Strategic Management Case of Unilever

STRATEGIC MANAGEMENT
Strategic Management
Case of Unilever Company
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STRATEGIC MANAGEMENT 2
Question 1
A). Unilever Current Strategic Position
Introduction
Unilever is a multinational company that specializes in making of the best known brands
across the world. Some of the brands the company sells across every country includes Lux, Omo,
Lipton, Rexona, Magnum, Sunsilk, and Signal (Unilever, 2018). In overall, Unilever specializes
in manufacturing, marketing, and delivery of foods, beverages, personal care products, and
cleaning agents that all fall Fast Moving Consumer Goods (FMCG). The company has succeeded
in creating sustainable competitive advantage because of internal capabilities and competencies
from marketing and advertising, strong research and development, strong relationship with
communities where it serves, relationship with local farmers and suppliers of raw materials, as
well as international distribution network.
Key Performance Indicators
Unilever organizes its key performance indicators around; durable and effectiveness
quality products, production of environmentally friendly products, increasing wider accessibility
around the world, manufacturing healthy products (see figure 1 below), and achieving longevity
of all product brands.
Key competitors
Univeler operates in a competitive markets where other multinational companies
manufacture, market and distribute FCMG such as Coca cola, Procter & Gamble, Kinberly—
clerk, Colgage Palmolive, Herry Group, Kraft, and Nestle (Craft, 2018).
Unilever’s vision: “to double the size of business while reducing its footprint towards the
environment and ensuring an increased impact to society” (Unilever, 2018).

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Unilever mission: “to meet the everyday needs of people of people all around the world
for nutrition, hygiene and personal care. We do this with products that make people feel good,
look good and get more out of life” (Unilever, 2018).
Figure 1: Unilever brands
Source: (Unilever, 2018)
Summary Of Unilever Mission And Performance
The company current mission involves meeting everyday needs of people across the
world through delivery of nutrition, hygiene, and personal care products. The company does this
by ensuring that it continues to deliver products that mske people feel good, look good, and get
more out of life. The company balanced scorecard offers a strategic planning and management
system that helps to align Unilever activities to its vision and overall strategy. According to
Singh and Sethi (2017), a company can do this when it monitors its performance against strategic

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goals. As indicated in figure 2 below, the balanced scorecard of Unilever financial perspectives
shows the revenue growth, cost reduction, and asset utilization. Currently, the company
continues to performs well in returns on invested capital.
Figure 2: return on invested capital of Unilever vs. its peers
According to figure 3 below, it is clear that Unilever has succeeded in efficiency
allocation of capital to achieve profitable investment from 2015 to 2017. Similalry, the company
returns on equity (ROI) remains higher at 40.38%.
Figure 3: Profitabilty ratios

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Source: (Pendrous, 2017).
Summary Of External Environment
PESTEL Analysis
Unilever headquarters is situated in London in a British political system. The United
Kingdom is a member of European Union, which enables trade among member states by
harmonization of specific rules relating to business and removal of trade barriers. Household
consumption has gone down drastically all of Europe due to the recession. Unemployment and
stagnation of wages is a significant issue in economies where Unilever Company supplies
consumers. The drop in salaries brings about a decline in consumer demand for Unilever
products. In the UK there, has there been a high level of life expectancy. There is a significant
ramification of the business like Unilever. It might change the structure of demand since the
older people have special needs that Unilever will meet. Today individuals rely so much on the
social media, mobile and retailing websites to get information.
Table 1: SWOT Analysis
Strengths
 Strong brand portfolio
 Strong innovation and launch of new
products
 Strong strategic acquisition
Weakness
 Product recalls
 Revocation of product-line licenses
Opportunity Threats

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 Growth in emerging economies
 Increased opportunitis in consumption
of health and wellness space
 Growth in home and personal care
 Ever increasing labor wages
 Risk from fluctuation in foreign
currencies
 Growth in counterfeit goods
Corporate Governance
Unilever acknowledges the significance of adopting good corporate governance and
behaviour. The company has succeeded in designing the code of business principles as the
standard guiding rules for employees working in all departments (Kalsoom, 2013). Unilever is
guided by six tenets of corporate governance (legal and regulatory framework, organizational
hierarchy, monitoring and internal controls, transparency & accountability, policies &
procedures, and the board of directors and committees). Management ensures that all employees
do the right thing that applies to legislation. All the principles are as extension to its values as
well as a reflection of its commitment to regulatory compliance and ethical practices (Unilever,
2018). Employees working in different departments believe that they need high levels of
standards and behaviour to work with everyone in the community. Unilever is committed to
communicate its performance in a regular manner and in a transparent manner. The company has
continued to report on its sustainability performance since 1996 (Unilever, 2018. Besides,
Unilever conducts its operations according to internationally accepted principles of good
governance and best practices.
Social Responsibility & Ethics
Unilever applies Sustainable Living Plan to set out decouple growth from the
environmental footprint while ensuring that it achieves positive impact in a society. The plan