Strategic Analysis of UNILEVER Pak LTD

Strategic Management Of UNILEVER 1
STRATEGIC ANALYSIS
OF
THE ISLAMIA UNIVERSITY OF BAHAWALPUR

Submitted by:
Nadia Shoukat (23)

MBA, 4th semester,
Section A, (M)
Submitted to:
Sir Shahid Yaqoob

MBA Marketing
Submittion Date: 22 May, 2010

DEDICATION
WE DEDICATE THIS HUMBLE EFFORT TO
The Holy Prophet

“HAZRAT MUHAMMAD”
(P.B.U.H)
The greatest Social Worker,
Whose every tear was for
The Cause of humanity
And also dedicated to

THE UNFATHOMABLE LOVE, UNFLINCHING SUPPORT
UNTIRING MIDNIGHT PRAYERS AND STEADFASTNESS
OF
“OUR REVERED PARENTS”
WHO HAS BEEN A BEACONHOUSE

FOR USFOR THE WHOLE OF OUR LIFE, WHO HAS
ALWAYS SHOWED US THE RIGHT PATH, THE PATH OF
TRUTHFULNESS AND HONESTY AND WHO HAS BEEN
ALONG WITH US THROUGHOUT OUR
STUDYING CARRIER

Acknowledgements
God never spoils any effort; every piece of work is rewarded according
to the nature of devotion for it. We are extremely thankful to ALLAH
ALMIGHTY Who, in spite of numerous difficulties, vicissitudes and
acute frustrations enabled us to probe the present study and
dissertation. We bow our head to ALLAH ALMIGHTY for the buntings
and the blessings that He has bestowed upon us. Who has given us
the courage and stamina to come up to the expectations of our revered
teachers and ever loving parents and to sum up my maneuverings for
the completion of this manuscript.
All the respects are for the last Prophet of God, HOLY
PROPHET MUHAMMED (Peace Be Upon Him) Who is the greatest
scientist of all the ages, whose moral and spiritual teachings enlighten
our heart, mind and soul and flourished our thoughts towards
achieving higher ideas of life.
We deem it utmost pleasure to avail this opportunity to

express the heartiest gratitude and deep sense of obligation to our
revered Teacher Sir Shahid Yaqoob, Lecturer, Department of
Business Management Sciences, Islamia University, Rahim Yar Khan
for his skilled guidance, keen interest, constructive criticism, constant
encouragement, valuable suggestions and pains taking supervision
throughout the course of our study and research work. The work
presented in this manuscript is accomplished under his dynamic,
skillful, affectionate guidance and generous transfer of knowledge.
Whenever we sought help from him, he was the person who was
always there bearing a welcoming smile on his face and having the
doors of his good offices always opened for us. We have learnt a great
deal from him.
We have the honor to express our deep sense of gratitude and

profound indebtedness to ever affectionate Sir Shahid Yaqoob for his
keen interest, encouragement, generous guidance and untiring help at
all times. In fact it was not possible to bring this work to fruitful
conclusions without his day and night persuasive and sincere efforts.
He has guided us at every step that we took throughout our career at
postgraduate level. He has always thought right for our betterment
and for our success in the professional field. We cannot thank him, as
we have no words that can have an idea of the respect we have in my
heart for him.

Table of Contents
1- Introduction of UNILEVAER………………………………….6
2- Company Summary...………………………………………..…8
2.1- Vision………………………………………………..….8
2.2- Mission……………………………………………..…...8
2.3- Objectives……………………………………………….9
3- Internal and External Audit…………………………..................10
4- The Input Stage………………….……………………… ...12
4.1- EFE matrix…………………………………… ………..12
4.2- IFE Matrix………………………………………………14
5- The Matching Stage ……………………………………………16
5.1- SWOT Matrix………………………………………….16
5.2- SPACE Matrix ……………………………………..….18
5.3- BCG Matrix…………………………………………….21
5.4- IE Matrix……………………………………………….24
5.5- Grand Strategy Matrix………………………………….25
6- The Decision Stage …………………………………………..…26
6.1- QSPM Matrix………………………………………….26
7- Strategic Recommendation…………... ……………………….…27
8- References ………………………………………………….…..…28

INTRODUCTION OF UNILEVER PAKISTAN Ltd.
Unilever is one of the world's leading suppliers of fast moving consumer

goods across Foods and Home and Personal Care categories. Unilever's
portfolio includes some of the world's best known and most loved brands.
Unilever Pakistan Ltd:
Unilever Pakistan (70.4% Unilever equity) is the largest FMCG company in

Pakistan, as well as one of the largest multinationals operating in the
country. Unilever Pakistan Ltd., a subsidiary of the Unilever Group is
operating in Pakistan since 1948. The Company’s main business lines are
Soaps and Detergents, Personal Products, Cooking Oils and Fats, Packed
Teas, and Ice Creams. Unilever has a long list of brands such as Surf, Vim,
Rin, Lifebuoy, Sunlight, Lux, Rexona, Sunsilk, Close-Up, Blue-Band, Dalda,
Planta, Lipton’s Yellow Label, Taaza and Richbru, Brook Bond’s Supreme and
Kenya Mixture etc. which are common household names in Pakistan.
The Company’s factory at Rahim Yar Khan was one of the first industrial
units to be constructed after the creation of Pakistan. As the consumer base
expanded over the years and the Company entered into new product lines
like Personal Products and Margarine, it invested further in the installation of
modern manufacturing facilities including a factory at Karachi. Today, the
Company is using latest state-of-the-art technology for producing high
quality products.
In 1995, the Company established a new factory near Lahore to manufacture

the Wall’s range of ice creams, which have become popular within a short
time. In 1996, the present group – Unilever UK acquired the Polka Group that
produced ice creams. In 1999, Pakistan industrial promoters (Private) Limited,
owners of ‘Polka’ brands of Ice Cream were merged with Lever.
In order to leverage the synergies of Unilever’s international brand strength,

market edge and corporate image, Lever Brothers Pakistan Ltd. changed its
name to Unilever Pakistan Ltd., in August 2002.

Overview of Unilever Pakistan Ltd.
The company had a turnover of Rs. 23.3 bn (Euro 309 mn) in 2007, and enjoys
a leading position in most of its core Home and Personal Care and Foods
categories, e.g. Personal Wash, Personal Care, Laundry, Beverages (Tea) and
Ice Cream.
The company operates through 5 regional offices, 4 wholly owned and 6 third
party manufacturing sites across Pakistan.
Accountable to our stakeholders
Since the time Unilever Pakistan began its operations in 1948, the Company
has been closely connected to the Pakistani people and its brands have been
an integral feature in their daily lives. In fact, the nature of our business
enables our brands to be the pulse and heartbeat of the 164 million people in
Pakistan.
This is a huge commitment, which makes us responsible and accountable to

all our stakeholders and society as a whole and strengthens our resolve to:
 Make a positive difference to the lives of low income consumers

 Create new opportunities for growth
 Improve the overall quality of life in Pakistan, by promoting education,
nutrition, health and hygiene.

Our Vision
“Touching Hearts, Changing Lives.”
Our Mission
“Mission Is To Add Vitality To Life. We Meet Everyday Needs For Nutrition,

Hygiene and Personal Care With Brands That Help People Feel Good, Look
Good and Get More Out Of Life.”
Adding Vitality to life:
150 million times a day, in 150 countries, people use our products at key
moments of their day. In the future, our brands will do even more to add
vitality to life. Our vitality mission will focus our brands on meeting
consumer needs arising from the biggest issues around the world today –
ageing populations, urbanisation, changing diets and lifestyles.

Scale and geographic reach:
“Our deep roots in local cultures and markets around the world give us our
strong relationship with consumers and are the foundation for future growth.
We will bring our wealth of knowledge and international expertise to the
service of local consumers - a truly multi-local multinational” - extract from
Unilever’s Corporate purpose.
Strategy and long-term financial target

At the heart of Unilever's strategy is a concentration of resources on areas
where we have leading category and brand positions and which offer
excellent opportunities for profitable growth, especially in personal care,
developing and emerging markets and Vitality. The focus is primarily on
developing the business organically, but acquisitions and disposals can also
play a role in accelerating the portfolio development.
To execute this strategy we have reorganised the business to simplify the
organisation and management structure and to improve capabilities in
marketing, customer management, and research and development. The result
is better allocation of resources, faster decision-making and a lower cost level.
This transformation, known as the One Unilever programme, allows us to
leverage our scale both globally and locally.
Unilever's long-term ambition is to be in the top third of our peer group in
terms of total shareholder return. We expect underlying sales growth of 3-5%
per annum and an operating margin in excess of 15% by 2010 after a normal
level of restructuring charges of 0.5 to 1 percent of turnover. Return on
invested capital is targeted to increase over the 2004 base of 11%. Over the
period 2005 – 2010, we aim to deliver ungeared free cash flow of €25-30
billion. It should be noted that previous and planned disposals and the
additional restructuring plans will have reduced ungeared free cash flow by
about €2.5 billion over this period, while enhancing the ongoing cash
generating capacity of the business.

Internal and External Audit of Unilever
Strengths:
 Customer’s Loyalty.
 Latest state of the art facilities and technology for producing high
quality products.
 International brand strength.
 Committed to business ethics, safety, health, environment and

community.
 UNILEVER’s key competitive advantage over other market

participants is the retail reach of the company. UNILEVER services
500,000 outlets with 50 % through direct distribution and remaining via
wholesalers.
 UNILEVER is enjoying market edge of 41% in FMCG industry.

UNILEVER is at number one in ice cream segment and having 14%
market share all over the globe.
Weaknesses:
 The biggest challenge in safeguarding market position is to become

cost leader.
 Operational complexity due to a large number of products in portfolio

and due to diverse work force.
 Strategic alliance with other small mills for manufacturing purpose is

the weakness as well as a threat for UNILEVER. Although UNILEVER
claims that it is a part of its cost reduction strategy but it can not hide
the reality that it shows weakness of UNILEVER.
Opportunities:

 Markets of developing countries can be proved a profitable segment

because people are consumption oriented rather than saving or
investment oriented.
 UNILEVER can gear up its market share in the untapped rural market.
 Diversification in unrelated business.
 Rapid increase in world population. World population is set to grow

by 800m in 2010 and almost all increase will be in developing
countries.
Threats:
 FMCG market is highly responsive to economic conditions, inflation

and social disruptions resulting in variations in sales revenues and
demand for the company.
 P & G is the major competitor and threat for UNILEVER. Other

organized players are Nestle and R & B.
 UNILEVER is facing intense competition from unorganized players i.e.

cheaper smuggled products and Chinese products. According to
industry source, 40% of tea consumed locally and a large portion of
HPC products are smuggled into the country.
 Legal, political and regulatory factors of host country. For example,

supportive Government policies for attracting FDI, 1% tax rate on
corporate profit and inability of Pakistan Government to control
smuggled products etc.
 Although UNILEVER has a first mover advantage in ice cream

segment but Engro has announced to enter in ice cream segment and is
considering a big rival post CY2010.
 Rapid increase in raw material cost and supply disruptions from

suppliers of raw material. The unprecedented surge in palm oil, tallow
prices and other materials has resulted in declining margins. Going
forward, high raw material costs are a key risk to UNILEVER’s
profitability.

EFE Matrix
Weighted
Key External Factors Weight Ratings
Score
OPPORTUNITIES
Market of developing countries due to more
1. 0.15 4 0.60
tendency towards consumption
2. Rapid increase in world’s population. 0.15 3 0.45
3. Unrelated diversification. 0.10 1 0.10
4. Rural area. 0.05 4 0.20
5. Hygiene Consciousness 0.10 2 0.20
THREATS
1. Competition from organized players, P & G 0.15 4 0.60
2. Inflation Rate 0.08 2 0.16
3. Smuggled products and local competition. 0.07 2 0.14
Legal, political and regulatory factors of
4. 0.05 2 0.10
host country.
5. Rapid increase in raw material cost. 0.10 4 0.40
Total Weighted Score 1.0 2.95
Ratings:
1 – Poor 3 – Above Average
2 – Below Average 4 – Superior
Total weighted score of EFE matrix of UNILEVER (2.95) shows strong

response of company towards external factors.
Justification of ratings:
On opportunity side:
1. It is a general observation that people of developing countries like
Pakistan are more inclined towards consumption rather than saving
and the major portion of spending is on FMCG.
2. World population is increasing at an alarming rate. World population

is set to grow by 800m in 2010 and almost all increase will be in
developing countries. And increase in population leads to increase
demand of FMCG sector.
3. Like Engro, UNILEVER can enter in unrelated areas of production.

4. The under penetrated rural market offers tremendous growth potential

as rural population constitutes around 60% of the total population. In
the past few years, favorable structural changes, such as double digit
growth in agricultural credit, increased penetration of television cable
media have boosted demand for FMCG products. Following table
shows that rural population will be almost 50% of total population in
near future.
% of total population 1990 1995 2005 2010 2015E

Rural 31.9 34.3 37.0 43.3 47
Urban 68.1 65.7 63.0 56.7 53
Total (mn) 109.4 123.6 159.2 179.6 202.2
On threats side:
1. P & G with 50% market share is a big threat for UNILEVER. Nestle
with roundly 30% market share is also posing a threat in near future.
Engro is planning to enter in ice cream market and a future rival in ice
cream as well.
2. Rapid increase in inflation rate can increase the prices of products and
hence can reduce demand.
3. Smuggled products swallow a big part of profits of UNILEVER every

year. Almost 40% tea and 29% shampoo used in Pakistan is smuggled
from Afghanistan and China.
4. Economic system of host country and rapid increase in raw material

cost are last two major threats for UNILEVER.
IFE Matrix

Weighted
Key Internal Factors Weight Ratings
Score
STRENGTHS
1. Customer’s Loyalty. 0.15 4 0.60
2. Micro level retail outlets 0.10 4 0.40
Latest state of the art facilities and
3. 0.10 4 0.40
technology.
4. International brand strength. 0.08 3 0.24
5. Market share of 41% 0.12 3 0.36
Committed to business ethics, safety,
6. health, environment and community. 0.10 3 0.30
WEAKNESSES
1. Strategic Alliance 0.15 1 0.15
2. Costly Products. 0.15 2 0.30
3. Operational Complexity. 0.05 1 0.05
Total Weighted Score 1.0 2.80
The score 2.80 shows that company has solid internal position, its strengths
are overcoming the weaknesses.
Ratings:
1 – Major Weakness 3 – Minor Strength
2 – Minor Weakness 4 – Major Strength
Justification of ratings:
On strength side:
1. Customer’s loyalty is not a hidden fact in UNILEVER case. People have

developed and adopted the taste of UNILEVER’s high quality products
and there is no comprise on quality. 150 million times a day, in 150
countries, people use UNILEVER’s products at key moments of their
day.
2. Micro marketing in developing countries. UNILEVER services 500,000

outlets with 50 % through direct distribution and remaining via
wholesalers.
3. UNILEVER’s continuous expansion and its large market share indicate

their strength in latest facilities and quality management. UNILEVER
has ISO certification.

4. Its brands are enjoying international recognition. UNILEVER is serving

almost 150 countries.
5. UNILVER is concerned about its customers as well as employee. There

are strict safety standards for employees and visitors of plants too.
On weakness side:
1. Although UNILEVER claims that strategic alliance with small firms for
manufacturing purpose is the part of its reducing cost objective but if
we look at the other side of the picture, strategic alliance is a weakness
as well as threat for UNILEVER. For example, Asad Soap Factory is
manufacturing soap for UNILEVER Rahim Yar Khan, and now Asad
soap factory is searching for buyers of soap plant.
2. UNILEVER’s products are costly as compare to local producers.

Although costly goods are not posing any big threat to UNILEVER but
in long run it can be proved harmful for company. So company is
responding greatly towards covering its weakness. For this purpose,
company has adopted policy of contractual hiring, strategic alliance
etc.
3. UNILEVER has a large number of products in its portfolio. It means

that UNILEVER has a large number of SBU’s to control. It adds
operational complexity to UNILEVER’s operations.
SWOT or TOWS Matrix

STRENGHTS WEAKNESSES
1. Customer’s Loyalty. 1. Strategic Alliance
2. Micro level retail outlets 2. Costly Products.
3. Latest state of the art
facilities and technology. 3. Operational Complexity.
4. International brand
SWOT / TOWS strength.
Matrix
5. Market share of 41%
6. Committed to business
ethics, safety, health,
environment and
community.

OPPORTUNITIES S-O Strategies W-O Strategies

1. Developing countries. 1. Discover new markets 4. Market Expansion in
(O1,O2,O4,S4,S3) rural areas (O4, O1, W2)
2. Rapid increase in world’s 2. New quality products
population. (O3,O5,S3,S6)
3. Unrelated diversification. 3. Unrelated diversification
(O3, S1)
4. Rural area.
5. Hygiene Consciousness
THREATS S-T Strategies W-T Strategies
1. Competition from
organized players, P & G 5. Vertical Integration 6. Increase in
(T1,T3,S2,S4) manufacturing capacity.
2. Inflation Rate
(W1, T1).
3. Smuggled products and
local competition. 7. Cost leadership(W2,T5)
4. Legal, political and
regulatory factors of host
country.
5. Rapid increase in raw
material cost.

Proposed Strategies:
1. UNILEVER can capture untapped rural markets and markets of

developing nations by using its state of the art facilities & technology.
International brand strength is plus point which will be proved helpful
while positioning.
2. UNILEVER’s Commitment to business ethics, safety, health, environment

and community can be proved helpful in order to satisfy hygiene conscious
customers. UNILEVER should focus more on quality of goods.
3. Unrelated diversification is a risky decision to be taken. Loyal

customer is the major power to cope up with after effects of this
decision.
4. Customers in rural areas and in developing countries usually have low

income level. UNILEVER should reduce its costs in order to capture
that uncovered markets effectively.
5. UNILEVER can use its international brand strength and wide network
of retail outlets in order to compete with organized and unorganized
players of market.
6. Strategic alliance is showing the weakness of UNILEVER in

particularly manufacturing area which the competitors do not hold.
UNILEVER should its production capacity in order to compete in
market and to reduce competitor’s threat.
7. If UNILEVER can obtain cheaper raw material, it can reduce cost of

goods manufactured.

SPACE Matrix
Financial Strength (FS) Ratings
10% increase in net income in 2009 as compare to 2008. +4

Net sales were 15.7% 2009 as compare to 14% in 2008. +3
Total asset turnover is 3.2times in 2009 as compare to 3.1 times
+2
in 2008.
ROI has declined from 87% to 86% in 2009. +1
ROA is averaged 27% which is declined to 24% in 2009. +1
Total: +11
Industry Strength (IS)
Consumption Oriented Culture. +4

Rapid increase in raw material cost. +2
Growth potential in rural and developing countries market. +4
Profit potential is reducing due to intense competition
+1
especially from un-organized players.
Total: +11
Competitive Advantages (CA)
Committed to business ethics, safety, health, environment and

-1
community.
Customer loyalty. -1
Market share of 41%. -2
Control over supplies and distribution. -4
Latest state of the art facilities and technology. -1
Total -9
Environmental Stability (ES)
Demand in the retail industry is price elastic. -3

Smuggled products and local competition. -5
Legal, political and regulatory factors of host country -3
High rate of inflation effects demand. -4
Law and Order Situation -2
Total: -17

Average scores:
FS = 11/5 = 2.2
IS = 11/4 = 2.75
CA = -9/5 = -1.8
ES = -17/5 = -3.4
X-axis = IS+CA = 2.75-1.8 = 0.95
Y-axis = FS+ES = 2.2-3.4 = -1.2
FS
+6
CA -6 + 0.95 +6 IS
-1.2
Competitive
Strategy
-6
ES
SPACE matrix indicates whether conservative, aggressive, defensive and

competitive strategies are more appropriate for given organization.
UNUILEVER should pursue Competitive Strategies that are intensive and
integration strategies.
I will suggest following two strategies:
1. Product development
2. Market Development

Company will use Product Development to increase sales by slightly

modifying its products. It would eliminate its threat from unorganized
market competitors which are selling smuggled items and hurting the market
of UNILEVER quite badly.
Following are some factors that prove why I choose this strategy for
UNILEVER:
 UNILEVER’s existing products are very much successful across the

globe. Its 41% market share shows the number of satisfied customers.
 There are rapid technological developments in FMCD industry.
 FMCG is a high growth industry. High growth is characterized by

rapid increase in demand due to some factors like increase in
population etc.
 UNILEVER has both organized and un-organized rivals. Organized

rivals are competing by introducing comparable prices and un-
organized rivals are hurting UNILEVER by selling even at lower of the
cost.
Market development is another strategy suggested for UNILEVER, we’ve

seen that UNILEVER is producing high quality products and captured the
maximum market share. But still lots of lower and middle income people are
out of its user for most of the products as they are highly priced. Rural area is
also an untapped market for UNILEVER. UNILEVER must consider about
producing low-priced products as well so company can earn maximum share.

BCG Matrix
Market Share
High Medium Low

1.0 0.50 0.0
?
High +20
Ice cream
Knorr
INDUSTRY
SALES
GROETH
RATE (%) Detergents Dove
Medium 0
Beverages (Tea)
Soap
Home & Personal care
Low -20
Industry Classification:
Industry Industry Classification Indicators

Tea Mature Industry growth lagging GDP growth.

Low profit margins
Reduced sales volumes
Ice cream Growth 0.5kg per capita yearly consumption
Double digit revenue growth
Large Capex and advertising spend
Soap Mature ULEVER Growth company within
mature industry
Lux sales doubled in 3 years
High profit margins
Introduction of liquid hand wash
Detergent Growth 11% rise in Surfs market share
Low penetration, 50% population uses
laundry soap
Double digit turnover growth
Shampoo Growth Lowest penetration in Asia.
Clear Shampoo highest growth in
comparable regions
STARS - Ice cream:
Unilever has the first mover advantage in the capital intensive ice cream
segment. With around 65% market share, ULEVER is the only major operator
in the industry. The company is in the process of increasing production
capacity and strengthening its distribution channel. In CY07, sales were
restricted by lost trade confidence, delay in factory expansion resulting in
plant shutdowns, and adverse weather conditions. However, going forward
with per capita consumption at a low 0.5 liters per annum tremendous
growth potential exists in the ice cream segment.
We expect segment revenue growth of CAGR 19% in CY08-CY12E.
QUESTION MARK – Frozen foods:
According to matrix, UNILEVER’s frozen foods like Knorr and some products
of household care business units like Dove are question marks as they are
operating in a growing market without high market share, thus holding the
sales growth of the company’s 400 leading brands by 0.6%.
Therefore it can be noticed that not the whole divisions are under
performing, as a result UNILEVER needs to invest more in these business
units to keep up with the fast growing market because they are already

successful but need better performance. Brands such as Knorr and Lipton in
food and Dove in the household product sector are among the core brands
that raise concern for UNILEVER. As they operate in a growing market more
investment is needed to boost sales and margin and as it is unlikely that these
units achieve sufficient cost reduction benefits, UNILEVER may turn to its
cash cow businesses to offset such investment.
As part of its path to growth strategy UNILEVER must build on these
businesses to improve performance as the market share must grow if they are
to become stars otherwise they may face alternative solutions that could
include the sale of the business, which should be the last alternative because
of the growing divisions inside the business.
UNILEVER might be better off investing more cash in frozen foods and
household care; since the market is growing it may gain more share and
dominance
CASH COWS – HPC:

The HPC segment continues to drive the top-line and profitability growth,
and is the key focus of the company’s growth strategy. In CY09 the company
posted impressive turnover growth of over 25% attributable to higher
volumes and price increases. Among the key brands in the HPC business Lux,
Surf and Sunsilk continue to be the star performers with market leadership
positions.
DOG – Beverages (Tea):

The mature tea segment continues to follow a declining trend as ULEVER
faces stiff competition in the tea market. ULEVER continues to lose sales
volume to Tapal in organized sector and to small local brands in rural areas
that are using cheap smuggled tea. Supply disruptions as a result of political
turmoil and drought in Kenya ensue in squeezed margins.
The companys strategy is to defend losing market share as no growth is
expected in beverages segment. ULEVER had two production facilities for tea
located in Karachi and Khanewal. Recently, ULEVER has closed down the
Karachi tea factory in view of low demand and sales volumes.
This is expected to result in restructuring charges in the short run, however,
in the long run the company is expected to benefit in terms of cost efficiencies
and reduced overheads.
In the backdrop of losing market share, the contribution of tea business to

total turnover has declined over the years (34% in CY09). Going forward, the
tea segment is expected to remain under pressure. It is forecasted a flat
outlook for the segment with decline in turnover of 5-6% each year.

Internal-External Matrix
IFE Weighted Scores
Strong Average Weak

3.0 2.0 1.0
4.0
High i ii iii
EFE 3.0
Weighte
d Medium
iv v vi
Scores
2.0
Low vii viii ix

1.0
The IFE matrix score for UNILEVER is 2.80 and for EFE matrix score is 2.95
therefore our IE matrix falls more around ‘v’ cell.
The company should adopt HOLD & MAINTAIN STRATEGIES and I

recommend Market Development and Product Development for
UNILEVER. UNILEVER can introduce existing products to new geographical
area that are rural markets and markets of developing nations. On the other
hand UNILEVER can also modifying its existing products and introduce
variants in order raise its market share.
Grand Strategy Matrix

Rapid
Rapid Market
market Growth
Growth
Q2 Q1
Weak Strong
Competitive Competitive
Position Position
Q3 Q4
Slow Market Growth
The grand matrix helps us to determine the strategy that firm must pursue,
based on its competitive position and market growth.
UNILEVER lies in Q1 which represents excellent strategic position of

company. For these firms, continued concentration on current market and
products is an appropriate strategy. UNILEVER has abundant resources so
backward, forward and horizontal integration may also prove effective.
QSPM Matrix
Market Product
Development Development
Attractive Attractive
External Factors Weight Total Total
Score Score

Untapped Rural area. 0.05 4 0.20 --- ---

Market of developing 0.15 3 0.15 --- ---
countries.
Rapid increase in world’s 0.15 4 0.60 1 0.15
population.
Hygiene Consciousness 0.10 --- --- 2 0.20
Unrelated diversification. 0.10 --- --- --- ---
Legal, political and regulatory 0.05 4 0.20 1 0.05
factors of host country.
Inflation Rate. 0.08 2 0.16 3 0.24
Competition from P & G 0.15 4 0.60 3 0.45
Raw material cost increased. 0.10 3 0.30 4 0.40
Smuggled products and local 0.07 3 0.21 4 0.28
competition.
Total 1.0 2.42 1.77

Internal Factors
Costly Products. 0.15 --- ---- --- ---
Customer’s Loyalty. 0.15 3 0.30 4 0.60
Micro level retail outlets 0.10 4 0.40 1 0.10
Latest state of the art facilities 0.10 3 0.30 3 0.30
and technology.
Market share of 41% 0.12 4 0.48 3 0.36
Committed to business ethics,
safety, health, environment 0.10 --- --- --- ---
and community.
Strategic Alliance 0.15 --- --- --- ---
International brand strength. 0.08 4 0.32 3 0.24
Operational Complexity. 0.05 --- --- --- ---
Total 1.0 1.8 1.6

Grand Total 4.22 3.37
Strategic Recommendation
Appropriate strategy for UNILEVER is Market Development. UNILEVER

should remain in the present business and should introduce present products
in new geographical area.
Following are necessary factors that must be present while choosing market
development strategy:

 UNILEVER has its own strong distribution channel.
 UNILEVER is very successful at what it does.
 Untapped rural market and market of developing countries exist for

UNILEVER to cover.
 UNILEVER is a strong MNE in Pakistan. It has abundant resources

both financial and human, so it can easily expand geographically. Here
we are not concerned about expansion of operating activities to new
geographical area. We are particularly concerned about capturing
untapped market. It is up to UNILEVER whether it is decided to start
operating in new areas too or just introduce products by using its
strong channel of distribution.
 UNILEVER is operating globally. It means that FMCG is such an

industry which can be grown globally.
References
 www.pakistanunilever.com
 www.igisecurities.com.pk

And various news paper articles, research findings and blogs, which helped me
indirectly to build up my mind about Pakistan UNILEVER and figure out their
External and Internal Factors which were involved in the project.

Strategic Analysis of UNILEVER Pak LTD

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Strategic Management Of UNILEVER 1

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

Nadia Shoukat (23)

Sir Shahid Yaqoob

Submittion Date: 22 May, 2010

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

WE DEDICATE THIS HUMBLE EFFORT TO

The Holy Prophet

And also dedicated to

“OUR REVERED PARENTS”

WHO HAS BEEN A BEACONHOUSE

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

We deem it utmost pleasure to avail this opportunity to

We have the honor to express our deep sense of gratitude and

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

INTRODUCTION OF UNILEVER PAKISTAN Ltd.

Unilever is one of the world's leading suppliers of fast moving consumer

Unilever Pakistan Ltd:

Unilever Pakistan (70.4% Unilever equity) is the largest FMCG company in

In 1995, the Company established a new factory near Lahore to manufacture

In order to leverage the synergies of Unilever’s international brand strength,

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

Overview of Unilever Pakistan Ltd.

Accountable to our stakeholders

This is a huge commitment, which makes us responsible and accountable to

 Make a positive difference to the lives of low income consumers

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

“Touching Hearts, Changing Lives.”

“Mission Is To Add Vitality To Life. We Meet Everyday Needs For Nutrition,

Adding Vitality to life:

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

Scale and geographic reach:

Strategy and long-term financial target

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

Internal and External Audit of Unilever

 International brand strength.

 Committed to business ethics, safety, health, environment and

 UNILEVER’s key competitive advantage over other market

 UNILEVER is enjoying market edge of 41% in FMCG industry.

 The biggest challenge in safeguarding market position is to become

 Operational complexity due to a large number of products in portfolio

 Strategic alliance with other small mills for manufacturing purpose is

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

 Markets of developing countries can be proved a profitable segment

 Diversification in unrelated business.

 Rapid increase in world population. World population is set to grow

 FMCG market is highly responsive to economic conditions, inflation

 P & G is the major competitor and threat for UNILEVER. Other

 UNILEVER is facing intense competition from unorganized players i.e.

 Legal, political and regulatory factors of host country. For example,

 Although UNILEVER has a first mover advantage in ice cream

 Rapid increase in raw material cost and supply disruptions from

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

Total weighted score of EFE matrix of UNILEVER (2.95) shows strong

2. World population is increasing at an alarming rate. World population

3. Like Engro, UNILEVER can enter in unrelated areas of production.

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

4. The under penetrated rural market offers tremendous growth potential

% of total population 1990 1995 2005 2010 2015E

3. Smuggled products swallow a big part of profits of UNILEVER every

4. Economic system of host country and rapid increase in raw material

THE ISLAMIA UNIVERSITY OF BAHAWALPUR