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Independent University, Bangladesh

Course Title : PRINCIPLES OF MANAGEMENT
Course ID : MGT201
Section : 07
Submitted to : Ms. Seeratus Sabah
Date of submission : 15th September, 2020

Submitted by :

NAME : ID :

Anika Nawar Mohoshin 1920935

Pinki Akther 1930223

Fauzun Nahar 1920006

Eyaliduzzaman Shunucki 1810904

Raghib Noor 1710305

Aahaduzzaman Auigen 1931359

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Letter of Transmittal
15th September, 2020
To,
Ms. Seeratus Sabah
Lecturer, School of Business
Independent University, Bangladesh
Bashundhara, Dhaka, 1212

Subject : Submission of Assigned Report

Dear ma’am ,
With due respect, it’s our pleasure and honor to be your students and have this
opportunity to present to the report. While preparing we have given the effort thoroughly
on the topic regarding this business. We are pleased to submit our group report of on
Uniliver. Working on this project as a group, has made us learn and gain a lots of
experiences. We want to thank you for your guidance and support throughout the entire
course. I sincerely hope this report meets your approval and demonstrates our ability to
present the report.
Thank you

Faithfully,
TEAM “PORICHALON”.
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Acknowledgemnet
While doing this assignment, we had to take help and guidelines from our respected
faculty, who deserves our greatest gratitude. We have worked in this assignment with
great pleasure.
Firstly, we would like to thank our faculty Ms. Seeratus Sabah of Independent
University, Bangladesh for giving us the opportunity to make this report. We would like
to expand our greatest our deepest gratitude to all these who guided us in writing this
assignment.
Many people, especially the members of team PORICHALON, has given valuable
comments and suggestions which gave us an inspiration to improve this project by a
significant margin. We thank all the people who helped us directly or indirectly to
complete this assignment.

Thank You.
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Table of Contents

1 Research Methods ...............................................................................................5

2 Exicutive Summary ...............................................................................................5

3 Introduction ....................................................................................................6

4 Body of Report...........................................................................................................7
4.1 Components of the External Environment.....................................................................7
4.2 Effects of COVID-19....................................................................................................11
4.3 SWOT Analysis........................................................................................................... 12
4.4 Competitive Advantage:..............................................................................................14

5 Conclusion.................................................................................................................. 15
6 Appendix...................................................................................................................... 16
7 References................................................................................................................. 17
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1. Research method

This is a report on Unilever. the affects of Unilever and its critical stakeholders and shows the
organization structure and report has a disciplined inquiry approach to the study of organization
theories and studies related to the business environment leadership style followed by Unilever.

Information about Unilever was collected from its website and different webpages with the help
of the best search engine, google. Additional information were collected from the internet along
with our recommend course book, management twelfth edition, by Stephen p. Robbins.

This report gives a detailed explanation about Unilever’s management style and approaches.
However, basic information is given to develop or refine theory, not to solve immediate practical
problem.

2. Executive Summary

The main object of this report is to evaluate Unilever's general external factors like- stakeholders,
organizational structure and leadership style; and it’s competitive advantages and the effects of
COVID-19 on Uniliver. As we move on further, we get to know thoroughly about the
companies’ backgrounds and how widely their operations are. Further-more, we also discuss
how the structures are put into action.

In the introduction we discuss how the external factors such as Political, Economic, Social, and
Technology that influence Unilever's operation. Additionally, we elaborate the stakeholders and
why they are crucial for the organization. Unilever’s main stakeholders are the customers,
employees, community. There are other stakeholders as well which affects Unilever's operations.
We have a discussion about the organization structure, and Unilever has a mechanistic
organizational structure also known as a bureaucratic structure, describes an organization
structure that is based on a formal and centralized network. It's a rigid and tightly controlled,
characterized by high specialization, narrow spans of control, high formalization and a limited
information network. In this organization, works are carefully scheduled, tasks are certain, roles
are defined strictly and most formal communication flow along the life of hierarchy. The whole
structure is organized like a well-designed machine.

Moving further, we look into back into the history of Unilever, its motives, goals, achievement
till now, its mission and vision. We also look at the leadership style followed by Unilever which
has been classified as pragmatist. Pragmatist leadership set high standards and unapologetically
expects those standards to be met by themselves and by their employees. This also helps them to
accomplish their objectives.
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3. INTRODUCTION (Company Overview)

Unilever is a multinational corporation, formed of British and Dutch parentage that owns many
of the world’s consumer product brands in foods, beverages cleaning agents as well as personal
care products. Unilever was created in 1930 by the amalgamation of the operations of British
soap maker, Lever Brothers and Dutch margarine Producer, Margarine Unie, a merger as palm
oil was a major raw material for both margarines and soaps and could be imported more
efficiently in larger quantities. Unilever is a dual-listed company consisting of Unilever NV in
Rotterdam, The Netherlands and Unilever PLC in London, UK. This arrangement is similar to
that of Reed Elsevier and that of Royal Dutch Shell prior to their unified structure. Both Unilever
companies have the same directors and effectively operate as a single business.
Over the years, Unilever products many varieties of product, most of which became very widely
consumed products worldwide and was part of customers’ everyday household needs. From
cleaning and detergents to skin care and products, Unilever became the public choice and now
operates in over 190 countries consumed by over 2.5 billion people with a 52 billion euros
turnover in the 2019 fiscal year having around 400 brands.
Unilever was established Bangladesh in 1964, under the name Lever Brothers Bangladesh Ltd
until 2004, when the Government became 39.6% of the company. Later, it was renamed Unilever
Bangladesh in December, 2004. Unilever promotes vitality to life and meets with everyday needs
for nutrition and hygiene. Their goal is to promote cleanliness for a healthier and a better quality
of life towards a sustainable future in every corner.
Through many campaigns, social works, charity, Unilever has promoted a cleaner and healthier
way of life in the rural areas especially in a third-world country like Bangladesh, with their
affordable products, where spending money for consumer goods is difficult for many poor
families. Unilever’s vision is to change people’s lives.
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4. BODY OF REPORT

4.1 Components of the External Environment :

Specific Environment :
1. Customers : An owner of over 400 brands, Unilever is an organization that is known to
target and serve customers of different genders, age groups and income levels all around
the world. From children to adults, there is something that could be provided by this
Brand to everyone. Most of the brands owned by Unilever are those of everyday uses
such as shampoo, soaps and other personal care, e.g Sunsilk, Dove, etc and food products
or groceries like Lipton, Hellman’s and Knorr and are at low price levels, which are
loved and preferred by people of all ages. They are a cult favourite in grocery stores and
supershops, and have many loyal buyers. Their target customers range from upper middle
class to lower class of people. Unilever has especially made its mark in developing
countries like Bangladesh where there are many people with low incomes and can afford
their products since the price range can be under low to mid range. According to studies
conducted by Unilever, 2.5 billion people use the products of Unilever everyday.
2. Suppliers : Unilever owns a diverse range of brands, with each brand selling a lot of
different products from global household names such as Knorr, Lipton, Ben &Jerry’s and
Axe to local brands which are specific to a certain country such as Wheel. Unilever has
suppliers from all around the world, and what is particularly noteworthy is that they are
aiming for sustainability given the recent climatic issues that have been surfacing and the
increased level of pollution. This includes Palm oil from Indonesia, paper from Asia Pulp
and Paper for the packaging of products, tea leaves from Sri Lanka and India, eggs and
oil from American Farms, Milk sourced from Vermont, etc. Synthetic products are made
in laboratories. They claim to have reduced their use of water in factories and in
agriculture, keeping the worldwide issue of water scarcity in mind.
3. Competitors : It is important for Unilever to take its competitors into account especially
when it comes to improving their products and to set prices. Competition also would
enable Unilever to think out of the box and make products that are unique and will attract
consumers away from their competitors and towards buying their products. Unilever’s
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greatest competitors and rivals are mostly in the healthcare, personal care and food
processing industries which include :
● Colgate - Palmolive
● Nestle
● Proctor & Gamble (P & G)
● Johnson and Johnson
● Pepsico
4. Pressure Groups : Unilever faces several pressure groups which include :
a) Environmentalists : With recent changes in the climate including those of global
warming as well as the rises in levels of pollution in both the land and in seas, oceans and
other water bodies, environmentalists are concerned with the amount of pollution
Unilever is creating. From causing deforestation of Indonesian wild forests for obtaining
palm oil to producing non biodegradable plastic packaging to wasting water in factories
at a time when water scarcity is a common issue, Unilever must see through these issues
and concerns raised by environmentalists and implement sustainable means of both
obtaining resources and manufacturing of products.
b) Trade Unions : In many countries, if Unilever fails to keep their labourers happy, they
may risk getting backlash from the Trade union. This would lead to strikes and the delay
in getting everything completed.
c) Human rights activists : A concern which Human Rights activists may have is that
there could be undesirable working conditions for the laborers in factories or in the farms
from which the raw materials are sourced from or there could be the issues of forced
labor or worse, human trafficking, which is common in deeloping or underdeveloped
countries. However, Unilever claims to have safe working conditions, the laborers are
paid fair wages and they are strictly against human trafficking and forced labor.
General Environment :
1. Economic Conditions : Unilever has to take into consideration the many different
economies of different countries in order to distribute their products as well as set the
prices. No matter how wealthy a country is, and regardless of the income level of a
certain country, consumers are likely to prefer inexpensive products which are of good
quality, especially if they are to buy them in bulk, such personal care products or food
products. There will be a high demand for cheap, quality goods. In developing countries
like Bangladesh, where the income level is rising, consumers are able to afford almost all
of the products offered by the many brands of Unilever. This has a positive impact on
their business, for more income means people would buy more, and as a result, the profits
will rise. The pricing of products also depends on the demand and supply in the economy
of each country they operate it. However, rise in income could lead to a greater cost in
production, in developing countries where Unilever has set up factories and where there
are laborers working. This is due to the fact that they have to pay laborers a higher wage
as well as buy raw materials at a greater price if price levels increase.
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2. Legal Conditions : The products of the different brands of Unilever are sold in 190
countries. Different countries have different laws and legal procedures which they have
to abide by since it is an organization with several international ties. First and foremost,
Unilever has to follow strict guidelines and limitations when making their products and
also ensure quality. These include European Commission and Food and Drug
Administration (FDA) in the United States. They also have to comply with regional as
well as local laws of the countries they operate in, which include the likes of India,
Russia, Bangladesh, etc. Failure to follow the laws and regulations would cause them to
face legal issues and fines. Every brand has to follow copyright, product safety, taxes and
laws regarding the health and safety of labours and employees. They are also strictly
against the notion of taking bribes, or encouraging forced labour, as is stated in their
official website.
3. Political conditions : Unilever operates and sells its brand in 190 countries. This includes
developed countries like the USA and the United Kingdom, as well as developing
countries like India and Bangladesh. Different countries have different laws and
regulations that Unilever must adhere to. In recent times, the growing free trade relations
have made it easier to set businesses and factories in developing countries. Politically
stable countries like the USA encourage a growth in the economy which would make it
easier for brands to flourish. However, political instability, such as that of Brexit, makes
it difficult for the UK to trade with European countries, and in turn makes it difficult for
Unilever which operates its markets in the European countries. Also, in developing
countries like Bangladesh, which is politically unstable, many issues arise such as strikes
or the nature of people to take bribes, which could often make it difficult for Unilever to
operate.
4. Sociocultural conditions : All of the brands of Unilever can be put into two major
categories which are Health/ personal care and Food products, both of which are a
necessity in every household. In most countries where people with a low income are
greater in the population, it would only make sense that they would prefer goods which
are of good quality but are cheaper. Unilever does keep this in consideration while
making their products. However, in recent times, there is a rising health consciousness
and environmentalist behaviour among consumers given the climatic conditions, high
levels of pollution, the usage of harmful ingredients in products or the means by which
these ingredients are made/ obtained. Consumers are concerned about sustainable means
of production using raw materials that aren't environmentally harmful. These include
protecting the forests, reducing the usage of non biodegradable packaging such as that of
plastic and sustainable means of obtaining raw materials. Failure to follow these would
make consumers choose from alternatives from their competitors. Unilever has taken up
sustainable means of production which include sustainable farming methods, reduction of
plastic packaging and environmentally friendly methods of manufacturing which
generates less waste.
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5. Demographic conditions : Unilever is the favorite of many households throughout the

world, boasting the usage of 2.5 billion people worldwide. People of all ages, gender and
income level are able to buy the products. However, in certain densely populated
countries, such as Bangladesh, where 50% of the population falls in the lower and lower
middle class, Unilever has to take into consideration both the pricing and how much they
have to supply, which is often a challenge in such countries. There are recent trends in
people (Millennials or Gen-Z born during the 1990’s and 2000’s respectively) becoming
health conscious as more and more people are getting aware of the harmful ingredients
found in day to day products and the way these are sourced or tested on animals. So
Unilever must also take into consideration these concerns when producing every product
using safe ingredients ( safe even for the environment) which are sustainably sourced and
tested using ethical means.
6. Technological conditions : Unilever depends on technologies for everything that is
required to produce consumer goods. Factories have machineries which help produce
goods efficiently and effectively by manufacturing more products in less time and for
certain stages in making a product which might be dangerous for a labourer to do (such as
heating ingredients at a high temperature or the handling of dangerous tools) .
Information about Unilever’s business can be stored, protected and easily accessed in the
most effective way possible due to technological advances in data servers. It is also used
to analyze data to predict or make sound decisions about making their products based on
customer wants and needs. Technological advances have led to digital advertising which
helps people know about a new/ existing product ; people would buy only if they are
aware of its existence, and that is where advertisement comes into play. It also makes
communication with employees, customers and other stakeholders easier due to the
existence of the internet and social media.
7. Global Conditions : Unilever has 400 brands and operates in 190 countries.The way of
running business varies from country to country and Unilever must adhere to the laws of
every country when running their business in those countries.Not only this, they get their
raw materials from all around the world. Hence, the availability of raw materials is also a
probable issue in certain countries. These issues are especially prevalent during war or
any sort of natural disasters. There will also be differences in cultures which will lead to
communication problems for Unilever. Even though more and more countries are
merging together to be interdependent in terms of trade, there are many instances of
Government intervention in many countries discouraging globalization. These include the
imposing of tariffs as a barrier to international trade.Competition also varies from country
to country, and Unilever has to keep up with the customer demands of every country,
which could vary as well. It’s biggest international competitor is Proctor and Gamble.
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4.2 Effects of COVID-19 :

COVID-19 pandemic is impacting business and economy globally. It’s having an unprecedented
impact on people and economies worldwide. Demand patterns are changing. As the crisis hits
countries around the world, we see upswing in sales of hygiene and in home food products
,combined with some household stocking, and near cessation of out of home consumption which
is particularly affecting food service.
Unilever has announced its results for the first quarter of 2020 ,which show flat underlying sales
with developed markets growing 2.8% whilst emerging market declined 1.8%.
Sales of beauty products got down. The spread of (COVID-19 )has led to extensive changes in
the operating environment in our markets. The lock-downs and restrictions that have been
implemented in many countries have varied in severity, but all have had some impact on
consumer demand patterns and many have also had a significant impact on the supply of goods.
Most major markets, outside China, saw normal sales patterns in January and February with
Covid-19 impacting in March. The Chinese market slowed significantly during the lockdown
period, which began in January, whilst Europe and North America, saw a positive impact on the
household stocking Market. The Indian market had slowed even before the strict lockdown
began at the end of March. Conditions in Latin America remain challenging as they were before
Covid-19, although we have seen some household stocking at the end of the quarter.
Overall performance of Unilever:
Underlying sales growth was 0.0% with 0.2%from volume and negative 0.2% from price.
Developed markets grew 2.8% whilst emerging markets declined 1.8% .China declined as a
result of the downturn in food service out of retail sales during the lock-down. Growth in India
was impacted by both the slowing market and the lockdown implemented at the end of March,
which stopped production and shipping for a number of days. Latin America grew 4.9% whilst
South East Asia was mixed ,following the introduction of strict restrictions in the Philippines.
North America and Europe benefited from household stocking, despite a decline in food service
and ice cream. E- Commerce grew as shoppers moved from offline to online channels. Turnover
increased 0.2%. There was a positive impact of 0.6% from acquisitions net of disposals and a
negative impact of 0.6% from acquisitions net of disposals and a negative of 0.4% form
currency.
Impacts of Covid-19 on Unilever Bangladesh :
● Sales of liquid hand wash growing at 30%.
● Tea sales are also rising.
● Double-digit growth for soaps and detergents.
● Sales of beauty products got down .
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● In Bangladesh, most products of Unilever were available through grocery

delivering sites like Chaldal, due to the current situation and also due to low
supply in departmental stores.

4.3 SWOT Analysis :

A SWOT analysis is a compilation of your company's strengths, weaknesses, opportunities and

threats.
The primary objective of a SWOT analysis is to help organizations develop a full awareness of
all the factors involved in making a business decision.

Strengths:
Strengths are internal strategic factors based on the company’s conditions, such as human
resources, production processes, organizational structure and investments. The following
strengths are significant in Unilever’s consumer goods business:

1. Strong brands: Unilever has some of the strongest brands in the consumer goods industry. This
strength enables the company to penetrate markets and effectively compete against other firms.

2. Broad product mix: The broad product mix shows the extent of Unilever’s business growth.
For example, the company has increased its product portfolio through years of mergers and
acquisitions, leading to organizational growth and corresponding increases in revenues.

3 .Economies of scale:  economies of scale support production efficiency necessary for

competitive pricing strategies.

4. Strong global market presence: Through years of international expansion, the company has
also increased its market presence, which is a strength that reinforces brand popularity

Weaknesses:
Despite its strong market position, Unilever has weaknesses that limit its potential growth. This
section of the SWOT analysis presents the internal strategic factors that impose barriers to
organizational and business development. Unilever must address the following weaknesses:
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1. Imitable products: One of Unilever’s weaknesses is the imitable nature of its products. For
example, even though the company heavily invests in its product development processes, other
firms can imitate Dove and Rexona products.

2.Limited business diversification: Unilever is weak because of limited diversification in

businesses outside the consumer goods industry.

3 .Dependence on retailers :The company lacks direct strong influence on consumers,

considering that retailers are the ones who directly affect buyers.

Opportunities:
Unilever must take advantage of growth opportunities in consumer goods markets around the
world. This section of the SWOT analysis determines such opportunities or external strategic
factors that can facilitate business development. The following opportunities are significant in
Unilever’s external environment:

1. Business diversification: Unilever has opportunities to diversify by entering businesses outside

the consumer goods industry. Diversification reduces market-based risks and improves business
resilience.

2. Product innovation for health: product innovation can increase Unilever’s product
attractiveness by addressing the needs of increasingly health-conscious consumers.

3. Business enhancement for environmental conservation:  the company has an opportunity to

make its business more sustainable and environmentally friendly to attract and retain
environmentally conscious consumers.

4. Market development: market development can grow Unilever’s business by increasing

revenues from the sale of its current products in new market segments.For example, the
company can market its Lipton products as health drinks for consumers with special diets

Threats:
A variety of external factors can limit or reduce Unilever’s business performance. The SWOT
Analysis model considers these external factors as threats that the company must strategically
tackle. The following are the threats relevant to Unilever’s consumer goods business:

1. Tough competitive rivalry: Unilever faces tough competition, which is a threat based on the
strengths of other firms in the industry. Competitors threaten to reduce the company’s market
share and corresponding financial performance. 
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2. Product imitation: Product imitation is also a major threat against Unilever. For example, local
firms can develop products highly similar to Unilever’s.

3. Increasing popularity of retailers’ house brands: retailers impose a threat by selling their own
brands. These brands are known as house brands, store brands or generic brands. For
example, Costco uses Kirkland Signature as a house brand and Walmart has its own house
brands that directly compete against Unilever’s products.

4.4 Competitive Advantage :

Competitive advantage is the favorable position an organization seeks in order to be more

profitable than its rivals. To gain and maintain a competitive advantage, an organization must be
able to demonstrate a greater comparative or differential value than its competitors and convey
that information to its desired target market.

Unilever has a distinct competitive advantage over its nearest competitor, Proctor and Gamble
because of its flexible pricing and expertise in distribution channels that manage to reach the
nook and the corner of the globe.

Procter & Gamble boasts a market cap of just about $300 billion. It generates nearly $70 billion
in annual sales. The consumer staples giant  sells products in over 180 countries around the
world and operates in 10 product categories. It is largely focused on personal care products, from
diapers to soap to razors. The one thing it doesn't do is make food.

Unilever, at a nearly $160 billion market cap, is smaller than P&G, but still a giant company with
a similar global reach. It generates around $50 billion in annual sales. The company, based in
Europe, operates in many of the same industry segments and countries as P&G, but it also makes
food. That is one of the key differences here. 

So we can see that Unilever is likely to have that competitive advantage for that amount of
price which is lower than P&G and also give extra production that is food.
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5 . Conclusion

Along with this, there is an explanation about the external factors such as global, economic,
political, socio cultural and technological which affect Uniliver significantly and its operations.
There is a brief about critical stakeholders of Uniliver, such as its customers, employees,
communities. As we can see, Uniliver pays a lot of attention to the needs and wants of the
stakeholders and tries its best to satisfy them, keeping them happy with initial benefits. Uniliver
leads to a greater leadership style where employees value hitting behind any task, initiative or
goal. Their top priority is to figure out how the team is going to get things done. This is how
Uniliver successfully manages its 150,000 employees approximately, and operates as the leading
multi-national retailer . So based on these observation we conclude that Uniliver will have a
great success in the years to come.
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6. APPENDIX

A. SWOT ANALYSIS
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REFERENCES

1) https://www.unilever.com.bd/news/press-releases/2020/q1-results-flat-sales-reflect-
unprecedented-impact-of-covid-19.html

2) https://www.unilever.com/about/who-we-are/about-Unilever/
https://www.unilever.com/sustainable-living/reducing-environmental-impact/
https://www.statista.com/topics/1397/unilever/