Innovation Capabilities for Unilever: Action Plan Roadmap for Development and Implementation

This report discusses the importance of innovation for organisations to achieve competitive advantage in the market. It elaborates on various innovative trends and models like Porter's 5 forces and PESTLE analysis for Unilever to examine the need for innovation. It also investigates the requirement for innovation within the organisation for improving future growth and development activities. The report discusses the relationship between value chain and innovation, innovation factors for success and failure, and the role of leadership in knowledge development and transfer. It also elaborates on the SECI model for creating knowledge within the organisation and various innovation strategies to improve supply chain management.

Managing Innovation
in Business

EXECUTIVE SUMMARY
It is discussed the report that an organisation can innovate through various processes and
ways so that it can achieve competitive advantage in the market. It is obtained that innovation is
very important in a constantly developing world because there is always the need for
improvement within the business so that they can sustain themselves in a highly competitive
world. The following report is demonstrating various innovative trends such as change in
technology and globalisation that are majorly impacting the innovation within the FMCG sector.
Moreover various models like Porter's 5 forces and PESTLE analysis are also provided for the
Unilever so that the need for innovation can be examined. Along with this it is investigating the
requirement for innovation within the organisation for improving future growth and development
activities. In this context the relationship between value chain and innovation is discussed along
with the innovation design and economic reality of innovation that are affected by organisational
culture. Furthermore, various innovation factors for success and failure within the organisation
are discussed along with the role of leadership in knowledge development and knowledge
transfer for innovation. Knowledge management matrix SECI model is also elaborated for
creating knowledge within the organisation so that higher competitiveness of the organisation
can be achieved. Finally various innovation strategies are discussed to improve supply chain
management within the organisation to meet future requirements of the business.

Table of Contents
INTRODUCTION 250 W................................................................................................................1
The Future of the Industry 2020 and Beyond..................................................................................1
Innovative trends that are prevailing......................................................................................1
Range of models to assess the industry trends.......................................................................2
The Organisations Innovation Requirements 2020 and Beyond.....................................................4
Relationship between value chain and innovation.................................................................4
Innovation designs vs. economic realities and organisational culture issues affect the
innovative process..................................................................................................................4
Implementing innovation factors for success and failure within the organisation.................5
Leadership is managing knowledge development, knowledge transfer and innovative culture
development...........................................................................................................................5
Knowledge management Matrix and the Knowledge transfer framework............................6
Building the Future Innovation Capabilities for the Organisation...................................................6
Organisation’s innovative capabilities, the innovative strategy, technological orientation and
the market orientation.............................................................................................................6
Upstream and downstream supply chain significance for the organisation...........................8
How the organisation can improve supply chain agility and sustainability to meet future
requirements...........................................................................................................................8
Models that organisation can use to improve Supply Chain..................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
APPENDIX....................................................................................................................................11

INTRODUCTION 250 W
Innovation is a very broad term that deals with the creation and development of new
processes, methods, concepts and ideas that can help to improve the performance of the
organisation. With the help of innovation the goals and objectives of the organisation can be
achieved easily because it can also lay an applied form for inventing, modifying and discovering
new things from given resources so that greater levels of productivity and performance can be
achieved. In today's constantly developing world it is very important that an organisation should
keep on evolving and inventing new processes, approaches, thoughts, ideas, etc. to sustain
themselves in the highly competitive world. It is integral for a business that they should use
certain techniques of innovation in a constant manner so that they can achieve better productivity
and competitiveness in the market (Daim, 2021). The constant innovation and development is
very necessary within an organisation that can be achieved through little enhancement and
advancement of the organisation on a continuous basis. Unilever has adopted imaginative efforts
and a greater level of innovation by which it stands customer demand by providing best quality
products and services that does not create negative impact on them. Unilever Plc is a British
multinational consumer goods organisation that was established in the year 1929 and is
headquartered in London. The company has adopted many innovative approaches throughout the
years but there are various trends that are impacting the innovation in the consumer goods
industry. This report will discuss various innovation trends in the consumer goods industry and
the innovations that are required within the organisation to stay competitive in the market. In the
end it will discuss future innovation capabilities that can be adopted by the organisation to
improve supply chain and achieve sustainable growth in the future.
The Future of the Industry 2020 and Beyond
Innovative trends that are prevailing
There are various trends that are affecting the future of the consumer goods industry that
are elaborated below.
 Changing technology is one of the biggest aspects that is leading innovation in the
consumer goods industry because of upcoming technologies like artificial intelligence,
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digital technology, machine learning, big data, etc. The rapid advancement in technology
and the growth of internet, digital platform, mobile banking, online shopping etc. has
made it mandatory for Unilever to make innovations in the business.
 Globalisation is the second most important factor that is leading innovation in the FMCG
or consumer goods industry and is also affecting organisations like Unilever to innovate
their businesses so that they can stay competitive in the business (Daniels and Amadi-
Echendu, 2021). Due to the higher competition from the companies throughout the world
Unilever need to use innovation as a shield to protect themselves from external factors
and their competitiveness.
 Consumer demand is constantly changing and with the help of innovation and
organisation can fulfil customer needs more easily. Innovation helps to understand the
needs or desires of the customers, and helps to produce goods and services that can
satisfy these needs.
Range of models to assess the industry trends
Porter’s 5 forces
Porter's 5 forces is a framework that helps to identify and examine the prevailing
competition in the market for a given organisation (Dobbs, 2014). Porter's 5 forces of Unilever
are entailed below.
 Competitive rivalry is high in the FMCG sector because external factors affect the
business very strongly because of the high number of competitors prevailing in the
market, greater level of competition and low switching costs.
 Bargaining power customers is also strong that affects performance of business in the
market because the consumers have low switching costs, have a variety of products and
services in the market and there are many organisations that supply similar products as
Unilever does.
 Bargaining power of suppliers is moderate in Unilever's industry because there are many
suppliers available in the market and they are of medium size and have less control on the
organisation, there is a moderate population of suppliers in the market and the overall
supply is dependent on these suppliers.
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 Threat of substitution is weak in the case of Unilever products and services because the
company produces very unique products that do not have any substitutes and the
substitutes that are available at this price range are of low quality as compared to the
products of Unilever.
 Threat of new entry is also weak because Unilever stands at a very high position in the
FMCG market and any organisation that wants to increase their coverage in the market
there are many barriers that will stop them to gain such huge market share.
PESTLE analysis
PESTEL analysis is a framework that is used to understand the external factors such as
political, economic, ecological, socio-cultural, legal and technological aspects that affect the
activities of an organisation (Jafari and Othman Soleiman, 2020).
 Political factors of Unilever that have an impact on the businesses are the regulations set
by the Food and Drug Administration for FMCG products. Unilever abides by various
laws of the government to avoid any political interference in their business activities.
 Economic factors for an organisation like Unilever involved in the FMCG sector have
certain aspects like the contribution of the organisation in the development and growth of
the economy of a country.
 Social factors are very important for Unilever to understand the socio-cultural
requirement in more than hundred Nations where it operates that enhances its ability to
achieve success in its business.
 Technology factors are the most dynamic aspects that affect the business operations in
the international market (Franco-Giraldo and Gentilin, 2021). Unilever has many aspects
that affect the need for innovation in the business.
 Legal factors are those mandatory laws and regulations that must be followed by the
organisation so that it can continue its activities smoothly. Unilever strongly deploys all
the legal aspects in the business so that it does not face any legal displacement.
 Environmental factors are also very necessary for the organisation due to the changing
climatic condition throughout the world. Unilever has adopted various sustainable means
like recycling its packing materials so that it can improve the environmental health of the
planet.
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The Organisations Innovation Requirements 2020 and Beyond
Relationship between value chain and innovation
Process innovation is a chain of exercises intended to decrease the expense and season of
assembling an item or conveying a help with the ideal quality and upper hand. The most difficult
issue in process development and improvement is distinguishing the redundancies in the
assembling or administrations conveyance process and disposing of them to diminish the
expense and time engaged with the method involved with creating the final results. In this way, it
is fundamental for supervisors to comprehend the cycle at work and track down a basic way to
enhance the time and cost of completing an innovation. The significant chiefs can plan a
productive interaction to further develop functional thoughts that will have a genuine effect on
the association as they move the development into the commercial centre. There are many
capacities and a capability of organizations in completing cyclic development and worth chain
the board, and dissects the cycle result and concentration. There is a huge connection of process
upgrades innovation, and fostering an innovation value chain.
Innovation designs vs. economic realities and organisational culture issues affect the innovative
process
Innovation design is focused towards understanding, analysing and identifying the needs
and demands of customers to fulfil the economic requirements of the customers instead of
creating completely new products (Grace, 2019). In Unilever Innovation design tools and
processes mainly help to create better business processes and ideas that can help to enhance the
business performance and its growth activities. With the help of creative design and innovation
the company is able to fulfil fresh ideas while discovering the needs of customers and fulfilling
their desires.
Organisational culture directly or indirectly affects the performance of the organisation
towards innovation because it has positive as well as negative direct or indirect effect on the
performance of the firm. The main important factors of organisational culture that affect the
innovation process within Unilever are corporate strategy, knowledge management, research and
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development, level of technology, employees, availability of resources, management style and
leadership.
Implementing innovation factors for success and failure within the organisation
Innovation is very important for success within an organisation because innovation leads
the growth of a business and helps it to adopt changes (Mazzarol and Reboud, 2020). An
organisation that adopts innovation is open to many advantages and risks that may lead to critical
success or failure of the organisation. With the help of Business Innovation Unilever can
introduce new things within the organisation and can develop new products and services, market
strategy, methods and processes etc. to promote new values and growth within the organisation.
The main aspects of innovation that lead to the success of business are growth of business,
increase in competitiveness and advancement of technology. The major factors that may lead to
the failure of business Innovation are high amount of investment and expenses involved
instability and need for time. These factors can affect the success or failure of innovation in
Unilever.
Leadership is managing knowledge development, knowledge transfer and innovative culture
development
Leadership plays a very important role in knowledge development, knowledge transfer and
innovation because with the help of knowledge development and knowledge transfer the leaders
and team members are able to exchange their knowledge and ideas that helps to contribute
towards innovation that provides maximum benefit to the business (Sousa-Ginel, Franco-Leal
and Camelo-Ordaz, 2021). The leaders in Unilever lie in knowledge sharing and knowledge
development so that individuals and teams within the organisation can grow their abilities and
provide innovative solutions for the business. Effective knowledge development, knowledge
transfer and knowledge management provides competitive strength to the business and also
enhances the creativity, innovation and reputation of the organisation. Knowledge management
mainly focuses on knowledge sharing, knowledge exchange, organisational memory, knowledge
acquisition and knowledge use at the workplace that creates better chances for innovation and
growth within the business.
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Knowledge management Matrix and the Knowledge transfer framework
The SECI model of creating knowledge is used in many organisations throughout the
world that have their business operations across many areas of the world. Unilever can use
socialization, externalization, combination and internalisation models in cross cultural context.
 Socialization process focuses on linking knowledge tactfully by analysing, discussing,
observing and interacting through various processes in the same environment. Unilever
uses this to gain new knowledge from the external environment by interacting with the
stakeholders, suppliers and customers of the business.
 Externalization process is related to creating new knowledge by creating such panels for
growth where the people can interact with each other to develop new ideas for resolving
particular problems.
 Combination is the process of knowledge transformation from raw knowledge that is
used by organisations to improve performance in the long run (Temel and et. al., 2021).
 Internalisation is the process of using knowledge that is already obtained by an
individual and this knowledge is circulated to all the people at the workplace which helps
to improve the performance of employees and achieve greater outputs from them.
Building the Future Innovation Capabilities for the Organisation
Organisation’s innovative capabilities, the innovative strategy, technological orientation and the
market orientation
Unilever has been innovating for more than 100 years starting from reinventing soap in the
late 19th century to pioneering sustainable development in today's world. The organisation has
mainly focused its innovation towards the society, people and planet so that it can provide better
customer services and goods to satisfy the needs and desires of customers. Unilever has many
specialists that focus towards making innovations in various fields so that the organisation can
achieve greater efficiency and effectiveness in the long run. Unilever has a global network of
innovation partners who provide the organisation with sustainability innovation, digital
innovation and biological innovation. The researchers and developers in Unilever have focused
on sustainable development so that better growth of organisation as well as environment goes
hand in hand. Innovations within the organisation has been elaborated below,
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Upstream and downstream supply chain significance for the organisation
Supply chain is a network of business processes that are mainly involved in creating and
selling goods and services from the point of its acquisition to the production process until it
reaches the final customer. Upstream supply chains mainly consist of the suppliers of the raw
materials of the business and the focus of organisation is towards maintaining relations with
these suppliers. The downstream supply chain mainly consists of processes of organisation
related to delivery and distribution of goods and services to final customers. With the help of
upstream and downstream supply chain Unilever can obtain various advantages such as smooth
flow of goods and services from the producers to customers and in the case of order returns and
repairs downstream supply chain can help the customers to easily return the products to the
organisation. This helps the organisation to maintain fruitful relations with the customers, reduce
wastage, improve optima, higher profits and lower the overall cost of production.
How the organisation can improve supply chain agility and sustainability to meet future
requirements
Agile supply chain refers to the ability of the supply chain to quickly and efficiently adapt
to the changes in the market and customer demand. There are various strategies to improve
supply chain agility that can help to react swiftly to the changes, avoid delays in supply chain,
fulfil customer requirements, stay competitive, tackle hindrances and grow business to greater
extent. Unilever can use various technologies like E-Commerce to fulfil market demand, low
down the cost of supply chain, stimulate supply chain processes and increase the level of
customer satisfaction (Zhou and Wang, 2020). There are various methods by which Unilever can
make its supply chain agile like implementing demand forecasting within the business, use of big
data, investing in automated warehousing, expanding the inventory channels and partnering with
3PL so that it can achieve comparative advantage and tackle the swift changes in the business.
Models that organisation can use to improve Supply Chain
 Traditional supply chain: Conventional supply network is characterized as an incorporated
assembling process, wherein the Supplier supplies unrefined substances or semi completed
merchandise to the producer and are fabricated or collected into end results, and afterward
the completed products are shipped off the distributer, to retailer lastly conveyed to definite
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shoppers. Unilever can use this form of traditional supply chain to improve its supply chain
activities and achieve competitive and sustainable growth.
 Green supply chain: The term 'Green Supply Chain Management' (GSCM) alludes to the
idea of coordinating practical natural cycles into the customary inventory network. This can
incorporate cycles, for example, item plan, material obtaining and determination, assembling
and creation, activity and end-of-life the board. Unilever can use Green Supply Chain
Management to improve its supply chain activities and achieve competitive and sustainable
growth.
CONCLUSION
It has been concluded from the above report that an organisation can innovate through
various processes and ways so that it can achieve competitive advantage in the market. It has
been obtained that innovation is very important in a constantly developing world because there is
always the need for improvement within the business so that they can sustain themselves in a
highly competitive world. The following report has been demonstrating various innovative trends
such as change in technology and globalisation that are majorly impacting the innovation within
the FMCG sector. Moreover various models like Porter's 5 forces and PESTLE analysis have
been provided for the given organisation so that the need for innovation can be examined. Along
with this it has been investigating the requirement for innovation within the organisation for
improving future growth and development activities. In this context the relationship between
value chain and innovation has been discussed along with the innovation design and economic
reality of innovation that are affected by organisational culture. Furthermore, various innovation
factors for success and failure within the organisation has been discussed along with the role of
leadership in knowledge development and knowledge transfer for innovation. Knowledge
management matrix SECI model has been also elaborated for creating knowledge within the
organisation so that higher competitiveness of the organisation can be achieved. Finally various
innovation strategies have been discussed to improve supply chain management within the
organisation to meet future requirements of the business.
9

REFERENCES
Books and Journals
Dobbs, M., 2014). Guidelines for applying Porter’s five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), 32-45.
Jafari, H. and Othman Soleiman, K., 2020. Assessment of effective environmental factors in oil
and gas industry policies using PESTLE & SWOT analysis (case study: Kurdistan,
Iraq). Environmental Sciences, 18(3), pp.134-151.
Daim, N., 2021. R&D funds to kickstart commercialisation of products, innovation. R&D funds
to kickstart commercialisation of products, innovation.
Daniels, C. and Amadi-Echendu, J., 2021. Entrepreneurship, innovation, and technology
commercialisation for transformative change in Africa: perspectives, policies and practices.
In Entrepreneurship, Technology Commercialisation, and Innovation Policy in Africa (pp.
1-9). Springer, Cham.
Franco-Giraldo, L. and Gentilin, M., 2021. Factors affecting the commercialisation of new
knowledge: a roadmap proposal. International Journal of Business Innovation and
Research, 25(1). pp.19-34.
Grace, C., 2019. Innovation beyond the stage-gate: Factors influencing commercialisation phase
within financial services and solutions to mitigate barriers.
Mazzarol, T. and Reboud, S., 2020. Disruptive Innovation and the Commercialisation of
Technology. In Entrepreneurship and Innovation (pp. 265-310). Springer, Singapore.
Sousa-Ginel, E., Franco-Leal, N. and Camelo-Ordaz, C., 2021. Knowledge conversion capability
and networks as drivers of innovation in Academic Spin-Offs. Journal of Engineering and
Technology Management, 59. p.101615.
Temel, S. and et. al., 2021. Exploring the relationship between university innovation
intermediaries and patenting performance. Technology in Society, 66. p.101665.
Zhou, C. and Wang, R., 2020. From invention to innovation: the role of knowledge-intensive
business services in technology commercialisation. Technology Analysis & Strategic
Management, 32(12), pp.1436-1448.
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APPENDIX
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