Strategic Evaluation of Unilever: Mission, Vision, Objectives, VRIO Analysis, PESTLE Analysis, Porter's Five Forces

This report provides a strategic evaluation of Unilever, including its mission, vision, objectives, VRIO analysis, PESTLE analysis, and Porter's Five Forces. It analyzes the company's strategic direction and reviews its strategies based on various analyses.

Strategic Evaluation

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1:Evaluate the Mission, Vision and objectives in setting the strategic direction of Unilever
organisation............................................................................................................................1
2:VRIO Analysis of Unilever company.................................................................................3
3:PESTLE Analysis................................................................................................................4
4:Porter's Five Forces Model on Unilever..............................................................................6
5:Based on above Analysis, review the Unilever's strategy..................................................8
CONCLUSION................................................................................................................................9
REFERENCES:.............................................................................................................................11

INTRODUCTION
Strategic evaluation refers to the gathering data or information about the procedure of
strategic planning. It is also defined as a procedure of determining the effectiveness of current
strategies which business are using for achieving business objective or targeted goals and taking
correct action whenever in future required. The below report is based on Unilever company. It is
British multinational consumer goods organisation based in London and it is founded in 1929.
They serve their services and product in world wide and also have different categories in
products such as food, energy drinks, baby food, cleaning products, tea and coffee, toothpaste,
pet food and many other goods. company have 400+ own brands such as Dove soap, lux, sun-
silk,surf and etc. Unilever is divided into three major category first is food and beverages, second
is personal and beauty care products and third is home care products. The below report includes
the Vision, mission and objectives in building strategic path of this business, organisation using
VRIO analysis to measure strategic capabilities and PESTLE Analysis to measure and observe
the external factors which affect the business directly or indirectly. Business using Porter's five
model to analysing the competitive environment and after company using different models
analyse the strategies and review on that (Grissom and Bartanen, 2019) .
MAIN BODY
1:Evaluate the Mission, Vision and objectives in setting the strategic direction of Unilever
organisation
Unilever is a British multinational consumer goods providing company. The company 's
products includes confections, energy drinks, baby food, soaps, soft drinks, cheese, cleaning
agents, coffee, bottled water, toothpaste, frozen pizza etc. The mission statement of the company
identifies and determines how the company delivers the products and services to its target
customers. As the company has a mission to fulfil the needs, wants and desires of the customers
with nutrition, personal care and hygiene in order to serve the customers so that they can feel
good towards the products and services and customer satisfaction can be generated towards the
company. The mission statement of the company includes:
 Adding a vitality to a life.
 Meeting the daily needs of the customers (Shitong, Linna and Xinan, 2018) .
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 Helping the customers to get more in terms of quality.
And the vision statement of Unilever is to make an emphasize on sustainability among the
consumers. The vision of the company is to make sustainable living place for the customers and
promoting the business company to grow in the marker. The vision statement of the company
includes:
 To provide sustainable living.
 To support the business growth of the company.
 To have best long term business practice in the corporate market.
Unilever has set its goals and objectives to achieve them and maintain its position in the
corporate market. The objective of the company which helps in providing the strategy direction
are as follows:
 The company aims at providing the branded products and services which provides the
quality in terms of value and price to the customers (Ansoff and et. al., 2018).
 To ensure that the products and services of the company should be packaged, labelled,
advertised and promoted to the customers properly to the customers.
 The company focuses to carry its business in different countries so that company can be
able to face growth and generate revenues.
 To makes continuous improvement in order to generate the sustainability to serve the
environment and the society as well.
 To focus of different generic strategies to build the competitive advantage by satisfying
and fulfilling the consumer 's preference and the needs.
 To provide the quality products to the customers so customer satisfaction can be
generated towards the company.
 To generate revenues and increase the profitability of the company.
As the purpose of Unilever is to make a sustainable living common place for the
customers by having constant innovation (Velikorossov and et. al., 2020). The main purpose of
the company is to regenerate nature, deal with the climate change and conserve the resources for
having use in future. Al the purpose and the objectives helps the company in designing the new
strategy according to that market needs and want and directs and implement them in the business
practices. As strategy directions refers to the plans and guidelines that are to be implemented for
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the business to run its business in the markets to accomplish its planned goals and objectives of
the company.
2:VRIO Analysis of Unilever company
It is is business framework that is helps in develop organisation strategies for effective
growth in market and it provide long term advantages from competitors (Schilling and Shankar,
2019).
Resources Valuable Rare Imitability Organization
Financial
Resources
yes yes yes yes
Patents yes yes No No
Marketing
strategies
yes yes No yes
Distribution
Network
yes yes No yes
Valuable: In Unilever organisation the financial resources are highly valuable and this
will helps in investing external opportunities that originate. These are also useful to combating
company's threats. Their patents are valuable resources because it allows sell their products
without any competitive interference, it helps in generate revenue at high level. Their marketing
strategies are very effective in market this is reason behind the success of Unilever. Distribution
network are valuable resources of this industry because they have largest distribution network in
world wide, they have various products that they are serve in different countries. Better market
research can save resources and cost (Makadok Burton and Barney, 2018).
Rare: Financial resources of Unilever company are found very rare in market as per
VRIO analysis and strong financial status rarely found in any other industry. In t his patents are
very rare, these patents are not easily available. This is allowing Unilever to use without any
competitors interference. They have marketing strategies are rare because Unilever use different
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marketing strategies such as; they highlights benefits of their products and services, they provide
proper information in market so people get awareness about goods. Distribution network of
Unilever company is rare because competitors would need lots of investment to reach the level
of Unilever industry.
Imitability: Financial resources of Unilever Company are costly to imitate. These
resources are acquired by company through extended profits over the years. New entrants would
need similar profit for long period of time to collect this amount of financial resources. The
patents are very difficult to imitate for Unilever Company because it is not allowed legally to
imitate a patented goods. Similar resources to be improved and getting patent products is very
costly procedure. Marketing strategies are costly for this company because their promotional
activities are at high price level. Distribution network is very costly to imitate as per VRIO
model, this has been improved over the years by company and competitors would need invest
essential amount if they are to imitate with similar distribution system (Dzwigol, 2020) .
Organisation: Financial resources of Unilever are much organised as per VRIO analysis,
these resources are used with effective strategies at right place and making use of opportunities
so it is helps in reduce threats of Unilever industry. Patents are not well organised in this
company because they are not using patents to their proper potential. The existing unused
competitive benefits are change into sustainable benefits if they selling goods before patents
getting expire. Marketing strategies are very organised in workplace that is why their reaching
and advertising power is strong. Distribution network are organised as per above model,
Unilever use this network to reach maximum consumers and also ensuring them that products are
available at very stores in different locations.
As per VRIO analysis, the Unilever financial resources, marketing strategies and distribution
networking system are provide sustained competitive benefits and patents are source of unused
benefits form competitors.
3:PESTLE Analysis
PESTLE analysis refers the analysis of the different external factors of the business
companies that consists of political, economical, social, technological, legal and environmental
factors which affects the performance of the business companies in the corporate markets (Wan
and et. al., 2019). In context to Unilever, the pestle analysis of the company is as follows:
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Political  There is a political stability of most of the countries that can be taken
as an opportunity by Unilever.
 As being a multinational company, Unilever is facing the political
issues in the European union.
 There are different free trade relations in some countries that are
growing which can be seen as a opportunity for Unilever.
Economical  There is a conflict with the distributors over the product with the
price rise because of the currency impact.
 There are sharp fluctuations in currency in the markets.
 There is a increasing rate of the wages in some countries that can be
treated as a opportunity and as a threat by Unilever.
 There is a opportunity of having high growth rate in different
developing countries where Unilever can carry its business practices.
 In developed countries as they have the economic stability so
Unilever can take it as a opportunity to carry its business practices.
Social  There is a constant growing demand of having the skin care products
from Unilever in the emerging corporate markets.
 There is a constant rise in the demand of health consciousness from
the customers.
 The environmental behaviours are rising that is a opportunity for
Unilever.
 The company is facing the gradual dismantling of the gender role in
the society (Deephouse Gardberg and Newburry, 2019).
Technological  Unilever is using the ' people data centres' to determine the customer
's behaviours.
 There is implementation of integrated supply chain management in
the company.
 There is a rise in business automation that is faced by the company in
the technological market.
 Unilever is facing the constant rise in the research and development
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investment which treated as a threat for the company.
 The company is facing the decreased cost of transportation that are
based on the technological efficiencies.
Legal  There is a regular change in the tax laws and regulations of the
government.
 Unilever can face the delay in making and in regulatory approvals by
the government.
 There is a rise in environmental regulations.
 Unilever is facing the strengthening in the international patent laws.
 The government is strengthening the consumer rights laws for the
benefits of the customers.
Environmental  The company is facing the actionable steps to address the climate
change in the value chain of Unilever.
 There is a rise in interest in the business environmentalism.
 The company are facing on the efforts on sustainability in the market
for having growth (Carayannis, 2018).
 There is a increased complexity of environmental programs .
4:Porter's Five Forces Model on Unilever
This analysis of Unilever industry observes competition and customers as the most essential
forces in the organisation’s industry environment. The macro factors related to these forces have
a direct affect on financial performance of Unilever industry in the consumer goods market.
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Competitive rivalry: Competition is main force in Unilever's business environment.
This section of this model is states external factors that are affect each other. The effective force
of competitive rivalry against Unilever Company based on various factors such as: there are high
number of industries in market it is strong force, less switching cost like if customers not happy
with this brand then in market there are lots of products available at similar price and quality.
Mostly industries are aggressive, in future adding to intensity of competition.
Bargaining power of suppliers: Unilever business environment totally depends on
customer's behaviour towards its products. This section shows the business performance in
market. Unilever mus identify the external factor that is lead to strong forces such as: switching
cost is very low, it makes easy for customer to switch products. They have high quality data or
information of customers products and services, it makes easy when transferring from Unilever
to another providers. Their weak force is small scale of individual buyers (Ketchen and
Craighead, 2020).
Bargaining power of customers or buyers: It is moderate force for Unilever Company,
the environment of this industry affects the level of supply available to industries. There are
various factors that are contribute to moderate force of this section such as size of individual
suppliers, suppliers populations and over all supply system. Like suppliers modify in level of
production that leads to important but minimum modify in availability of raw material used in
this organisation, another firms are similarly affected.
Threats of substitutes: This section can reduce the revenue of Unilever Company and
their strengths of industry in customer products environment of industry. The low switching cost
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enables customers to easily utilize substitute to products of Unilever. Affect of substitution is
weak point because of availability of substitute at low level. For example, it is easier to entrée
this company’s Close-Up toothpaste from grocery outlets than to get substitutes such as
homemade organic dentifrice. In relative, generally substitutes have little performance with
negligible or irrelevant price difference when compared to customer’s goods willingly available
in the market. This situation makes Unilever’s goods more eye-catching than substitutes, thereby
advance weakening the strength of the threat of replacement. This part of Unilever’s porter’s
Five Forces analysis refers that the threat of substitutes is a small issue in the industry
Threats of new entrants: They competes those industries who are already established
and new companies in consumer goods market. There are various external factors which are
creates weak force. High economies at scale, high cost of development of brand and minimum
switching cost. Like For example, customer can easily decide to try new goods from new
industry. However, it is very costly to create strong brands like Unilever’s. This macro factor
weakens the strength of the threat of new entries against the firm. Also, Unilever takes benefit of
high economies of level, which carry competitive cost and high managerial efficiencies that new
company typically require. As a outcome, the industry remains tough despite new entry. Based
on this part of the porter’s Five Forces analysis, the threat of new entrant is a minor concern in
this industry environment.
5:Based on above Analysis, review the Unilever's strategy
It has been analysed above report, Unilever industry used different models such as
PESTLE, VRIO and Porter's five forces. Unilever uses broad separation as its generic strategy
for competitive benefit. The major focus of this generic strategy is its highlighting on
characteristics or features that make the firm’s products stand up in opposition to competitors.
For example, this company produces personal care products such as Dove Cream Bars to satisfy
customer’s needs for soaps that are not cruel or drying. although their moderately high selling
costs, such Unilever goods are competitive because they stand up from a common of soaps that
centre more on cleaning than moisturizing. In this strategy, the organisation attracts consumers to
particularly designed products (Holloway, 2018). The objective of strategic based on the
differentiation generic strategy of competitor is to raise Unilever through concentrated efforts in
development in product. The main motive of this objective is to focus on products developing
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that stand up from the competition and attract consumers. On the other hand, the objective of a
financial connected to the generic strategy is to raise revenues of Unilever company in countries
developing, which provide high growth of opportunities. These opportunities are measured in
the PESTLE Analysis of industry. The mixture of these strategic objectives leads to advantage of
competitors reflected through goods or services and effective financial performance in the
customer’s goods market. Market Penetration: It is a primary strategy of Unilever and they apply
market penetration as its primary exhaustive expansion strategy. In this intensive strategy, the
corporation enhance its sales level to progress in revenues and equivalent business growth.
Product Development: it is a function as a secondary concentrated strategy that organisation uses
for growth of business. The industry applies this exhaustive enlargement strategy by introducing
innovated or new products that attend to customer’s needs. Diversification: Unilever uses this as
a supporting exhaustive enlargement strategy. This demanding strategy focuses on establishing
new enterprises to grow the industry. Market Development: it is used as a supporting exhaustive
growth strategy in this company’s business. In this exhaustive strategy, the firm grows by
entering in new market segments or markets (Barbosa, Castañeda-Ayarza and Ferreira, 2020).
CONCLUSION
It is concluded that strategical evaluation is essential aspect for business and in the above
report company used various models such as PESTLE, VRIO, Porter's five model and apart from
that is important to clear vision, mission and objective so that company can achieve goals easily.
Pestle analysis helps in identify the external environment and vrio model use to identify the
strategic abilities of company. Porter's model helps in develop strategies in business. Analysing
all models company can adopt effective strategy for better development and explore more
market.
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REFERENCES:
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