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When we look to unilevers history we will find that applying FDI through

acquisitions and Merging as follows

The early begin of the company from 1910 till 1919 there was a very hard
circumstances as there was the first world war which made trading difficult
to everyone
From 1920 till 1929 companies agree to merge which helped in the creation
of unilever
From 1950 till 1959 new markets open up in emerging economies around
the globe.
From 1960 till 1969 as the world economy expands unilevers economy
expanded and it began developing new products and entering new markets
and running a highly ambitious acquisition program
Also unilever achieved great market power through applying vertical

integration Unilever also followed a strategy of vertical integration to

secure key raw inputs and services and entered into operations
Such as oil milling, plantations, chemicals and packaging. They also
expanded into new countries in Africa, Asia, The Middle East and
Latin America.
Unilever strategy formulation:
- Identifying company mission and goals as follows:
We are a successful, growing, sustainable business. We will work to create a
better future everyday. We will help people look good, feel good and get more out
of life with brands and services that are good for them and for others. We will
inspire people to take small everyday actions that can add up to a big difference
for the world. We will develop new ways of doing business that will allow us to
double the size of our company while reducing our environmental impact.

As we see unilevers mission was designed to indicate how companys

operations affect its stakeholders
- it was balanced as it focused in its first part on the corporate brand and
the company itself as describing the company with success and
growth and sustainability
- then it focused on the customers themselves as they help people to
look good

Then it focused on shareholders whom are seeking for profits and

double sizing the profits and the company
- Then it focused on the environmental responsibility through reducing
their environmental impact
- Identifying core competencies and value creating activities as follows
Unique abilities of Unilever Company is mainly represented in its work
force as they are always attracting best talent in the market place and also
they are following a strategy called the compass and one of its core
objectives is winning with people This is because developing and
retaining the right quantity, quality and diversity of people is crucial to their
growth strategy.
Also they applied online Learning Management System (LMS) which offers
learning programmes in more than 20 languages to nearly 130,000
employees in over 100 countries. The system provides around 7,600 elearning modules.
All employees with corporate intranet access have a learning passport that
enables them to manage their own skills development, while at the same
time allowing us to drive specific training that is strategically or legally
In early 2011 we formed the Unilever Learning Academy (ULA). This
brings together all our major functional academies (Marketing, Supply
Chain, R&D, Finance, HR, IT, Customer Development) with our Leadership
Skills and General Skills teams to share best practices and to adopt common
processes and standards for learning. The Academy also provides career
skills maps for all our functions, providing employees with a clear
understanding of their development journey and access to the tools they
need to build a successful career.
By this way we find how Unilever Company gives great concern to its
workforce which is one of its core competencies

Porter's 5 Forces Model

For cost leader businesses like Unilever a cost leadership strategy may help to remain
profitable even with:
Rivalry, new entrants, suppliers' power, substitute products, and buyers' power. This
analysis for Unilever is as follows:
Unilever competes on the basis of its prices since the low cost products of Unilever and
its broad range of products allow it to enjoy a big family of customers. It is because of its
diversified product line that allows it to enjoy above average profit and allow it to
maintain low cost advantage over its competitors in the market.
As its a part of Unilevers competitive advantage that it offer low prices that help it to
retain its customers and to earn profit.
Unilever as a Cost leader is able to absorb greater price increases before it must raise
price to customers.
Unilever creates barriers to market entry through its continuous focus on efficiency and
reducing costs and because of its economies of scale.
As there are many substitutes available in the market to Unilevers products so for
Unilever its more likely to lower costs to attract customers to stay with their product,
invest to develop substitutes, purchase patents and invest in R&D.
As Unilever deal with a wide variety of products so it also focuses on its value chain. It
identify and evaluate the ways in which it can use its resources to identify and evaluate
the ways in which its resources and capabilities of workers can add value. It focuses on
its primary as well as support activities to achieve this objective.
According to Unilevers annual report, it defines its customers importance as:
We believe we are well placed to help people understand how their brand choices and
small actions, when added to those of others, can make a big difference across the world.

For example, Unilever's detergent brands are used in 125 billion washes a year. That is
the equivalent of 14 million washes every hour. Every time a Unilever consumer does the
laundry at a lower temperature or with a full load, the reductions in energy, CO 2 and
water are cumulatively very large.
With consumer use accounting for nearly 70% of our greenhouse gas footprint, inspiring
our consumers to change their behavior will be key to achieving our mission of creating a

better future every day. Unilevers Five Levers for Change methodology is helping us
create effective behavior change campaigns. (Unilever annual report, Web)

Unilever is providing value to its customers through unique features and characteristics of
its products. This is done through high quality, features, high customer service, rapid
product innovation, advanced technological features, image management, etc Unilever
Creates Value by:

Lowering Buyers' Costs with Higher quality and quicker response to problems.


Higher quality products

Creating barriers by perceptions of uniqueness and reputation

Creating high switching costs through differentiation and uniqueness

Wide product line

Efficient customer service and focus on customers needs

Operating all over the world

Porter's Five Forces Model
Effective differentiators can remain profitable even when the five forces appear
unattractive. Analysis of Unilevers differentiation strategy porters five forces is as


Brand loyalty is the strongest point for Unilever to have its

competitive advantage. It means that customers will be less sensitive to price increases,
as long as the firm can satisfy the needs of its customers

As Unilever always strive to satisfy the needs of its customers so

intense rivalry for Unilever is not a threat


Because differentiators charge a premium price they can more

afford to absorb higher costs and customers are willing to pay extra too so bargaining
power of suppliers is low here that give a competitive edge to Unilever (Albany,Web)


Brand Loyalty provides a difficult barrier to overcome

Once again brand loyalty helps combat substitute products.

Unilever focus more on the demographic features of population, it targets all age groups
and offer a wide variety of products to the people of all ages. It also focus on the
emerging markets like a few years ago it started to focus more on India because its an
emerging market. Apart from that its wide variety of products more and its attention to its

value chain make it capture a big market share. It focuses on customer needs and
customer satisfaction. It focuses on innovation, quality and R&D. It also focus on its low
cost and has a wide base of customers so all these factors together give it a competitive
advantage over others in the same industry.