Name: ________________
Course Name: ___________________
Business Report on UNILEVER
Integration of Balance Scoreboard Framework
(BSF) in the Business Operations.
Executive Summary
The company to investigate the business competitiveness critically is Unilever,
a global corporation founded by the Anglo-Dutch parent business that owns and
manages many consumer goods brands worldwide in cleaning agents, drinks,
meals, and personal care. Unilever also owns more than 400 brands that are sold
in 190 countries. The organization, which is headquartered in the United
Kingdom, was founded in 1896. The main reason for choosing Unilever to
examine its strategy is its global network of activities.
Furthermore, the business has one of the biggest customer inclinations for its
consumer goods items. It maintains a strong power in the market, compared to
its rival in the industry such Reckitt Benckiser and P&G. The study of the
company's operations and business model will be interesting since it may
provide knowledge of the company's strategic direction for its vast scale and
operation and more extensive consumers of over 1Billion consumers. As a
result, the emphasis of this study is on assessing business-level initiatives using
the balanced scorecard, as the report analyses how Unilever compares to its
competitors and how it keeps up with technology and market developments.
Business-level strategies focus on how a firm satisfies and attains its consumers
and delivers products and services to fulfill their requirements while increasing
profit margins. As a result, the study defends Unilever's differentiation approach
as a successful business-level strategy and the company's adoption of a product
development plan to effectively fulfill and cater to customer requirements by
offering a diverse variety of new goods to attract worldwide consumers.
Introduction
In today's constantly changing, complicated economic environment, traditional
performance metrics are inadequate to evaluate performance and steer
companies. Performance measurement must be linked to strategy, and success
must be measured to encourage good future outcomes and represent previous
performance. Over the past eleven years, the Balanced Scorecard has evolved
into a robust tool for implementing strategy and constantly monitoring strategic
performance. Creating a strategy-focused organization is an essential and
difficult cultural shift for many companies.
Businesses and companies that have effectively adopted the Balanced Scorecard
Framework (BSF) have seen dramatic improvements in their business
operations and profitability by leveraging the financial performance, rising to
the top of their industry groups in many instances. To be successful, several
elements of Balanced Scorecard development rely on the efficient use of
technology. A variety of software programs have been created to aid in the
automation of the Balanced Scorecard. The framework offers a comprehensive,
adaptable, and cost-effective method for using the Balanced Scorecard and
getting better results from people, processes, customers, and technology.
Consequently, performance measurement is an important analysis that includes
situational information analysis, remedial measures, and outcome assessment.
The BSF is a tried-and-true outcome evaluation tool. It's a system and technique
for strategic performance management. It's a framework for developing
communication, translating strategy into practical terms, and analyzing
implementation effectiveness.
The history, development, and essential components of the Balanced Scorecard
are briefly described in this paper. It outlines the critical criteria for
implementing a framework. Finally, the UNILEVER Balanced Scorecard
Framework (BSCF) is presented as a method to use a company's current
operations and skills to create and implement a scoreboard in a timely, cost-
minimization, scalable, controllable, and dependable manner.
Element of the balanced Scoreboard
The Balanced Scorecard is a strategy description and communication tool. It's
also a method of deciding which performance indicators will help in the certain
implementation strategy. According to Dr. Norton, the BSF is as follows: "A
balanced scorecard is a collection of connected goals, measurements, targets,
and activities that together define an organization's strategy and how it may be
implemented." It analyzes anything as complex and ambiguous as strategy and
turns it into something concrete and understandable."
The BS framework, developed by Kaplan and Norton, examines the process and
results in management from different angles. There are four viewpoints in the
traditional Balanced Scorecard:
Categories Focus Points
Financial How the company should appear in front of
stakeholder and present the financial performance.
Customer How to appear to the customer to achieve the
vision?
Process What business procedures must we excel at to
satisfy our consumers and shareholders?
Learning and Growth How to change and improve to sustain and
compete in the industry and achieve our vision?
Company background
Unilever is one of the world's most extensive fast-moving consumer goods
(FMCG) firms. Lynx, Ben & Jerry's, Dove, Hellmann's, PG Tips Sure, Knorr,
and Magnum, are just a handful of the world's most well-known brands.
Unilever manages the complete supply chain for goods from product research
and sourcing to manufacturing, distribution, marketing. Worldwide, 165,000
individuals manufacture brands sold in 190 states and utilized by two billion
consumers every day. In the 1890s, Lever Brothers founder William Hesketh
Lever penned his ideas for Soap, an important new product that helped promote
cleanliness and hygiene in England. It was "to make cleaning ordinary; to
reduce labor for women; to promote health and contribute to personal beauty, so
that individuals who use our goods may have a more pleasant and fulfilling
life." Unilever's culture has always included a sense of purpose and goal. They
are still assisting individuals in the twenty-first century in looking well, feeling
good, and getting more out of life.
Enterprise & Technology Solutions Support (ETS) is Unilever's worldwide
business component in charge of business operations, solutions, innovations,
and technological services.
ETS' purpose is to offer outstanding services across the world that help Unilever
succeeds in the market by:
placing the company's objective at the center of everything they do.
Improving the cost-minimizations, implementing global solutions across
Unilever to satisfy users' requirements
Building a competitive manufacturing company that allows individuals to
offer the best by continually improving the products and reducing the cost
of automating the manufacturing process.
establishing win-win partnerships with chosen suppliers to fulfill current
and future needs
UNILEVER Generic Strategy & Intensive Growth
Strategies
Unilever's generic strategy (based on Michael Porter's model) allows companies
to adopt the competitive edge by satisfying consumer preferences and providing
them with a better experience. The strategies adopted in Porter's model to
guarantee industries' competitiveness are essential for the development and
robustness of the company. The competitive edge to the company is the
efficient product development process with the help of research to assess the
market demand. Furthermore, the company sustains its power through a mixture
of different marketing tactics. The company focuses on its aggressive expansion
plans based on consumer needs and demand. Unilever's worldwide product
usage will thrive and compete with other brands due to its competitive strategy
and greater integration into the consumer markets.
Unilever's uniqueness among the consumer is its broad differentiation. The
broad differentiation makes visible the company's products from those of the
rivals.
Unilever's Generic Strategy (Porter's Model)
Cost Leadership Differentiation
Competitive
Advantage
Cost Focus Differentiation Focus
Cost Differentiation
Figure 1 – Porter's Generic Strategies Framework
Unilever's Intensive Growth Strategies
Market Integration (Main Strategy)
Unilever's rapid growth strategy is due to targeting the potential market around
the world. The firm increases its sales volume under intense strategy to enhance
revenue and eventually the business growth. The company promotes personal
and home care products aggressively in areas such as the US and Canada. Such
aggressive tactics boost the company's potential to attract clients from rival
companies with similar effects. The approach is implemented using a generic
differentiation method to produce goods more competitively and attract
consumers.
Product Development (Secondary Strategy)
The secondary strategy is product development for the company's growth. The
business implements the expansion in new markets and customers by offering
different products that appeal to customers. For example, to increase Unilever's
market share, the company launched a new or better version of personal care
products over time. The differentiation product method makes the products
unique and distinctive to the customer that helps in the company's growth. The
purpose of the product development is to expand the business and attract new
consumers.
Diversification
Integrating and launching different products into different markets is a critical
growth strategy for the company. The diversification helps the firm to target
different people with varying choices of products. This method helps in
discovering potential markets and target new consumers. In 2009-2010,
Unilever adopted various companies to diversify into different products and
markets. Sara Lee Corporations was adopted under the portfolio of Unilever.
The integration into various markets is due to a competitive differentiation
strategy that seeks to adopt distinctive qualities into products that appeal to
potential consumers.
Market Development
The market development method is utilized to adopt growth strategies to help
discover new products' markets. Entrance into a new market increases the
competition, and the brand has the power to win new customers. The company
can expand its presence in baby care products after analyzing the market trend
and demand. The product differentiation strategy gives a competitive edge to
Unilever due to its unique and quality products that help integrate into new
markets. The market development also adopts an appealing marketing strategy
that identifies and informs the products' potential benefits.
The Unilever Balanced Scoreboard Framework
Our people
The purpose of the company so appreciate fairly to the people for
their work and help them to become best they can and find their
purpose
Consumers
Provide Quality products and service and creat purposeful brand that
care for the people and the planet.
Customers
Engagement with SME and small retailer around the globe to help and
expand the business.
Suppliers & business partners
Product Innovation and sustainable grwoth with the help of suppliers
Planet & society
Improving the enviroment and developing more inclusive and diverse
society in the world.
Shareholders
Satifying the shareholder by providing them with sustainable and
responsible growth.
Our people
When Unilever cares for people, people take care of their business.
Our People had a challenging year in 2020. The epidemic had an impact on all
of us in various ways. Even when lockdowns erupted across the globe, Unilever
employees rallied to keep working swiftly and securely, from the home office,
factory floor, or onsite office. The company employed new working methods
during the pandemic, redesigning the company in preparation for an
unpredictable future. During the uncertain time, the employees were more
engaged and working closely with each other as engagement ratings increasing
by 6% to 83 percent, far above industry standards. In addition to the many
ways, the company reacted actively during the uncertain time. It continued to
prepare its people for the different modes of working and create an environment
to flourish.
Safe Working Environment
Unilever tried to keep the business and factories running during the Covid-19,
with all precautions for the employees, manufacturing workers, marketing, and
sales team. Protective equipment, distance restrictions, and regular health
checks, we're all used to ensure everyone's physical and psychological safety.
The company was also concerned about the mental well-being of its employees.
Getting ready for the future of work
Modern techniques are only one facet of rethinking how we operate to become
more future-ready. People will have to rethink their mode of working and
acquire skills best suited for the present times. The changing nature of work and
automation forces companies and businesses to adopt the needed skills to
compete with rivals.
Employability is a priority.
The focus on learning is critical to ensure that everyone can become more
skillful and work flexibly and adapt to the changing landscape of working
nature. Unilever is determined to ensure that all its employees remain
employable. For example, we're breaking new ground in the workplace by
expanding our UK flexible working trial to 10 different nations this year.
Consumers
Throughout the year, people's worries about cleanliness, health, and the
environment grew.
Living differently
As the epidemic spread across the globe throughout the year, many individuals
altered how they lived, worked, and bought. As individuals tried to safeguard
themselves and their families against Covid-19, the people were concerned
about their — health, cleanliness, and well-being – became essential almost
immediately. Daily routines changed significantly as nations went into
lockdown. People stayed at home more: from indoor dining to order at home,
in-store shopping to online shopping, and working at the office to working at
home, everything went digital.
Personal Care and Beauty
We want to be the most people- and earth-friendly beauty company on the
globe. Lockdowns altered customers' care behaviours at home as they impacted
the beauty business more broadly. Deodorants and hair care products were used
less often. When the pandemic began, the company lacked a substantial hand
hygiene portfolio to serve and fulfill customers' requirements in important
markets such as Europe and North America. People laboured as quickly as they
could to construct this. Lifebuoy, one of the most well-known soap brands
globally, has expanded into 58 new countries. Lifebuoy became a billion-euro
brand company. Vaseline also extended its antibacterial hand cream
manufacturing to 18 new markets.
Planet positive
The pandemic has forced people to be concerned about their health and hygiene;
the problem of environment and climate change has acquired greater
significance more than ever to the customer and the companies. Dove has
launched 100 percent recycled plastic bottles across all North America and
Europe as part of the company's drive to use less, better, or no plastic. It's also
expanding the number of refill stations accessible for our brands and
experimenting with trial projects to see how to make replenishing our goods
appealing and straightforward.
CUSTOMERS
From major eCommerce platforms to small family-owned businesses, many
clients rely on us to help them adapt to people's constantly changing
purchasing habits.
They offer their goods in over 190 countries via roughly 25 million retail
locations. Customers range from big conventional "bricks and mortar" store
partners to online-only retailers, tiny family-owned businesses, and discount
stores. Customers are essential to company success because they are the conduit
for reaching consumers, and our main goal is to assist them in growing
sustainably alongside Unilever.
Adjusting to the changing world of shopping
As a result of Covid-19, people's behaviors altered worldwide, causing a spike
in demand in specific product categories, which providers tried their utmost to
meet. As shops of all kinds struggled to maintain stock of essentials like
hygiene and cleaning supplies, the brand aided them in several ways. The
company provided financial assistance to customers and suppliers during the
pandemic. During the months of lockdown, the brand moved swiftly to
implement new safety procedures when visiting consumers to continue to
distribute goods and maintain shelves supplied. Finding innovative methods to
deliver goods to customers was sometimes necessary.
e-Commerce allows us to reach a larger audience and bring our brands'
distinct mission to life.
Society and the environment
Unilever cannot flourish without the people who work to manufacture goods
from natural resources and sell the goods.
In 2020, the link between a healthy natural environment and a flourishing
civilization was brought into clear focus. It will benefit the world, people, and,
eventually, our own company by preserving nature and enhancing health and
livelihoods. Environment degradation and social and wealth inequality have
long been at the forefront of the sustainable development agenda. However,
according to the Paris Agreement, doing more of the same would neither reduce
emissions nor eliminate poverty. That is why, with aggressive timeframes, we
have established new ambitious goals for enhancing the planet's health and
creating a more diverse and inclusive society. We're also encouraging others to
take bold actions, such as our suppliers and industry colleagues since we can
only make a sustainable living reality if we all work together.
Improving the health of the planet
The negative consequence of climate change and natural resources depletion has
become more visible, which drastically changes every year. As a major
worldwide corporation leader in sustainable business, they can decrease and
positively affect the environment. The firm established new objectives to
replace the Unilever Sustainable Living Plan (USLP) goals, which expired in
2020. As a company and via concrete and sustainable steps, we must address
the climate issue.
Shareholders
The company have remained determined and adaptable during the difficult time
and have provided the brilliant performance. To manage the unpredictability
and volatility of the Covid-19 epidemic this year, we relied on our market
agility and our five growth pillars. Protecting people, securing supply, reacting
to changing demand patterns, supporting our communities, and maintaining our
cash and balance sheet strength were our initial responses to the effect of Covid-
19.
In 2020, the firm proved its resiliency and unlocked new productivity levels in
reacting to significant shifts in customer demand and preferences. The emphasis
on operational excellence and growth principles resulted in an increase edge
over the other companies. We have strengthened our business by integrating our
dual-headed legal structure, providing greater strategic options for portfolio
development, reducing complexity, and improving corporate governance.
Performance in 2020
Unilever decided that focusing on productive and sustainable growth and
generating an operating profit and free cash flow was the best way to manage
the business during the early stages of the pandemic. They've accomplished
these objectives well, with over 60% of our business gaining market share in the
categories we monitor in the last quarter. Despite higher Covid-19 costs,
profitability in 2020 remained robust. Underlying operating profit dropped 5.8%
to €9.4 billion at constant currency rates but rose 0.7 percent. The gross margin
fell by 50 basis points, resulting in a 60-basis-point reduction in underlying
operating margin. It included the negative effect of 90 basis points from Covid-
19, representing additional costs related to altering our supply chain and an
unfavorable mix. Meanwhile, our focus on cash management and seamless
operations led to a free cash flow of €7.7 billion. The company strengthened
and shifted focus toward the due amount received from the customer and
redesigned the capital expenditure, resulting in a €1.5 billion benefit from
positive working capital movements during Covid-19.
Strategic choices for future success
Set out the Unilever Compass plan to achieve our goal in detail in early 2021.
Portfolio, brands, markets, channels, and culture are five critical areas driving
our choices and activities. Our emphasis on generating wealth via our multi-
year financial framework underpins all of this. We have exact worldwide
leadership positions; in a seventh, we dominate the number of products sold but
not yet in value. Our 13 largest brands account for more than half of our
worldwide revenue, each earning more than €1 billion in sales by 2020.
Creating a future-ready, purpose-driven company and
development culture
The people are important to achieve the goals and objectives of the company.
Unilever focuses on its employees' capacity and capability building and
provides them with better tools and technologies to become more productive.
Agile and digital transformation enables companies to discover new working
methods and refocus employees on the most important tasks. They're giving
workers the ability to upgrade to new skills to adopt a new working
environment and help our company flourish. More information about
individuals may be found on pages 16 to 19.
Risk appetite and approach to risk management
Unilever's strategy and long-term goals rely heavily on risk management. The
ability to address risk and take advantage of opportunities presented by business
and the markets in which we operate is essential to our company's success. As a
result, we implement an integrated risk management approach that, as it should
be, puts risk and opportunity assessment at the top of the Board's agenda. The
risk management approach is designed to provide reasons. Still, not absolute,
assurance that our machines and assets are safeguarded, hurdles and risk in the
company are removed or mitigated, and all the information is reported to higher
authorities of Unilever's, including the CFO and CEO.
Sustainable Development
Climate change and environmental degradation greatly threaten the world. The
planet's health, as well as people's lives and, are in danger. Climate change also
poses a great threat to companies and the supply chain. To prevent the negative
impact of climate change, the world must strive to achieve net-zero emissions
by 2050. Unilever also supports climate initiatives that can help sustain our
environment. The Paris Climate Change Agreement was a milestone step
towards protecting the environment. The target is to keep the temperature below
20C and under 1.5oC pre-industrial level. Companies and businesses can play a
vital role in taking solid actions to prevent climate change. Unilever is one of
the largest consumer products companies in the globe that have a significant
carbon impact. Much of the carbon footprint is caused by the procurement of
raw materials and the usage of our goods by consumers; the company is trying
to decrease the emission during the manufacturing process.
Risk management and strategy
The climate is changing very fast, which is the primary concern for Unilever, as
it has the potential to have a short, medium, and long-term effect on our
company. Extreme weather and water shortages are two physical hazards we
face due to climate change's impact on our company. Changing consumer
preferences and future policy and legislation are all potential risks connected
with the move to a sustainable and carbon-free economy. These offer
possibilities as well.
CONCLUSION
The paper analyzes the relationship between the internal management system
and sustainable development to the organization's performance and long-term
growth. According to the study's results, organizational performance is partially
mediated between strategic management systems and long-term growth. The
results indicate that non-financial metrics significantly impact employee
performance since they encourage workers to be more productive and efficient.
Unilever has also diverted its focus to facilitate its people in the companies and
work for their betterment. The results are consistent with Kaplan and Norton's
conclusions, which indicated non-financial criteria. It is observed that the non-
financial measures are used in combination with a financial measure to
accelerate the business operations to guarantee environmental sustainability. For
example, rather than conventional methods that may encourage sustainable
development, it is recommended that other resources be utilized to recycle
waste. For a company to succeed and compete in this era, it is imperative to
adopt the learning and growth mindset among the people rather than following
the traditional work methods.
References
Abbas, H. (2018). Analytical Role of Corporate Strategy in Growth and Expansion of Unilever.
Academic Journal of Business, Administration, Law and Social Sciences.
Alibašić, H. (2018). Role of Corporations in Addressing Climate Change. Reasearchgate.
Eldenburg, L. B. (2020). Management accounting (4th edition). John Wiley & Sons Australia.
Hockers, F. G. (2002). balance Scoreboard and Sustainibility. INSEAD, 151-166.
Ihlen, Ø. (2019). Business and Climate Change: The Climate Response of the World's 30 Largest
Corporations . Taylor & Francis online, 244-266.
kaplan, R. S. (1993). Putting Balance scoreborad to Work. Harvard business Review.
Khalid, S. (2019). Incorporating the environmental dimension into the balance scoreboard. Emrald
insight.
Khalid, S. B. (2019). Incorporating the environmental dimension into the balanced scorecard.
Meditari Accountancy Research,. Retrieved from https://doi.org/10.1108/MEDAR-06-2018-
0360
Muhammad Rafiq 1, *. ,. (2020). Impact of a Balanced Scorecard as a Strategic Management Tool to
improve sustainable development. MDPI.
Ogendo, J. L. (2009). APPLICATION OF THE BALANCED SCORECARD IN STRATEGY IMPLEMENTATION
BY UNILEVER TEA KENYA.
Øyvind Ihlen, J. L. (2010). Corporate Social Responsibility and Communication. Researchgate.
PERSPECTIVES SURROUNDING THE BALANCED SCOREBAOD. (n.d.).
Samuel O. Idowu, B. A. (2004). A comparative study of the contents of corporate social responsibility
reports of UK companies. Emerald Insight.
Unilever. (2020). Annual report.
Zdenka Dudic 1, B. D. (2020). The Innovativeness and Usage of the Balanced scoreboard. MDPI.
