Business Strategy for Unilever PLC ltd.

This report discusses the PESTLE and SWOT analysis of Unilever PLC ltd. and evaluates the organization's resources and capabilities. It also analyzes the competitive environment using Porter's Five Forces model and identifies the organization's existing and/or potential competitive advantage through VRIO evaluation. The report critically evaluates and justifies strategic options for the organization.

Unit 32 – Business
Strategy
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Table of Content
Introduction 2
Part A: An internal and external analysis that provides a platform for
strategic decision making: 2-7
1. PESTLE and SWOT of the organization and an evaluation of the
organization’s resources and capabilities 2
2. Competitive environment analysis using Porter’s Five Forces model
4
3. Identification and justification of the organization’s existing and/or potential
competitive advantage 6
4. Valid strategies and tactical objectives to achieve overall strategic objectives
7
Part B: On the basis of this analysis critically evaluate and justify strategic
options for the organisation: 8-12
1. Critical evaluation of the different types of strategic directions available to the
organization 8
2. Justification and recommendation of the most appropriate growth platform/s and
strategies 9
3. Evaluate ways and means by which the chosen strategies can be monitored in order
to ensure success 10
5.0 Conclusions 11
References 12
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Introduction
In an organization, the business strategies are followed to enhance and leverage the internal
proceedings as well as financial and managerial activities in a business. The fundamental and crucial
aspect for any entity is the determination of long term together with the short term goals and objectives,
which the process of adoption for utilization of necessary and scarce resources. They help establish the
direction of tasks, focuses and unifies efforts of employees and provides clarification for organizational
rules and regulations, all together with the response towards dynamic environment. By this report, the
various business models and strategies followed by management are discussed, through implementing
such strategies for Unilever PLC ltd., an international consumer goods company whose headquarters are
situated in London, UK. The company begin its operations in 1929, with the mission to create the largest
consumer commodities company, whose products include food, cleaning agents, personal care and more.
It has successfully diversified and established itself in more than 190 countries, with a significant turnover
of 52.44 Billion Euros as of 2021 (Al-Shaer and et. al., 2022). The first part of this assignment will
critically evaluate the strategic decision making theories in context to Unilever PLC ltd. And the second
part will concentrate on analyzing the strategies while discussing and suggesting various strategies which
are best for the business.
Part A: An internal and external analysis that provides a platform for strategic
decision making:
1. PESTLE and SWOT of the organization and an evaluation of the
organization’s resources and capabilities
PESTLE Analysis:
For studying the key external factors such as political, sociological, economic and legal elements
that influence the different aspects of an organization. It can be implemented for variety of different
conditions and helps the managers make effective and efficient decisions. It also describes the framework
of macro-environmental factors which is implemented in environmental scanning. For Unilever, PLC ltd.,
the following analysis will present multiple aspects which helps understand the business proceedings
effectively (Ritson and N.H., 2019). Following are the Pestle analysis for Unilever Ltd.:
 Political Factors – All of the factors which are defined by the government through rules,
regulations, provisions, conditions are called political factors and every organization is bound to
follow the same. For Unilever, the broad range of consumer goods it offers creates various
opportunities for the company to attract customers and expand its horizons, which will also
drastically impact its turnover. However, due to Unilever being a multinational enterprise, it has to
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maintain a significant turnover and endless transactions related to various departments, this
requires the management to comply and be in line with policies led down by the government and
other relevant authorities. Also, the company has branches situated in foreign countries where it
has to abide by the local laws and follow there governmental proceedings.
 Economic Factors – The determinants which analyze an economy's performance through
understanding the factors such as growth prospects, exchange rates, inflation rates, disposable
income of consumers and unemployment rates. In case of Unilever, the chances of being adversely
affected by above mentioned factors is low in developed nation as compared to developing
nations. The unemployment rate is the most vital source for Unilever to support its production
costs and reduce it, with employment of labor at rate lower then the developed countries, while
maintaining the same quality of operations.
 Social Factors – The society is defined as the deciding factor for improving the company's
goodwill or reputation which will also help strengthen its position in the industry. Hence, Unilever
tends to concentrate on sociological factors such as consumer beliefs, norms, customs and
attitudes (Thompson and I., 2019). All of these factors help management build reputation among
various group of consumers and also presents the local workforce as a group of motivated and
dedicated individuals who are willing to provide utmost satisfaction to employees.
 Technological Factors – The innovations and advancements in technology during the recent
period are a crucial factor for deciding the position of the company in the market, whether its
favorable or unfavorable. Unilever sells consumer products which require digital marketing and
other technological methods to attract the masses, with the intention to maintain its position in the
market for a long period of time. To support this aspect the company must appoint relevant and
skilled workers along with effectively allocating the available resources.
 Legal Factors – Unilever must successfully run there business in variety of locations, by
following several rules and regulations. Moreover, safeguarding the patents, trademarks as well as
intellectual property rights is important for efficient business running and mitigating risk related to
fraudulent activities, which may cause significant amount of losses and low turnover.
 Environmental Factors – In an era of climate crises, the organizations involved in production of
consumer goods must improve there ways of doing business to leave low to zero impact on the
environment. Sustainable business practices by Unilever will not only influence the environment
by way of reduction in greenhouse gases, but also the customers, to adopt green practices and
implement ways to utilize resources wisely. The company should concentrate on managing its
whole supple chain process, that is, from production of the product to delivery of the same.
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SWOT Analysis:
The framework which defines a company’s position in the industry by analysis of its internal and
external limitations along with advantages is defined as SWOT analysis (Voukkali and et. al., 2022). The
company in consideration is Unilever, which has established itself as a multinational entity requires a
thorough analysis of its strengths, weaknesses, opportunities and threats. Where the company concentrates
on improving its strengths to diminish its weakness and unravel the opportunities to avoid the threats.
Following is the SWOT analysis for Unilever:
 Strengths – The company is known for its wide variety of products which are available in more
than 190 countries by crucially maintaining its brand value and portfolio related to it. It not only
offers diversified product range and variety of after sale services, but also puts emphasis on
research and development initiatives through cutting edge technologies, systems and techniques
which are in line with customer preferences (Voukkali and et. al., 2022).
 Weaknesses – The first and foremost weakness of Unilever is the presence of other similar global
giants who are Nestle, P&G and more, they being present as close competitors ensues to be a
weakness to the company, additionally the local players may also act as a barrier between the
company and customers. Furthermore, selling mass products which can easily be replaced by other
business also restricts its success factors.
 Opportunities – An emergence of globalization and proliferation of global media, the consumers
tend to aspire for developed country lifestyles which creates opportunities for Unilever to establish
itself among the universal consumer base that melds with the league of westerners. Apart from
that, with developing country customers on the rise, Unilever is presented with the golden
opportunity to leverage its consumer base (Forleo and et. al., 2019).
 Threats – Due to the global economic crises, the profitability of Unilever as well as other similar
companies in the industry. At the same time the disposable income of consumers tends to
decrease, which implies that they prefer to buy less and insist more value for their money. This
implies that Unilever faces a threat of decreased revenue and increasing costs of production, which
is often referred to as “Double Whammy”.
2. Competitive environment analysis using Porter’s Five Forces model
Unilever is one of the well-set up business enterprises who competes within-side the worldwide
marketplace of customer goods. Porter's 5 pressure version allows to apprehend the want to
tactically prioritize bargaining strength of clients and competition. This is one of the maximum
effective control devices that allows to renowned the effects of outside elements within-side the
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enterprise environment. In this analysis, aggressive competition is regarded as one of the maximum
impactful outside forces together with the bargaining strength of customers. It is critical that
Unilever should make sure its long-time period fulfillment through weighing all of the outside
forces.
Porters Five Forces:
 Competitive contention: Unilever is a multinational agency that is well-known in everywhere in
the world. That is why, the opposition of contention may be very sturdy and excessive.
Competitions aren't best the small shops however additionally huge giants withinside the
enterprise which include Nestle, Kraft and P&G. These are such competitions which confuses the
client with the aid of using launching the similarly exceptional performer and appealing
merchandise withinside the enterprise. Low or zero switching fees permit customers to
interchange to different businesses very without difficulty (D’Cruz and J.R., 2018).
 Threat of substitutes: It is all approximately the studies of customers' nature is they need to strive
opportunity and new merchandise as a minimum as soon as of their existence span. They will
sincerely pass for the options this is to be had withinside the marketplace if you want to convert
their thoughts from Unilever. By thinking about the price, merchandise and pleasant of the goods,
a client can without difficulty shift to any other logo. But the customers who're addicted to apply
the Unilever merchandise can even consider the popularity and logo call withinside the enterprise.
Therefore, the danger of substitutes of Unilever is excessive.
 Threat of recent entrants: As the Unilever unfold its commercial enterprise for the duration of the
world, the danger of recent entrants can be very low for the agency. These matters majorly rely
upon at the society, location and with numerous varieties of people, it'll vary. In the international
locations and states that are normally pass for the running on logo popularity and call will by no
means pass for the brand-new entrants. Hence, the danger of the brand-new entrants is low as
customers will not often pass for the brand-new logo.
 Bargaining energy of providers: It is pretty not unusual place that each one the groups in client
meals merchandise and private merchandise buy their uncooked substances from limitless quantity
of providers. Suppliers are very dominating withinside the marketplace as they could lessen the
earnings margin of the Unilever. Powerful providers use their negotiating energy to get better
charges from the businesses. The normal effect of providers' bargaining energy is that it could
lessen the profitability of the agency (Moon and H.C., 2018)
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 Bargaining energy of customers: Customers are regularly disturbing lots withinside the
marketplace. They are usually seeking out the gives wherein they'll get most blessings with the aid
of using paying the minimal quantity as possible. This promises excessive strain on the selected
agency because it influences the long-time period profitability. Therefore, the smaller however
effective client base is better the bargaining energy of customers and additionally better the cap
potential to are seeking elevating gives and discounts.
3. Identification and justification of the organization’s existing and/or potential
competitive advantage
VRIO Evaluation of Unilever-
The VRIO evaluation will awareness on every inner source of the employer which will realize
whether or not those sources are facilitate a sustainable aggressive blessing or now no longer. It
additionally discusses at every level whether or not such sources can be more desirable to facilitate
a large aggressive advantage. Lastly, the sources tested are summarized as to whether or not they
offer sustainable aggressive blessings, has brief aggressive benefit, unused aggressive benefit,
aggressive parity or disadvantage (Moroz and et. al., 2018).
Valuable:
 The employer has distinctly precious economic sources which will make investments into
outside possibilities that occurs.
 The nearby meals merchandise also is precious to the employer as they introduced
distinctly differentiated merchandise. Due to differentiation, the goods also are valued
through the clients withinside the marketplace.
 Employees also are precious to the employer. Unilever distinctly targeted on their personnel
schooling which leads better productiveness for the business.
 Patents also are precious to the Unilever as those lets in the to promote their items and
offerings without the interference of competition (Moon and H.C., 2018).
Rare:
 Employees of the employer are uncommon as they may be distinctly professional and
skilled that's pretty specific from different organizations.
 The nearby meals merchandise of the Unilever isn’t uncommon as clients avail those
merchandise very without difficulty withinside the marketplace through different
businesses. That means, the nearby meals merchandise brings about aggressive parity.
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 Patents are the uncommon useful resource for the employer. These can't be possessed
through its competition and aren't without difficulty available.
 Financial sources of the employer are uncommon as sturdy economic sources are best
carried through few competitions withinside the marketplace.
Imitable:
 The economic sources are high-priced to mimic.
 The nearby meals merchandise isn’t that luxurious to mimic. This may be received through
different corporations as nicely in the event that they make an affordable funding in R&D.
It may also now no longer necessitate years’ lengthy experience (Moore and I., 2022).
 Patents aren't clean to mimic because it isn't always allowed in prison phrases to mimic a
patented right or service.
 Employees aren't high-priced to mimic due to the fact different businesses additionally
educate their personnel to decorate their understanding and skills. Other businesses also can
offer identical blessings, paintings environment, repayment packages, increase possibilities
and plenty of more.
Organization:
 The economic sources of the selected employer are prepared as those are used strategically
to make a most useful use of possibilities, put money into proper locations and fighting
threats.
 Patents of the employer aren't nicely-prepared i.e.; the employer isn't always the use of their
patents with its potential.
 Employees are nicely-prepared with inside the employer.
4. Valid strategies and tactical objectives to achieve overall strategic objectives
It is crucial to apprehend the boom and fulfillment of the enterprise. The Ansoff matrix or product
grid is a confirmed framework that permits sustainable sourcing to discover the boom and
improvement possibilities through leveraging each outside possibilities in addition to inner
strengths (Hsieh and et. al., 2019). In context of Unilever, the Ansoff matrix permits 4 widely wide-
spread techniques for boom:
 Market Penetration: This is an approach utilized by the Unilever so one can growth its
marketplace proportion with inside the contemporary marketplace. It carries income pushed
technique with inside the present commercial enterprise environment. This may be finished
via attaining at once to consumers, boosting income contact points, improving the provider
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network, boosting the basket proportion of customer overall spending, boosting the
customer lifestyles time fee and plenty of extra.
 Product improvement: In this approach, the enterprise makes a specialty of the product
improvement that's related with the creativity or innovation withinside the products. The
principal awareness at the improvement of product way both the enterprise improves its
contemporary services or release something new to the marketplace. In context of Unilever,
they are aware of the importance of improving the product line even as hold on launching
the brand-new items for attracting a distinct patron base of the enterprise.
 Market improvement: This is a approach via which an enterprise enters into new
marketplace to increase its operations and commercial enterprise. In context of Unilever,
the enterprise by no means aimed to live on the home marketplace however it usually
carried out the marketplace improvement approach so as hold their commercial enterprise
growing. Hence, the enterprise has its presence in extra than a hundred and fifty
international locations at some point of the sector which louds its quantity of the fulfillment
(Oldman and et. al., 2018).
 Diversification: The company has been adapting the diversification approach via unrelated
and associated way of diversification. The possession and acquisition of numerous
subsidiaries are finished to have unrelated diversification through the company. Tatcha
LLC, Seventh Generation and Dermalogica are a number of the unrelated diversification. In
associated diversification, the nonstop boom with inside the product line is finished from
the angle of associated diversification.
Part B: On the basis of this analysis critically evaluate and justify strategic
options for the organisation:
1. Critical evaluation of the different types of strategic directions available to the
organization
It is crucial for the Unilever to formulate techniques with the guide of numerous theories,
standards and fashions including Porter's standard techniques, Bowman's techniques and plenty of
more (Nayak and et. al., 2019). These are defined underneath:
Porter's standard techniques-
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This consists of specifically 4 techniques which may be selected with the aid of using the agency as
in line with their needs-
 Cost leadership: It shows the agency to lessen the prices in their merchandise so that it will
enhance their modern patron base.
 Differentiation: It shows the agency to create differentiate items and offerings from
different manufacturers with inside the marketplace that will aggressively benefits.
 Cost focus: The agency makes a specialty of the positive matters so that it will lessen the
prices whilst reaching consumers' loyalty.
 Differentiation focus: In this method, agency makes a specialty of the lacking function of
their services and products which ends up in switching emblem with the aid of using the
consumer.
Bowman's Strategies:
 Low fee and coffee fee added: This method makes a specialty of the discount of prices. But
it'll additionally lessen the first-class in merchandise.
 Low fee: This method makes agency to lessen the prices of products with the aid of using
boosting the productions (Pucheta and et. al., 2019.).
 Hybrid: This may be a powerful method as agency provides fee to the goods and offerings.
It consists of each low fee with excessive fee to be added with the goods.
 Differentiation: In such method, the agency specifically makes a specialty of the product
differentiation in preference to fee factor.
 Focused differentiation: This method is first-class appropriate for the excessive-stop
manufacturers as they don't forget differentiation at the pinnacle and don't worry
approximately the prices.
 Risky excessive margins: It is the maximum riskiest method in which agency places
excessive fees on the goods.
 Monopoly pricing: This one suits for the ones corporations which might be try and create
monopoly withinside the business.
 Loss of marketplace shares: In order to draw a number of customers, the agency is dropping
its marketplace shares. In order to live relevant, they use general fees.
2. Justification and recommendation of the most appropriate growth platform/s and
strategies
Strategic control plan:
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 Vision: The imaginative and prescient is to create a sustainability withinside the
commercial enterprise.
 Mission: To offer the premise desires for hygiene, vitamins and private care with brands.
 Objectives: To enhance the health and fitness of consumers.
 Strategies: Market improvement method is pleasant suitable for the corporation to amplify
its marketplace. It could be very clean for the Unilever to goal consumers.
 Tactics: It may be understood via way of means of the efforts to reap dreams of
corporation.
Product Place Price Promotion
Personal care, foods,
beauty products, home
care.
Stores, retailers, kiosks. Personal selling,
advertising, direct
marketing, public
relations, sales
promotion
Premium price strategy,
product bundle pricing
strategy, market-
oriented pricing
strategy.
 Implementation: It is useful for the corporation to put into effect plan for which they're
require to allocate the commercial enterprise resources. Unilever can allocate their budget
with the assist of advertising price range produced via way of means of monetary branch of
the corporation. While to govern and compare the commercial enterprise overall
performance, KPI is beneficial to degree and enhance the commercial enterprise overall
performance (Dzwigol and H., 2020).
 Evaluation: It determines the gathering of data whilst following up the strategic control
plan. It specially specializes in the troubles that influences the commercial enterprise
overall performance. While increasing the marketplace the selected corporation will take a
look at and evaluate the real and preferred overall performance of advertising branch.
3. Evaluate ways and means by which the chosen strategy/ies can be monitored in order
to ensure success
With a rationale to increase a strategic control plan, an employer can use quite a number
facts and facts via environmental and aggressive evaluation. Nevertheless, the macro
environmental evaluation is achieved via pestle framework in which with the intention to get
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the information approximately aggressive evaluation Porter's 5 forces version appears to be
very beneficial. Also, the employer wishes to don't forget all of the statistics with the
intention to paintings withinside the handiest manner.
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5.0 Conclusions
Business approach may be very sizeable for any employer in search of to amplify its commercial
enterprise in a strategic way. Business approach is supposed through a hard and fast of aggressive
moves and movements that an employer makes use of to compete successfully, entice consumers,
strengthening performance, accomplishing commercial enterprise dreams. It allows how an
employer need to be accomplished to perform its long-time objectives. It is the spine of any
employer. Nowadays, it's far very crucial to broaden an powerful and end result orientated
techniques for the commercial enterprise. This mission is primarily based totally at the Unilever
Plc i.e., multinational customer items employer in British Administration. The headquarter of
organization is in London, England. It gives vast variety of merchandise consist of health vitamins,
condiments, food, minerals and supplements, ice cream, coffee, breakfast cereal, tea, puppy food,
cleansing agents, air and water purifiers, splendor merchandise, toothpaste in addition to non-
public care. This organization may be very well-known for generating cleaning soap withinside the
complete world. It has allotted their operations of commercial enterprise in greater than one
hundred ninety countries. Additionally, it owns over four hundred brands, with a turnover of 51
billion Euros in 2020 (Bowman and R.F., 2018). The mission will speak diverse theories and fashions
so as to research inner and outside surroundings of commercial enterprise employer. The
aggressive surroundings of a organization is analyzed thru porter's 5 pressure model. There are
many sorts of strategic selections are to be had for the organization. A plan for strategic control is
likewise produced with dreams techniques and tactics.
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