Unilever Global Business Strategy Case

Running Head: Management
Management
Unilever Global Business Strategy Case
SystemJP
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Management 1
“Global Business Strategy of Unilever”
The fact is true that a firm needs to make various important decisions before implementing
business expansion decision in the market. Along with assets and opportunities, the business also
gains various liabilities and unseen conditions for the business as well which fluctuates its
growth during the expansion strategy. However, after analyzing the external market
opportunities it becomes clear with the management of companies that benefits of expanding in
international markets are much more than the threat present in the environment due to which
they take such decisions for the profitability of the business. So, this paper discusses about the
business expansion strategy of the company Unilever in alignment to Pankaj Ghemawat’s AAA
global strategy (Ghemawat 2017). Unilever is British-Dutch transnational consumer goods brand
that is headquartered in London along with Rotterdam, Netherlands. Major share of the company
is earned from food and beverages sector. Unilever is world’s seventh most valuable company
and is one of the oldest companies present in worldwide market with its global presence in
around 190 countries. The company owns more than 400 brands with a net profit of 9.8 billion
euros. The company was founded in the year 1929 by the merger of Margarine Unie (Dutch
Margarine producer) and British soap maker Lever Brothers. It should be noted that the company
Unilever has grown its profitability by expanding the scope of business in different parts of the
world (Unilever 2019).
Talking about the global expansion, it should be noted that Pankaj Ghemavat has rightly defined
global expansion strategy by the way of AAA framework presented in the environment.
Adaptation, Aggregation and Arbitrage (AAA) is a framework used to understand the diverse
economic conditions of a foreign country and organize actions accordingly in order to grow.
Adaptation refers to the strategy under which the company organizes a global business strategy
that will help them to enter in new international market. This strategy helps the company to start
local operations in country and deliver products and services that are customized in the local
country (Ghemawat 2015). Aggregation refers to the strategy in which the company arranges a
global strategy where they try to capitalize the economies of scale by imitating the success of the
product and service in the home country and aims to promote the standardized product in the
new environment. Further arbitrage refers to the strategy under which the company arranges a