Business Strategy: PESTLE, SWOT, and Porter's Five Forces for Unilever

This report provides a comprehensive analysis of Unilever's business strategy, examining its external and internal environments. The report begins with an introduction to business strategy and its importance, followed by an analysis of Unilever's external environment using the PESTLE model, which considers political, economic, social, technological, environmental, and legal factors. The internal analysis utilizes the SWOT model to assess Unilever's strengths, weaknesses, opportunities, and threats. Furthermore, the report investigates the competitive environment using Porter's Five Forces model to evaluate competitive rivalry, the bargaining power of suppliers and buyers, the threat of new entrants, and the threat of substitute products. The analysis concludes with an assessment of strategic paths available to the company, providing insights into Unilever's market position and potential future strategies. The report aims to provide a detailed understanding of Unilever's business strategy and its implications.

Unit 32 Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1 ................................................................................................................................................1
P 1 Analysis PESTLE and SWOT analysis of the organisation .................................................1
LO 2 ................................................................................................................................................3
P 2 Internal Analysis (SWOT Model):........................................................................................3
LO 3 ................................................................................................................................................4
P 3 Analysis of competitive environment utilising the Porter's Five force model......................4
LO 4 ................................................................................................................................................7
P 4 Assessment of various kinds of strategic paths available to the company ...........................7
CONCLUSION .............................................................................................................................10
REFERENCES .............................................................................................................................12

INTRODUCTION
Business strategy can be interpreted as the course of act or set of judgement that aid
enterprises in accomplishing business objectives. It is an important plan which administration
utilization to secure competitors view in the market, carry on their operations. It is a set of
competing for decision and activities which business utilises to attract consumers. Compete
successfully, transformation execution and accomplish objectives of the organisation (Akter and
et.al., 2016). This study id based on Unilever. It is the British Dutch transactional consumer
goods organisation. The report will analyse the internal and external capabilities by utilising the
PESTLE and SWOT analysis of the organization. It will investigate the competitive environment
using Porter's Five force model within the organisation.
LO 1
P 1 Analysis PESTLE and SWOT analysis of the organisation
Business strategy of Unilever:
As one of powerful as well as flushed organisations in global with various booming
brands, the selected company has chance to enlarge into international markets which it is not yet
operational in, in relation to gain a way to consumers approximately world. Selected company
foremost come in an international market to compete globally by come in just one or choose few
international marketplaces which are supported by strengths of fur key brands like Sunsilk, Lux,
Rexona and Dove. An international concept utilised by the selected company is desirable to local
concepts because the selected company can more merge their operations and directs on set brand
image and honour which is uninformed from nation to nations (Higgins, Omer and Phillips,
2015).
Mission and Objective of Unilever:
The mission statement of Unilever is to conclude that the firm expands into the
international market in relation to gain access to consumers worldwide. The objective is to bring
their knowledge and global expertness to the services of localised consumers follows the firm to
produce many nutrition, hygiene and personal acre goods with successful brands.
In order to that, Unilever needs to identify the internal and external capabilities of the
business, so that they are determined the PESTLE analysis as external and SWOT analysis as
internal capabilities for implementing the business strategy (Kourdi, 2015).
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External Analysis (PESTLE Model):
Political Factors:
It involves government policies, level of corruption, taxation and so on. The impact of
government policies and laws which directly influences on operations and strategies of Unilever.
The political stability of the location in which the firm is worked will certainly chance for the
firm. Great intra-governmental relations are also the source of chance for international firms like
Unilever with many of a lot of rivals. The limitations relating to imports, exports and trade laws
can hinder the success is going forward of Unilever. It is the difficult to set up rules and
regulation according to nation which can impact on distribution of goods of firm.
Economic Factors:
It involves interest rate, currency exchange rate, inflation rate, unemployment rate and so
on. In order to that, Unilever has always directed on the area of goods need which aids in
maintaining the stability and worth in the entire world (Zhong and Li, 2018). The execution of
the Unilever is directly relative to the economic stability of the state in which the company is
operated. The organisation has followed their business method to assure that its gainfulness drive
is sustained. Some goods are packaged in small size for low-income or regular-income earner for
affordability. If the goods are not demanded, so that this can impact on cash flow and profits
negatively of Unilever.
Social Factors:
It includes attitudes, demographics, education level, class structure, hierarchy, culture and
so on. This factor includes the feelings as well as the style of people and most essentially the
civilisation of area. For example, the contemporary regime people are more inclined to live life
with a good lifestyle and they discovered the sure luxuriousness goods of the selected company
as the basic requirements. The trends of utilising the cheap and localised brands frequently
become threats of international products manufacturing like Unilever. Firm expresses powerful
desire to aid people feel and look good while also living life the deserve many of goods of
Unilever focus on personal care and health.
Technological Factors:
It involves technical improvement, rate of technological diffusion, the impact of value
chain structure and so on. The fair research and development in the area of the products
manufacturing industry have always been a high chance for firms like Unilever. With the help of
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technological encouragement is the chance, the company needs to develop in the knowledge
management system (Leonidou and et.al., 2015). The enhanced trend of automation in business
strategy is surely a great chance for expanding the business for the global acknowledged
organizations like Unilever. Also, There are larger level of automation as compared to their
challengers which allowing to supply goods to store area fast.
Environmental Factors:
It involves climate change waste management, recycling, attitudes towards green or
ecological goods etc. these factors cover the high standards and expectation on the waste
spendable related policies (Buckley, Burton and Mirza, eds., 2016). There can be directly on the
sustainability of the business. The world’s first concern is climate change which is some time
threats and sometimes chances for international firms like Unilever. Company has already been
part of many such campaigns. If proper strategies a right upcoming plan have been chalked out,
Unilever can sustain the name of the marketplace. Company boost sustainable and renewable
resources. Their goods are designed to safe for customers in every areas in which they distribute.
Legal Factors:
It involves discrimination regulations, copyright, patent, employment, health and safety
as well as data protection laws which can be influenced by operations and business strategy of
Unilever. Many other legal views of governmental reforms also laid direct influence on the
selected company (Hasan, 2015). Each brand and areas of shops to follow copyright, laws
relating to health and welfare of workers internationally and regionally.
LO 2
P 2 Internal Analysis (SWOT Model):
Strengths:
Unilever runs in nearly 190 nations across the world as well as international footprints
combined with top of the mind brand recall. There are wider brand portfolio and diversified
goods range, positioning to tap into ever-changing user preference around the worldwide. This
can help to increase the consumer satisfaction and expectation towards the brand or goods of
Unilever. The economic of scale support manufacture ratio which is needed for raising
competitive pricing strategies of firm.
Weakness:
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The largest weakness which selected company faces is that it runs in an uber competing
market where the other international large like P&G and Nestle in addition to the host of
localised players challenge its control at every twist and increase the stakes on Trillion Dollar
Fast Moving Consumer Goods (FMCG) space (Grant, 2016). Company has limited business
diversification which is also weakness of firm that directly impact of operation and function of
Unilever.
Opportunities:
The arrival of the economic process as well as the growth of international media,
customers in the emerging marketplaces which are wishful of occidental lifestyle. This refers that
selected company has big chance ready for its as it taps into this big and varied consumer base
which wants to join the association of westerners in taste and preferences for consumers
products. Unilever will make efforts to market development which is high opportunity for
business which can impact positively on the sales and revenue of business.
Threats:
The current international economic crisis has many damaged the profits of the FMCG
companies like Unilever which is not the exception. Consumers are purchasing less and insisting
on more value for the money with the reduction of the disposable profits of international
consumers (Santos and Laczniak, 2015). There are tough competition in industry which is the
largest threat of the Unilever that can decrease the market share of the business.
LO 3
P 3 Analysis of competitive environment utilising the Porter's Five force model
The competitive analysis is the idea of the business strategy and ways which is related to
the competition. The aim of the competitive analysis is to define the strengths and weakness of
the challenges within the marketplace, strategies that will give with well-defined benefits,
barriers which can be improved in relation to keep competition from entering market and any
weakness which can be employed within the product development cycle (Alam and Wulandari,
2019). Selected company efficaciously contends in international user product marketplace.
Porter's Five Force Analysis of the organisation presents requirements to schemes rank
contention and bargaining power of the consumer in business. This model is the management
technique for identifying the effect of external factors in the environment of the company.
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Porter's Five Force Model:
Competitive rivalry or competition:
Rivalry is the leading force in the Unilever business situation. There is a powerful unit of
competing rivalry against Unilever is based on outside elements such as a large number of
companies, big aggression of organizations and low switching costs. Selected company has
tough competition due to low switching costs. For instance: it is simple for customers to shift
from one firm to another company (Porter’s Five Forces of Competitive Position
Analysis, 2018).
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Illustration 1: Porter’s Five Forces of Competitive Position Analysis
Source: (Porter’s Five Forces of Competitive Position Analysis, 2018)

Bargaining power of suppliers:
The level of supply available to companies which impact on business and industry
environment of the selected company. The bargaining ability of provider is the medium force
which involves different external force like the situation of individual providers, the population
of providers and overall supplying (Velásquez and Meunier, 2017). For instance, any change of
suppliers in production level leads to important but limited modification in the availability of raw
material utilised business of Unilever. The bargaining power of supplier is less as compared to
Wal-Mart and Nike (Unilever PLC Porter Five Forces Analysis, 2018).
Threats of New entrants:
Company compete with set organisations and new companies in the consumer product
market. There is a weak force of the threat of new entrants which includes various external
factors like low shifting costs, high cost of brand development and economies of scale. The
lower shifting costs allow new entrants to impose powerful force against the selected company
(Chereau and Meschi, 2018). For instance: customer easily decides to try new goods from new
companies. The new entrant brings innovation in personal products which can highly pressure on
Unilever by lower pricing approach, decreasing costs etc. This impact on market share and
profits of company negatively.
Bargaining power of buyers:
The enterprise, as well as industry situation, depending on the result of customers to its
goods. The effect of purchasers on the execution of business is well-advised in this part. There is
also a high-level unit of bargaining power of consumers by low-level shifting costs, large choice
of info and small size of individualistic consumers. For instance: consumers can comparison
goods supported on online info. The little size of individual purchases of the consumer which has
minimum effect on the profits of the selected company. Also, this can increase sales and market
share of the Unilever. Consumers satisfaction is also essential aspect for firm as compared to
their competitors.
Threats of substitute products:
Substitutes can decrease revenues of Unilever and capability of the company in user
products business surroundings. The threat of substitute product is the weak force which involves
external factors like low shifting costs, secondary accessibility as well as execution to cost ratio
of substitutes (Enz, Canina and van der Rest, 2015). In case: it is the simple to way close-up
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toothpaste from grocery shops instead of obtaining substitutes such as home-made organic
cleaner. The threat of substitute product is very high if it offers value proposition is unique from
present offering in the industry. It is the beneficial for company like Unilever in relation to
increase sales and profits.
LO 4
P 4 Assessment of various kinds of strategic paths available to the company
Basically, there are three types of strategies like corporate, business and functional.
Business strategy which is outlined at the level is slightly more specific and normally relate to
smaller businesses within the large company. It is good thoughts to focus to the business strategy
level so that it can decide on ways through which they are going to manage each different
portion of the operation of the company (Mamouri and et.al.,2018). For focusing on strategic
direction, Unilever utilised the Ansoff's growth vector matrix involves four factors such as
market penetration, market development, product development and diversification.
Ansoff's Growth Matrix:
Ansoff's matrix is focused on the present and possible goods and markets to represent
alternative corporate growth strategies. Through existing and new products, existing market and
new markets, there are the possible product and market combinations.
Market Penetration:
This scheme is most risky since it advantages existent beginning and capacity of the
company. In the increasing market, simply keeping market share will outcome in growth and
there can survive chances to raise market share if challengers reach capability limits (Akter and
et.al., 2016). Still, market penetration has limits and once market concepts impregnation another
strategy can be pursued if the company is to continue to develop. In order to that, Unilever tries
to accomplish development with existing goods in their current market segment which aims to
raise its market share.
Product Development:
This strategy can be proper if the strength of the company is related to particular
consumers instead of the specific product itself. It can advantage their strengths by enhancing
new products target to its existing consumers of the company. Now, the company tries to
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develop new goods targeted to its existing market segments. New product development carries
more risk than simply attempting to raise market share.
Market Development:
This strategy involves the movement of the extra market section or geographic locations.
The improvement of a new marketplace for good can be a good concept if the set ability of the
company is affiliated to more to the particular good than to its experience with the particular
market segment (Higgins, Omer and Phillips, 2015). Market development strategy typically has
more risk than the market penetration strategy, because the company is expanded into a new
market.
Diversification:
It is most hazardous of growth strategy since it needs both good and market improvement
and can be external to the core abilities of the company. This area of the matrix has been mention
to through some as the suicide cell. This can be a healthy prime if the high risk is remunerated by
the chance of a high rate of return.
Justify and recommend most suitable development platform and strategies
The market development scheme is the best and appropriate strategy and growth platform
which help to achieve the mission and vision as well as objective of Unilever. The objective of
the company is to enter into a foreign market with the existing products at the affordable prices.
They are focused on a new target market and consumer for increasing the sales and profits of the
company (Kourdi, 2015). If the core competencies of the firm are affiliated more to particular
good than to its occurrence with particular marketplace section, so that, the improvement of new
markets for the good can be a great strategy for the company. In this strategy, the company is
trying to grow by reference their existent goods to a new market segment.
Produce the strategic management plan with strategies, objectives and tactics
Strategic Management Plan:
It is the representation utilizes to communicate within the company the goals, set
priorities, focus energy, modify operations ensure that workers and other stakeholders are
performing towards common objective set agreement across intended results (Buckley, Burton
and Mirza, eds., 2016). There are various elements involves such as background statement,
vision, value, mission and objectives, SWOT analysis, implementation and evaluation.
Executive Summary
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From the strategic management plan, it has covered the background of the company and
its strategy. Also, it has covered that strategic direction by utilising the model, tactics by utilising
the strategies, action plan and implementation of the strategic management plan. With this, the
company implement the plan as per the business strategy.
Background statement:
Unilever is the British Dutch multinational corporation user products organisation
headquartered in London, UK. Its goods involve food and drinks, cleaning factors, beauty and
personalized care goods. It is one of elder international organisations, these goods are available
in across the 190 nations. The company owns over 400 brands and it is the double listed
organization consisting of Unilever Plc based in London and Unilever N.V. Based in Rotterdam.
Mission and Vision:
The vision statement of Unilever is to sort property surviving ordinary. They consider
this is the first long-term mode for their business to develop. The mission statement is to add
energy to live. They just requirements for nourishment, medicine and personalized care with the
product which aid people feel better, look good and get more out of the day to day life.
Strategies and Tactics:
The selected company utilised the different strategies or tactics like Porter's Generic
Strategy of determining the strategic capabilities of the business. Porters have presented that
capabilities finally fall into one of two heading cost-benefit and differentiation (Alam and
Wulandari, 2019). Through implementing these strengths in either wider or constrictive range
three general strategies such as cost leadership, differentiation and focus. These strategies are
implemented at the business unit level.
Cost Leadership:
This general strategy presents for being the low-level producer in an industry for a given
level of quality. The company sells its goods either at average business prices to gain profits
larger than challengers or below average enterprise prices to earn market share (Porter's Generic
Strategy, 2010). Organization succeed in cost leadership strategy frequently have internal
strengths like efficient channels and a high level of expertise production procedures.
Differentiation: This strategy presents for the improvement of goods and services which
offers specific concepts which are valued by consumers. Customers realise to be better than or
differ from the goods of the competition (Alam and Wulandari, 2019). Company follow in
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differentiation technique frequently have many interior capabilities like access to lead scientific
study, corporate reputation for quality and invention.
Focus: This strategy attention on constrictive section and within that section efforts to
accomplish either value benefit or differentiation. The assumption is that the requirements of the
group can be better serviced by focusing wholly on it. Company win in focus strategy is able to
adopt a wide range of good development strengths to the comparatively narrow market section
which they know very well.
Action Plan:
In the action plan, Unilever has been utilised the differentiation general strategy for
competing for benefit (Mamouri and et.al.,2018). The primary focus of differentiation generic
strategy is their importance on a characteristic which creates products of firm standout against
challengers. For instance: a selected company produce personalized care goods like Dove Cream
Bars to meet user requirement for soaps which are nor rough or dying. Disregard their relatively
high selling prices like Unilever goods are competitive because they stand out from the number
of soaps which focus on more cleaning than wetness. This kind of generic strategy aligns with
mission and vision evidence which purpose to assistance international property and to raise
energy in the lives of consumers (Leonidou and et.al., 2015). This can help to increase reputation
for quality and invention, high skilled and innovative product development team. Sometimes, the
risk linked with this strategy involves info by challenger and modification in consumer tastes.
Many of companies pursuing focus strategy can be capable to accomplish even larger
differentiation in their marketplace sections.
Implementation:
In this section, the company needs to determine the 5M's like Machine, Material, Man,
Minutes and Money. It is needed for skilled workers and manpower for applying the plan. Also,
it is necessary for various materials for implementing the plan within the business. This can aid
to accomplish the strategic objectives of Unilever. It is also necessary to define and fixed a
timeline for applying the strategic management plan by the company (Chereau and Meschi,
2018). This can aid in the effective strategic management plan and its implementation as well as
accomplish the goals of the firm. This can assist in entering into the international market to
Unilever. Effective implementation of the strategic management plan can be an aid to increase
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productivity and profitability within the industry. Also, it can help the company in relation to
entering into the foreign market.
CONCLUSION
This report has summarised that selected company utilise PESTLE and SWOT analysis
which have beneficial for determining the internal and external capabilities of the business. It can
be concluded that the utilization of Porter's Five Force Model that has beneficial for increasing
the competitive advantage in the industry. It can be discussed that use the Ansoff's growth matrix
which has well for identifying the strategic capabilities and direction to the company. In this
context, the company has utilised the market development strategy to determine the strategic
positioning of the business. Furthermore, the study has completed that strategic management
plan which involves background of the firm, its mission and vision, strategic and tactics, action
plan and implementation of the plan in the business.
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