Unilever in Russia: Challenges and Recommendations for Global Business Expansion

This report discusses the challenges faced by Unilever in expanding their global business in Russia and provides recommendations to overcome them. It covers topics such as rising costs, business ethics, security, capital markets, environmental concerns, managing overheads, monitoring performance, listening to feedback, and responding to competition.

Lucian Sebastian Costache
GLOBAL BUSINESS (REPORT)
UNILEVER IN RUSSIA
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Introduction
Definition of Global Business
When a company does the business worldwide and has foreign offices, distribution centers and
manufacturing ,which is related to international trade, it is called global business. A global business also can
be said as Globalization differently. Globalisation is a long-standing program advocated by the economically
advanced nations to free up international trade across the globe (Hakmaoui et al. 2017). If a worldwide
market is being set up in different countries becomes the multinational company. A global business
company operates in at least one country other than its originating country. (Carroll, 2015).
Background of the company
Unilever is a consumer packaged goods or consumer goods company, which may consist of personal care
products and food and beverages, co-headquartered in London and Rotterdam, established almost 90 years
ago. People from nearly 200 countries use Unilever products in their daily life basis. So, it can be said that
this is one of the oldest multinational companies worldwide. According to sources worldwide, their number
of employees was 169,000 in 2017. Established their foundation back in the 1870s. After the 2010s the
company products slowly closing their food and beverages products facing their slow revenue in business
and shifting their interest towards health and beauty related products and gradually increasing the production
of those products. Procter & Gamble and Nestlé are the most significant competitors of Unilever, also faces
competition in specific product ranges from various companies worldwide or in adjacent local markets
(unilever.com, 2018).
Problem statement
Unilever Company wants to grow in a business field, and thus they want to set up their business in Russia. I
am preparing this report to enter in a new international market as a marketing team executive and what type
of management and operational challenges they may face and how to overcome the problems they face in
international business and the actual meaning of global trade in international markets (Velean et al. 2014). In
this report step by step, we will be discussing the problems they face and trying to give some
recommendations what should they do and how can they plan their businesses to expand worldwide and do
the same things in future also.
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Analysis
Challenges in a managerial platform in the context of International business
While business persons strategies on economic, technological and barriers of socio-cultural, they able to
focus on few factors including rising cost, business ethics, security, capital markets and environmental
issues. Now, let's join in some discussion about them briefly.
Rising cost: Different countries have different problems of unstable currencies, economy or government. In
Unilever, the manager must plan for the uncertainties they can face depending on the changing the business'
price relationship. Also, the most percentage of cost depends on the changing prices of hard materials and
transportation.
Business ethics: To stop crime related to any business and rising of various anti-corruption campaign
internationally, an industry globally should ensure transparent company operations and applicable laws are
adequately confirmed.
Security: Unilever should ensure employees', who have to travel to various places, personal safety, which
consists of appropriate measures and careful planning.
Capital market: Every investment must imply appropriate contingencies which will be used to strengthen
the risk management.
Environmental concerns: Global warming is like a headache to the multinational companies throughout
the first and second decade 21st century. Nowadays ordinary people are very much concerned about the
corporation impact on the environment, which is a very crucial challenge, could be tackled by environmental
issues appropriately incorporated into plans and corporate strategies (Montgomery et al. 2014).
Challenges in an operational platform in the context of International business
As a business grows, various challenges are going with the business progress. Many companies were facing
issues and problems that they think managing are very difficult. Now when the issues are arising it is
essential to think about some solutions. While business persons strategies on economic, technological and
barriers of socio-cultural, they able to focus on few factors including Managing overheads, monitoring
performance, listen to feedback, responding to competition etc., Now, let's join in some discussion about
them briefly.
Managing overheads: Mount up of costs can be done quickly, whether they are coming in the form of
insurance, admin expenses, utility charges or rent. Excessive overheads are damaging mainly if cannot be
managed in time, so they are a big problem to a small business.
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Monitoring Performance: Measuring and monitoring the performance of employees of Unilever is an
essential factor in business. Potential indicators are illustrating that your team is performing to the fullest can
be useful for any company, but if some members of your team do not work correctly, then the business can
suffer (Yonezawa, 2014).
Listen to Feedback: In a modern world of business, the reputation and image of Unilever can easily be
destroyed by negative online reviews. Increasing the customer service effectively and quick, this is the
expectation of today’s customer. It's essential to businesses listening feedback given by the customer,
delivering a satisfactory service to the core audience, putting the feedbacks in a position is mandatory.
Responding to Competition: Today there is so much guidance and information out there, competition rises
in the same market. It is a great achievement today to start a business when the competition arises in a
broader market or single service so much that it is difficult to stand out.
Proper planning to establish the business in the international market
For finding new customers, at first wider audience should be made and want to see investment opportunities
and new sales its great way to expand the startup at international markets.
To set up the office anywhere in the world Unilever has to research the regional data.
Making strategic alliances with local partners and a in a new country would be easy to start a business, as
the local markets can be understood better by local partners.
To determine if the alliance approach is suitable for the firm, the firm must decide what value the partner
could bring to the venture in terms of both tangible and intangible aspects.
The advantages of partnering with a local firm are that the local firm likely understands the local culture,
market, and ways of doing business better than an outside firm.
Foreign market entry strategy
Unilever has been ranked as one of the leading companies with regards to strength and health due to
the many brands, and this has made it possible for Unilever to expand into global markets to have access to
customers across the globe (Fikri 2010). The primary brands include Rexona, Lux and Sunsilk among others
and have made it possible for Unilever to venture into foreign markets to compete globally by selecting few
international markets such as Russia. Unilever starts by introducing its products to various markets, and this
then goes further to expanding brands that are successful in other markets and begins to compete
internationally.
In penetrating and competing in a country such as Russia for its cosmetics and toiletries
commodities, Unilever used the global strategy commonly referred to as act-global strategy (Fikri 2010).
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The approach entails using the same competitive strategy in all country markets where Unilever has a
presence and only varies the product slightly to respond to the local conditions. Unilever sells the same
product everywhere and only allows minor adaptations to regional countries to accommodate the
preferences of local countries. The global strategy developed by Unilever is ideal as it will enable strategy
localization since Unilever can unify its operations and concentrate on introducing a brand image and
reputation that is identical from country to country.
Recommendation
Some are the recommendations should be like these:
Security is a must for employees of Unilever, and especially women employees and immediate strict action
should be taken towards them if any case of harassment happens. And securities should be there to be
habituated with the different political and environment scenarios in a different country.
Environmental issues should be checked at first when setting up a business office in a different country and
the ecological guidelines should be obeyed.
Managers have to look at the spending and see which can be cut back. Unnecessary services should be
stopped in Unilever. Manage to rent the office equipment instead of buying.
For showing how well your business and ream is performing, performance indicators instead of simple
finance indicators should be used (Amran et al. 2015).
Investing in a third party or a consultant for monitoring online perceptiveness should be good as they can
check then what is going wrong with the customer service.
Competitor activity should be checked from time to time, which can give you an inside look at the process
of going ahead. Monitoring their practices and procedures help you to anticipate their next plan. Showing
your customer, you're a forward thinking and progressive company with a product or service that match is a
healthy way of standing out.
Conclusion
Growing globally is much tricky for any company everywhere. As Unilever has set up their business at most
of the countries, they are aware of these. Looking at the difficulties they face for setting up a shop in a
different country and take the exact steps to overcome it, it becomes possible to set new branches in a
different country.
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References
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Businesses Today. Corporate Social Responsibility and Sustainability, p.23.
Carroll, A.B., 2015. Corporate social responsibility. Organizational dynamics, 44(2), pp.87-96.
Fikri,M., ‘Unilever’s Strategies for Competing in Foreign Markets’,[web blog] 20 February 2010,
https://mohammedfikri.wordpress.com/2010/02/20/unilever%E2%80%99s-strategies-for-competing-in-foreign-
markets/ (accessed 10 December 2018).
Hakmaoui, I. and Loukili, A., 2017. GLOBAL PERFORMANCE MANAGEMENT: CASE OF SMALL
AND MEDIUM-SIZED BUSINESSES IN MOROCCO. International Journal for Quality
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chains: A general systems theory perspective. Journal of Business Studies Quarterly, 5(4), p.173.
Velean, D., Shoham, A. and Asseraf, Y., 2014. The conceptualisation of MILE Orientation (Market
Innovative Learning Entrepreneurial) for Global Businesses. Procedia-Social and Behavioral
Sciences, 109, pp.837-840.
Yonezawa, A., 2014. Japan’s challenge of fostering “global human resources”: Policy debates and
practices. Japan Labor Review, 11(2), pp.37-52.
https://www.unilever.com/ [Accessed on: 21.11.2018]
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