Business Strategy for Unilever: Internal and External Analysis with Valid Strategies and Objectives

This report provides an in-depth analysis of Unilever's internal and external environment with PESTLE and SWOT analysis, competitive environment analysis using Porter’s Five Forces model, identification of competitive advantage, and valid strategies and tactical objectives to achieve overall strategic objectives. The report also includes stakeholder analysis and Ansoff’s growth vector matrix for developing new strategies and plans for achieving overall objectives.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
PART A.......................................................................................................................................3
An internal and external analysis that provides a platform for strategic decision making..........3
1. PESTLE and SWOT of the organisation and an evaluation of the organisation’s resources
and capabilities............................................................................................................................3
2. Competitive environment analysis using Porter’s Five Forces model....................................5
3. Identification and justification of the organisation’s existing and/or potential competitive
advantage.....................................................................................................................................7
4. Valid strategies and tactical objectives to achieve overall strategic objectives.......................8
PART: B.....................................................................................................................................9
On the basis of this analysis critically evaluate and justify strategic options for the
organisation:................................................................................................................................9
1. Critical evaluation of the different types of strategic directions available to the organisation9
2. Justification and recommendation of the most appropriate growth platform/s and strategies
...................................................................................................................................................10
3. Evaluate ways and means by which the chosen strategy/ies can be monitored in order to
ensure success............................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
Business organisations are successful in this present world only with efficient strategic
planning and analysing all its internal and external environment. Strategic decisions are made
according to the macro and micro factors of every organisation because without strategic
decisions and business strategy the firms cannot survive in this present competitive world
(Kitsios, 2021). In this report we will discuss about the company Unilever is a British
multinational consumer goods company of United Kingdom and this report will cover internal
and external analysis with PESTEL and SWOT analysis of the organisation and an evaluation of
the organisation’s resource and capabilities. Furthermore, it will also include evaluation of the
competitive environment using Porter’s Five Forces model. Identification and justification of the
organisations existing and potential competitive advantage and valid strategies and tactical
objectives to achieve overall strategic objectives. Part B will include different types of strategic
directions available to the organisation and recommend the most appropriate growth platforms
and strategies. Moreover, evaluating the ways and means by which the chosen strategies can be
monitored in order to ensure success.
MAIN BODY
PART A
An internal and external analysis that provides a platform for strategic decision making
1. PESTLE and SWOT of the organisation and an evaluation of the organisation’s resources and
capabilities
Unilever is an international company selling its goods and services worldwide with
international customers. This company is selling all types of products and services in around 190
countries and facing huge competition in the world due to high competition and various
substitutes globally. This company is using PESTEL and SWOT analysis for analysing all its
internal and external factors for making its business strategy successful.
PESTEL analysis

This model is used for analysing all its macro environments which are affecting the
organisation externally and which are uncertain and should be evaluated for knowing all the
factors which are reducing the performances of the organisation. Political factors: They are the factors like which are affected by Government of different
countries like corporate taxation, trade disputes, fiscal policy initiatives etc
(Alhawamdeh, 2019). This can affect the working of the firm like for example Unilever is
doing its business internationally and globally and political conditions of different
countries are not the same which affects the working of the firm due to unstable political
environment it becomes hard to operate its business in those areas. Economic factors: This is the main factor in macro environment because they completely
affects the working of the firm and creates problems in strategic decision making process.
This factors are interest rates, employment rates, inflation, exchange rates and any
changes in this by the Government affects the working of the organisation so this all
factors have to be analysed before making strategic decisions (Huo and et.al., 2022). Social factors: Social factors are the habits, behaviours, choices, preferences, taste of the
consumers which affects the buying of the products and sales or demand of the products.
The factors like lifestyle trends, consumers attitudes, there level of education, working
conditions and society views and perspective affects the company’s demand and supply
(Zickgraf, C., 2019). Unilever should produce the products which are demanded most by
the customers.
 Technological factors: All the new technologies that coming in the market with new
innovations techniques like with the help of cyber security, technology infrastructure,
automation, research and development etc affecting the working of the firms like rival
firms are using this new technologies which involves producing more goods at low cost
with new features and more profits and this makes huge competition due to low cost and
more production with new technologies (Abdullah, and et.al., 2022). Environmental factors: Environmental factors are uncertain like any climate changes or
natural calamity affects the working of the firm specially to those firms who are dealing
its business worldwide and having its business operation in the whole world. Legal factors: They are the legal policies or laws which are implemented by the
Government like consumer protection act, environmental protection law, industrial

regulations etc which are affecting firms working environment (Cristi-Montero, and
et.al., 2021).
SWOT analysis
Unilever is also using this analysis for internal analysis so that it can get to its internal
strength and weaknesses and making its strategies according to its strength and weaknesses. Strength: Unilever with the help of internal analysis investigate its internal strength like
the its brand, its products for which the brand stands and all the strength which helps this
company to become more successful in the future (Akinosun, and et.al., 2021). Weakness: With the help of this analysis all the weakness are also identified like for
example products which are decreasing its demand and the areas of department which are
weak and adding the cost of products etc are identified for improving them with help of
strategic decision making. Opportunity: All those opportunity are also identified like opportunity for expansion and
product diversification or pricing the products with high prices due to in crease in
demands of the customers etc all this opportunity are identified and strategies are made
for achieving this strategies (Jaber, M.M., 2022). Threats: Threats like competition or new entry or firms, substitutes of the products
creates threat for the firms and they are to be identified early for so that strategies can be
made for overcoming or removing all this threats (Murashima, M., 2020).
Stakeholder analysis: Stakeholder mapping
Stakeholder are all the interested parties who affects the project or companies strategy
and which has to given proper importance for effective decision making and has to make all the
strategies and decisions considering them first (Christie, 2020). They are the people at high level
of the companies like CEO, director, president, founder of Unilever etc are the main stakeholders
and they are working on important roles not on day to day working of the firm. Unilever
company has and this company with the help of Stakeholder mapping has align the levels of
interest and involvement of the stakeholders in the decision making process (Benzaghta, and
et.al., 2021).
Stakeholder mapping is the visual representation of the stakeholder’s place according to
interest, influence, financial stake etc. Some are internal and some are external stakeholders of
the company which all have to be considered while taking and decisions and planning strategies

the stakeholders who are on the top of the rank and are most interested will be given more
importance and the lowest level are given less importance. All the stakeholders can affects the
working of the firm and there involvement is necessary due to there funds involved in the
business.
2. Competitive environment analysis using Porter’s Five Forces model
Unilever is facing huge competition and with the help of Porter’s model it gets to know
about its strength and weaknesses so that it can use its strength in a way to achieve huge success
and plan various strategies to remove all the weaknesses in an organisation (Bruijl, 2018).
Increasing large competition due to globalisation and industrialisation has made the competition
so high and availability of substitutes goods makes it difficult for companies to plan its business
strategy and make appropriate decisions.
Porter’s Five Forces model Competition in the industry: Increasing competition making its difficult for the firms to
earn huge profits due to globalisation and availability of all the products in the market
makes the value of products and demand law only those products with low cost and
more features or which are new and trending are highly demanded. Unilever is selling all
variety of goods and services which are prevailing in the market but due various large
organisation with same products and services are giving tough competition. Unilever is
famous for its home care and refreshment products and are facing huge competition
nowadays due to same kind of products are producing by other companies at low rates
which are creating tough competition for this company. This company has to makes its
strategy more strong to compete in the market environment effectively. Potential of new entrants into the industry: New markets and entering of new firms in
the markets are creating huge competitions or making difficult for the existing firms to
operate properly in the environment due to new entrants with low cost and price of the
products and attracting customers with low prices and high featured goods. Unilever has
to plan its business strategy which makes its customers stable with providing reasonable
prices goods with high quality and low cost of productions (Cho, and et.al., 2019). Power of customers: If the company has few number of customers and then each
customer can influence the price of the products and company cannot charge high prices
whereas if the company has more customers then customers bargaining power reduces

automatically. Unilever has international market with huge customers and this company
should produce those products and services which has large number of customers for
earning huge profits. Power of supplier: If the suppliers of the raw materials are less than the company are
depended on the few suppliers and they can charge any price as they want that increase
the cost of production where as if the suppliers are more than company can buy its inputs
an draw materials from any where at low cost and will increase its profits. Unilever has
to buy raw materials and inputs for production which has huge suppliers for reducing its
cost and increasing its profits (Gago-Rodríguez, and et.al., 2021). Threat of substitute products: Due to availability of everything in the market by every
organisation every organisation for earning more profits is producing substitutes goods
in the market with low prices and low prices always attract customers if Unilever has
more substitute products then it will have to suffer huge losses and cannot increase its
price due to low demand. This company is producing all types of goods and services
which are also produced by the other firms with low cost and low rates and this is
creating problems for the firms to increase the price of this products due to substitutes
available. This company has to plan its strategy according to the need of the customers
and produce the products which has no or less substitutes available (Niño Durán, and
et.al., 2020).
3. Identification and justification of the organisation’s existing and/or potential competitive
advantage
Unilever is an international company and having its branches worldwide and providing
products and services to every customers outside the geographical areas. This company is
famous for its quality products and its brand with headquarter in London. Due to its large
operation its area of scope is high and has large number of customers with large revenue and its
customers are increasing every single year. This company has following advantages with which
it can make its strategic plans more effective with the help of this following advantages which
are:
 Large number of customers: Unilever has large number of customers spread worldwide
and the customers are increasing every year due to more satisfaction and product

varieties. Large number of customers will automatically increase the revenue and profits
of the firm and this company is planning its strategies and plans accordingly to increase
huge customers by producing more satisfying products. Distribution channels: This company has large distribution channels for distributing the
products and services it has great network all over the world through which it distributes
its products to the customers with shops and small markets established internationally.
All the stores and units has all the products available every time for making consumer
satisfy every time when they go to purchase the products and services. Variety of products: This company is providing variety of products and services and the
customers will not have to think twice before taking the products due to complex variety
of products for each group or age group of customers and this makes this company more
competitive due to every company cannot afford to sell all type of products and services.
 Flexible pricing: This company is charging flexible prices from the customers in which
all classes or groups of peoples can buy the products and services of this firm with low to
high salary people can buy this company products and services which is also a big
advantage of this company.
4. Valid strategies and tactical objectives to achieve overall strategic objectives
Unilever is using variety of strategies and objectives for achieving overall objectives of
the firm like this company is following the strategies which is Blue Ocean strategy in which the
company is selling the products in those markets where there is very less competition and very
less businesses of the products for no competition or very little competition (Khare, C.P., 2019).
This way this company can target those market as well and charge as much profits as it can due
to no substitutes and full monopoly in the market and less efforts for selling the products and
services are required (Leavy, B., 2018). Another model they are using which is Ansoff’s growth
vector matrix it is also called product/market expansion grid in which all the strategies related to
market development, product development and diversification and diversification strategies are
developed in which they get to know the firms growth with various stages and developing new
strategies and plans for achieving overall objectives of the company. For example Unilever is
using various product diversification or development strategies after investigating all the market
strategy for growing its products demand in the market or developing those products whose

demand is decreasing so that firm can earn huge profits with proper strategies and objectives in
the long run. This strategies are used by Unilever for growth of the company in the long run by
removing all the weaknesses and working for achieving each type of goals (Dawes, J., 2018).
PART: B
On the basis of this analysis critically evaluate and justify strategic options for the organisation:
1. Critical evaluation of the different types of strategic directions available to the organisation
Unilever is using various strategic directions for ensuring that there plans are implemented
properly with all the strategies. It ensures that the employees and management are properly doing
there work efficiently towards achieving organisational objectives. This company is using the
strategic model which is
Bowman’s Strategy Clock
This model used by the Unilever for positioning its products and services on the two
basis one is price and second is perceived value of the product, service and overall brand. In this
model the companies prepare eight strategies and are divided over four quadrant and displayed
like on a clock that is the reason this model called strategy clock (Menetski, and et.al., 2019).
The company chooses the best strategy or position which has more competitive advantage over
other the eight positions are: Low price and low added value: In this position prices are generally low for both the
products and services. Low prices are the only competitive advantage available to the
customers through which they can earn huge profits with low prices. Keeping the prices
low are most effective method to attract huge number of customers with low prices but
this method is not attractive enough and not used for long period of time. Low price: In this position the companies sell products and services at low prices and
producing products at large volume and selling at cheap rates with low cost this way
companies can earn huge profits due to large volume and low cost but this strategy is also
not effective in case of long run. Hybrid: In this method company offers the products and services which are different
from other products and services like offering quality and products which has different
added value and are slightly different from other products and which makes the
customers attracted towards the products to buy.

 Differentiation: In this position Unilever is using producing and selling products which
are of high value and are of high quality with brand. This way this company is producing
and selling some unique products and services which has no similarities and customers
are willing to buy the products due to unique features and high quality. This strategy is
used when the particular brand or products which are of high value and high price and
which can leads to high profits and revenue. Focused differentiation: This strategy focused on those products and services which are
of high value and price and the customers are willing to pay high prices more then
demanded by the company. This way company focuses on targeted promotions.
Marketing, distribution so that they can increase there profits by attracting more
customers. Risky high margins: In this strategy companies demand high prices without offering
much value in return. This is the risky strategy because this strategy works till consumer
did not find the substitute products or the products with same quality and features. This
strategy involves huge risk but are beneficial for the short term high profits (Echchakoui,
S., 2018). Monopoly pricing: This is the market in which company enjoy complete monopoly in the
market due to only one business which is selling the products and services in the whole
market. This companies no need to worry about the price and customer value due to
complete monopoly. Unilever is producing those products in which they have complete
monopoly in the market for earning huge profits. Loss of market share: This involves products with low perceived value with high prices
and this generally a risky way to earn profits. Unilever should use this strategy according
to the situation prevailing in the market.
2. Justification and recommendation of the most appropriate growth platform/s and strategies
Unilever can use various growth platforms and strategies for the growth of the firm with
success and the best strategy this company can use is BCG matrix in which company uses
graphical representation of a company’s products and services through which can decides its
plan and strategies on which it has to invest or what products it should sell to earn huge profits
etc. All the selling, investing, and other activities are planned according to this graphical
presentations and strategies are prepared according to this matrix. This matrix plats on four

square matrix in which on Y-axis representing the rate of market growth and the X-axis
representing market share.
BCG growth share matrix
In this model the company grouped its products and services according into four
categories which are as follows: Dogs (or pets): All the products of Unilever which has low market share and low rate of
growth are grouped in these categories like the products which are out fashion, products
which has less demands or no demands and no growth in the future due to old products
comes in this category which brings very less cash in the company (Ha, and et.al., 2021). Cash cows: They are the categories of products and services which has low growth areas
and relatively large market share and these products and services brings good cash flow
into the company. Stars: These products has high growth market and have a sizable portion of that market
are considered. These categories products and services generate huge incomes but also
consume huge cash of the company. Question marks: This products categories have high growth rate market and does not
maintain large market share. The growth is high of these types of products and services
but they consume large amount of company’s resources.
3. Evaluate ways and means by which the chosen strategy/ies can be monitored in order to
ensure success
All the strategies can be monitored with strategic management plan in which
organisational structure, planning, mission, vision, marketing mix, evaluation are done for
systematic implementation of the strategies that will bring more growth and success in the
organisation with proper using all the models and theories. This company is also using value
chain analysis in which each opportunities for improvement lie. This analysis helps in what
should be added and subtracts so that the company can implement its plan and strategies in an
effective way. Like for example the Unilever should produce more products of children then
adults due to more demand for the children products and less for adults or it can use various
others forms of advertising like social media advertising for promoting its products due to more
use of digital marketing and social medias for attracting more customers. Unilever should set

certain standards for each strategies and the standards should be met for accomplishing the goals
and if the performances of the company are not meeting the standards then it will have to
develop another strategy or plans or improve those strategies for meeting the overall goals. The
company firstly should check all the plans and strategies and after proper investigation they
should implement those strategy and those strategy should be timely monitored for any king of
improvements or change etc.
CONCLUSION
From the above report it has been concluded thar business strategy are important for doing
any kind of business for more growth in the future. Strategic decisions are necessary for planning
and implementing the future goals and these decisions or strategies are affected by the internal
and external environment due various macro and micro factors which has to be analysed. Further
more it also concluded that this factors can be analysed affectively with help of Pestel and Swot
analysis in which all the strength, weakness and outside factors of the company can be analysed
efficiently. This company is suing Porter’s five forces in which all the market competitive
advantages and competition in the markets can be analysed so that company can plans its
strategies accordingly. Moreover organisational internal competitive advantage can also be
analysed with the help of its number of customers, its products demand in the market, earning
per year etc. It is also concluded in the another part that company uses various strategic
directions for knowing companies products and services position in the market and helps in
deciding the strategies which it has to use for more growth. Company also uses various growth
platforms and strategies for analysing and investigating the strategies which are best suited for
the company’s growth. Lastly, it also monitored all the strategies whether they are properly
implemented or not or any changes are needed with the help of various models.

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