Consultancy Report

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Consultancy Report

For this consultancy report, the organization selected is Unilever. The key points

discussed in this report include background information of Unilever, external contexts affecting

HR strategy and practice, analysis of the attempts made by Unilever for managing such contexts

and recommendations for enabling Unilever to more effectively manage these contexts.

Background Information on Unilever

Unilever is an international corporation that sells consumer goods in many countries. The

company was founded in 1929 and has since created jobs in several countries. Headquartered in

Rotterdam. The most important products sold are FMCG, body care products and cleansers.

According to sales statistics for 2016, Unilever has been selected as the world’s third-largest

company. Today the company operates in 190 countries and has become a successful company.

In 2013, the company employed approximately 174,000 people in several countries. The use of

information systems and strategic management has helped the company to control the scope of

its operations in several countries.

Unilever is a global company with a global presence that achieves all possible

management forecasts and functional targets while demonstrating the superiority of its

competitors. Unilever’s goal has been to develop a sustainable living standard for everyone.

They are trying to follow an approach that continues to build a better future. To address the

terrible effects of aerobics in the atmosphere, the company has focused on natural problematic

factors. The organization’s administration knows that some common factors are important for

improving business management capabilities. The company has been trying to do business by
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presenting the social factors needed for years. These are general specifications for a functional

marketing concept.

Unilever has shown great diversity. These teachers work tirelessly to provide quality

products to people to make greater improvements. Unilever has adopted a procedure for dealing

with a similar number of accessible market segments. He realizes his organizational attitudes

through industry relationships. The organization is aware of many issues around the world and is

committed to promoting and addressing this issue globally. Unilever produces many brands that

can affect the life of the community. Always focus on lighting, focusing on strategic approaches

to improve the company’s business.

Generic Strategies and External Contexts Affecting HR Strategy and Practice

Unilever’s overall strategy offers a competitive advantage in meeting the specific needs

and preferences of consumers. The Porter model employs common strategies to ensure the

competitiveness of the organization needed to grow and grow the company (Banks, Vera, Pathak

and Ballard, 2016). Unilever’s competitive edge depends on a product development approach

that combines research to meet market demand. Besides, joining an intensive strategy will

continue to grow.

Cost Leadership

Unilever competes on price factors for several factors. The price of the product is mainly

based on the internal efficiency of profitability, which allows business processes to raise

customer profit and cost above average. The organization determines the price based on cost and

revenue factors so that customers can buy the product. Further, this strategy has been deemed
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most suitable for the organizations that produce standard and universal quality products, meet

consumer demand at the lowest cost, and offer quality products. To become a cost leader,

organizations like Unilever must closely monitor competitors’ pricing strategies and lower prices

to those of their competitors. It takes into account factors such as building efficient production

structures, minimizing sales and service costs, and maintaining strict control over production

problems and indirect costs.

Unilever is an organization that manages many products but also requires to focus on the

value chain. Identify and evaluate how classification and evaluation can best use resources to

determine how resources and employees could add value to the company’s business. Unilever is

committed to achieving its most important goals and support activities. According to Unilever’s

annual report, this demonstrates the importance of customers, who believe that the organization

can help people understand their brand choices and small movements with other people around

the world.

Differentiation

It has been significant for Unilever to provide value to its customers by the ownership

and features of its products. This can often be achieved through improved quality, functionality,

high customer service, product development and advanced technical features. Unilever creates

value through quality products, shows more product choice, provides efficient services to

customers and focuses on consumer needs. Unilever’s overall competitive strategy is to expand

the organization through intensive product development efforts. This particular goal focuses on

developing products that are different from competitors in terms of attracting customers. Brand

loyalty is considered to be the most important advantage of Unilever’s competitive advantage.

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This shows that as long as the consumers can meet their needs, their response to price increases

will be diminished (Unilever Strategic Report, 2017).

Focus

In its core strategy, Unilever focused primarily on the demographic characteristics of its

population, targeted people of all ages and offered a variety of products to people. The aim is to

focus on emerging markets in India, which a few years ago gave the company greater growth

prospects. Besides, product selection and value chain management are limited to a larger market

share. Focus on customer needs and satisfaction, which is always quite important to customers.

Innovation, R&D, quality of service and products have always been at the heart of the company

and ensure that the focus has been on such factors that appeal to more customers and develop a

loyalty base. Unilever, for example, owns the AX brand, which aims to improve the foreign

market and style for attracting the female market. The financial strategy of Unilever has also

been linked to the company’s overall strategy. It is significant for the Unilever to grow in

developing countries that offer more growth opportunities.

Analysis

Five Forces Model of Porter

The Five Forces model of Porter has been deemed one of the effective models for

critically analysing the competitive and career development factors retained in the business

environment (Grant, 2016).

Suppliers Bargaining Power

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The workforce of suppliers shows how authority and power conquer them. Unilever is

available worldwide. Suppliers have strong bargaining power but a limited influence on the

organization. Further, the focus of Unilever has been on production policies and local

purchasing. It can help organizations use their power to stop supplier power and weaken the

company. Thanks to this strategy, suppliers cannot become Unilever’s competitors and demand

higher wages than Unilever.

Competitive Rivalry

The business interest of the company from other global world market giants has led the

company to threatened areas (Ehrenberg and Smith, 2016). There seem to be many competitors

in the big market. Not only large companies but also local companies are creating strong

competition for Unilever. Moreover, the competitions range from small corner stores to tough

organizations like Procter and Gamble, Nestlé and Kraft. These competitors have urged the

company to maintain its unmatched position in the market as they provide and deliver consistent

products and services to customers. These competitors can and will attract existing Unilever

customers by offering better services and products. Furthermore, there is another type of

competition that is mainly based on product prices. As the consumer market is quite freely

tradable, customers are always offered the best products at the best prices. Procter and Gamble

offers clients more job offers to attract more customers. Besides, local stores and shops have a

better idea related to the customers and offer more opportunities to attract customers (Ehrenberg

and Smith, 2016).

Substitution’s Threat
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The 21st century brought new areas to the demands of advertisers. Because the age of

consumption is strictly dependent on variations in consumer demand, sharp changes in product

and service models have created a gap between businesses and customers (Mathooko and Ogutu,

2015). Therefore, uniformity of product variants means malfunctions and mistakes of the

company. On the other hand, companies like Procter and Gamble (P&G), Kraft and Nestlé have

introduced new products and service areas that explicitly serve Unilever customers. It is known

that consumers have not experimented with Unilever products other than household products.

Therefore, Unilever must develop new procedures and strategies to meet customer needs. An

honest and strategic vision of client psychology can lead to the long-term success of the

company (Morschett, Schramm-Klein and Zentes, 2015).

Buyer Power

As it is known that Unilever has been recognized globally, its buyers are found in

different parts of the world. Besides, the purchasers have been quite different in different

countries and regions, so the concept of paying for products and how they are consumed vary

accordingly. However, many customers do not influence the company’s pricing process.

However, they may go on to consume other companies’ products. As a result, Unilever has a

huge chance of losing customers. To satisfy its customers, Unilever must take steps to set prices

for its products and provide services to its customers.

New Entry’s Threat

Unilever has a large geographic market and has been in business for years.

Geographically, the strongest market segment is represented by the developed countries where
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the company has been operating since its inception. Newcomers to developed countries need

thorough legal procedures, while LDCs or developing countries provide international

organizations with investment opportunities to replace the best job and business opportunities.

Unilever has the advantage of creating a franchise, affiliate or affiliate business base in almost all

markets worldwide. The brand image is the biggest barrier to entry of other new products.

Strategic Management’s Theoretical Interpretation in Unilever

To analyse the external contexts and Unilever's strategic management processes, three

different theories have been considered and are related to the strategies implemented in the

business process (Barney and Hesterly, 2015). Such theories are survival based theory,

contingency theory and profit maximization theory.

Profit Maximization Theory

Profit maximization theory has been linked to the commercial economic profit’s concept.

In general, this theory is the difference between a firm’s marginal costs and its marginal benefits.

The gap is widening and profit margins are growing. This theory is related to the company’s

neoclassical theory. As per the neoclassical theory, the ultimate goal of a company is to

maximize profits. This process occurs when a company follows two extrinsic economic rules:

(i) The marginal cost of an enterprise is equal to the marginal revenue.

(ii) The marginal cost curve reduces the marginal yield curve.

Maximum advantage also refers to pure advantage. This is more than the cost of

production. Once all the necessary production factors have been paid, the entrepreneur can enjoy

the remaining amount. In summary, this is a situation where the residual income of the
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entrepreneur exceeds the normal income. Trading companies have developed several strategies

to maximize profits. Maximizing the benefits is the driving force behind the spending of certain

consumer goods by business organizations. There are several hypotheses about profit

maximization theory. The first prerequisite is advertising and saving strategies. Today, Unilever

is one of the most viewed organizations that utilize profitability to communicate with customers

about savings strategies. However, the company did not exceed the advertising costs for

promoting the product. Besides, the company’s strong brand image reduces opportunities for

regular advertising. Therefore, the company controls the advertising costs. Not only does

Unilever strictly control its suppliers, but it also buys the necessary supplies from warehouses to

ensure that unexpected shipments increase. Therefore, the ratio of the cost margin is lower than

the profit margin. Sometimes companies check that their total production and operating costs are

balanced against total invoices. In current time, different advertising strategies have been

implemented by Unilever along with varied policies in various sectors. Small but regular

promotions help increase profit margins by helping the company’s product attract more people

and reduce advertising costs.

Contingency Theory

Contingency theory has been based on the leadership development process and the

company strategy. Situation theory is one of the most effective theories on earnings with

different forms of expectation. As per the contingency theory, the main psychology influences

the growth of the business. When working on a strategic framework, it is necessary to improve

the vision of business executives in the future without ignoring current business conditions.
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Three key factors that can be applied to strategic management in emergency theory. These

include:

(i) Management

(ii) Structure of activities

iii) Post Office (Laursen and Andersen, 2016)

All of these factors must be integrated with the experience of the strategic designer.

Relationships between leaders and members determine the constant strength and boundaries of

an organization. Establish public relations between managers and employees. It must be a solid

platform for managerial comment on the company’s new strategy, which needs to be refined in

an appropriate strategic intervention process. In Unilever, the relationships between directors and

subordinates are well defined and structured so that information can be accurately communicated

within the organization. Under the central policy, branches, franchises and affiliates also have to

comply. For ensuring the market’s future, regular employee conferences and meetings have been

set up by Unilever for building a strong bond between all of the company’s internal stakeholders.

The next factor, the structure of activities, is important for setting work standards and attracting

customers. The work culture required by the company is always the responsibility of the

employees, which requires a higher level of production, which leads to more supply and sales in

the market. Special task building is one of the main strategies the company applies at

headquarters and in resale. Unilever also participates in the structuring and evaluation of certain

tasks that must be rigorously performed in various activities, such as sales, marketing, production

and supply.

Lastly, the state of power is one of the key factors that affect HR strategy and practice.

This factor asks whether employee participation is guaranteed by strict measures or incentives.
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Although this factor has little to do with the organization’s strategic management, it harms the

company as planning and overall strategic structures are highly dependent on employee

participation and company performance.

Survival Based Theory

Like profit maximization theory, survival theories are related to economics. The theory of

survival is also called Neo-Darwinism (Khalil and Economic 2016). This theory applies to the

best and best companies that do not win in the market. This theory is driven by social

Darwinism. As per this theory, business development has made them successful. Changes in

market strategies have led to continued market growth, specifically in developing countries. For

reproducing the developed markets’ nature, Unilever requires to make some specific changes to

achieve strategic development.

Recommendations

After a brief discussion on strategic management, except Unilever, it could be

recommended that the company applies several theories and models related to strategic

management. The goal must be the customer and the strategy must be strictly customer-centric,

but the main motivation for the company must be to maintain product quality and change

marketing methods and product content. Besides, after analysing Porter’s five types of

competitiveness, it could be recommended that Unilever should focus on competing companies’

business strategies to compare and compensate for differences and technical failures. To build a

strategic framework for all aspects, a company needs to start with its core business, supply chain
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and human resources. By managing the organization’s internal capabilities and other franchise

rights, Unilever has an analytical insight into its market and position.
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References

Banks, M. A., Vera, D., Pathak, S., and Ballard, K. 2016. Stakeholder management as a source

of competitive advantage. Organizational Dynamics, 1(45), 18-27.

Barney, J. B., and Hesterly, W. 2015. Strategic management and competitive advantage

concepts and cases. Pearson.

Ehrenberg, R. G., and Smith, R. S. 2016. Modern labour economics: Theory and public policy.

Routledge.

Grant, R. M. 2016. Contemporary strategy analysis: Text and cases edition. John Wiley and

Sons.

Khalil, E. L., and Economics, N. 2016. Neo-Darwinism: Clearing the Way for Historical

Thinking.'. Economics as Worldly Philosophy: Essays on Political and Historical

Economics in Honor of Robert Heilbroner, 22-72.

Laursen, L. N., and Andersen, P. H. 2016. Supplier involvement in NPD: A quasi-experiment at

Unilever. Industrial Marketing Management, 58, 162-171.

Mathooko, F. M., and Ogutu, M. 2015. Porter’s five competitive forces framework and other

factors that influence the choice of response strategies adopted by public universities in

Kenya. International Journal of Educational Management, 29(3), 334-354.

Morschett, D., Schramm-Klein, H., and Zentes, J. 2015. Strategic International Management.

Springer.

Unilever- strategy report. 2017. unilever.com. Retrieved 9 March 2020, from

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