Business Environment and Strategic Management

Business
Environment and
Strategic
Management

STRATEGIC MANAGEMENT 1
Introduction
Business environment is the sum total of all factors that affects a business in terms of growth
(Hamilton, and Webster, 2018). It is essential for an organization to analyses the internal or
external factors in order to evaluate the risk. The various tools that help the organization to
evaluate the business environment such as PESTLE Analysis, Value Chain Analysis, Porter’s
Five Forces Framework and many others (David, and David, 2017). In this report, the discussion
is made on the concept of business environment analysis. Unilever has been selected in order to
analyses the external or internal environment.
In the beginning of this report, external environment will be analyzed with the help of PESTLE,
Porter’s Five Forces Framework. After that, internal analysis will be analyzed to evaluate the
competitive advantage of the organization. At the end of the report, strategies will be
recommended in order to overcome the issues.
Overview of the organization and industry
Unilever is a transnational consumer goods company in British-Dutch, and its headquarters in
London, United Kingdom and Rotterdam. It offers the personal care products, beauty products,
food and beverages and cleaning agents. It is marked as the oldest multinational companies and it
provide the products in 190 countries. Organization has its 400 brands with the turnover of 53.7
billion euros in the year 2017. Organization operates in consumer goods industry to serve the
services to consumers. There are 155000 of employees in the organization that helps to attain the
success at the higher level. The company earned the revenue of €50.982 billion and net income is
€9.808 billion in 2018 (Unilever, 2018).

STRATEGIC MANAGEMENT 2
Consumer goods industry is the largest industry in the world. Nowadays, fast moving consumer
goods companies have seen their revenue growth and operating profit growth. The industry is
rising from 0.5% in 2016 to 5.7% in the year 2017 (Consultancy, 2018).
(Source: Consultancy, 2018)
External Analysis
PESTLE Analysis
Trends
Political- Brexit has creates uncertainties and open doors for UK. Unilever face some challenges
during the Brexit period although, there are numerous opportunities open for the company such
as competition is decreases in the market (Politics, 2018).
Economic- It is observed that UK is positioned at the largest national economy in the world and
also ranked at the fifth number in terms of Gross Domestic Product (GDP) and ninth largest
country in terms of purchasing power of consumers. From the last years, it is noticed that the
GRP per head of the country has been fluctuated such as in 2005, it is 7200 but in 2010, it is

STRATEGIC MANAGEMENT 3
below 7000 and in 2019, it is 7800. It states that the economy of the country is growing rapidly
due to which the willing power of consumers is also increasing.
(Source: Financial Times, 2018)
Social- It is observed that 65% of UK customers that claim to be loyal shoppers which is above
the global average. The trend for consumer services is high as the loyal shoppers never sacrifice
with the necessity of products or services. Their demand towards the products or services has
been increases.
Legal- The Employment Act 1996 is followed by the country to protect the rights of employees.
There are some other legal laws that the organization has to implement to provide the services to
consumers such as sales of goods act 1979, and electronic commerce regulations 2002.
Environmental- The step taken by the government, local councils, communities of UK taken an
initiative to create the environmental awareness in the nation and also encourages the people for
protection of environment.
Key Drivers