Understanding the Business and Economic Environment of Unilever: A STEEPLE Analysis

This report provides a STEEPLE analysis of Unilever's business and economic environment, including social, technological, environmental, political, legal, and ethical factors. It also discusses microeconomic factors affecting demand, supply determinants, and business challenges faced by Unilever.

Understanding the business
and economic environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Overview of Unilever..................................................................................................................3
Using the STEEPLE Analysis for evaluating the external business environment of
organization-................................................................................................................................3
Identifying the microeconomics factors which affect the demand of Unilever's goods..............5
Supply determinants.....................................................................................................................6
Competitiveness of UK market and its impacts on the future businesses...................................6
Random shocks of the UK fiscal policy......................................................................................6
Discussing business challenges faced by Unilever......................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................1

INTRODUCTION
The economic environment can be defined as all the factors of the economy which has
the ability of influencing the buying behaviour and habits of the consumers as well as of the
businesses and this ultimately affects the overall performance of the organization. Unilever PLC
is the British multinational consumers goods organization which is headquartered in the London,
UK. This report will discuss the STEEPLE analysis is of the company as well as microeconomic
factors which affects the demand and supply of goods as well as the market competitiveness of
the UK. Further, the structure and nature of the organization will also be covered in the report.
MAIN BODY
Overview of Unilever
Unilever plc, a consumer goods British multinational company, is the world largest
producer of soaps and deals in around 190 countries. Consumer goods industry deals in
providing the consumers with trending products and from which they can derive the maximum
satisfaction (Murphy and Murphy., 2018). The global goods company offers a range of beauty
and personal care products, refreshments and foods, home improvement products etc. Most of
the revenue generation of the brand is done by the segment of personal and beauty care but at the
same time, the segment of refreshments and food is getting an immense response and is growing
very fast.
Using the STEEPLE Analysis for evaluating the external business environment of organization-
Social Factor Analysis-
The Unilever company is offering the wide variety of the brands to its customers and so
the company has decided to increase the strong reputation of the organization. For this, the
company is highly focusing on the social factors, they are considering the products such as the
personal care as well as the well-being products. The company is showing the strong interest for
helping its customers look beautiful and good by using their products. The company is also using
the effective marketing for its products so that the products reaches to the people. The UK is the
country which is developed and the people living in this country has very high living standards
and for this they are highly depended on the consumer goods. The social and the employee
groups in the UK are demanding for keeping the 4 day work as this may have the drastic affect
on this company.
Technological Factor Analysis-

The UK is having the advanced technological infrastructure for supporting the latest
technological innovations in the overall retail industry. The retail industry in UK is changing
very rapidly in the technology such as IoT, Artificial intelligence, visual research options, digital
tools of marketing and many such technology (Sroufe, 2018). The country is promoting the
environment for increasing the technological innovations as well as the boosting of invention.
The Unilever company may be affected by the highly advanced technology in this country as this
company is mostly depended on the technology for supporting the goods which are produced by
this company. This has also affected in the positive manner as the rising use of the business
automation has created the opportunity for the company as this will help them in improving the
operational efficiency of the organization. The competition in this industry has also raised
because of the increasing the investments in the research and development.
Environmental Factor Analysis-
The UK company is considered as the one of the most significant country in the
International Paris Agreement as well as it is highly committed towards reducing the carbon
emissions in the country. This country is also having the environmental plan of the 25 year
which will also affect the functioning as well as the working of the retail industry. The country
has also introduced the tax for the plastic packaging in which they will be liable to pay the tax if
the packaging of the products will contain the less than the 30% of the recycles plastics. It is very
necessary for the Unilever company to constantly innovate as well as look towards addressing
the environmental factors which may affect the performance as well as the image of the overall
organization. The business environmentalism has increased and this is the biggest opportunity
for the company tom improve its environmental programs.
Political Factor Analysis-
The UK is having the stable government as well as its political environment is also
stabilised which positively contributes the commercial environment within the country. After the
UK has came out from the European union, the retail industry is facing very issues related to the
supply chain. The emergence of Brexit Deal has brought new trade regulations regarding the
imports from the European Union countries. The stable political government and the situation
has helped the Unilever company to grow in the highly competitive market. The political issues
related to the European Union are becoming the threats for the company's operations in the
country. The government of UK is also taking the initiatives for improving its trade relations

with other countries such as Israel, India and many more. Both the countries such as India and
UK are planning to start the free trade agreements in the future among them (Bambi).
Legal Factor Analysis-
According to the Competition Act of 1998, it has been identified that the anti-competitive
activities within the country has been forbidden by the law. Which means that if any of the
businesses are involved in such activities like bid-rigging, price-fixing then the penalty will be
charged against there company which is of 10% of the global turnover. This has very large
impacts on the working as well as the performance of the overall company because this creates
the monopoly and the price exploitation of the single business. Such norms and the regulations
are also applicable on the retail industry and for the Unilever company as well. The labelling as
well as the packaging laws of the country are strictly had to practice by the companies in UK
which means that the labelling of the product should disclose all the important and necessary
details of the product.
Ethical Factor Analysis-
The Unilever company is facing many of the ethical issues such as the environmental
reporting, habitats and the resources, palm oil, pollution and toxics, human rights and worker's
rights, supply chain management, factor farming and many more such issues. This is highly
affecting the working of the business as this shows that the company is not following the ethical
code of conduct (Willan, 2021). It is very important for the company to consider all the factors
and take the effective and right moral decisions which will help the company in the specific
situation to run smoothly all the business activities.
Identifying the microeconomics factors which affect the demand of Unilever's goods
Microeconomic factors refers to the factors which can affect the business in both, positive
and negative way. Examples of such factors are inflation, deflation, regulations, taxes, national
income etc. Here are some factors which affect Unilever the most
Prices of the goods- The economic condition of the world has made the prices rise in the market.
Due to inflation and high costing the brand has also declared to raise its pricing by 8% which is
now affecting the sales of the company.
Level of competition- The company has number no. of competitions in its product variety
(Romdonny and Rosmadi., 2019). For example, Johnson &Johnson, Nestle USA, Mars etc. high
number of competitors involve a risk of consumers shift.

Consumer income- Dues to the economic condition of the world, the income of the consumer is
becoming a major factor behind low demands and revenue of the firm.
Consumer's preferences and tastes- The consumer is always changing and shifting its interest
from one to another product, which is leading in low demand of the company's products
DEMAND CURVE
Supply determinants
Determinants of supply are the major factors which causes a shift in the supply curve.
Increase in price leads to increase in quantity supplied. Here in Unilever's, the major
determinants of supply are the
1. Costing of input
2. Competitive prices in the market
3. Government taxes and subsidies
SUPPLY CURVE

Competitiveness of UK market and its impacts on the future businesses
UK holds a competitive rank which is averaged to 9.08 since 2007 to 2019. The entire
market reached the highest rank of 13 in 2010 and lowest of 2 in 2007. The market holds a very
bright future ahead as the industries such as financial services involves less labour, but has a
strong upholding because of its accumulated knowledge and expertise in this sector. UK's
economy also tend to grow by 3.5% this year.
Random shocks of the UK fiscal policy
Fiscal policies refer to the policies made by the government to keep pace in the economy.
One of the major shock for the UK economy was the Covid-19, which let the taxation policy of
the government down (Chugunov and Pasichnyi., 2018). The taxation policy also impacted
Unilever's business as due to uncertainty the taxes were lower down and at that time the
company took right advantage by introducing more employees to the company and expanded its
operations even more.
Discussing business challenges faced by Unilever
The current challenge faced by the company is of high costing of the input materials. Due
to which, Unilever is forced to increase its price. This is leading to low demands of the brand
products and low revenue of the company. The entire fall in the business is making the
employees of the company to quit as the salaries provided by the company are lowered.
CONCLUSION
From the above study it has been concluded that Unilever plc is a consumer goods
company which deals in variety of products, but there are various factors which affect the
smooth functioning of the company. Later the report shows various challenges faced by the
company and identification of UK market's competitiveness and its impacts on the future of the
business world.

REFERENCES
Books and journals
Bambi, B.I., A Tool for Enhancing Quality of Services in Nigerian Universities Using Strategic
Planning.
Chugunov, I.Y. and Pasichnyi, M.D., 2018. Fiscal policy for economic development. Науковий
вісник Полісся. 1(1 (13)). pp.54-61.
Murphy, P.E. and Murphy, C.E., 2018. Sustainable living: unilever. In Progressive Business
Models (pp. 263-286). Palgrave Macmillan, Cham.
Romdonny, J. and Rosmadi, M.L.N., 2019. Factors affecting customer loyalty in products.
Budapest International Research and Critics Institute-Journal (BIRCI-Journal) Volume.
2. pp.337-343.
Sroufe, R.P., 2018. Enterprise Systems–Operational and Strategic Assessment. In Integrated
Management. Emerald Publishing Limited.
Willan, M., 2021. The Essentials of Contemporary Marketing. Bloomsbury Publishing.
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