Strategic Analysis and

Recommendations for Unilever

First and Last Name
Date
Executive Summary
Key Findings:
• Unilever, a global consumer goods company, has a rich history and a commitment to
sustainability.
• Internally, Unilever possesses strengths in innovation and a diverse product portfolio.
• However, weaknesses include supply chain complexities and organizational size.
• Externally, opportunities lie in the growing demand for sustainable products.
• Threats include intense competition and regulatory changes.
Recommendations:
• Unilever should continue its differentiation strategy with a focus on sustainability.
• Strengthening supply chain resilience and innovation is essential.
• Ethical considerations should guide cost-saving measures.
Organization Background
Unilever at a Glance
 Founding Date: 1929
 Mission Statement: To make sustainable living commonplace.
 Core Values: Integrity, responsibility, respect, and pioneering.
 Major Products: Personal Care, Foods, Refreshment, and Home Care.
 Key Brands: Dove, Lipton, Ben & Jerry’s, Axe, and Omo.
 Sales Regions: Over 190 countries worldwide.
Internal Strengths

1. Diverse Product Portfolio: A wide range of popular and trusted brands.

2. Sustainable Practices: Leadership in environmental sustainability.
3. Strong R&D Capabilities: Continuous innovation in product
development.
4. Global Supply Chain: Efficient and resilient distribution network.
5. Market Positioning: Strong presence in emerging and established
markets.
6. Brand Loyalty: High consumer trust and brand equity.
Internal Weaknesses

1. Complex Organizational Structure: A vast organization can lead to inefficiencies.

2. Brand Overlap: Some product lines may compete with each other.
3. Dependence on Mature Markets: Vulnerability to economic downturns.
4. Sustainability Challenges: Meeting ambitious sustainability goals can be costly.
5. Supply Chain Complexity: Global operations bring logistical challenges.
6. Talent Retention: Attracting and retaining top talent in a competitive industry.
External Opportunities

1. Growing Demand for Sustainable Products: Increasing consumer preference for

eco-friendly goods.
2. Emerging Markets Expansion: Untapped markets in developing regions.
3. Digital Transformation: Leveraging technology for e-commerce and data-driven
insights.
4. Health and Wellness Trends: Rising interest in healthier and organic products.
5. Collaboration for Innovation: Partnerships and alliances for product innovation.
6. Evolving Consumer Behavior: Adapting to changing consumer habits and
preferences.
External Threats
1. Intense Competition: Competitive rivalry in the consumer goods industry.
2. Economic Volatility: Vulnerability to economic downturns and currency
fluctuations.
3. Regulatory Changes: Evolving regulations on product ingredients and labeling.
4. Supply Chain Disruptions: Risks related to global supply chain disruptions.
5. Changing Consumer Preferences: Shifting consumer preferences and trends.
6. Environmental Challenges: Growing environmental concerns and regulations.
Macro Environment Analysis: PESTEL
• Trade Policies: Impact of international trade policies on global operations.
Political Factors • Regulatory Changes: Government regulations on product safety and labeling.
• Taxation Policies: Tax rates and policies in various markets.

• Currency Exchange Rates: Effects of currency fluctuations on international sales.

Economic Factors • Economic Growth: Economic conditions in key markets affecting consumer spending.
• Inflation Rates: Influence of inflation on pricing and profitability.

• Consumer Preferences: Trends in consumer preferences for sustainable and healthy products.
Sociocultural Factors • Cultural Diversity: Cultural differences in consumer behavior and preferences.
• Health and Wellness Trends: Societal focus on health and well-being impacting product demand.

• Digital Transformation: Utilization of technology for e-commerce and data analytics.

Technological Factors • Innovation: Advancements in product development and manufacturing technologies.
• Automation: Automation of production processes and supply chain management.

• Sustainability Initiatives: Environmental sustainability efforts and their impact on operations.

Environmental Factors • Climate Change: Risks associated with climate change and resource scarcity.
• Waste Management: Management of waste and packaging materials.

• Product Regulations: Compliance with regulations on product ingredients and safety.

Legal Factors • Environmental Regulations: Adherence to environmental regulations and sustainability standards.
• Intellectual Property: Protection of intellectual property rights and patents.
Micro Industry Analysis: Porter’s Five Forces
Threat of New Entrants Threat of Substitutes Supplier Power Buyer Power Industry Rivalry

High Entry Barriers: Low to Moderate Diverse Supplier Base: Large Customer Base: A Intense Competition:
High capital requirements Substitute Availability: Access to a wide range of diverse customer base Numerous competitors in
and brand recognition. Limited substitutes for suppliers reduces supplier reduces individual buyer the consumer goods sector.

Economies of Scale: essential consumer goods. power. power. Innovation Focus:

Established players benefit Brand Loyalty: Strong Forward Integration: Switching Costs: High Industry leaders invest in
from cost advantages. brand loyalty reduces the Limited threat of suppliers switching costs for buyers continuous innovation.

Regulatory Hurdles: likelihood of substitution. entering downstream due to brand loyalty. Market Saturation:
Strict regulations in the Product Differentiation: markets. Product Differentiation: Mature markets lead to
consumer goods industry. Unilever's diversified Global Sourcing: Unique product offerings heightened rivalry for
product range minimizes Unilever's global presence reduce buyer power. market share.
substitution. provides negotiation
leverage.
Generic Strategy Recommendations
● Current Strategy: Differentiation
● Recommendation: Continue with Differentiation

Unilever's current strategy of differentiation aligns well with its internal strengths and the external market
environment. Here's why:

• Strong Brand Portfolio: Unilever has a diverse range of well-established brands known for quality and
innovation, which allows for product differentiation.
• Innovation Culture: The company has a culture of continuous innovation, which is a key element of a
differentiation strategy.
• Global Presence: Unilever's global reach and customer base provide a solid foundation for a
differentiation strategy.
• Brand Loyalty: Unilever enjoys a high level of brand loyalty, making it well-suited for a differentiation
strategy.
Organization Design Recommendations
● Current Strategy: Differentiation ● Recommendation:
● Organization Structure 1. Enhance Cross-Functional Collaboration: Unilever should work on
breaking down silos and enhancing cross-functional collaboration. This
Assessment: Partial Fit
will enable faster product development and innovation, a crucial aspect of a
● While Unilever's current differentiation strategy.
differentiation strategy aligns well 2. Invest in Research and Development: To support its differentiation
with its strengths, there is room for efforts, Unilever should allocate more resources to research and
improvement in terms of development (R&D). This will help in consistently introducing innovative
organizational design. The products.
3. Strengthen Marketing and Branding Teams: Given the importance of
organization's structure
brand image in differentiation, Unilever should strengthen its marketing
demonstrates a partial fit with the and branding teams to maintain and enhance brand equity.
strategy. 4. Talent Development: The organization should focus on talent
development programs to nurture a culture of innovation and creativity.
Ethical Considerations
Sustainability and Ethical Implications
● Positioning for Long-Term Sustainability
● Attracting and Retaining Talent
● Credibility of the Brand
● Ethical Dilemmas in Cost Reduction
References
Ansoff, H. I., Kipley, D., Lewis, A. O., Helm-Stevens, R., & Ansoff, R. (2018). Implanting strategic management. Springer.
Hunger, J. D. (2020). Essentials of strategic management.
Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.). Upper Saddle River, NJ: Pearson Education Inc.
Küng, L. (2016). Strategic management in the media: Theory to practice. Strategic Management in the Media, 1-256.
Lakada, M. N., Lapian, S. J., & Tumiwa, J. R. (2017). Analysing the financial statement using horizontal–vertical analysis to evaluate the company's
financial performance period 2012-2016 (Case Study at PT. Unilever Indonesia Tbk). Jurnal EMBA: Jurnal Riset Ekonomi, Manajemen, Bisnis dan
Akuntansi, 5(3).
Lynch, R. (2018). Strategic management. Pearson UK.
Open Source (2019), Principles of Management, OpenStax, Houston, TX, Rice University
Tien, N. H. (2019). Comparative Analysis of Multidomestic Strategy of P&G and Unilever Corporation. International Journal of foreign trade and
international business, 1(1), 5-8.
Nazarova, V. (2015). Corporate Diversification Effect on Firm Value (Unilever Group Case Study). Annals of economics and finance, 16(1), 173-
198.
Unilever PLC. (2023a, November 13). Unilever launches first-ever soap opera on TikTok. Unilever; Unilever PLC.
https://www.unilever.com/news/news-search/2023/unilever-launches-firstever-soap-opera-on-tiktok/
Unilever PLC. (2023b, November 14). World-first partnership to pilot near-zero emissions laundry ingredient. Unilever; Unilever PLC.
https://www.unilever.com/news/news-search/2023/worldfirst-partnership-to-pilot-nearzero-emissions-laundry-ingredient/
Unilever PLC. (2023c, November 17). A new AI lab will boost innovation, technology, and collaboration. Unilever; Unilever PLC.
https://www.unilever.com/news/news-search/2023/new-ai-lab-to-boost-innovation-technology-and-collaboration/
Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2018). Strategic management and business policy: Globalisation, innovation, and
sustainability. Pearson