Strategic Management Plan for Unilever plc

This report analyses the impact of macro environment factors and internal capabilities on Unilever plc. It includes the impact of political, economic, social, technological, legal, and environmental factors on Unilever. The report also analyses the internal environment and capabilities of Unilever using appropriate frameworks such as SWOT and VRIO analyses.

Strategic management
plan

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
P1. Impact of macro environment factors on Unilever plc.........................................................3
P.2 Analyse the internal environment and capabilities of a given organisation using
appropriate frameworks..............................................................................................................6
P.3 Porter's five forces model....................................................................................................9
P.4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organization............................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Strategic management plan related to those frameworks under which company describes
their goals and objectives within the organisation. To develops these plans, business
organisations applies many strategies and theories of management in organisation in order to
analyse the opportunities and weaknesses of their organisation. Unilever plc is the organisation
which is chosen here to make report on their strategic management plan. This report contains
various framework to analyse the impact and influence of macro environment on Unilever plc. It
contains impacts of various factors of internal environment on Unilever plc. Porters five forces
model is systematically describes in this report(AGHAZADEH and AHMADI, 2017). Unilever
plc is a British multinational organisation. The headquarter of Unilever plc is located in London,
England and it currently holds more than 400 brands. It deals with different products such as
food, ice creams, wellbeing vitamins, beauty products and personal care products.
TASK
P1. Impact of macro environment factors on Unilever plc
Macro environment factors related to those factors which are present in external
environment of organisation. These factors influence the operations of Unilever in both negative
and positive aspects. These factors are political, economic, social, technological, legal,
environmental and the brief discussion related to these factors are given below.
Political
One of the most important political aspect faced by British organisations is Brexit. In this
aspect England restricts trade agreements with other European nations and provides many
problems for British organisations to perform their business operations in European nations.
Unilever plc is facing many problems while performing their business operations in European
nations because of termination of trade agreements under Brexit. The major impact is to increase
transportation cost of Unilever's goods from England to other European nations (Pasch, 2019).
Another impact of political factor on Unilever is united states new rules and regulations for
foreign companies which makes difficult for Unilever to perform their business operations
smoothly in USA.There are three main points which describes the impact of economic factor on
Unilever plc such as political stability in many countries and growing free trade relations in
many countries. Political stability in many countries helps Unilever to gain many opportunities

from the market and these policies helps the company to perform their business activities without
any restriction from political organisation. Political issue is related to the Brexit under which
most of the British companies faced many restrictions and regulations from European nations.
Growing free trade relation enables Unilever plc to easily expand their business in different
nations and earns huge profits from these operations.
Economic
This factor of pestle analyses is related to impact of various factor of economy on
business organisations. There are many factors of economy such as currency, development level,
employment and national income. All these factors influence operations of business organisation
in different aspects. There are three main points through which the impact of economic factor on
Unilever are cleared such as increasing wages in developing countries, high growth of
developing countries and economic stability of developed countries. The increase in wages of
workforce impact negatively on Unilever's cost structure because high wages increases the cost
of production and ultimately decreases the profit margins of Unilever (Asil, 2019). It is seen in
many developing countries that their economic growth is high in comparison to another countries
so it is beneficial for Unilever plc to operates in this type of country. England is witnessing the
stability in their economy which benefits many organisation to earn considerable profits because
of stability on public income.
Social factors
This factor of pestle analyses deals with the issue related to social belief and harmony of
buyers. In this factor business organisation focuses on different social issues of people. These
social issues include gender, age group, taste, cultures and emotions. It is the duty of business
organisation to develops their products and marketed them in such a way to satisfy social needs
of the people. Product must develop on the basis of consumer age, taste and cultures. It should
not challenge traditions and belief of consumer. As Unilever is operating in more than 100
countries and each country has their different culture and social issues of people so these
differentiation in cultures and traditions influence the Unilever to provide the varieties of
products and services according to these traditions.
Technological factor
It is one of the most important factor of modern business to have proper technological
background in their business organisation. It is not possible for large organisation to conduct

their business organisations without the involvement of technology because all their activities
such as production, research and development and marketing department needs advance
technology to be performed. It is required for large business organisation to make huge
investment in research and development department so that new and advances technology is
developed for organisation as well as fort customers. Uses of robotics technology in process of
production enables the company to optimum utilisation of their resources so that the cost must be
minimised and profit margins will increase. Unilever is one of biggest organisation of world
having their business operations in many countries. This expansion requires proper coordination
and effective communication mediums. Use of latest internet type is the technology solves the
issue of communication in Unilever plc. Company spends the major part of their profits in their
research and development department so that it develops new and advanced technology
effectively and efficiently.
Legal factors
This factor is related to the various rules and regulations such as employment rights act
1996, equality act 2010 provided by united kingdom government to Unilever plc to be followed
in their business operations. These factors impact positively when Unilever follow these rules
and regulations in organisation and sometimes it impacts negatively due to non-performance of
these regulations by Unilever plc. These norms and regulations also provides safe environment to
Unilever plc such as many countries provides facility of patent and trademark under patent act
1977, which protects products of company from fraud companies which theft their ideas and gain
advantage of company’s brand (Denning, 2017). Unilever is the organisation which deals in
varieties of products and their products are easily substitutable. It is required for Unilever plc to
follow the trademark act 1994 to sell their products without fear of copy products.
Environmental factors
Nowadays it becomes the first priority of many countries to provides considerable
importance to their natural environment. United kingdom develops many laws such as the clean
air act and the endangered species act relating to protect their environment from malfunctions of
Unilever plc. These laws are based on proper waste management, sustainable development of
business and promotes plantation from their business operations. Unilever analyses the benefits
of environment friendly organisations so it applies those policies and strategies such as clean
water act in their business organisation which are favourable for natural environment. It

improves their focus on organic products and try to introduce those products which does not
harm environment by a way of follow waste hierarchy process prescribed by EU
P.2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks
SWOT analyses is used here to analyse various internal environmental factors impacts
Unilever plc and the discussion is given below;
Swot analyses of Unilever plc
There are many factors which impacts and influence the organisation from inside and
these factors are called internal factors.
Strength
 One of the most important strength of Unilever plc is their brand image due to high
demand of their products. Consumer recall some products with their brand name instead
of their actual name such as life boy in place of soap.
 Unilever is providing huge variety of product range such as beauty products, health care
products and daily care product to consumers which satisfy the different needs of
consumer (Ferlie and Parrado, 2018). This factor makes the brand of company unique in
industry and helps them to achieve competitive advantage from industry.
 Innovation is great strength of Unilever plc because it makes huge investment in their
research and development department which result the availability of considerable degree
of innovation in Unilever.
 Unilever plc makes economies of large scale production as their greatest strength because
of its business operations in more than 150 countries. (Unilever's manufacturing site in
Hefei, 2021)
Weaknesses
 One of the most important weakness of Unilever plc is that it operates in highly
competitive market where there are many big players such as P&G, Nestle and Johnson
and Johnson present in industry. These players hold considerable market share and
always be in a position to take advantage from any mistake of Unilever plc.
 Unilever plc deals in a products related to health care, personal care and beauty products.
These products are easily substitutable and can be provided by any company without any

problem. It is a weakness for Unilever because it decreases the sale of company's
products.
Opportunities
 It becomes the opportunity for many business organisations that the preference of
consumer is shift towards the health conscious and everyone demands those products
from market which promotes their health so Unilever has opportunity in market to
provide healthy products and gain advantage of this opportunity.
 Unilever has great structure of corporate and environmental responsibilities and many of
their products comes with the feature that some portion of price is spend for noble cause
(Fontrodona, Ricart and Berrone, 2018). This feature helps those persons who want to
make donations their habit and becomes opportunity for Unilever plc.
 In many non western nations, peoples are more aspiring to follow western lifestyles and
very strictly committed to it so its an opportunity for Unilever plc to provide western
lifestyle in these countries and earns good profit margins.
Threats
 One of the most common threat faced by every organisation of the world is covid
pandemic. All the economic activities are suffered from severe downfall and operations
of any industries becomes stop. Unilever also faces severe downfall because most of
their business activities becomes halt.
 After globalisation takes place most of the Asian conglomerates gains considerable
market share from international market which becomes threat for Unilever in foreign
market.
 Great Britain withdrawn from the European nations becomes the greatest threat for all
local business organisations and it makes difficult for Unilever plc to make trade
agreements with other European nation's companies.
VRIO analyses of Unilever plc to analyses the capabilities of organisation
VRIO related to those technique under which the capabilities and strength of any
organisation is clearly defines and helps to gain information related to competitive advantage of
particular organisation (Song, Sun and Wang, 2018). Detailed analyses of Unilever capabilities
are given below;
valuable

 It is analysed from the VRIO model that availability of funds in Unilever plc is very
valuable and these can be used for their international expansion.
 As per the VRIO analyses of Unilever the employees of organisation is valuable. Some
part of workforce are very motivated, skill full and dedicated towards their work. These
qualities of their employees enables the organisation to produce effective output.
 The VRIO analyses shows that Unilever's holding of patents are valuable. These patents
helps the company to provide unique products in market and gains competitive
advantage.
 Unilever's VRIO analyses shows that its distribution channels is very valuable and it is
useful for the movement of their goods and services in more than 150 countries where it
operates their business operations (G'iyosov, 2019).
 The cost structure of Unilever plc is not valuable according to the analyses and this is
because of production process.
Rare
 The availability of funds are observed to be rare in Unilever plc according to VRIO
analyses.
 The skill full employees found in Unilever plc is rare in comparison to other organisation
because of it is no other organisations holds these types of employees.
 The patent capacity of Unilever is rare of Unilever plc because no other competitors
holds these capability according to the VRIO analyses of Unilever.
 The distribution channels of Unilever plc is considered to be rare because of its strong
financial background.
Imitable
 The availability of funds of Unilever is very expensive for other organisations to imitate
because these capabilities is developed due to long years profits.
 The skill full employees of Unilever plc are not costly to imitate by their competitors
because any organisation can develop skills in their workforce by a way to provide proper
training to their employees.
 To match the capacity of Unilever's patent is the most difficult task to imitate by other
organisations according to VRIO analyses because of many legal obligations.

 Distribution channels of Unilever plc is not easy to imitate because company develops
these channels after hard work of many years and with their high investment.
Organisation
 The capacity of funds of Unilever is well organised to grab any opportunity as per the
VRIO analyses.
 The patents of Unilever plc are quite unorganized because company is not able to utilise
their patents with great potential.
 The distribution channels of Unilever plc are well organised as per VRIO analyses
because company is able to provide their product to consumers at right place at right
time.
capabilities valuable Rare Imitate organisation Competitive
advantage
Availability
of funds
Yes Yes No Yes Long term
competitive
advantage
Skill full
employees
Yes Yes Yes Yes Strong competitive
advantage
Patents Yes Yes No No High competitive
advantage
Distribution
channels
Yes Yes No Yes Moderate
competitive
advantage
P.3 Porter's five forces model
Nowadays there is a cut throat competition in the market and there are many business
organisation in industry which provides severe competition to Unilever plc. It is required to
provide new and innovative product by Unilever to gain competitive advantage from industry
(Hadi and Ulinuha, 2019). To analyse competitive environment in Unilever, porter's five forces
model is used in this report. It includes five factors such as threat of new entrant, threat of

substitute, bargaining power of buyer, bargaining power of supplier and rivalry among the
competitors.
Threat of new entrant
There are many new entrant such as Estee lauder and Church and Dwieght which enters
in product industry where Unilever is conducting their business operations. One of the main
problem of new entrant is there is a possibility to capture considerable market share because of
their new and innovative products (Schmid, 2020). There is common mentality of buyers to use
the products introduce by new entrants.
How Unilever tackle threat of new entrant
 one of the most common method to tackle this threat that Unilever should provide new
and innovative products to their buyers. This method not only make new customers but
also retained their existing customers.
 Unilever should work to achieve the economies of large scale production so that their
cost of production could minimised and company is able to provide their products at
reasonable price.
 To make huge investment in their research and development department which enables
them to develop new and advance technologies.
Threat of substitute
There are many big players such as P&G Nestle and PWC operates in same industry
where Unilever operates and these organisations provides similar product which are closely
substitute of Unilever's food and health care products (Jain, Jain and Metri, 2018). The result of
this problem is that it decreases the sale of particular product.
How Unilever tackle the threat of substitute
 Important suggestion to protect from threat of substitute is that it should focus on services
with product.
 It is necessary for Unilever to analyse the actual need of customer rather than what
customer buy from other organisations.
 It is one of the most important solution to protect from substitute to have high switching
cost of own products.
Bargaining power of supplier

It is one of the most important factor of cost structure of Unilever plc because if the
number of supplier of raw material is high then the bargaining power of suppliers are low and
Unilever can obtained raw material at low prices which reduces the cost of production. If the
number of supplier is low then the bargaining power of suppliers becomes high and it demands
any price for raw material which increases the cost of production. Today Unilever has more than
50000 suppliers so the bargaining power of supplier is low.
How Unilever tackle the bargaining power of suppliers
 It is required for Unilever to develop effective supply chain which contains huge
number of suppliers.
 Develops dedicated suppliers which are loyal for the company so that they never take
advantage in critical situations.
Bargaining power of buyers
Nowadays the buyers become dynamic in market, it always demands unique products
from Unilever plc (Keivanpour and Ait Kadi, 2018). Smaller the number of customer base
enables high bargaining power of these customer and larger the number of customer base lower
the bargaining power of customers.
Rivalry among the existing competitors
customers enjoys the main benefits of rivalry between existing competitors because if the
rivalry is intensive then the price of the products decreases and customer can easily acquire new
products at lowest prices.
How Unilever tackle rivalry of existing buyers
 Unilever can develop new and innovative products to fight with their competitors.
 Collaboration with competitors can solve this problem.
P.4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organization.
Strategic plan ;
Executive summary

Unilever is a British multinational company and formed in 1929 by the merger of Dutch
Margarine Unie and British soap maker Lever Brothers. It is a product base company which
deals in multiple product range.
Organizational structure
Unilever is a big organization and it follows well established ans managed organizational
structure under which all the powers are divided between different departments of organization
according to their importance. There is effective communication channel through which all the
department heads reports to their senior level management.
Mission
Unilever has mission to add vitality to life under which it try to satisfy everyday need of
customer related to nutrition and health.
Vision
Unilever's vision to organization is to provide sustainable living condition to their buyers
under which they provide those products which eases the life of their customers.
Objectives
 One of the main objective of Unilever plc is to gain competitive advantage from industry
by proving new and innovative products to their customers.
 To increases the sale by 20% which helps the company to increase their revenue.
 To established new and well equipped research and development department in their
organization.
Porter's generic theory
Porters generic theory is developed by Michael porter to develop strategies for business
organization under the following factors such as cost leadership, differentiation and focus
strategy.
Cost leadership
This strategy is related to the cost production relationship. In this strategy unilever
considered many factors to reduce the cost of their production and gain competitive advantage.
Unilever can achieve competitive advantage by a way of proper utilization of resources and
achieve economies of large scale production. When Unilever utilized all their resources properly
in the process of production and uses modern and advanced technology, unit cost production

decreases and ultimately their profit margins decreases and Unilever is able to provide their
product at low prices in comparison to their competitors.
Differentiation strategy
In this type of strategy, Unilever try to capture large number of customer base by
providing unique and different product from their competitors to achieve competitive advantage.
These strategy can be achieved by Unilever plc by proving new and innovative product inn
market and to provide good quality products to their buyers (Maduro, Fernandes and Alves,
2018). For example Unilever is providing Dove soap as their differentiated product on the basis
of their qualities such as it smooth en the skin of user and not harsh for sensitive skin.
Focus strategy
Under this strategy Unilever try to focus in niche market and develops their products
according to the buyers of niche market. This can be done by properly analyses the needs of
niche market customers and targeting a particular buyers from niche market.
It is recommended to the management of the Unilever to aooply the differentiation
strategy in their business. Under this strategy Unilever focuses on their research and
development department by a way of large investments in them (Penco, Torre and Scarsi, 2019).
The main aim of this department is to provide new and innovative products to company's buyers
and it also develops modern technology to use in business operations of Unilever plc so that the
activities must be completed effectively.
According to SWOT analyses which is described above in report it is concluded that the
image of their brand is their greatest strength , availability of strong competitors are their
weaknesses in market, shifting of consumer preference towards health is their opportunities in
market and covid pandemic is the threat faced by Unilever in market.
According to PESTLE analyses conduct on Unilever plc in this report, concluded that all
the factors of this analyses impacts in both aspects such as positive and negative on Unilever plc.
Under political factor Brexit impacts very badly to the business of Unilever plc it collapse the
business structure of British companies in European nations.
CONCLUSION
It is concluded from this report that strategic management plan is very important for the
success of organisation in this highly competitive market because this management plan enables

the organisation to analyse their strength and weaknesses. This analysation helps the company to
develops various strategies related to sales, production and marketing of product. This report
provides systematic study related to the impacts of various internal and external factors on
Unilever plc (Mariina and Tjahjadi, 2020). It contains different aspects of competitive advantage.
VRIO model is successfully applied on Unilever which provides comparative analyses of
different capabilities of Unilever plc and distinguish them on the basis of four factors of VRIO
model such as Valuable, Rare, Imitable and Organisation. This report provides application of
various theories such as Porters generic theory on Unilever plc which helps the company to take
competitive advantage from industry. The final part of this report contains strategic plan under
which the Unilever's mission and objectives are defined.

REFERENCES
Books and Journals
AGHAZADEH, H. and AHMADI, I., 2017. Strategic Management Model of Parent (Holding)
Organization.
Asil, A., 2019. Design and implementation of strategic agility evaluation model with structural
equation modelling approach. Academy of Strategic Management Journal, 18(1), pp.1-
16.
Denning, S., 2017. The next frontier for Agile: strategic management. Strategy & Leadership.
Ferlie, E. and Parrado, S., 2018. Strategic management in public services organizations:
Developing a European perspective. In The Palgrave handbook of public administration
and management in Europe (pp. 101-119). Palgrave Macmillan, London.
Fontrodona, J., Ricart, J.E. and Berrone, P., 2018. Ethical challenges in strategic management:
the 19th IESE International Symposium on Ethics, Business and Society. Journal of
Business Ethics, 152(4), pp.887-898.
G'iyosov, I.K., 2019. THE THEORICAL FEATURES OF THE ORGANIZATION OF THE
STRATEGIC MANAGEMENT ACCOUNTING IN BUSINESS. Theoretical &
Applied Science, (9), pp.260-266.
Hadi, R. and Ulinuha, R.A.N., 2019, November. Strategic Management Organization in Central
Java: Analysis of Members Organizations KONI Central Java Province. In 5th
International Conference on Physical Education, Sport, and Health (ACPES 19) (pp.
134-138). Atlantis Press.
Jain, S., Jain, N.K. and Metri, B., 2018. Strategic framework towards measuring a circular supply
chain management. Benchmarking: An International Journal.
Keivanpour, S. and Ait Kadi, D., 2018. Strategic eco-design map of the complex products:
toward visualisation of the design for environment. International Journal of Production
Research, 56(24), pp.7296-7312.
Maduro, S., Fernandes, P.O. and Alves, A., 2018. Management design as a strategic lever to add
value to corporate reputation competitiveness in higher education institutions.
Competitiveness Review: An International Business Journal.

Mariina, E. and Tjahjadi, B., 2020. Strategic management accounting and university
performance: a critical review. Academy of Strategic Management Journal, 19(2), pp.1-
5.
Pasch, T., 2019. Organizational lifecycle and strategic management accounting. Journal of
Accounting & Organizational Change.
Penco, L., Torre, T. and Scarsi, R., 2019. Does strategic orientation influence strategy
formulation and organisational design in Italian food medium sized enterprises? The
role of the family. British Food Journal.
Schmid, Y., 2020. Workplace Design as a Strategic Resource—A Qualitative Study.
International Journal of Strategic Management, 20(1), pp.21-40.
Song, G., Sun, L. and Wang, Y., 2018. A decision-making model to support the design of a
strategic supply chain configuration. Journal of Manufacturing Technology
Management.
online : Unilever's manufacturing site in Hefei. 2021 [online]. Availaible through :
<https://www.unilever.com/news/press-releases/2020/unilever-is-manufacturing-site-in-hefei-
china-joins-the-wefs-renowned-global-lighthouse-network.html>