BMG872 Ulster University - Unilever's Global Strategy Report

This report delves into Unilever's global strategy, focusing on its international expansion, particularly into Slovakia. It examines the reasons behind Unilever's international expansion, including accessing new markets, diversification, gaining a competitive advantage, and leveraging foreign investment opportunities. The report discusses strategic choices available to Unilever, such as business strategy, marketing strategy, exporting, franchising, and customer relationship management. It also analyzes the reasons for choosing a specific location for a subsidiary, using PESTLE analysis to assess the environment of Slovakia. Furthermore, the report explores strategic methods of entry, like partnerships, and their potential consequences. The document concludes by addressing potential organizational and managerial problems for the subsidiary operating in the new international environment and provides strategic advice to overcome these challenges.

Global Strategy,
Development and
Implementation

Table of Contents
INTRODUCTION.................................................................................................................................3
MAIN BODY........................................................................................................................................3
Reasons for parent company’s international expansion.....................................................................3
Reasons for choice of location for the subsidiary..............................................................................6
The potential organisational and managerial problems for the subsidiary operating in the new
international environment..................................................................................................................8
Provide strategic advice for the subsidiary to overcome the problems..............................................9
CONCLUSION...................................................................................................................................10
REFERENCES....................................................................................................................................11

INTRODUCTION
The term strategic management is defined as the continuous strategy, supervision,
review, and evaluation of all the company needs to achieve its business objectives and goals
(Ammar and Chereau, 2018). Development and evaluation in corporate environment would
force companies to regularly evaluate their performance plans. Global strategy is defined for
the formulation of strategies by and organisation for expansion outside its boundaries which
helps businesses to maximize the sales of products and services. This strategy put an
emphasis to identify the approaches which helps in examining and explaining the function of
top management in enterprise. An adequately developed global strategy lets an organisation
discuss to achieve and develop the international presence market needed, the optimum site or
position worldwide to perform business process operations and to proceed with its global
presence in order to obtain competitive edge on the international market. Unilever is
considered in this report. This entity is founded in year 1929 and founded by in London,
England, UK. Number of employees working in company is 155000 all over the world. This
report includes reasons for parent company’s international expansion in the country Slovakia,
strategic methods of entry with consequences, managerial problems in new environment and
solution to overcome them.
MAIN BODY
Reasons for parent company’s international expansion
International expansion is important for the business growth as it is going
internationally. The entry of foreign markets enables companies to expand further. New
customers experience your product or services by expanding the global reach of companies.
Unilever is a British multinational consumer goods company as they produce their products
such as skin, personal care, cleaning goods, drinks, food, baby care, pharmaceutical as well as
bottled water and many more to its consumers. The historical performance of Unilever is
stable as the organisation revenue is 50.724 and asset is 67.659 in the business. However, the
market share of selected entity is 4044 in the United Kingdom. The competitive position of
Unilever is to offer innovative goods and services as which is distinct from the other
competitors in order to attract new and existing users. There are various reasons of the
organisation to expand their business in Slovakia are mentioned below:

New market: Global expansion provides an opportunity to dominate and attract more
markets which help company to maximize sales and revenue in business. Management of
Unilever observe that the expansion of their business in China, Brazil and Europe develops
their market share and growth of business venture in order to increase profitability and
productivity. The expansion in new market of Slovakia will help them to expand their
business operations and activities in order to achieve organisational goals and objectives.
(Belso-Martinez and Diez-Vial, 2018).
Diversification: Most of the organisations are expanding to broaden their resource
worldwide, an activity which will protect a corporation from unpredictable occurrences.
Unilever diversify and operate their business effectively and efficiently in the other market
that have foreign business will mitigate negative growth. The selected enterprise use overseas
market to launch new goods and services in order to increase sales and revenue which help
them to develop and the growth of business. Manager diversifies their business in Slovakia
which helps them to achieve the targeted goals in their business. This helps them to diversify
their product line to attract customers and gain the interest of them to buy more products from
their brand in a new country like Slovakia.
Competitive advantage: The reason for the parent company’s to expand
internationally is to take competitive advantage. With the help of competitive advantage
Unilever gain entry in Slovakia which greatly enhances business process and activities to
emerge technologies and business environments (Boys, 2018). This helps them to build brand
awareness in order to promote potential business situations for the further development in
new market and new country. Unilever key strategic strength was the capacity to define
takeover priorities and absorb the capacities of acquired firms.
Foreign investment opportunities: By competing in foreign markets, several
companies are encouraged to create new opportunities and build valuable relationship. Often,
foreign firms gain from the profitability of non-existent investment opportunities in their
country. The company will get more foreign investment in their business by establishing their
operations in Slovakia. For example, businesses searching for investments in their area offer
rewards.
From the above analysis it is evaluate the expansion of business in international
market helps them to growth their organisation, increase market share and assist them to

innovate new products or services in the marketplace. Therefore, it increases market share
from their competitors in market.
Possible strategic choices available to parent company
Strategic choices include a whole mechanism in which a criterion for selecting a
certain solution from different options is made. Each organisation is provided with a certain
number of capital including economic resources, human capital, production capability and
networks for marketing. The corporate plan development takes advantage of the fact that both
businesses need to cope to a degree with finite capital. Scare capital should be allocated by
profitable businesses to programme which have the most beneficial influence on development
in incomes or boost production and quality which raise the profit margins. Administration of
Unilever adapts various strategies to meet the requirement of customer’s tastes and
preferences which help them to reach organisational goals and objectives (Cuervo‐Cazurra,
Mudambi and Pedersen, 2019). However, there are many strategies which are mentioned
below:
Business strategy: It is described as the direction or collection of assumptions that
allow management to accomplish their business goals. A corporate plan of Amazon is a
number of competitive movements and acts used by firms for retaining clients, competition,
efficiency enhancement and operational objectives. This explains how business is to reach the
desired goals.
Marketing strategy: It refers to the general approach of an organisation to meet and
develop potential buyers into clients of their goods or services. Unilever includes this
business model for the core brand message about their personal, home care and many more
items with the profile of potential customers. However, the management of Unilever
encourage the advantage of brands through the many diverse brand engagement of the
multinational retail industry (Kalasin, Cuervo‐Cazurra and Ramamurti, 2020).
Exporting: Exporting requires manufacturing and distribution of products from one
company to other and the job of exporter is not over until the products hit foreign coasts. The
products are sold to local buyers by a local company. Unilever grow their business in abroad,
start-ups as exporters which provide a best way to determine if goods of a organisation cater
to consumers in other regions. This is to export their products or services in order to gain
more profits and increase sales of business.

Franchising: It is an effective method of entering international markets because the
franchisor would not need much capital spending. A franchise is a way of selling goods or
services with a franchisor that creates a patent or trademark to a company as well as
franchisee that costs a royalty and sometimes a permanent change for the right under the
initials and scheme of the franchisor to do business. Unilever franchise their brands is called
Swirl’s in UK.
Customer Relationship management: The management of Customer Relationship
Management refers to a technology used to handle all the partnerships and encounters with
clients and prospective customers in your business. The framework supports consumer data
management. Sales management is supported, insights can be done, integrates with online
networking and group coordinated is facilitated. Unilever manage and understand the
customer’s needs and wants in order to build strong relationship with ultimate users
(Kowalik, Danik and Francioni, 2020).
Reasons for choice of location for the subsidiary
The subsidiary of the company is to maintain its corporate name distinct, a
corporation should arrange subsidiaries. Companies are also used to buy other organisation
that wish to preserve the identity and reputation of their target business. As part of the
holding group, consumers and investors should be cautious about the future. Limiting their
obligations is among the most basic ways that management register a subsidiary as with the
legal arrangement by joining a corporation (Wu and Ang, 2020). Unilever has many
subsidiary companies such as Ben & Jerry’s, Kibon, Dollar shave club, Seventh Generation,
The vegetarian Butcher and Sundal brands. Unilever subsidiary enterprise Ben & Jerry is
situated in South Burlington, Vermont, United States in the year 1978. Number of locations
are 615 across U.S. This company sell and manufacture ice cream, sorbet and frozen yogurt.
The reason for choosing this location is to engage in these critical, social missions and global
economic. The reason for this is to increase the production of business process and activities
in order to maximize the sales and revenue. The location of subsidiary is chosen by Unilever
because it is to attract different types of customer. Due to the production facilities they have
to choose United States to attract the customers so that they make interest towards their
business. The location is important for every organisation so they can grow their business
faster to build overall performance and productivity in their business. However, this will
ensure that they follow all the legal rules and regulation in order to fulfil and meet the
requirement of the ultimate users. It expands the business activities and operations of

Unilever to accomplish goals and objectives (Zahra, 2019). To assess the environment of
Slovakia to establish the operations of Unilever in the country PESL analysis can be used.
The PESL analysis of Slovakia for Unilever is given below:
Political factors: To operate in any country a business needs a proper political stability
which helps them to operate efficiently and earn more profits from the country. Slovakia is a
country which has good political stability which is good for Unilever to expand their business
in this country.
Economic factors: These factors include employment rate inflation rate and many more
economical variables. These economical variable are very essential to a cell in order to
ascertain the economic condition of a country. Slovakia is a country which have a moderate
economic stability which is helpful for Unilever to establish their business operations in
Slovakia
Social factors: Social factors depict the current social or cultural trends which are followed
in the society. It is essential to assess the social factors as it will help the company to know
the taste and preferences of the customers. Unilever is a company of consumable goods
which is essential for each and every individual in the country and have favourable social
factors for the company to establish their operations in Slovakia.
Legal factors: There are several legislations which are applicable on a company to operate
their operations in a country. In order to establish their business operations in Slovakia
Unilever has to face several legislations which are applicable in the country.
Strategic methods of entry and the possible consequences
Unilever can adapt various strategies methods for entering into the market. There are
various strategies by which Unilever enter into the other market which are mentione below:
Partnership: It is an agreement with the more than two individuals which operate
and mange their business and share their income and lossess equally or as per the agrreemnt
between them. In context to Unilever, management can establish a firm with the other
partner. With the help of partnership, they have to enter the partnership which already in
existence in market in order to expand business and profitability. They do not have to do an
legal formalities in their organisation. Therefore, it helps them in order to increase market
share. The consequences for this is that it is unlimited liability to perfrom their task

effectively and efficiently as well as culture clash which affect them to take decisions. It is
essential as it helps them to develop their business in order to achieve organisational goals
and objectives.
Joint venture: It refers to the business which manage and control with the two or
more persons that come with the objectives to achieve the particular activities. In this type of
strategy it includes those company which start their work with new assignement or any other
tasks in order to achive goals. Unilever can follow this strategy as this helps them to share
risks as well as return and ownership. The main consequences is that the purpose of the Firm
is not clearly defined and there is possibility of lack of communication among the members.
Direct investment: This signifies to enagge them to establish by their own
investment in their subsidiaries companies. The own the manufacturing as well as production
of their own subsidiaries firm in order to expand their business operations and activities. In
context to Unilever, It is the best stratgy for manager to adapt as organisation has many
subsidiaries such as Ben & Jerry's, Kibon, Dollar shave club, Talenti and many more
company which operate and manage their business accross worldwide. Therefore, their are
many consequences such as exchange crisis, inflation of economy as well as trade deficit.
The problem of the direct investment as this takes lots of time and efforts as well as huge
capital which impacts the subsidiary companies to enter into the market.
Trade intermediaries: The best strategies method of entry into the market is trade
intermediaries. In this method, the work of people is based on the commission to export their
products or services in market. Management of Unilever hire many intermediatries to sell
their goods or services to the customers which lead to gain high profit and develop
productivity in their business. There are various intermediaries such as agents, distributors,
wholesalers as well as retailer. Thre is problem of this method as the management has a fear
of losing their new as well as existing ultimate users.
The potential organisational and managerial problems for the subsidiary operating in the new
international environment
International business environment is defined as the various development process to
determine the risk of the political, legal as well as taxation problems. This comprises of the
need and demand of different business products or services in order to build environmental
awareness. Subsidiaries of Unilever has to identify and understand the new international
environment by training and development to ensure that they perfrom their task effectively

and efficiently. Managerial problems for the subsidiary operating in the new international
environment which are mentioned below:
Company's structure: The structure of organisation should be in a proper and
defined manner to remain in competitive market. The subsidiary company has to decide their
locations to manage and operate their team effectively in order to maximize the profitability
and productivity. The subsidiary of Unilever can face challenges about the structure of firm
in international environment as well as the team operations.
Accounting: It is the main problem for the subsidiary as to operate their new business
internationally as they have to take training and development program to know the
compliances, tax rates as well as they are responsible to pay the corporate tax in which they
are operating their business. In context to Unilever, the problem for the subsidiary firm is that
they have to follow those accounting techniques in which they are managing their activities
and operations in order to expand their business.
Tax liabilities: Organisation has to pay the taxes on their income in which they are
operating their subsidiary which lead to reduction in revenue. Subsidiary of Unilever have to
pay the double taxes in the country which lower the profitability of business.
Currency: It is the main challenges in which they operate their subsidiary in other
country that have different currency as it affect the profit of their business. However, the
subsidiary of Unilever face this problem as the fluctuations of the currenmcy rate affect the
income and expenditure of business.
Cultural differences: It is the problem by where the organisation operates have
different culture and backgrounds of individuals. Thus, this impacts the perfromance of
business in the international business environment. Unilever subsidiary is to face challenges
in operating their new business such as communication skills which is very important for
international process as well as success.
From the above analysis, it is evaluate that the managerial problems for the subsidiary
operating in the international environment as they have to face challenges in their business to
operate and manage their business process as well as activities.
Provide strategic advice for the subsidiary to overcome the problems
There are many ways by which their are strategies by which the subsidiary
organisation overcome with it which are as follows:

 Communication is important to operate their subsidiary enterprise which helps them
to manage their business. As they will not confuse about the language barriers in their
organisation. In context to Unilever, they can eliminate the risk of failure which is
occured due to the language barriers.
 To overcome with cultural differences the subsidiary have to ensure that they
communicate in a clear and defined manner that helps them to work towards
accomplishing future goals.
 Subsidiary of Unilever management can overcome the problem of tax as they can
hire the person who know the tax policy and procedures to manage all the financial
statements.
 They have to manage all the issues regarding development and expansion of business
and performance of their organisation.
 The corporate tax is important for every organistion and their subsidiary companies
in which they can perfrom their activities and efficiently.
 When the company expand their business in other country such as Unilever develop
their business in other nations they have to increase their business operations and
productivity.
 By following the foreign laws and regulations so that they protect their organisation
from the missappropriation in order to develop the performance of business.
 Adapting the international tax, tariff and other regulations helps them to minimize the
risks of the issues so that they operate and manage their business in an appropriate
manner.
CONCLUSION
Global strategy is defined as the plans where company develops the startegy to achieve the
targed goals in order to reach the customers. This helps them to meet the requirements of consumers
to know about their taste and prefrences which helps them to gain interest of end users. It is essential
to implement the plan which assist them to enter into the market which helps them to gain the
competitve advantage in market. However, the international expansion is defined as the process by
which the business can enter into the market which lead to expansion and build operations in their
enterprise. Strategic choices available to parent company which includes business strategy,
marketing strategy, exporting, franchising and customer relationship management. On the

other hand, Strategic methods of entry such as partnership, joint venture, direct investment
and trade intermediaries. Managerial problems for the subsidiary operating in the new
international environment are company's structure, accounting, tax liabilities, currency and
cultural differences. However, this is faced by organisation which reduces the revenue and
income due to operating their subsidiary in other country.

REFERENCES
Books and Journal
Ammar, O. and Chereau, P., 2018. Business model innovation from the strategic posture
perspective. European Business Review.
Belso-Martinez, J. A. and Diez-Vial, I., 2018. Firm’s strategic choices and network
knowledge dynamics: how do they affect innovation?. Journal of Knowledge
Management.
Boys, J. D., 2018. The Clinton administration’s development and implementation of
cybersecurity strategy (1993–2001). Intelligence and National Security. 33(5).
pp.755-770.
Cuervo‐Cazurra, A., Mudambi, R. and Pedersen, T., 2019. Clarifying the relationships
between institutions and global strategy.
Hoffman, M.A., Cannone, D., Barilla-Labarca, M.L. and Kline, M., 2018. Development and
implementation of an instrument for assessing the proficiency of oncology fellows in
the delivery of bad news.
Kalasin, K., Cuervo‐Cazurra, A. and Ramamurti, R., 2020. State ownership and international
expansion: The S‐curve relationship. Global Strategy Journal. 10(2). pp.386-418.
Kowalik, I., Danik, L. and Francioni, B., 2020. Specialized marketing capabilities and foreign
expansion of the international new ventures. Journal of Small Business Management,
pp.1-39.
Pérez-Vidal, A., Escobar-Rivera, J. C. and Torres-Lozada, P., 2020. Development and
implementation of a water-safety plan for drinking-water supply system of Cali,
Colombia. International journal of hygiene and environmental health. 224.
p.113422.
Pratt, S. E., 2019. Development and Implementation of a Reversibly-interacting TRAP-
peptide Pair as a Live-cell Imaging Strategy (Doctoral dissertation, Yale
University).
Wu, J. and Ang, S. H., 2020. Network complementaries in the international expansion of
emerging market firms. Journal of World Business. 55(2). p.101045.
Zahra, S. A., 2019. Technological capabilities and international expansion: The moderating
role of family and non-family firms’ social capital. Asia Pacific Journal of
Management, pp.1-25.

Online:
Reasons for the company to expand their business internationally.[Online]. 2021. Available
through:
< https://www.bizjournals.com/bizjournals/how-to/growth-strategies/2017/12/5-benefits-of-
international-expansion.html>
Strategic choices. [Online]. 2021. Available through:
< https://smallbusiness.chron.com/setting-objectives-making-strategic-choices-50236.html >