Business Environment: Unilever's Operations and Internal Analysis

This report provides an in-depth analysis of Unilever's business environment, focusing on its operations, value chain model, Porter's five forces, and SWOT analysis. Learn about Unilever's global presence, product categories, and success factors. Understand how the value chain model helps analyze internal activities and the impact of Porter's five forces on Unilever's main activities. Finally, explore the strengths, weaknesses, opportunities, and threats faced by Unilever through a SWOT analysis.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
1:Unilever as a sub-sector business of UK and its working to make money...............................1
2:The elaboration of Value Chain Model to examine the internal business environment...........2
3:Porter five forces that affect the main activities of Unilever business.....................................4
4:SWOT analysis of Unilever to examine internal environment.................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Business environment includes all the factors of business whether it is internal or external
including supplier, clients, owner, management, employees, technology innovations, needs or
expectations etc. The report explain about the Unilever company as a sub sector of UK and
provide brief discussion of its main activities. Further, the report elaborate about the Value chain
Modal along with its primary or secondary activities in order to analyse internal environment of
business. In this report, the micro environmental is discuss with a thorough explanation of the
Porter Five forces. Lastly, the elaboration of SWOT is done to examine the internal business
environment.
1:Unilever as a sub-sector business of UK and its working to make money.
Unilever is a multinational company of British, has its headquarters in London, England. It is one
of the most successful business of UK, that now able to serve almost 2.5 billion clients around
the world. The company is arranged its products into three main categories like Home Care
products, foods and refreshment or beauty products. The company is selling more than 400
brands across the world and that is sold its products in almost 190 countries. Unilever is
managed to acquire its success with the help of its brilliant team and management of about
155000 in number (Murphy and Murphy, 2018).
Unilever becomes a well known brand among people because its fulfil the requirement of its
clients and produces those goods that folks love, that make the company different from other
competitors. Unilever is now become a multinational brand and sold the Nutritionist food like
energy drinks or cereal for breakfast, household goods that includes cheese, ice-cream, baby
foods, coffee, purified water and other necessary items of daily life. The company now become
the largest soap producers globally. Unilever has its own brand which is loved by all its
customers that involves Dove, Heartbrands, Lipton green tea, Sunsilk and Surf with its sales of
more than one million euros. The company always make sure that its products make the biggest
positive impact on the lives of human who is using its products (Ma, 2017).
Unilever make the local brands as well, hence all this local brands in India, America are
managed to fulfil the specific needs of the people for example Brooke and Suave. The company
managed to make the most of its profits in 2019, including for beauty products it generated the
revenue of about 21.9 billion, foods made the revenue of about 19.3 billion and home care
products created turnover of about 10.8 billion.
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2:The elaboration of Value Chain Model to examine the internal business environment.
Value chain modal is used to examine all those activities that impact the organisation in the long
run such as planning, production, distribution, so that it creates the value for it customers. The
model let understand the Lets discuss more in detail about the activities of Value Chain in below
paragraph.
Primary activities – Those are directly involve on all the activities of producing and selling that
affect the Unilever to target its customers. Carefully examination of primary activities should
improve the overall performance of Unilever for its management.
Inbound logistics: It includes all the processes of storing, distribution or receiving of activities.
A strong relationship with suppliers for Unilever is the key for the development of all the
activities of store, receive or distribute etc. If Unilever fails in proper analysation of these
activities than if might possible that Unilever face major challenges in the product development.
The main example of inbound logistics are storage of inputs, recovering of raw materials, proper
distribution of raw materials and includes all those components that start process of production.
Accurate analysation of inbound activities helps the Unilever to focus on each aspects of process
of transformation that is from raw materials to finished goods (Andarin , 2017).
Operations: When raw materials arrives, the next step for Unilever is building the importance to
examine the operational activities. Therefore, the company is now ready for the process of raw
materials into completion of products and ready to launch in the marketplace. The services and
manufacturing operations both are involve in this method. The careful examination of all
operational activities is necessary for improvisation in productivity, efficiency maximisation, and
ensure the competitive growth of Unilever. Packaging, machining, or testing along with the
repairs of maintenance are the main example of operations that Unilever should need to
evaluate.
Outbound logistics: These activities are responsible in delivering the products or services to
customers. The main examples of outbound logistics are warehousing, material handling,
delivering or transporting of products, correct scheduling or controlling that can be internal or
external for company. Unilever can benefit from the outbound logistics in order to achieve the
competitive advantages and acquire the business objectives, if complete the correct analysation
of those activities. It also helps Unilever to increase the growth opportunities and also maximises
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the satisfaction among its buyers, if outbound activities are managed timely with minimal cost
and those product put very less amount of negative effects on quality.
Marketing and sales: These involves all those methods that company try to attract it targeted
customers to purchase the products rather than from its competitors in which Sales agents plays a
vital role. Promotional activities, advertising, quoting, pricing, building relations with various
channels etc. are the main examples of sales ans marketing. The marketing activities can be the
funnel approach as it depends upon the structure for sales or marketing activities of Unilever. In
order to maintain the brand equality of the Unilever and stand out from its competitors, the
effective integrated of marketing activities is paramount (Yang, and et.al 2020).
Services: Once a product is purchased by customers, these are the processes that develop or
maintain the value of products or services. To build the loyalty of the customers, the pre or post
sales services of Unilever play an important role here. Now many of buyers is taking the post-
sales services very seriously, so the Unilever should neglect those activities that damage its
brand reputation, instead making use of those service in timely and efficient manner.
Secondary activities – Those activities are essential for the coordination of primary value chain
and Unilever can benefit it as explained in below paragraph:
Firm infrastructure: It involve various activities that is legal matters, accounting, general
management, planning etc. Unilever should able to maintain its brand in market if it control the
infrastructure activities.
Human Resource Management: Unilever can examine the HRM by doing the analysation of
various HR functions that involves recruitment, selection, training and development, bonuses
and rewards etc. The minimisation in cost is achieve if Unilever examine the training or hiring
costs correctly. The productive of HR management will allow Unilever to lower its competitive
pressure which mostly based on motivation or commitment of it management team.
Technology development: Today, almost all the organisation is heavily depend on the
technology and its support. These activities are connect with the managing information and
provide protection to the knowledge base of Unilever. Automation of software, product design
and data analytics etc. are some of the example of the technological development. These
activities can be divided into product or process (Pacheco, and et.al 2017). Unilever able to
increase its value by lowering the cost of information technology, staying with advancement of
technology and also maintain the excellence of technology.
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Procurement: These process is creating a connection with all other value chain activities, hence
Unilever should need to carefully evaluate its procurement activities in order to enhance the
outbound or inbound value chain. Procurement value chain includes the procedure of purchasing
the inputs that may set from raw materials, supplies, machinery or equipments or other useful
items which required for the finished goods. After a thorough understanding of all those
activities, will provide Unilever many benefits including cost efficiency, proper differentiation or
proper optimisation of processes that can be achieved.
3:Porter five forces that affect the main activities of Unilever business.
Porter five forces is a necessary tools for the strategic management to examine the industry. The
below paragraph will provide brief explanation.
Buyer Power: The power of buyer is low for Unilever company. Unilever has its buyers all over
the world and as per the quality of company they have not lower down the prices of its goods.
However, the customers secure the highest power comparatively from buyers so they need to be
pleased whether it is about the product or price of quality (Bruijl, 2018). Hence, Unilever should
be careful about the threat of buyer and need to maintain the prices of goods as per the demand
of customers .
Rivalry of competitive: The competitive of rivalry is high. Since,Unilever is the biggest
company globally and everyone other individual should at least know about the company an its
products. Hence, the competition of rivalry is relatively high for Unilever and not only the small
shopkeeper but there are some big companies as well who is given tough competition in the
market.
Threats of new entrants: The new entrants is moderate for Unilever. The products of the
Unilever is scattered all over the world so it is less likely possible that the new entrants will be
disturb it more.
Supplier's Power: The power of suppliers is low for Unilever. Now the Unilever is working on
the loyalty of the suppliers by provide them utmost satisfaction. The Unilever's loyalty and chain
of its suppliers make a healthy agreement and maintain a long term relation (Stindt,and et.al
2017).
Threat of substitute products: This factor has moderate effects for Unilever. An individual
always wants to try new products once in life so they may switch the products of Unilever and
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try new goods. So Unilever used the strategies that the alternative used like the quality of product
and the use of effective marketing so that threat become lower.
4:SWOT analysis of Unilever to examine internal environment.
The following are the SWOT of Unilever -
Strength: From this factor the company is able to identify is main strength like Unilever is now
becoming the global face and spreads its operation in nearly 190 countries. Moreover, Unilever
has benefits of differentiation of products range. Unilever also took the initiative to maximise its
fund on the Research and development programmes. It always bring innovations and creativity in
its product as per the demand of the buyers and always try to fulfil it (Isabelle, and et.al 2020).
Weaknesses: By examining the weaknesses, Unilever should need to overcome it like it has
presence of its biggest competitors for example P&G and Nestle is consider weakness for
Unilever, apart from this there are local competitors in all the countries that provide the same
goods. Another one is that its products can easily replaceable with other traditional brands.
Opportunities: Unilever has already make the mark on consumer goods, hence now it can
diversify its products apart from those goods its already produced since, Unilever has better
infrastructure, brilliance in market experience and have the financial strength to explore the
various markets. Unilever now further spreads it brands on environmental friendly or healthy
products because every person is now concern about its health and looking for more artificial
free goods (Vlados,., 2019).
Threat: The entrance of Asian market in which the labour intensive techniques is used that
result in selling there products in lower cost. Since, Unilever is spreading its operation in various
other markets that put the huge risk of microeconomics mainly in those markets where
economies is usually not stable. The ongoing crisis regarding the global economies which
effects the disposable income of people so Unilever will face the threat of fluctuation in revenue
and increasing prices.
CONCLUSION
To conclude, the above report go thorough about the operations of Unilever and its emergence
growth in market all over the globe. Additionally, the report elaborate about the company's
internal and environment and details about all its activities including primary or secondary and
its effect on the company's profitability or growth (Elavarasan, ,and et.al 2020) . Moreover,
Value Chain Modal is used and its overall threats is examine like the competition in market or
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its substitute goods, and also how it overcome all its hurdles by taking preventive measures.
Lastly, Unilever's SWOT is examine so that it will identify and note down all it threat and
weaknesses and should try to mitigate them.
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REFERENCES
Books and Journals
Andarin, K.D., 2017. FACTOR INFLUENCING SUPPLY CHAIN RESPONSIVENESS IN FAST
MOVING CONSUMER GOODS INDUSTRY: CASE STUDY OF PT. UNILEVER
INDONESIA, TBK (Doctoral dissertation, President University).
Bruijl, G.H.T., 2018. The relevance of Porter's five forces in today's innovative and changing
business environment. Available at SSRN 3192207.
Elavarasan, R.M.,and et.al 2020. SWOT analysis: A framework for comprehensive evaluation of
drivers and barriers for renewable energy development in significant countries. Energy
Reports.6. pp.1838-1864.
Isabelle, D., and et.al 2020. Is Porter's Five Forces Framework Still Relevant? A study of the
capital/labour intensity continuum via mining and IT industries. Technology Innovation
Management Review. 10(6).
Ma, L., 2017. Financial Analysis of Unilever Company.
Murphy, P.E. and Murphy, C.E., 2018. Sustainable Living: Unilever. In Progressive Business
Models (pp. 263-286). Palgrave Macmillan, Cham.
Pacheco, P., and et.al 2017. The palm oil global value chain: Implications for economic growth
and socialand environmental sustainability (Vol. 220). CIFOR.
Stindt, D., and et.al 2017. On the attractiveness of product recovery: The forces that shape
reverse markets. Journal of Industrial Ecology. 21(4). pp.980-994.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.
Yang, G., and et.al 2020. Recycling sustainability of waste paper industry in Beijing City: An
analysis based on value chain and GIS model. Waste Management. 106. pp.62-70.
Online
About Unilever 2021. Available through <https://www.unilever.com/about/who-we-are/about-
Unilever/>
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