Strategic Knowledge Management and Organisational Learning Doc

STRATEGIC
MANAGEMENT OF
KNOWLEDGE AND
ORGANIZATIONAL
LEARNING

Table of Contents
Introduction-....................................................................................................................................3
BCG Matrix of Unilever-............................................................................................................3
Ansoff Matrix of Unilever-.........................................................................................................4
Porter’s five force of analysis ....................................................................................................5
McKinsey 7-S Model-.................................................................................................................6
Natural Capital of Unilever.........................................................................................................8
Conclusion.....................................................................................................................................10
REFERENCES..............................................................................................................................11

Introduction-
The ongoing analysis, monitoring, planning, controlling, directing and assessing the necessary
task of an organization so that it can meet the expected results that is known as strategic
management. Changes in the environment happens so assessing of strategies are constantly
required. Unilever is a British Dutch multinational company with headquarters situated in
London United Kingdom and in Netherlands. Company deals in consumer goods such as beauty
products, food and beverages etc. The company has turned out to be the 7th most valuable
company of Europe. This report covers topics of BCG matrix, Ansoff matrix, 7S of Mckinsey,
porters five force of analysis and a brief description of natural capital of the company.
BCG Matrix of Unilever-
Star- Brands with high share of market and with a scope of high growth in market. These type of
brands are at their peak stage which means they hold a large share in market which also has a
scope for high growth. To maintain that position or stage continuous investment is needed
because a continuous threat from competitor is there as they constantly keep on trying to enter
the market. As for Unilever Lipton is the suitable example here as it is the best selling tea brand
in the world. Despite the existing share in the market of the product and their continuous flow of
investment in the technology of TESS which extract the natural essence from leaves which are
freshly picked. Unilever relaunched it as Lipton Yellow Label that has growth 5.5 percent in the
last two years from its launch.
Cash Cow- Some brands have a high share of market but low growth they are known as Cash
Cows. These type of products have been on the peak stage but due to some factors they lost their
position and now reached saturation. For many companies it is a important factor as for Unilever
a very less amount of investment is needed to start generating revenue which also allows profit to
reinvest in Stars or Problem Child brands. Marmite is the product suitable for this category as the
product has started slowing in terms of sales in Europe and North America. That is wh Unilever
is investing only in advertising campaign for Marmite.
Problem Child- These type of products are those which are recently introduced that is why they
have low market share but if operated successfully can be a high market growth. It can be a
bread winner for the company. Young and new brands requires a large amount of investment and

company extract it from the Cash Cows so that they can compete with the products of
competitors. The profits which come out of brands like Marmite are again invested into the new
product line like T2 as it has now become the tea brand which is growing fast in Australian
market and new products like detergents have made their way into the market of UK which is
unique in terms of quantity.
Dog- This stage is often refer to dead end stage because they have low share in market and low
scope for growth. Outdated products have no future. Keeping them in the market is also resulting
to hole in the pockets of the company. Company must discontinue dogs unless they are helping
the company to increase the sales of other brands. Like Unilever did, they sold their slim fast
brand to a private company.
This study helps Unilever to analyze that to survive in the market company need to maintain a
balance between these stages because of the factors affecting the market. A product develops,
matures and then declines. The stage goes on like this Problem Child, Star, Cash Cows, Dogs.
Ansoff Matrix of Unilever-
Market Penetration- When companies implement the strategies to increase the market share of
the company investing money in the existing products that is known as Market Penetration. This
strategy has a minimum amount of risk as Unilever has to focus only on the marketing of its
products to improve and grow their share. When the product reaches the stage where it meets
saturation the growth of the product starts to decline this is the only limitation that Unilever
needs to be concerned about.
Market Development- This strategy is used when firm needs to enter into a new market with
their existing products. This strategy is suitable for Unilever as they have the viable resources to
enter into new markets. Unilever must make sure that competencies are aligned with products
rather than the market they are going to enter. This strategy is more riskier in comparison with
Market Penetration as entering a into a new market is more riskier.
Product Development- When company plans to launch new products in the market they are
already serving. It is easy for Unilever as they have already established their market which
makes it easier for them to launch a new product which will also help in increasing the image
and reputation of the brand and fulfill the demand of customers. For example Unilever has the

advantage because of the goodwill they have in the market and from that even after launching a
new product they can make it into the list of successful products.
Diversification- When the company wants to launch new products into new markets they use
this approach. In this approach new products are introduced and new markets are covered. This
stage is said to be the most riskiest of them all in the Ansoff Matrix. This strategy is indeed a
strategy of high risk and companies such as Unilever only considers this option when they know
that the chances of return is high. Diversification strategy is recommended when company have
already enough resources existing in their pockets until the money is realized. In addition to this
loyalty of customer for Unilever and their base helps them easily to obtain more share in market.
Porter’s five force of analysis
Competitive Rivalry-
For Unilever it is a major force. Many firms are operating in the same industry in which
Unilever operates which creates a strong force to compete with in the market. Not that Unilever
has to cope up with their aggression they show in the tactics they use. Factor of low switching
cost also affects the market of Unilever because consumers don’t think before shifting to other
brands it is easy for them. This shows that Unilever faces a tough competition in the market.
Bargaining Power of Buyers-
Unilever deals in consumer goods and that means that it is important for them to know that how
consumers feel about their products. This model focuses on the influence of buyers. Because of
the low switching cost factor consumers starts to shift on products of other companies, external
factor like this creates strong intensity for buyers which will increase their bargaining power.
Information of high quality consumer goods and access to get that information, consumers have
it all. All of this makes it easier for them and having second thoughts which leads to switching
on competitor’s products. For example Buyers can easily compare online about Unillever’s
product and of competitor’s product. Even as small or slight shift result to losses in pockets of
Unilever. Even after that factors like getting the information of high quality products and low
switching cost reduces the impact of third factor. In this whole five forces model the bargaining
power of buyers is the most riskiest and strongest forces which hit Unilever very hard.

Bargaining Power of Suppliers-
Unilever has set up their markets by making deals with foreign suppliers who are big in terms of
money. This factor has a moderate intensity over Unilever and over that no. of suppliers
influences the company. For example if there is any change in the level of production then it
does not make a big difference even the other competitors gets affected at the same level.
Threat of Substitutes-
These type of threats directly affect the revenue generation of Unilever and the company will
notice a downfall in the strength. Factors such as low switching costs affects Unilever. However
substitution gets weak sometimes because of low substitutes of product. For instance it is easy to
pick up Close Up fro the market than to pick up all the substitute ingredients or substitute
products for cleaning of teeth. It has been proven that the substitute products don’t have a ajor
difference in terms of quality with a minor difference in cost. This makes Unilever more
attractive than the product of its competitors which results to weaken the power of this threat.
Threat of New Entrants-
In this consumer goods industry Unilever competes with new as well as old firms who are
already existing in the market but it is costly to establish a brand of that stage on which Unilever
is operating. Also Unilever has the advantage of economies of scale which helps in supporting
the competitive pricing and gain the efficiencies in the organization where new firms may lack.
Also low switching cost affects Unilever. To conclude Unilever will remain strong in the market
despite many competitors enter into the market and tries to obtain the share.
McKinsey 7-S Model-
Unilever want to reach heights where no other company can reach and for that they have to align
their work to the right way. Even if one or two products are not working in their respective areas
even that will affect the performance of the company in terms of overall sales which will not
fulfill the expected results. This tool helps Unilever to understand how aligned their organization
is and where they need improvement and where they are lacking. Each element in this model
must function properly otherwise they won’t reach success. Only when all the elements come

together then only Unilever is assured that they are properly aligned. To understand this model in
a easy way. It is divided into two categories that is hard elements and soft elements in which four
elements are on soft side and three are on hard side.
The Hard Elements
Strategy- This element helps Unilever to focus on how to rise above their competitive rivals
with time. When the company is getting started and planning about this they will draw most of
the strategy from that plan. In some of the cases Unilever their sub-section of the business can
define the work about the company whereabouts. For instance how the company’s account
manager will provide the accurate data to those who are above him in comparison with the whole
business operations.
Structure- By the help of this element Unilever visualize their work in the form of document or
chart which helps them to know that what work is assigned to whom and who reports to whom.
This element helps the company to know about a single department and even about the whole
organization. For instance departments such as finance, marketing, public relations etc.
Systems- This element is concerned with how to assess the job and complete the job. Unilever
depends a lot on it as it helps them on a regular basis so that the company can move ahead and
operates easily. Managers of the company spends most of their time with this element. This
element helps the company to makes sure of it that the employees of the company are aware
about the project and are working on the right ones, it even keeps a record of that they are being
completed on time or not. This element is said to be the root of this model without the proper
functioning of this element no other element will function properly.
The Soft Elements
Shared Values- To create a feeling of cohesiveness and mutual trust between the organization
this element is used by Unilever. It is the overall culture of the company and behind this it
defines the purpose of the company. Values and Morale of the company must be present in every
employee working at Unilever.
Style- This element concerns Unilever in a way that how they are going to lead their team. Style
that the company follows must match with the demand of the team and the culture followed by

the organization. Depending on the situation the managers employ people with different styles of
leadership. So Unilever needs to draft the job and see what fits best for them.
Staff- Responsibility of a leader is to understand the strength and weaknesses of your team.
Unilever knows how to extract most fro them while working on developing the skills together.
Leaders in Unilever make their priority to focus on improving the performance of the team for
the upcoming ventures.
Skills- This point is similar to staff in terms of knowing that what talent is available in the
organization. No company would want to ask their employees that if or not you are capable of
this task. That is why Unilever has made it their priority to have the full knowledge of the
workforce and their skills.
Natural Capital of Unilever
Unilever rely on many things such as their raw materials and ingredients of the products which
they extract from natural resources. To explore it the company is working in partnership so that
they can integrate it with decisions of business. This capital is also concerned with the stock of
resources that are renewable and non renewable resources when combined is beneficial for all.
Unilever has measure the impacts like many organizations the first step that the company took
was to relate and compare the natural capital with their impacts on environment. Unilever has a
sustainable living plan the company defines it by its three pillars that is water, waste and
greenhouse gases. Their sustainable plan makes them apart because they use a value chain
approach so that they can measure the impacts not only of their operations but it also includes
consumer and the supply chain. Company has developed many methods to reduce the time and
measure the footprints of these areas in a restricted time. Unilever is putting their efforts in
reducing and eliminating the issue of deforestation from the supply chains. Company is also
considering the factors that put them to risk these factors are resources need a high value of
conservation and recognition of the natural capital which is rich. The supply chain of tea the
company has manage the relationship from the beginning between plantations of the tea and the
ecosystem that supports them. The list goes on to the borders of Kenya which also supports the
plantation and supply of water.

When considering the location of site or place where things are manufactured availability of
water is checked first by the company. As they know without the natural capital company cannot
complete the operations. In addition to that Unilever is also focusing on efficiency of water
where water is scarce. The company has come up with an innovation where they can have
access to clean water due to their smart foam technology. It is a 2 in 1 product it uses half of
water in washing and rinsing and makes the whole process easier where water is scarce.
Currently Unilever is focusing on developing the tools so that they can integrate them with
natural capital during the time of decision making. Agriculture is the main source of their raw
materials, it helps the company in making of food and refreshment products and other products
which includes home care, soap, detergents, beauty and personal products. Company is making
their efforts to prevent it from the ill use of people because by 2050 the demand of these products
will increase with the increase in demand of non food agricultural products that is textiles, bio
fuels, products of wood as well as increase in demand of land and water but by the time scarcity
will also increase at every place. Company is focusing on managing the demands of these
resources so that they can preserve it for the future. For reasons like these Unilever’s Safety and
Environmental Assurance Centre contributed to a partnership with Stanford University and the
University of Minnesota and they have called that Natural Capital project. Unilever deals in
consumer goods and these companies often rely on these resources to an extent. That is why they
are trying to get every detail about the products and in how and what way does it impact to
natural resources such as water, land and biodiversity. Since the company has launched the
program of USLP many companies globally have come in contact on how can they make the
resources strengthened and improved. Many of them has already observed that managing is not
enough as impacts on national capital are now more severe than before. Companies apart from
Unilever are also working on this same issue. The most prominent thing that the company has
done is becoming a member of Natural Capital Coalition. It is made up of organizations which
deals in different fields such as finance, business, academics, science etc. They have come
together and joined it because they all have a vision where all the natural capital is conserved and
business organizations work on enhancing it.

Conclusion
From the above studies it has been concluded that Unilever uses various tools and practices to
remain on top of the charts. It has been shown in the BCG matrix, 7S of Mckinsey, porters five
forces of model and the ansoff matrix of Unilever which shows the performance of the company
where they are lacking and where they need to improve. This report also describes the natural
capital of Unilever in which it is clearly proved that company is making various efforts by
themselves and with others so that they can come up with new innovation which requires less
resources so that can preserve the natural resources.

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