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[Report of Unilever]

By: Alladin M Yaseen

Abstract
Unilever is one of the worlds leading suppliers of fast-moving consumer goods aimed to
make sustainable living a commonplace. Past strategies focus such as winning with brand
and innovation, the market place and continuous improvement are contrasted with the
new sustainable living plan. Core values such as integrity, respect, responsibility and
pioneering are compared to competitors financially. A SWOT analysis, IFE, EFE and
growth matrix are displayed for better strategies in future. Unilever financial position and
Billions dollar brand are also emphasised.

Contents
Contents................................................................................................................................4
Introduction......................................................................................................................... 5
Unilevers Global Strategy..................................................................................................6
IFE and EFE Matrix............................................................................................................. 8
Sustaining Research and Development...............................................................................9
Emerging Market.............................................................................................................. 10
Unilevers marketing strategy for competing in foreign market........................................11
Proctor and Gamble...................................................................................................... 12
Competitor comparison.....................................................................................................13
Major Financial Analysis for Unilever during the past 5 years........................................ 14
Supply chain.......................................................................................................................15
Controversies-.................................................................................................................... 15
Axe vs Dove.................................................................................................................... 15
Hindustan Unilever Mercury fever................................................................................ 16
SumOfUs against deforestation of free palm oil production.......................................... 16
Unilevers Growth Matrix in the future............................................................................ 17
Conclusion..........................................................................................................................18
Reference............................................................................................................................19

Introduction
Unilever is an Anglo-Dutch multinational corporation created in 1930 from a merger
between the British soap maker Lever Brothers and Margarine Unie. The company
sustainable plan include 3 key aspect namely: Improve health and well beings of billions
of people, reduce environmental impact and enhance livelihood. Values which are
instilled and ingrained in the core process of the business are underpinned under
(Pioneering, Integrity, Respect and Responsibility). Rivaling competitors like Proctor &
Gamble, Unilever must acknowledge the management of the smaller brands slowed down
its growth though it has 400 master brand under four divisions: Foods and refreshment
and Home & Personal care.

Photo source: Unilever Financial Report 2014

The company historically grew through acquisition where the main strategic style focused
on Research & Innovation (1 billion yearly), diversification into a broad category
worldwide and penetrating emerging markets. This lead to severe economic and political
exposure beyond control which is mitigated by the diversity of their portfolio and
geographic reach to eradicate specific risk. Their biggest asset is brand which also
represent a risk if they do not maintain value and relevance to customers.

Did you know- Two bi l l i on times a day, in 170 countries, people use Unilever products.
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Unilevers Global Strategy


A global strategy used by the Unilever is think-global and act-global strategy where
same product is sold everywhere with minor adaption to local country preferences while
building its global brand and coordinating its activities. Localized strategies is suited to
establishing a brand image that is uniform from country to country by building strong
character brand such as Dove, Sunsilk, Rexona and Lux thus coordinating its marketing,
logistic and supply chain worldwide.
The graph below shows how Doves innovation helped Unilever to sustain in stiff
competition across 86 countries

Photo source: Annie Kao strategic marketing

Unilever is striving to unify its operations and efforts to build on its long-established local
root in both the traditional and modern retail outlets to suit local markets and predict
growth in these countries.

Did you know- Unilever buys a third of the world's tea.


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IFE and EFE Matrix

Source Author: All application on Unilever

Did you know- Unilever produces 155m pot noodle for first-year university students in UK.
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The IFE Matrix together with the EFE matrix is a strategy-formulation tool that can be
utilized to evaluate how a company is performing in regards to identified internal
strengths and weaknesses of a company (Maxi- Pedia). Both score are above the
transgressed 2.5 (average) which show that Unilever is adept to exploiting opportunities
and defending against threats whilst maintaining market leader in target segment, earning
billions of turnover and spending billions on R&D.

Sustaining Research and Development


Employing 6000 R&D professionals globally and funding it 1 billion is not only for
show.It led to the creation of an UltraLogistik control tower in Poland which maximise
transport movements products minimising CO2 emission as if taking out 250 000 cars off
road. This regional distribution hubs was awarded a Marco Polo grant of 5.7 million to
invest and develop sustainable transport of goods across Europe which led to
manufacturing waste reduced by 62% as a ratio to production by engaging a deal with
Terracycle. Terracycle not only release new zero waste boxes to help recycle at the
factory level but also up-cycle shipped material into new material.

Unilever combine global strength in R&D with local knowledge to create unique products
with proven benefits:
On process level, (Discover, Design and Deploy) it was found that Margarine can be
produced with 80% less animal-sourced fat (discover), at a 30 degrees Celsius
(design) thus rendering gas emission 30% lower (deploy).
R&D scientists re-engineered the spray system in Axe to reduce the flow rate to
deliver 75ml of protection and fragrance in the same spray time as the full sized can.
Also by reducing its size, less aluminum carbon footprint per can is reduced by
around 25% and more can can be transported resulting in a 35% reduction in
transport and logistics.
Did you know- 35 million cups of PG tips are drunk every day - enough to fill six Olympic-sized
swimming pools

Lipton Yellow Label was being smuggled through the Black Market causing
disruptive blow to the brand. So Unilever R&D has pioneered a process that extracts
natural essence from pressed leaves to enhance the flavor of Lipton Yellow Label.
A pact with Rainforest Alliance Certified tea eradicated this growing phobia in
Pakistan.

Emerging Market
Strategic commitment to emerging market involved significant investments in brand
launches new production facilities such as Lifebuoy into China and Omo into Saudi
Arabia. A low cost based strategy is focused in emerging-country market where low-cost
local competitors are not administered justice unless they offer better product at lower
prices. Why focus on emerging market? The Boston Consulting Group estimates that
the growing middle class in China and India will spend $10 trillion by 2020. Also
Emerging markets represent 57% of turnover for Unilever.

Photo Source: Annie kao-adding Vitality to life

Did you know- Project Sunlight pledged to help 2 million children providing school meals
through the World Food Programme.
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Bottom of the pyramid is a market to low-income consumers identified as a multi-trillion


dollar opportunity that is largely untapped. Building markets and driving penetration is
the core strategy of Unilever to exploit this region.
Indonesia
Discount is given to shop owners to display product in front to the extent that sales
representatives are sent to check if stock is neatly displayed. Cheaper, smaller and
affordable version are displayed which induce emerging market buyers into thinking that
they also can afford a branded product. Hari Sumarno state in Bloomberg: You cant
fight Unilever. Competing brands sit on dusty shelves at the back of his store.
Brazil
10 million free samples and aggressive marketing helped lead to a very successful launch
of TRESemme shampoo in Brazil. Once they have gained a strong foothold in these
markets, the growth of the new consumers, with higher spending power and standard of
living means that the predicted billions of people will start to up-trade. Which means that
these consumers will be buying more of Unilevers products and for a longer amount of
time.

Unilevers marketing strategy for competing in foreign market


Unilever brand innovation program is powered by positive review from media, offensive
marketing and advertising activities where differentiated product line and market analysis
provide a well-established product.
Unilever partnered with World Dental Federation to be involved in oral healthcare
projects in both developed and emerging nations, where a low-cost toothbrush, at retail
price of just EUR0.20 was produced and distributed in India and Indonesia.
Close-Ups Project Smile in Nigeria, displayed its product in small kiosk outlets
andprovided oral hygiene information. 83% people said in term of quality the prices of
Did you know- Unilever make 500,000 Cornettos a week at one of their ice-cream factories.
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Close up are Fair and reasonable while being influenced by positive review from local
media.
Unilever partnered with Brazilian supermarket Pao de Acucar in Brazil which employed
not only 300 people in a local recycling co-operative, but also boost Unilevers Rexona
by having their logos on point-of-sale information thus raising their profile and projecting
greater in- store prominence.

Proctor and Gamble


Over the decades, the rivalry between the kept on intensifying while P&G dominated the
US household and personal care market, Unilever dominated the European household and
personal care market. Foreseeing loss of market, P&G had resort to corporate espionage
to gain competitive information about Unilever's shampoo business in the US where
rogue operators was hired to gain access to classified information on Unilevers
ThermaSilk. The law suit was filed at 10 million
In India, most people wash their clothes by hand, and due to the scarcity of water
suppliers, rinsing wasted a lot of water and time. Unilever devised a formula where surf
excel produced less foam, meaning that clothes can be cleaned quicker and with less
water. The same brand, sold in Brazil as Omo, is another example of how Unilever target
multiple segments. Unilever has 81% market share in the detergents, compared to just
15% from Proctor and Gamble.
World population is expected to rise to 8 billion by 2025 and P&G is providing fierce
competition to the incumbent supermarket chains of Unilever , most notably in the US
and Europe. P&G and LOreal are the future rivals in cosmetic and toiletries where both
respond to changes faster than Unilever and deploy significant resources in product
innovation. To snatch and steal customer away from these rivals, Unilever employ
cross-market subsidization with multiple markets and brand scattered over a wide variety
of product especially when cross industry involvement is perceived.
Did you know- Unilevers Logo is composed of 24 icons woven together to create a U shape,
with each icon representing one of the company's sub-brands or its corporate values.
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Competitor comparison

Top Segment

Personal Care

Fabric Care
Food
and Home Care

Health and
Hygiene

Top Brand
Revenues
Revenue
Growth
Employees
Market Place

Dove
48.4 billion
2.9%

Tide
$83.6 billion
3%

Milo
$88.6 billion
4.9%

Detol
$13.82 billion
4%

172,000
57% in
Emerging
market

118,000
39% in
Emerging
Market

339,000
Europe- 28%
Americas-43%
Asia-29%

37,200
7% in
Emerging
market. North
America,
Russia and
Australia
accounts for
the rest

Strategy

Positive social
impact, Double
the business &
environmental
impact

Investing in
developing
market and
strengthening
core categories
like baby care.

Innovation and
renovation,
emphasis on
unmatched
geographic
presence

Focus its Brand


Portfolio on the
faster growth
and Higher
Margin
Consumer
Health and
Hygiene
categories

Profit

7,020 million

Earnings Per
Share
Cash Flow

1.61

$11,643
million
4.22 ($)

$14,456
million
3.44

$5,039.6
million
2.70

3.1 billion

$14.1 billion

$14.9 billion

$1.96 billion

Did you know- Unilever was honored as one of the 'Top Companies' for LGBT Equality in 2012.
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Major Financial Analysis for Unilever during the past 5 years.


2010

Turnover increasing from 40 billion, rising 11% to over 44 billion While


7% was due to currency changes.
Re-launching of Wheel detergent brand in 49 days across 25 Indian states.
Blockbuster $3,7billion purchase of the Alberto Culver Company.
Ice cream and beverages had 45% exposure and grew by 5.9%, whilst
personal care had 61% of sales and grew 7.9%.

2011

Volume growth dropped to 1.6% whilst cost-driven price increases totalled


2.4 billion.
Increase in the companys 6 billion advertising budget leading 3 million
shops signing up to Unilever Perfect Store program.
Foods division dropped 1.2% by volume whilst Home Care and Personal
care delivered 2.2% and 4% respectively.

2012

Margin increased to 13.8%, boosted by Magnum and Sunsilk where 14


brands accounted for almost 50% of the 2012 growth with sales of more
than 1 billion/year.
TRESemme in Brazil contributed 150 million to turnover, which took
Unilever above the 50 billion barrier for the first time.
Unilevers emerging markets business, accounting for 54% of the sales and
rising.

2013

Reduction of CO2 by 50,000 tones and saving 10 million.


Underlying sales growth of 4.3% and 14.1% core operating margin.
Won the 29th Annual Gold Medal for International corporate Achievement
in Sustainable Development from the World Environment Center.

2014

Turnover was 48.4 billion, down 2.7% with a negative impact from foreign
exchange of 4.6%, accompanied with an Underlying sales growth 2.9%.
Statement to purchase all palm oil from certified sustainable sources by
2015.
Around 7.2 billion invested in brand and marketing
New packaging technology for Dove Body Wash bottles that uses 15% less
plastic reported cost saving of 50 million.

Did you know- Did you know- Around 48% of Unilevers agricultural raw materials were
sourced sustainably by the end of 2013.
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Supply chain
The Design Once and Deploy Everywhere philosophy is guiding global supply chain
network towards environmentally responsible factories. Every new factory produce 50%
less waste by reusing, recovering or recycling waste to reach 0-waste to landfill . The
achievement is shown below for various Unilever affiliated countries.

Russia

Tonnes of perforated outer-tea bags is collected annually to be sold in pet


shops as animal bedding.

France

Saving of 50, 000 by separating ice cream waste from packaging to


produce Biogas.

Leeds, UK

Effluent Treatment Plant for use as fertiliser for professional football pitch
turf saving over 35,000.

Argentina

Global CapExfund Small Action Big Difference- 88 tons of product


recovery equipment on production lines thus evading 35,000 costs.

Australia

Distance barriers led suppliers to collect waste materials for reblending and
shifting to recycled cardboard. This is same as taking off 10,000 cars
off-road.

ControversiesAxe vs Dove.
Unilever has been plagued by controversies where Axe and Dove are hugely in contrast in
their advertising campaigns. Doves uplifting campaign portrayed a positive message of
embracing the womens natural beauty whilst Axe adverts consisted of scantily dressed
women inferring to The Cleaner you are, the Dirtier you get.

Did you know- Unilever delivered 16 million meals to 76 000 children in 2008.
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Source: Symphony RIs Dove Men Care launch 1

The above diagrams highlights positive growth sales of both product until the
contradictory adverts based on misleading interpretations. Axe faced -10% sales to -0.2
till the year end. Dove the brand leader only highlighted + 1.7 at year end and a mere
+2.4 in contrast to +5.5 in 2012.

Hindustan Unilever Mercury fever


Unilever did not disposed its mercury waste properly.

It all started with kidney pains

from workers was no protective equipment or information about the disastrous impact of
mercury was given. Death toll of 45 workers led Tamil Nadu Alliance to force a close
down after discovering a heavy concentration 20mg/kg of mercury in the soil. Health
specialist from Bangalore came to the conclusion that the health of the workers as well as
of their children were affected by mercury poisoning.

SumOfUs against deforestation of free palm oil production.


In a whim to obtain sustainable palm oil, the destruction of Southeast Asia's rainforests is
being encouraged as a license for deforestation in the name of conservation. Knowing
that Unilever is sensitive to consumer pressure, SumOfUs launched an online petition in
an attempt to stop growing consumer demands for deforestation-free palm oil.

Did you know- At the end of 2014 70,000 micro-entrepreneur woman were trained to sell
Unilever product in rural India
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Unilevers Growth Matrix in the future


Unilever strategy is to concentrate on areas which enforces and sustain high growth, with
clear leadership and continue to invest in these brands. For the instance of Dove, they
envisage a future two billion-euro brand. Doubling the size of business will help to
compete for market leader against Proctor&Gamble whilst tagging-up with the tag-line of
enhancing livelihood will induce new customers. Three segment are mandatory to
inculcate for the future:
1.Winning with brands and innovation
In laundry, eco-packs Surf drive growth, while at the same time reducing environmental
impact. Eco-packs use up to 70% less plastic and mean a 50-85% reduction in greenhouse
gases per consumer use.
2.Winning in the marketplace
Regenerate, a highly differentiated oral care system based on market-leading technology,
which penetrated the UK market
3.Winning through continuous improvement
The Dove Body Wash bottles 50 million by using 15% less plastics. This is another
substantial step towards the USLP target of halving Unilevers waste footprint by 2020
Nowadays all corporation are becoming sensitive to green-environment due to pressure
groups which is Unilever core competency but the Mercury controversy in India
resuscitated. Competition is cut throat and the emerging market identified is also being
rivaled by new small entrepreneur targeting the niche market. To sustain . Unilever is to
continue to adopt these 3 above mentioned labeled.

Did you know- Around 397 million people reached by end 2014 through the programmes on
handwashing, safe drinking water, sanitation, oral health and self-esteem
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Conclusion
Unilever doesn't retail under its own name but with individual brand names where
management of the smaller brands slowed down its growth thus compelling them to
narrow their focus on the attractive areas, and their core strengths in competition.
Downsizing brand portfolio and stream line the business portfolio will reflect vitality
concept against P&G which accounts 36% sales in emerging market. Unilever should
eradicate the misbelief that marketing needs big budgets but rather deliver innovative
products that capitalizes on changing consumer preferences.

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