Unit 32 Business Strategy

This document provides an overview of business strategy and its impact on Unilever. It covers the analysis of frameworks that have influenced the macro environment, the internal environment and capabilities of the organization, and the application of Porter's five forces model to gain competitive advantages. The document also includes a stakeholder analysis and a VRIO analysis.

Unit 32 Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
Analysis of frameworks that has impacted and influenced macro environment.........................3
LO2..................................................................................................................................................6
Internal environment and capabilities of organisation.................................................................6
LO3..................................................................................................................................................9
Application of porter's five forces model that is used to get the competitive advantages...........9
LO4................................................................................................................................................10
Applying range of theories, concepts and models.....................................................................10
CONCLUSION..............................................................................................................................12
REFERENCE................................................................................................................................13

INTRODUCTION
Business strategy is defined as combination of all decisions taken and action performed
by business owner to accomplish the goals and objectives. Every organisation should have
strategic plans so that it can secure a competitive position in the market. In other words,
strategies are the backbone of business that leads to desire the goals (Carlson, 2020). To
understand about this and gaining competitive competition Unilever has been chosen that is
multinational corporation in UK and other countries. This is British Dutch transactional
consumer goods company, headquarter in London, England and Rotterdam etc. Different topics
are covered in this report such as impact and influence that the macro environment has on
organisation, application and outcomes of an analysis using porter's five forces model, models
and theories that are used in strategic directions to a company. Moreover, report has covered
porter's five forces model in order to take competitive advantages.
LO1
Mission – The mission of Unilever is to increase the organisational productivity and
profitability by offering variety of products and services.
Vision – The vision of Unilever is to provide products and services in global market which
customers want.
Objective – To increase brand image, profitability and competitive advantages by running a
business continuously.
Definition of Business strategy – This is planning which is developed by management in
order to attain business goals and objectives. Strategy should be appropriate and understandable
which attracts customers and increase organisational productivity.
Analysis of frameworks that has impacted and influenced macro environment
About company and its vision – Unilever is a British multinational company which is
operating its business in London and other countries by providing better quality of consumable
products and services. The vision is to create a sustainable and healthy living place. Moreover,
its objective is to increase productivity and profitability by selling number of products.
Strategy: An action and long term plan which is designed by managers in order to
achieve particular goals and objectives is consider as strategy. If organisation is having good
plans and skilled employees then only it can complete task and attain business goals. This is

important for organisation that make plans and implement them effectively. In Unilever,
managers are responsible to take right action by executing plans that helps to get the
profitability. In other words, the role of organisation is to provide fast consumable products to
customers which helps to improve productivity (Strelchenko, 2019).
Macro environment – This refers as an environment in which how macroeconomic
conditions of a company operates a business that is impacting on operations and performance. It
is related to external factors which have impacted on business, consumer's ability and
willingness. Every organisation is required to analyse macro environment as it is the part of
strategic management that covers various factors which are important to run a business. In
context to Unilever, manager focus on external environment that assist organisational people
which factor can impacts on business strategy such as:
Political factor: This factor extent the government policies and stability of a nation
which is required to follow by a business that may impacted positively and negatively. In UK,
government is stable who make fair decision by formulating policies and regulations that has
impacted on business positively. The business and operational activity of Unilever increasing as
managers make decisions regarding to expand business in other location with the help of
government support that affect business positively. Along with this, increasing rate of tax and
fuel can impacts negatively as low production and reduction in selling activity due to changes in
tax rates (PESTLE analysis of Unilever, 2017).
Economical factor: The containment of this factor involves economy of a nation which
has affected the performance of a business. Rate of inflation, interest rates, foreign exchange
rates, economic changes etc. are covered in this element who has affected business strategy. The
business performance of Unilever depend on situation of economies across the world. For
instance, the inflation rate of UK is stable that is increasing wages of people in developing
countries, is opportunity for Unilever to get profits by selling products and services. On the other
hand, sales of organisation can be reduced due to increasing rate of interest and inflation in UK
that create a risk for Unilever (Azevedo and Budish, 2019).
Social factor: When people are behaving in differently and they have different demands
is related to society that has impacted on business performance. The people of UK are highly
health consciousness and environmentalist behaviour that has created a opportunity for Unilever
as it is growing continuously by addressing consumer's needs and creating interest of healthful

products. This is impacting positively on business performance and improve profitability.
Moreover, not focusing on customer's demand and not providing health consciousness products
it can reduce the productivity that can impacts negatively.
Technological factor: The businesses in relation to all sector and field depends on
technologies and innovation that helps to produce new products and services as people wants that
affects business in good ways. The positive impact of technological factor on Unilever is rising
automation and new business processing equipment that helps to enhance inventory monitoring
and supply chain. Moreover, it helps to increase the operational efficiency and distribution
efficiencies by using this factor optimally. However, at the same time it can threat for Unilever
as it increases high competition in relation to other firms by involving small ones in market. This
can be create cost of organisation in research and development that affects business strategy
negatively (Schwarz, Ram and Rohrbeck, 2019).
Legal factor: This factor have relations with political factor as both are containing
government rules and regulation which affects the business and its performance. The
performance and operational activity of Unilever can be increase as it follow new patent laws
that reduces patent related issues and increase profitability. On the other hand, not following the
equal wages, health and safety and consumer protection laws then it become threat for entire
company to run its business.
Environmental factor: The relation of this factor with ecological trends and conditions
that has impacted on business strategy and performance. Under this factor, Unilever is improving
its business performance by running environmental programmes that attracts customers and
enhance the business sustainability. Oppositely, this factor can impacts negatively in case of not
contributing in corporate responsibility the opportunity would be taken by other organisation that
reduced sustainability (Szopinski and et. al., 2019).
Stakeholder analysis
Stakeholder matrix is consider as a tool and framework that assesses by managers by
implementing potential changes in interested parties. In organisation, stakeholder are those
people who have interest in operations and making decisions in relation to any task or project.
The stakeholder matrix in context to Unilever organisation as defined:
LEVEL OF

INTEREST
HIGH LOW
HIGH Managers Suppliers
LEVEL OF POWER LOW Employees Communities
High power and high interest – These are consider as major stakeholders that are
heavily invested amounts in business projects and expects to get high return. According to above
matrix it has considered as manager is having high interest and high power in Unilever who
make decision and run their business effectively (Romero, Ruiz and Fernandez‐Feijoo, 2019).
High power but low interest – This is also stakeholder who are playing a significant
role and it must be kept satisfied. In context to Unilever, suppliers is having high power who
distribute raw material but less interest in activities. Suppliers can derail the organisational
project after seeming the minor issues.
Low power and high interest – This type of stakeholders must be kept informed and
creating high influenced. In Unilever, employees are consider in this category who have low
power to make any decision but have high interest that encourages them to work properly. This
type of stakeholders do not get what they wants.
Low power and low interest – This stakeholders must be monitored that helps to
complete the task. In Unilever, communities have low interest and low power who do not
participate in business activities. In case of becoming more powerful it can affect the project in
future so it is required to monitored (Kerridge and Simpson, 2019).
LO2
Internal environment and capabilities of organisation
Internal environment is composed of the elements in relation to business organisation,
involving management, current employees and corporate culture that affects business and its
performance. With the help of this internal analysis capabilities can be get and improvements are
done accordingly. For Unilever, it is important that they should analysis internal environment
that can help to improve business activities. The management of Unilever company uses
appropriate framework to analysis environment that are as defined:

McKinsey 7S model – This is a powerful expository tool which is used to accept the
changing organisation culture and plans in order to make effective business decisions. In
Unilever, this model is used by management to assess and monitor changes in internal situation
of company and helps to identify what needs to be realigned in order to improve performance.
The description of such model is defined below:
Shared value: This means super ordinate goal that involves set of values and aspirations
in order to accomplish business goals. In context to Unilever, the share values is customer
services and supply chain that can help to increase the productivity and selling. Therefore,
marketing manager and customer service of such organisation address or resolve customers
problem within 24 hours that processes to complete shared values.
Strategy: This means to achieve purpose of organisation and maintaining good
performance. The main strategy of Unilever is to develop good relations with customers and
organisation so sale can be increase. Another strategy of organisation is to increase its financial
position by conducting research and providing products to people (Roelens, Steenacker and
Poels, 2019).
Structure: This prescribes formal relationships between different positions and activities.
Unilever is following network organisational structure that helps to connect people at every
place. As this is multinational company, operating business in London and other countries by
following network structure that helps to increase number of customers in order to attain the
business goals.
System: This involves rules, regulations and procedure that helps to attain the
organisational goals and objectives. The management and employees of Unilever company are
following MIS system in which all information are involved properly and systematically that
attracts customers and make decision to buy products and services.
Skills: This means qualities and capabilities that is required to complete the task and
attain business goals. In Unilever, employees are learning, communicating, problem solving and
customer relation skills that helps to complete task and increase organisational profitability.
Staff: For very organisation it is require that employees should understand what are the
organisational goals and how it can be attain effectively. In Unilever, staff member are
performing their role and contribute in business activities so goal can be achieved effectively.

Style: This is used to bring changes, pattern of action and implementation of plans by
using effective leadership style. In Unilever, leaders are using participating leadership style that
helps to participate in business activities and assist what need to do further. With the help of this
strategy organisation can attain business goals (Martinez and Ferreira, 2019).
VRIO Analysis: In business organisation there is require many resources to run a
business by evaluating ideas and thoughts that can help to take the competitive advantages. This
tool states which resources are valuable, rare, inimitable and organised so, competitive
advantages can be taken effectively. The VRIO analysis in context to Unilever is defined as:
Resources Valuable Rare Inimitable Organised
Financial
resources
Yes No No No
Brand image Yes Yes No No
Skilled
employees
Yes Yes Yes No
Supply chain Yes Yes Yes Yes
Valuable: This means sources which are valuable for organisation are valuable or not. In
Unilever, financial resources, brand image, supply chain and skilled employees are considered as
valuable that helps to increase profitability. Financial resources helps Unilever in investing in to
external opportunities occurred in organisation. Skilled employees are valuable who processes to
high productivity and create a great value for customers. Supply chain is valuable as it helps to
increase the number of sale by reaching out to more customers. Moreover, brand image is also
valuable that attracts number of customers and encourage them to get variety of products.
Rare: Financial resources are not rare for organisation because it can have in other
company also that helps to run the business activities. In context to Unilever, brand image,
supply chain and skilled employees are rare for other organisation that helps chosen company to
take the competitive advantages (Bhargava, 2019).
Inimitable: Skilled employees are the part of organisation who understand the goals of
organisation and put efforts to accomplish goals. In Unilever, skilled employees and supply

chain are those resources which are inimitable for other organisation. This is creating
opportunities for selected organisation and increases profitability.
Organised: It is important for company that its all resources should be organised and
maintain effectively so goals can be attained effectively. In Unilever, supply chain is managing
by management that helps to increase sale and profitability. In this organisation, managers are
focusing on selling and distribution activity that process to take competitive advantages.
LO3
Application of porter's five forces model that is used to get the competitive advantages
The aim of business organisation is to get the competitive advantages by attracting
customers and increasing business performance. Different types of planning are made by
management in aspects to taking competitive advantages that helps to improve the organisational
profitability. Unilever is using porter's five forces by evaluating competitive resources that are as
described:
Competitive rivalry: This states the competitive firms in same business sector that can
be threat or opportunity for existing organisation. In UK, there are many organisation such as
Johnson & Johnson, Nestle, Procter & Gamble, Kerry, Edgewell personal care etc. are
competitor of Unilever who are providing consumable good to customers. This can be threat for
Unilever to sale its products in competitive market.
Bargaining power of suppliers: In UK, the bargaining power of suppliers is low
because there are high number of suppliers who are providing goods at different prices. This is a
opportunity for Unilever to get goods at less prices and set the prices of products accordingly that
can help to take competitive advantages (Elmagrhi and et. al., 2019).
Bargaining power of buyers: In UK, population ratio is increasing that means people
are increasing that is increasing profitability. Herein, bargaining power of buyers is low because
Unilever is providing different quality of products for which customers are ready to pay extra
amount.
Threat of substitutes: This refers as substitution of product and services which are
available in market and reducing profitability. In context to Unilever, there is less substitution
because it provide quality of products which attracts customers and increase productivity
effectively (Liao and et. al., 2019).

Threat of new entrants: When new organisation has entered in market by using
resources and capital in order to run business and increasing profitability then it become a threat
for existing company to run its business. There is less threat of new entrants in context to
Unilever because to enter in to market required investments, resources, technical services etc.
which are difficult for new entrants.
Balance scorecard – This can considered as a management tool which is used to keeping
track of execution of activities. In this tool, manager analysis the performance by monitoring and
controlling the activities effectively. This is used by Unilever organisation to evaluate the
performance and control the business activities that helps to run a business effectively.
LO4
Applying range of theories, concepts and models
Strategic planning is the process which is prepared by management in order to attain the
business goals and objectives. In Unilever, managers prepare a strategic plan for the purpose of
increasing number of customers and selling the product and services that processes to
accomplishment of objectives. This organisation is applying Porter's generic strategy that helps
to take competitive advantages are as discussed:
Porter's generic strategy: This model states that how a company can take competitive
advantages by selecting appropriate strategy and maintaining good performance. With the help
of this existing company can get its profitability and sustaining advantages. The description of
this strategy is determined below:
Cost leadership: This style is related to cost of products and services that states that to
attain the business goals organisation need to sale its products at low cost. Herein, organisation
set prices to become a low cost producer. This can be use by Unilever, by setting low cost of its
products that can attracts customers and increase productivity (Demirel and Kesidou, 2019).
Differentiation: This is related to product differentiation as people are demanding
different products that can attracts customers and increase profitability. In this strategy, Unilever
is require to provide different types of products and services that are not available in market that
helps to meet with customer's needs and process towards competitive advantages.
Focus: Such generic plan is related to cost focus and differentiation that helps to increase
productivity and profitability. For using this strategy, Unilever needed to set low cost and

provide different types of products and services that can help to increase productivity and selling
activity (Haq and Singgih, 2019).
From the above discussion it has evaluated that Unilever should use Cost focus strategy
that is suitable and will help to take the competitive advantages. Herein, manager set low prices
of its products which helps to increase sale and competition in market. This will be beneficial for
Unilever as customer will influence from low cost and would buy products in wider range.
Boman strategy clock: This is a strategy which was given by Cliff Bowman and David
Faulkner. It highlights the aspects on how a organisation can position its products and services
by offering in to market. This covers two dimensions first is about price and second is perceived
value of product and overall brand. In context to Unilever, Bowman strategy involves cost
leadership, product differentiation and market segmentation that can attracts customers and
increase productivity. In this management of Unilever provide products and low prices as
compare to others that helps to maintain the competition in market and increase benefits
effectively (Cotterill, 2019).
Hybrid strategy: This is also a business strategy, used by companied to attain the
business goals and objectives. In this, organisation achieve differentiation and low price of
products relative to competitors. In context to Unilever, managers are using hybrid strategy that
helps to deliver low prices of products to customers. By using this organisation get success and
achieve sufficient funds for reinvestment and increasing business activities effectively (Chaffey,
Hemphill and Edmundson-Bird, 2019).
Strategic management plan that are having tactical strategic priorities
Strategic Planning: Planning is the important part of success without this a organisation
cannot attain business goals. In other words, planning is first step to start a work and reach near
by goal. In Unilever, planning is formulated by managers to understand the goals and they give
their efforts to complete them effectively. The managers of Unilever has decided to increase the
brand image and attaining more customers (Vision and mission statement of Unilever, 2017). For
this, they have planed and make tactics that are as described:
Vision: The corporate vision is “To make a sustainable living common place and grow
business performance”.
Mission: “Meet everyday needs for hygiene, nutrition and personal care with brand that
helps to feel good, look good and give more to life”.

Objectives:
 To help people by improving their health and well beings.
 To capture market share by 40%.
 To improve the brand image and increasing competitive advantages.
 Increase customer satisfaction up to 80%.
Strategies and tactics:
Engage people in business idea: Unilever should use this strategy in which management
should involve with employees by sharing business information and goals that helps to compete
the task in certain time (Wahyuni, Fahada and Atmaja, 2019).
Training and development tactics: This tactic is important for organisation that can
help to attain the business goals effectively. Whenever Unilever is going to bring something new
technique in supply chain and distribution process that helps to attracts customers and will help
to improve business performance.
Implementation and control:
This is ending stage of strategic plan which is used to implement and control the all
activities and make profits. All activities are controlled by management by evaluating
performance. For performance evaluation chosen organisation is using Benchmarking tool that
will help to monitor and compare with other organisation. With the help of this company know
its errors make efforts to improve this that helps to attain the business goals effectively.
CONCLUSION
From the above report it can be concluded that strategies are formulated by management
in order to complete task and attaining business goals. The main object of organisation to
increase profitability and competitive advantages so, different framework are used to completing
this object. Different frameworks such as PESTLE, stakeholder analysis, SWOT analysis,
McKinsey 7s model and Ansoff growth matrix are used to accomplish business goals. Moreover,
porter five forces used to run business in competitive environment. Vision and mission statement
of Unilever. 2017Vision and mission statement of Unilever. 2017Vision and mission statement of
Unilever. 2017

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PESTLE analysis of Unilever. 2017. [Online]. Available through:
<http://panmore.com/unilever-pestel-pestle-analysis-recommendations>
Vision and mission statement of Unilever. 2017. [Online]. Available through:
<http://panmore.com/unilever-vision-statement-mission-statement-analysis>