The following political external factors are significant in Unilever’s consumer goods business: 1. Political stability of most countries (opportunity) 2. Political issues in the European Union (threat) 3. Growing free trade relations (opportunity)

The political stability of most countries presents opportunity for Unilever to grow in these markets. For example, the political stability of the United States helps minimize challenges in the company’s strategic implementations in the country. On the other hand, the political issues in the European Union are a potential threat against Unilever’s operations in the region’s consumer goods market. Nonetheless, the company has opportunity for global growth based on the expanding free trade relations, especially those involving developing countries. Based on the political external factors in this section of the PESTEL analysis, there are opportunities generally available in the market, although Unilever must address the challenges linked to the political condition of the European Union.

Economic Factors Important to Unilever Unilever’s business performance depends on the situation of economies around the world. This section of the PESTEL analysis outlines the influence of economic conditions on firms and their remote or macro-environment. The following economic external factors are determinants of Unilever’s performance in the consumer goods industry: 1. Increasing wages in developing countries (opportunity & threat) 2. High growth of developing countries (opportunity) 3. Economic stability of developed countries (opportunity) The increasing wages in developing countries present the opportunity for Unilever to profit more from higher potential sales, as consumers gain higher disposable incomes. However, the same external factor is a threat in terms of increasing costs, considering that the company has many manufacturing facilities located in developing regions. Nonetheless, Unilever can expect business growth, as these countries grow in terms of consumer goods market size and value. For example, China presents major growth opportunity for the company. Moreover, the economic stability of developed countries cushions the business from risks in other markets, while facilitating gradual but steady growth. Thus, this section of the PESTEL analysis of Unilever highlights opportunities for global growth.

Social/Sociocultural Factors Influencing Unilever’s Business Environment Sociocultural trends and issues affect Unilever’s business performance and the remote or macro-environment. The socially driven behavioral aspect of markets is considered in this section of the PESTEL analysis. The sociocultural external factors significant in Unilever’s consumer goods business are as follows: 1. Rising health consciousness (opportunity) 2. Rising environmentalist behaviors (opportunity) 3. Gradual dismantling of the gender divide (opportunity) Unilever can grow through products that directly address consumers’ increasing interest in healthful products. In addition, rising environmentalist behaviors present an opportunity for the company to attract more consumers by improving its environmental impact. For example, Unilever can minimize its energy consumption by adopting new and more energyefficient technologies. Also, the company can grow through higher sales based on improving incomes among female consumers worldwide. The external factors in this section

of Unilever’s PESTEL analysis show the importance of product innovation in growing the consumer goods business.

Technological Factors in Unilever’s Business Unilever depends on available technologies to support its consumer goods business. This section of the PESTEL analysis identifies the impact of technological trends on firms and their remote or macro-environment. In Unilever’s case, the following technological external factors are significant: 1. Rising business automation (opportunity & threat) 2. Rising R&D investments (threat) 3. Decreasing cost of transportation based on technological efficiencies (opportunity & threat) Rising business automation is an opportunity for Unilever to increase operational efficiency. For example, new business processing equipment can enhance inventory monitoring to support supply chain and distribution efficiencies (Read: Unilever’s Operations Management). However, the same technological external factor is a threat because it increases the competitiveness of other firms, including small ones in local markets. On the other hand, rising research and development (R&D) investments threaten Unilever because it also increases the competitive advantage of other firms in the consumer goods industry. Nonetheless, the decreasing cost of transportation leads to lower operating costs, which contribute to business growth. Still, the decreasing cost of transportation is a threat because it contributes to the competitiveness of other firms. This section of the PESTEL analysis of Unilever highlights growth opportunities and competitive threats based on technological trends in the remote or macro-environment.

Ecological/Environmental Factors Affecting Unilever Ecological trends and conditions influence Unilever’s remote or macro-environment. The effects of the natural environment and related issues are considered in this section of the PESTEL analysis. The following ecological external factors significantly affect Unilever’s consumer goods business: 1. Rising interest in business environmentalism (opportunity) 2. Increasing business efforts on sustainability (opportunity) 3. Increasing complexity of environmental programs (opportunity) The rising interest in business environmentalism is an opportunity for Unilever to improve its environmental programs to attract consumers concerned about the environment. In relation, the company can enhance its sustainability programs to strengthen its competitiveness against other firms in the consumer goods industry. Unilever’s corporate social responsibility strategy must effectively implement these programs throughout the organization. For example, the strategy must consider product innovation and internal business processes to further reduce business environmental impact. These efforts should also support Unilever’s ability to satisfy increasingly complex environmental programs. Such external factor is an opportunity for the company to improve its competitive advantage through corporate responsibility. Based on the condition of the remote or macroenvironment shown in this section of Unilever’s PESTEL analysis, there are opportunities to

improve business performance by making the organization more environmentally sustainable.

Legal Factors Facing Unilever Unilever must satisfy regulations to minimize barriers to its consumer goods business. This section of the PESTEL analysis determines the impact of legal systems on firms’ remote or macro-environment. Unilever must satisfy the issues based on the following legal external factors: 1. Increasing complexity of environmental regulations (opportunity) 2. Strengthening international patent laws (opportunity) 3. Strengthening consumer rights laws (opportunity) Unilever has an opportunity to enhance its corporate image by matching the organization’s corporate social responsibility strategy with environmental regulations. In addition, strengthening international patent laws can facilitate the company’s growth. For example, new patent laws in developing countries help reduce patent-related issues Unilever experiences in its remote or macro-environment. Furthermore, stronger consumer rights laws create an opportunity for the company to improve its customer-service quality, along with product quality standards. These efforts can increase the attractiveness of Unilever’s brands in the consumer goods market. The external factors in this section of the PESTEL analysis of Unilever indicate the benefits of improving legal systems worldwide.

Unilever’s PESTEL Analysis – Recommendations This PESTEL analysis reflects a number of opportunities and threats that Unilever must prioritize in its strategies for growth and global expansion in the consumer goods market. A recommendation is that the company’s strategies must include the external factor of rising health consciousness among consumers. Unilever can take this factor as an opportunity to improve its food products. It is also recommended that the company must improve its sustainability programs to address opportunities regarding business sustainability. Another recommendation is to take rising business automation as a significant threat that empowers Unilever’s competitors, especially smaller ones in local markets. For example, local companies can increase their competitive advantage by automating their production processes. Given such issues based on this PESTEL analysis of Unilever, global growth with innovation and business sustainability require strategic focus. References •

• • • •

Dockalikova, I., & Klozikova, J. (2014, November). MCDM Methods in Practice: Determining the Significance of PESTEL Analysis Criteria. In European Conference on Management, Leadership & Governance (p. 418). Academic Conferences International Limited. Gillespie, A. (2007). PESTEL analysis of the macro-environment. Foundations of Economics, Oxford University Press, USA. Housing Industry Association (2011). An Introduction to PESTLE Analysis. HIA Ltd. Murphey, M., & Gause, R. (1974). UCF Research Guides. Industry Analysis. PESTLE Analysis. Business Horizons, 17(5), 27-38. Roper, K. (2012, November). BIM Implementation: PESTEL Drivers & Barriers (Cross-national Analysis). In World Workplace 2012. IFMA.

• • •

U.S. Department of Commerce – The Consumer Goods Industry in the United States – Select USA. Unilever – Investor Relations – Annual Reports and Accounts Overview. Yüksel, I. (2012). Developing a multi-criteria decision-making model for PESTEL analysis. International Journal of Business and Management, 7(24), 52.

Unilever: Five Forces Analysis (Porter’s Model) & Recommendations UPDATED ON FEBRUARY 21, 2017 BY DANIEL KISSINGER

A Unilever factory in Poland. (Photo: Public Domain) A Five Forces analysis of Unilever shows competition and consumers have the biggest impact on the firm, based on external factors in the consumer goods industry environment.

Unilever effectively competes in the global consumer goods market. A Five Forces Analysis (Porter’s model) of the company shows the need to strategically prioritize competition and the bargaining power of customers in the industry environment. Michael Porter’s Five Forces Analysis model is a management tool for understanding the impacts of external factors in a firm’s environment. In Unilever’s Five Forces Analysis, competitive rivalry is viewed as one of the strongest external forces, along with the bargaining power of buyers. To ensure long-term success, the company must address the issues related to these forces. Unilever’s market position and organizational strengths are adequate to address such forces. A Porter’s Five Forces analysis of Unilever identifies competition and consumers as the most important forces in the company’s industry environment. The external factors related to these forces have a direct impact on Unilever’s financial performance in the consumer goods market.

Competitive Rivalry or Competition with Unilever (Strong Force) Competition is a major force in Unilever’s industry environment. This section of the Five Forces analysis identifies the external factors that present the impact of firms on each other. The strong force of competitive rivalry against Unilever is based on the following external factors and their intensities: • High number of firms (strong force) • High aggressiveness of firms (strong force) • Low switching costs (strong force) There are many firms operating in the consumer goods industry. This external factor imposes a strong force on Unilever. In addition, these firms are generally aggressive, further adding to the intensity of competition. Unilever also experiences tough competition because of low switching costs. For example, it is easy for consumers to switch from one

firm to another. Thus, a high level of competition is shown in this section of Unilever’s Five Forces analysis, highlighting the need to consider competitive rivalry as a high-priority force in the company’s industry environment.

Bargaining Power of Unilever’s Customers/Buyers (Strong Force) Unilever’s business and industry environment depend on the response of consumers to its products. The influence of buyers on business performance is considered in this section of the Five Forces analysis. Unilever must address the following external factors that lead to the strong force of the bargaining power of customers: • Low switching costs (strong force) • High quality of information (strong force) • Small size of individual buyers (weak force) The low switching...