Contemporary Issues in International Business of Unilever

International Business

Table of Contents
INTRODUCTION ..........................................................................................................................2
MAIN BODY...................................................................................................................................2
Key contemporary issues in international business of Unilever.................................................2
Evaluation in which international business must function in twenty first century.....................3
Alternative method related to entry into foreign markets ..........................................................4
Companies decision to go international and alternative theories related to internationalisation 5
Impact of Unilever on home and host nations............................................................................7
Analysis of data of country markets............................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
International business refers to exchange of goods and services beyond the national
geography. The international business can be classified into three types which are import, export
and entrepôt trade (Cantwell, 2017). The scope of this business is also very wide as it includes
services of import and export, licensing and franchising is done and foreign investment is also
involved. There are many features of this business which are inclusion of two or more countries,
various currencies are used, involvement of documentation work and lack of personal contact.
Factors that influence this business are culture and economic system of host country and political
risks and regulations that home country needs to face in host country (Buckley and
Casson,2019).
Unilever is a British multinational company, founded in 1929, headquartered at London,
UK. The company deals in fast moving consumer goods product like ice creams, tea, coffee,
toothpaste, beauty products and many more. It is having four hundred brands under it and its
products are available in 190 countries. This report highlights the challenges faced by Unilever
when it entered into USA market and its impact on its home nation i.e. UK and host nation i.e.
USA (https://www.unilever.com/our-company/at-a-glance/).
MAIN BODY
Key contemporary issues in international business of Unilever
Key contemporary issues are faced by every organisation when they decide to enter into global
market. These issues are related to language barriers, difference of culture, global team
management, inflation rate, exchange of currency, laws and regulations of foreign country and
many more issues.
The issues faced by Unilever in USA market are maintaining prices of the product so that
they can earn more profit. As the market is becoming volatile so the exchange rate of currencies
is also becoming volatile. Also, due to inflation the cost of producing the products is also
changing. So the company is facing the biggest issue of setting the right price of the products so
that their products are accessible to all the consumers of United States. Due to politics of the
government, company is facing another issue that is when the new government comes to power
it brings its own trade policies and laws to conduct the business in their country. As BREXIT has
happened so the trade relations between both the countries i.e. UK and USA are not so good and
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because of this Unilever does not know what will happen in future. It is because the supply chain
of UK market is not in good health after BREXIT because most of the supply chain was
dependent upon Europe market (Buckley,Doh and Benischke, 2017).
There will be different global context in which international business must function.
 Labour and employment law- Companies which are operating in global levels must
follow labour and employment laws of those countries in which they are doing their
business. Neglecting such laws can have a negative impact on overall business
functionality and will negatively affect the goodwill of firm. In the terms of Unilever, it is
operating globally in different countries. Therefore,, in order to do their business
operations successfully they have to follow labour and employment laws of those
countries in which they are operating.
 International trade compliance- This involves the import and export of products and
technology via a variety of conveyance methods from home country to host country.
These are regulated by EXIM policy of government of import country as well as
government of export country. In the terms of mentioned company, it has to follow these
rules in proper way otherwise it would create problem for doing business in another
country (Cherunilam, 2020).
 Complete Cost structure for doing business- While operating or establishing business
in another country. A business must have to calculate the cost of doing business in
another country. Different cost include like infrastructure cost, employee hiring cost.
Market research cost and many more. In the terms of mentioned company, while
approaching other countries for business must calculate these cost. By calculating these
cost it is easy for mentioned company to analyse whether that country is suitable for
doing business or not.
 Taxes- Every country has different tax rules. Therefore, business must follow all the Tax
regulations of the country in which they are establishing their business. In the terms of
mentioned company, it is doing their business in over 190 countries, there it has to follow
tax rules of all those countries in order to carry on their business operations successfully
without any trouble. For instance, Unilever is operating in US market therefore its has to
pay sales tax levied by US government.(Chiand et.al, 2019).
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