GROUP ASSIGNMENT

TECHNOLOGY PARK MALAYSIA

BM007-3-1-ITM
UC1F1404

Student Name : TP Number

MIN NAING SOE : TP035323
ZAW MIN AUNG : TP035206
DATE OF SUBMISSION: 4th, July, 2014
Number of Words : 1478words

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 Analysis on Unilever

Introduction
Unilever is one of the oldest multinational consumer goods company, one of the
world’s leading fast-moving consumer goods company with products sold in over 190 countries,
established in 1930 by merging the British, Lever Brother and the Dutch Margarine Unie. Now,
Unilever PLC is in London, UK and Unilever N.V in Rotterdam, Netherlands. Unilever N.V and
Unilever PLC operate together as Unilever group. Both of the companies are under the same board
of directors. Unilever produces Food and Beverage, and Home and Personal Care. Some of their
products are Knorr, Breyer’s and Magnum, Lipton, Omo (detergent), and etc .With more than 400
brands focused on health and wellbeing, Unilever’s portfolio ranges from nutritionally balanced
foods to indulgent ice creams, affordable soaps, luxurious shampoos and everyday household care
products. Every day, 2 billions of people are using their products to look better, feel better and get
better more out of life. As it is very difficult to get vital information about Unilever’s
managerial strategies, most of the information here are collected from the internet websites and
encyclopedia. This report takes a look at the Unilever’s business environments.

Technology Environment
In the 1930, Unilever continue to expand business to be more successful in the 1950
with new technology being invented to be more productive and enhance quality products for
consumer, and boom competitors by improving their products using new inventions. Unilever did
not delay at their effort in research and development (R&D).Unilever is spending on IT to improve
their business especially in e-business, since 2000. So as to improve communication of brands and
market online, and to ease transaction along the chain. Today, Unilever is minimizing the cost by
using efficiencies of IT at global level. Additionally, Unilever Technology Venture collaborates
with Unilever R&D group to assist Unilever meet the desires of the consumers. Their area of
concerns are advanced bioscience, materials science, genomics, and nanotechnology. Unilever
installed pallet live storage system with Bitto Storage System Ltd, in 2003. It was to store their
frozen products. Carton live storage system, pallet racking and live storage system, boltless
shelving, plastic bins and containers, wide span and heavy load shelving, cantilever racking,
and multi-tier shelving systems are of the facilities.
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Legal- Political Environment
For Legal-Political Environment, Unilever set a standard to tackle political issues as a
matter of their policy. Unilever has its tactics of handling political issues. In 1960, many countries
nationalized foreign companies, and Unilever was also affected. That was for the participation of
local equity in foreign firms. So, many companies were subject to local control on prices, imports,
employment of expertise and etc. Many US companies left India in 1970 because of the
nationalization policy. The nationalization policy frightened the foreign companies on certain
issues such as leakage of knowledge, and loss of trademark. That also affected to Unilever because
their control over the operation in market was lesser. For instance, UAC, the subsidiary of Unilever
that operated in many African countries, and its profit margin and rate of profit remittance to its
parent company was enormous. As UAC was nationalized, the control of Unilever over the market
where UAC operates was reduced. However, Unilever used their experience to bargain with
government so as to modify the regulations. In south and Central America, Unilever only lobbied
rather than involving in active politicking. Unilever never sponsored any political parties. By using
their tactical strategy and experience, Unilever has gained political ground today. Unilever has
become the member of many organizations all over the world. Their aim is to make a fortunate
business environment, and to facilitate reputation of corporate management.

Customers and Clients

Unilever never sells their products under their own name and uses brand name to
illustrate diversity. For instance in UK, there are different brands of margarine for consumers to
choose. These are Stork, Blue Band, Flora, Summer County, and etc. However, these are the
products of Unilever. Unilever uses this strategy to get satisfaction of the consumers from different
groups of people. Consumers can make their choice from brands available. And Unilever makes
sure each country retain the local brand whenever their products are modified because the company
wants to keep their standard. Some of these brands are Algid in Italy, Bresler in Chile, HB in
Ireland, Miko in France, and GB Glace in Finland. The fact Unilever is successful locally is
strengthened by allowing every country to choose its own logo. Eg, the former logo used in UK’
it was a yellow logo. On the other hand, there is a strong relationship between Unilever and the
customers based on local market and culture. For example, there are various ethnic groups in

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Nigeria, where Unilever built a strong relationship with customers by maintaining their high
standard of corporate behavior towards local customers and employees.

Competitors
Especially in the Western Europe, Unilever’s market environment is very competitive
at where Procter & Gamble (P&G) is the major competitor in the EU market. Moreover, resulting
from EU free trade policy, there has been so many discounters in EU market. That affected on
profit potentials of Unilever. Unilever has been encountering competitive problem in Europe since
1990. Unilever has been spending more on R&D to provide the products with reasonable price and
that meets the customer satisfaction, too. Unilever is also connecting their business partners to for
promoting cross-border collaborations. “The Heart Brand”, a logo launched in 1991, it is designed
strategically to gain brand awareness internationally and promote international synergies in
marketing and manufacturing. That strategy is for recognition of Ice-cream brands and to
recognize that other units are integral part of Unilever. With different product standard, global
brand can carry the same logo and brand name. Since 2004, Unilever set a 5 years plan to cut 1200
brands that are underperforming due to the lack of brand recognition in the market, to yield sales
growth of six percent. In 2002, Unilever opened a procurement center in Shanghai, China to serve
as a source of raw material for Chinese companies as to compete favorably and internationally.
Since 1989, Shanghai Van Den Bergh has become a joint venture between Unilever and Shanghai
Sugar, Cigarette and Wine .FMCG producers has been pressuring by the retailers to reduce the
prices of the products. On the other hand, customers would not favor to buy expensive products or
brands due to current economic flow. As the competition in Europe is growing strong, Unilever is
having difficulties in places like Netherlands and France. Unilever adopted their strategy to sustain
their profitability drive at where with political instability like the developing countries, Asia and
Africa.

Conclusion
Unilever is operating in about 100 countries around the world with 206000 employees.
Unilever is penetrating into the big emerging economies like Africa and Asia where their business
is better than in EU market. In 2005, more than one third of their turnover came from the emerging
economies and developing countries. Even though, these economies have a very unsteady
environment, and it is challenging for Unilever to monitor and respond quickly to changes in

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 market performance to safeguard their business. Since Unilever has initiated the “Path to Growth”
strategy, which is the headway toward actualizing the dream of the organization. This system is a
key control strategy through IT. The reason of this strategy is because of the underperformance of
some of Unilever’s products especially the frozen food. The strategy is to increase effectiveness,
reduce cost structure and improve market competitiveness.

To reach where they are today, Unilever maximized their available resources and went
as far as creating a dedicated division that focuses on aligning strategy to sustainability. This
division not only includes experts in engineering and business, but also agronomists that can
provide a different perspective and add the necessary skillset variety to the team. Unilever assigned
a Chief Sustainability Officer and made every effort to learn more about their suppliers’ business
practices. The latter helped them “weed out” those suppliers that were not aligned with their vision
of being sustainable and could hurt their reputation. The appointment of a CSO was crucial as this
became a business unit that has grown into the organization’s core beliefs.

In sum, there were two main “keys to success” that Unilever adopted to become a Sustainability-
Driven grown company. First is Identifying, accepting, and committing to the need for change.
And second is aligning every party involved in the chain to their strategy to make sure they all
moved toward the same goals. So that, they continue to grow stronger today.

References

Akamavi, R; McKyitt, A. and Boateng, A. (2004). “Assessing the Francophone West

Africa market”: An ETOP analysis.
Bito Storage System. (2003). Unilever goes live.
Catherine Colbert. Unilever UK Home and Personal care.
Corporate Watch. Influence and Lobbying.
ElAmin, A. and Simon P. (2005). Unilever continues to struggle against P&G
Embracing Difference.

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FitzGerald, N. (2003). Understanding people to build brands.
Frances, A. J. (2006) “Unilever posts N1.6b after tax profit”, Wise Trade.
HLL. (2005). Hindustan Lever: Growing with India.
Hoovers. (2006). Unilever Cosmetics International.
Hoover. (2006). Unilever.
ICMR. (2004). Unilever's Strategies in China.
Unilever. (2013). Unilever Annual Report.
Unilever. (2006). Unilever signs agreement to sell European frozen foods business.