1.

INTRODUCTION

1.1 Company Overview

Unilever is one of the world’s top makers of packaged consumer goods operating in 190 countries
and have a large brand portfolio of over 400 brands under two divisions: Foods and Home &
Personal care. Unilever is one of the world’s top three food firms with Nestle and Kraft- and the
world’s second largest packaged consumer goods company –behind Procter & Gamble. The main
success factor of the company is the constant focus on innovative product developments.

Unilever owns over 400 brands, with a turnover in 2017 of 53.7 billion euros, and thirteen euro:
Axe/Lynx, Dove, Omo, Heartbrand icecreams, Hellmann's, Knorr, Lipton, Lux, Magnum, Rexona/
Degree, Sunsilk and Surf.[3] It is a dual-listed company consisting of Unilever plc, based in London,
and Unilever N.V., based in Rotterdam. The two companies operate as a single business, with a
common board of directors. Unilever is organized into four main divisions – Foods, Refreshment
(beverages and ice cream), Home Care, and Beauty & Personal Care. It has research and
development facilities in the United Kingdom (two), the Netherlands, China, India and the United
States.[4]
Unilever was founded on September 2, 1929, by the merger of
the Dutch margarine producer Margarine Unie and the British
soap maker Lever Brothers. During the second half of the 20th
century the company increasingly diversified from being a maker
of products made of oils and fats, and expanded its operations
worldwide. It has made numerous corporate acquisitions,
including Lipton (1971), Brooke Bond (1984), Chesebrough-
Ponds (1987), Best Foods (2000), Ben & Jerry's (2000), Alberto-
Culver (2010), Dollar Shave Club (2016) and Pukka Herbs (2017). Unilever divested its specialty
chemicals businesses to ICI in 1997. In the 2010s, under leadership of Paul Polman, the company
gradually shifted its focus towards health and beauty brands and away from food brands showing
slow growth.

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 Fig 1.1: Legal Structure

1.2 Mission & Vision of the company

“OUR PURPOSE IS TO MAKE
SUSTAINABLE LIVING COMMONPLACE”
We work to create a better future every day, with brands and services that help people feel good,
look good and get more out of life.

Corporate purpose of the company

OUR VISION: the compass strategy “We will lead for responsible growth, inspiring people to take
small everyday actions that will add up to a big difference. We will grow by winning shares and
building markets everywhere.”

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 Management: leadership executive diagram

1.3 The Competitive environment

Strategic Groups

Home& Personal • Household industry; laundry

care detergent, cleaner.
• Personal care; hair care, cosmetics,
toothpaste

Food & • Food: packagedmeals, Dairy.

Beverage • Refreshment:beverage, ice
cream

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 Table 1.3.1: Financial and non-financial KPI’s (2016) Source: www.dicamp.eu

Unilever Business
Activities Home care, Personal Care, Food and
refreshment
Brands >400 , 14 of which generate sales in excess of €1
billion a year.
Employees >174,000
International 190 countries
Customer 2 billions worldwide
Emerging Market 57% of the business
Financial key indicators
Market Capitalization 124.59B
Turn over ( euro) 49.797 million ( -0.3%)
Net Profit ( euro) 5,263 million (+0.9%)
Core earnings per share ( euro) 1.58 ( +0.3%)
Free Cash flow ( euro) 3.9 billion ( 4.3 billion in 2012)
Non financial indicator
R&D annual investment 1 billion euro/ year
Rank innovative company list of Forbes 63
Diversity workforce 58% male, 42% female
Safety 1.03 total recordable accident frequency rate
Engagement score 78%

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1.4 Home and Personal Care Industry

1.4.1 Competitors:

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1.4.2 Porter 5 Forces Analysis (Home & Personal Care Industry)

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 1.4.3 Comparison: Unilever vs Procter and Gamble

Table 1.4.3: Comparison with P&G

Unilever Procter and Gamble

Biggest Brands Dove, Axe, Rexona, Vaseline, Head & Shoulder, Olay, Pantene,
Lifebuoy, Signal, Lux, Sunsilk, Wella Braun, Gillette, Crest, Oral-B,
Clear, Surf, OMO, CIF, Domestos, Ariel, Duracell, Tide and Pampers.
Comfort, Lipton and Knorr

Turnover $ 66.7 $ 83.7 bn

Global Market share / Men’s grooming 12.7% (Axe, Men’s grooming 33% (
activity Dove) Gilette)
Bath 20.8% ( Dove, Lux) Laundry 26% ( tide and ariel) Hair
Deodorants 33.8% ( Rexona, Axe) Care: 19.6% ( H&S)

Market Place (2012) 55% in emerging market 45% in 37% in emerging markets 63% in
developed markets developed markets

Strategy Sustainable Innovation+ ++ Acquisition +++ Innovation ++

selective acquisition+ +

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1.5 Food and Beverage Industry

1.5.1 Competitors

1.5.2 Food and Beverage Industry 5 forces Analysis

Fig 1.5.2: 5 forces Analysis (Food & Beverage)

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 1.5.3 Food and Beverage Industry: Unilever vs Nestlé Corp.

Table 1.5.3: Comparison with Nestle Corp.

Unilever Nestlé corporation

Biggest Brands Knorr, Magnum, Flora, Nescafé, Maggi, Nestlé Nan ( infant
Ben & Jerry’s, Rama ,blue nutrition), Kitkat, Nespresso,
Band Stouffers, Häagen-Dazs Light ice
creams

Turn over 2013 49.797 million euro 92.158 million euro

Market Place 190 countries 130 countries Emerging market +++

Emerging market +++
Innovation Strategy 1 billion/ year on R&D 1.5 billion/year on R&D Sustainable
Sustainable innovation ++ innovation+++ Selective acquisition++
Selective acquisition++
Oxfam ranking list of sustainable companies (2015)

Fig 1.5.3: Oxfam Ranking

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2. Unilever Strategies and Moves

The Business Model of Unilever: Sustainability duty and an opportunity to do business

How does Unilever drive profitability from this business model?

Profitable volume Growth:

Is the growth in physical volume of sales it means more consumers buy more product which leads to
build a brand equity which is the mean target of Unilever, this is driven by investment in innovation a
marketing the brands.
Cost Leverage + efficiency:
The volume growth allows to optimize infrastructure and reduce average cost per unit which improve
profitability and more investment in the business
Innovation and Marketing Investment:
Driving by improving efficiency and growing of investment ability, new and improved products are the
result of investment in R&D and, together with effective marketing, strengthen the brand equity

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2.1 Marketing strategy

 Building brand equity

The aim objective of Unilever is building brand equity, according to the business Dictionary
“the brand equity is a brand's power derived from the name recognition that it has earned
over time, which translates into higher sales volume and higher profit margins against
competing brands”. Unilever’s strategy is to connect brands with people’s live and needs by
creating Brand with Purpose.

 Brand with purpose via program

As a marketing strategy to win market share in emerging market, Unilever associate
programs and purpose to their brands which identify and respond to the local need of people,
for example in Africa in a region with vit A deficient children, Rama and Blue Band margarines
are fortified with 7vitamines including vit A.
Brand with purpose strategy is another competitive advantage of Unilever to establish strong
Brand Equity.

 leverage bigger brands (The top brands makes up more than 54% of Unilever
business)

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Since the arrival of Paul Polman in 2009 Unilever is engaged in a process of brand
rationalization as it reduces its large portfolio by removing 30% of the number of references
in 2013 to focus on the 15 billionaire’s brands.

 New channel winning in the Market place:

• Investing in marketing and advertising is also a competitive advantage of Unilever
(Unilever earned the title of Most Awarded Advertiser at the 60th Cannes Lions
International Festival of Creativity, bringing home a total of 44 awards)
• Unilever explore new media opportunities and partnerships to help the reach more
consumers.
• To wide their ability of going to market and to reach fast and more consumers,
Unilever has developed new channels such as out of home, direct selling, home
vending, e-commerce… and segmented the market.

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2.2 The innovation strategy
Unilever innovates broadly in science and technology, in deep consumer understanding of
people’s habits, tastes and behaviors and innovation also covers areas such as design, packaging,
marketing and advertising. 3 pillar of the innovation strategy:
 strategic science group launched 2013:
 Unilever has over 20,000 registered patents, sets aside more than $1 billion
annually for research and development. Unilever has six strategic R&D
laboratories and 31 major development centres
 Some recent sustainable innovation examples include:
 An upside-down roll-on deodorant that uses 18% less plastic in each pack.
 Pureit, a battery operated home water purification device which gives households
in India access to clean, pure drinking water at low cost.
 Small and Mighty laundry liquids which, because of their size and concentration,
reduce CO2, water usage and transportation costs.

 Open innovation:
 Unilever has been in using open innovation for years, and in 2009 established an open
innovation unit to work with outside partners.
 Unilever is looking outside their walls for sustainable innovation, they launched an
online platform offering experts the opportunity to help the company find the
technical solutions it needs.
 Unilever has also published the key areas in which it wants to innovate such as better
packaging, safe drinking water and sustainable washing.

 New business unit:

 Unilever is collaborating with startup which can grow to become the future of
Unilever.
 The New business unit is constantly looking for developing new technologies,
business models and partnerships which can help stretch Unilever beyond the
company’s core capabilities
 For example; Unilever launched its Go Global start-up hunt, Unilever’s senior vice
president of marketing Marc Mathieu said the initiative aims to help the company
build on its status as a “pioneer in marketing”. “Start-ups are very nimble, agile and
very much able to take risks to invent new marketing platforms.
 Unilever has launched also an incubator for breakthrough ideas holder The Unilever
Incubator is a corporate hot-house for exploring brilliant ideas

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3. SWOT Analysis

 Strengths: (main competitive advantages):

 Operational and cost efficiency: building strong network of distribution
(performing Supply chain) and reduce cost by outsourcing operation.
 Superior value to consumer via brand purpose ( sustainable innovation linked to
local need)
 Consumer connectivity : they penetrate consumer life they are aware of their
needs
 Well established in emerging market: 50 years in Brazil, China and India
 Use of creative advertising and promotions on website and commercials (
pioneer in Digital business)

 Weakness:
 Organizational structure: 2 Unilever: Unilever NV (Netherlands) and Unilever PLC
(UK) may limit flexibility.
 Focusing on Emerging Market may slow down the business growth (Emerging
countries are not economically and politically stable)

 Opportunities:
 Demographics
 Products appeal to wide range of population
 Integration of international employees bring broad
 cultural and business experience in all processes
 Technology
 Already using high technology such as digital business new communication
technology to more efficient supply chain.
 Environment
 Maximize recycled packing materials Processes environmentally friendly
Products are biodegradable.
 Threats:
 Economic:
 Internal turmoil in third world countries.
 Ventures in developing countries are jointly owned.
 Politics:
 Non stable politic situation in some country of emerging market.

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  Environment:
 Increased regulations

4. Conclusion

Since 2010, Unilever start the Unilever Sustainable Plan and it became the spirit of its corporate
strategy: to double size the business whilst reduce its environmental impact and increase social
impact.

Unilever invest in Sustainable Innovation: they believe that innovation is the motor to connect
Unilever product to consumer life (reach up premium consumer, reach down: poor communities,
reach wide: to be the first to understand consumer and meet his need): this is a competitive
advantage to reduce the gap between Unilever and their big competitors.

Unilever is one of the first companies to look outside their walls by giving the opportunity to
expert and startups to collaborate and share Unilever Vision.
Unilever also invest huge amount on Marketing to reduce the power of substitution.

5. References

1. "Annual Report and Accounts 2017 Highlights". www.unilever.com.

2. "Our approach to sustainability". Unilever. Archived from the original on 2 April 2014.
Retrieved 21 March 2015.
3. "About Unilever". Retrieved 9 November 2016.
4. Unilever R&D Locations, Unilever, viewed 19 December 2013

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