Analysis of

Unilever’s strategy
Strategic Management Group 4
 Table of content

Business Overview Business Environment Competitive Strategy International Strategy

Cost Leadership &

Business Description External & Internal Analysis using
Differentiation Value
Vision & Mission Environment Analysis Ansoff Matrix
Chain Analysis
 1. Business
Overview

"To make sustainable living commonplace, impacting communities & promoting

responsible consumption for a better future"
Business Description & Rationale
Established in 1930 from the M&A of:

With the intention to:

Reduce cost in
Expand operations Diversify product Achieve economies
manufacturing
globally portfolios of scale
and logistics

Business Overview Business Environment Competitive Strategy International Strategy

Business Description

A high growth portfolio across five Business Groups

B e a ut y & W e llbein g P ersonal Care H ome Care Nutrition I ce-cream

190+ Nations 400+ Brands Top 5jjjjjjjjjjj

Presented with Unilever Associated under the Largest consumer
products name Unilever goods companies

Business Overview Business Environment Competitive Strategy International Strategy

 Vission & Mission Analysis
Vision Mission
To meet everyday needs for nutrition,
To be the global leader in sustainable business,
hygiene, and personal care with brands that
demonstrate how the purpose-led, future-fit
help people look good, feel good, and get
business model drives suprior performance in
more out of life, and to make sustainable
the top third of the industry
living commonplace

Sustainable living as the Align with the broader vision of creating a Aim to make sustainable living
central theme positive impact on society and the environment commonplace

Guide its strategy with a focus on enduring Reflect a long-term commitment to

Long-term perspective &
positive impact rather than short-term gains, sustainability and responsible business
continuous improvement
reflect the need for continuous improvement practices

Acknowledge the role of consumers and

Influence on stakeholders Engage and influence stakeholders and
stakeholders in driving sustainable living
and consumers consumers in sustainable practices actively.
practices

Triple bottom line Economic success is pursued alongside social Economic, social, and environmental
approach and environmental goals as a guiding principle consideration

Business Overview Business Environment Competitive Strategy International Strategy

 2. Business
Environment

The opportunities outweight the

threats with numerous strength
External Analysis: Macro-analysis

P E S T E L
Political Economic Social Technological Environmental Legal

Political stability Increasing wages Rising health Rising business Rising interest in Increasing comple-
of most countries in developing consciousness automation business xity of environmen-
(opportunity) countries (opportunity) (opportunity & environmentalism tal regulations
(opportunity & threat) (opportunity) (opportunity)
Political issues in threat)
the European Rising
High growth of Strengthening
Union (threat) environmentalist Rising R&D Increasing business
developing coun- international
behaviors investments efforts on
tries (opportunity) patent laws
Growing free- (opportunity) (threat) sustainability
trade relations (opportunity)
(opportunity)
(opportunity)
Economic stability
Strengthening
of developed
consumer rights
countries
laws (opportunity)
(opportunity)

B usiness B usiness Competitive Internationa

Business Overview Business Environment Competitive Strategy International Strategy
ov erview environment s trategy l s trategy
 External Analysis: Micro-Analysis

Bargaining power
Bargaining
Force of suppliers
suppliers

Strong
Substitute
Bargaining
threats
buyers
Size of individual
Porter's 5 suppliers
forces Moderate Populations of
supplier
Overall supply

New
Competitive Weak
entrant Level
rivalry
threats

Low Moderate High

Business Overview Business Environment Competitive Strategy International Strategy

 Micro Analysis: Porter’s 5 Forces

Bargaining power
Bargaining
Force of buyers
suppliers

Strong Quality of
Switching costs
Substitute information
Bargaining
threats
buyers

Porter's 5
forces Moderate

New
Competitive Weak
entrant Level
rivalry
threats

Low Moderate High

Business Overview Business Environment Competitive Strategy International Strategy

 Micro Analysis: Porter’s 5 Forces

Rivalry among
Bargaining
Force existing competitors
suppliers

Number of
Switching costs for competitors
Strong
consumer Aggressiveness
Substitute
Bargaining of firms
threats
buyers

Porter's 5
forces Moderate

New
Competitive Low
entrant Level
rivalry
threats

Low Moderate High

Business Overview Business Environment Competitive Strategy International Strategy

 Micro Analysis: Porter’s 5 Forces

Bargaining
Threat of
Force substitutes
suppliers

Strong Switching costs

Substitute
Bargaining
threats
buyers

Porter's 5
forces Moderate

Economies of
scale
New
Competitive Weak Cost of brand
entrant
rivalry developement
threats
Level
Low Moderate High

Business Overview Business Environment Competitive Strategy International Strategy

 Micro Analysis: Porter’s 5 Forces

Bargaining
Threat of
Force new entrants
suppliers

Strong Switching costs

Substitute
Bargaining
threats
buyers

Porter's 5
forces Moderate

Economies of
scale
New
Competitive Weak Capital
entrant
rivalry requirements
threats
Level
Low Moderate High

Business Overview Business Environment Competitive Strategy International Strategy

Internal environment analysis: SWOT Analysis

Strength Weakness

- Strong and diverse brand portfolio - Supply chain complexity

- Extensive global manufacturing - Challenges in integrating after business
infrastructure acquisitions
- Sustainable sourcing networks - High complexity of environmental
- Talented and diverse workforce regulations

Business Overview Business Environment Competitive Strategy International Strategy

Internal environment analysis: SWOT Analysis

Opportunity Threat

- Rising R&D investments and

- Technological advancements
environmental regulations
- High growth in developing coun-tries
- Low entrance barrier, high number
- Rising health consciousness
of competitors
- Increasing free-trade relations among
- Political issues in the European
countries
Union

Business Overview Business Environment Competitive Strategy International Strategy

3.
Competitive
strategy
Focus on differentiation rather than cost leadership;

Attract through unique value propositions rather than

primarily competing on price
Cost-leadership Value Chain Analysis

Firm infrastructure

Developed infrastructure which allows user access to any number of data sources for in-depth information.

Technology Development
Support activities

Increasingly implement of digital solutions to reduce manufacturing cost

Human Resource Management

Outsourcing with Accenture to manage its HR function help lower labour costs

Margin
Procurement
By cutting waste and reducing use of energy, raw materials and natural resources

Inbound logistics Operations Outbound logistics MKT & sales Services

Primary activities

- Maintain relation- - Simplify operations Factories and Ware- Effective products Constantly reviewing
ships with suppliers by divisional structure houses located closer distribution and online feedback about
-Effective use of - Use of leveraging the to customers to sho- shopping websites that products and services
analytics and data- scale to reduce costs rten distance, lower reducing large sales to reduce frequency of
driven insights logistic cost. force training recalls

Business Overview Business Environment Competitive Strategy International Strategy

 Key cost drivers of Unilever's cost leadership

Input costs Economies of scale Experience Product/Process design

- Sourcing raw materials
efficiently
- Negotiating favorable
supplier contracts
- Implementing cost-
saving in supply chain
Spreading fixed costs over - Optimizing processes Delivering cost-effective
a higher volume of output, - Identifying opportunities products while maintaining
reducing the average cost - Making informed quality
per unit decisions to reduce cost

Business Overview Business Environment Competitive Strategy International Strategy

Differentiation Value Chain Analysis

Unilever has distinguished itself from its competitors

and other corporations because of their heavy focus
on sustainability and high environmental awareness
Differentiation Value Chain Analysis – Demand Side

• Customers are mass-public, households & health-conscious, prioritizing sustainability and

ethical practices.

• Customers consume FMCG regularly and concern with the quality/sources of products along
with price.

Business Overview Business Environment Competitive Strategy International Strategy

 Differentiation Value Chain Analysis – Supply Side

Firm infrastructure

Adhering to global standards & regulations, Setting goals to reduce environmental footprint
Support activities

Technology Development
Operating innovation centers worldwide, Forming partnerships with external technology research institutions

Human Resource Management

Strongly emphasizing on attracting and retaining top talent, Training to enhance employees' skills & knowledge

Margin
Procurement
Seeking suppliers that align with sustainability goals and ethical standards, improving supply chain efficiency

Inbound logistics Operations Outbound logistics MKT & sales Services

Primary activities

- Procure diverse materials - Invest in R&D, aligned with - Established distribution - Branding & Advertising - Support customers
from global suppliers consumer preference and network to reach customers to differentiate its product through various channels
- Ensure certified sources market trend - Collaborate with retail - Conduct extensive market - Offer training programs
- Strictly adhere policy - Focus on sustainable partners to optimize product research and consumer and resources to educate
for People and Nature manufacturing processes placement and visibility analysis customers about product

Business Overview Business Environment Competitive Strategy International Strategy

Competitive Scope

1 Age group
Wide-ranging and diverse

2 Gender
Men, women, LGBTQ+ community

3 Income
Strong range

4 Geopraphical background
Global, operating on 190+ countries

Business Overview Business Environment Competitive Strategy International Strategy

 Unilever and P&G Comparision

Unilever
• Personal care (Dove, Axe, Rexona), home care (Sunlight,
Surf), and food and beverages (Knorr, Lipton)
Product portfolio &
main strategy • Strong emphasis on brand differentiation: each brand
target specific consumer segments and unique needs
P&G
• Personal care(Pantene, Gillette, Olay), home
care (Tide, Febreze), and baby care (Pampers )
• Has reputation for developing megabrands and
aim to appeal a broad consumer base

• Significant global presence (over 190 countries).

• Stronger presence in North America, main focus
Geographic presence • Significant portion of sales from emerging markets such as on developed countries and developed markets
Asia, Africa, and Latin America

• Build into their core about sustainability and social

responsibility • Also pay attention to sustainability and reducing
Corporate culture and
values • Goals for reducing environmental impact, improving social environmental impact but not its main focus

conditions, enhancing the well-being of people worldwide

Business Overview Business Environment Competitive Strategy International Strategy

 Unilever and P&G Comparision
Marketing approach and
brand positioning
R&D approach
Business Overview
Unilever P&G
Often emphasizes concepts like natural beauty, Often highlights product features, technological
inclusivity, and sustainability in its brand messaging. advancements, scientific research
→ emotional connections with consumers and → build trust and credibility and meet consumer
values-driven marketing campaigns. needs.
Collaborative approach: often partners with external Strong in-house R&D capability and invests
organizations (universities, startups) for innovation. heavily in research facilities and expertise.
Business Environment Competitive Strategy International Strategy
4. International Strategy
Unilever has been able to establish a strong presence in
Vietnam FMCG market
International strategy
High Local Responsiveness Pressure

Product:

Adapt to the needs of Vietnamese consumers

Place:

Participate in e-commerce platforms due to the

increasing demand for online shopping

Promotion :

Collaborate to produce the hit song "Ghen Cô Vy"

International
Business Overview Business Environment Competitive Strategy International Strategy
strategy
International strategy

High Global Integration Pressure

High

R&D and human resources expenses: Global Transnational

Global Integration Pressure

Strategy Strategy
Tailor marketing campaign for each country

Monitor changes in consumer attitudes by establishing

and developing Human Data Centers worldwide

Export Multidomestic
Strategy Strategy
Competitive costs against rivals:

Competitively priced domestic production and a large-

scale manufacturing line pose a competitive rivals for
Unilever's laundry detergent Low
Local Responsiveness Pressure High

International
Business Overview Business Environment Competitive Strategy International Strategy
strategy
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