Strategic Management Analysis of Unilever's Business Operations

This report provides a comprehensive strategic analysis of Unilever, a leading consumer goods company. It begins with an introduction to Unilever, highlighting its vision, mission, and global presence. The report then delves into a detailed SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis, followed by a Quantitative Strategic Planning Matrix (QSPM) to evaluate market and product development strategies. Part B includes a Strategic Position and Action Evaluation (SPACE) Matrix to determine Unilever's strategic posture and a Grand Strategy Matrix to identify appropriate strategic directions. The analysis considers factors like market development, competitive advantages, financial positions, and the impact of external factors. The report concludes with a summary of findings, suggesting that Unilever should focus on market penetration and cost reduction strategies. References to relevant academic sources are also included, providing a robust foundation for the analysis. The report's findings suggest that Unilever is well-positioned for growth and should prioritize market development and product innovation to maintain its competitive edge. The analysis leverages a variety of strategic tools to provide a comprehensive understanding of Unilever's current position and future prospects.

STRATEGIC MANAGEMENT
Submitted by:
1

Table of Contents
INTRODUCTION................................................................................................................................3
2. PART A..........................................................................................................................................4
2.1 Strengths, Weaknesses, Opportunities, Threats (SWOT) Matrix..............................................4
2.2 Quantitative Strategic Planning Matrix (QSPM) Matrix............................................................6
3. PART B........................................................................................................................................10
3.1 Strategic position and action evaluation (SPACE) Matrix........................................................10
3.2 Grand Strategy Matrix.............................................................................................................11
4. CONCLUSION..............................................................................................................................12
2

INTRODUCTION
Unilever is one of the most advanced consumer brands in the world.. They sell a large selection
of food, drink, personal care and many other items. Unilever's growth can be seen in its annual
revenue of 39.8 trillion in the year 2009, with a workforce of 163,000 in the country. The key
aim of Unilever is to bring value to people's lives. By fulfilling their daily needs, they want to hit
the customers. They will help people feel refreshed, look healthy and make the most of their
lives by offering food, grooming and self-care. They wish to further develop a new way of doing
business which prioritizes double the size of the enterprise and reduces the impact on the
environment.
Unilever operates in almost 190 countries worldwide and has traditionally been a sign of
excellence and consistency for the rapidly moving consumer goods industry. The competitive
advantage of the company is focused on its worldwide presence and its track record of raising
customer satisfaction worldwide. While Unilever managed to develop at a respectable rate,
3

amid the current recessionary climate, as we address this latter point, the emerging threats
from a broad range of global, regional and local players cannot be ignored. As the subsequent
SWOT Analysis makes clear, the fight for the emerging markets could increase into an
unrestrained rivalry between the global giants, including Unilever and Proctor and Gamble, and
a number of local players.
Company Vision Statement
Unilever vision statement is "To make life commonplace sustainable. This is our belief that our
company will expand best in the long run."
Company Mission Statement
Unilever mission statement is "to make life more vital. With brands that empower people to
feel good, look good and get more out of life, we fulfill daily food, grooming and personal
care needs”.
2. PART A
2.1 Strengths, Weaknesses, Opportunities, Threats (SWOT) Matrix
4

SWOT MATRIX ( Unilever)
Strength Weakness Opportunities Threats
1 Unilever has a
wide number of
outlets in a strong
distribution
network.
1 A large portion of
Unilever's land is
available for rent
and leases are
payable.
1 The worldwide
growth of internet
users. With the rise
in internet use, e-
commerce is also
increasing.
1 New entrants are
threatened to
enter the market.
2 It has a low-cost
structure that
gives it a
competitive edge.
2 Compared to
competition, low
expenditure on
research and
development.
2 Worldwide, users of
social media are
growing.
2 The currency was
devalued.
3 In recent years, it
has a good
financial position
with positive
earnings. It has a
solid foundation
for assets too.
3 It has a high
turnover, poor
motivation and
low moral
standards.
3 Home revenue is
that and
consumption
expenditure is
growing. Economic
inflation is projected
to continue to be
mild.
3 In recent years, the
price of fuel has
increased and
inputs have
become costly.
5
Strength Weakness
Opportunities Threats

4 It has a highly
educated, creative
and diversified
workforce.
4 It has low-speed
liquidity issues;
the current asset
level is less than
the liabilities
currently in place.
4 The increase in
goods and services
that are
environmentally
friendly. Subsidies
are available from
government.
4 The market is
increasingly
competitive.
5 It has a strong
social media
presence.
5 Cash flow issues
are also
encountered.
5 The interest rates are
poor, which gives big
ventures a chance to
invest.
5 There are now
more substitutes
available.
So Strategies WO Strategies ST strategies WT Strategies
1 Enhance
marketing in order
to target
customers (S1, S3,
O3)
1 Land ownership by
low interest rate
to raise the share
of property held
by the property
leased (W1, O5).
1 To reach consumers
and battle new
market entrants, use
a strong distribution
network (S1, T1).
1 Increase research
and development
expenditure so
that Unilever is
more competitive
(W2, T4).
2 Develop
environmentally
friendly goods
with creativity at
low cost to sell
them at low prices
(S2, S4, O4).
2 Enhance salaries,
provide workers
with incentives
and bonuses for
shrinking sales and
improved job
morality. This
could be possible
because current
costs are low.
(W3, O3) (W3, O3)
2 To invest in
intellectual property
rights use their
strong financial role.
This will contribute
to competitiveness
on the market (S3,
T4).
2 Provide rewards,
improve
participation or
create a stronger
working
atmosphere for
retaining talent.
This ensures that
staff do not resign
to join rivals (W3,
T4).
3 Low-priced
market goods and
discounts. This
will boost volume
sales and is
possible because
of low inflation
and expense (S2,
O3).
6

2.2 Quantitative Strategic Planning Matrix (QSPM) Matrix
Market development is a suitable approach for UNILEVER. In the current market UNILEVER
should stay and launch current products in a new geographical field.
Therefore, we chose the Business Growth Strategy following the requisite factors:
 UNILEVER's own powerful distribution system.
 In what it does, UNILEVER is really good.
 For UNILEVER, an untapped rural and developing country demand exists.
 UNILEVER is a strong MNE. It has plenty of financial as well as human capital, so it can
spread globally quickly. We are not concerned here with expanding the operations into
a new geographical region. We are particularly concerned that untapped markets are
captured. UNILEVER has to decide whether to start to operate in new sectors too or
simply to launch goods across a strong distribution channel, (Astika et al, 2021).
Market Development Product
Development
Strengths Weigh
t
A
S
TA
S
A
S
TAS
1 Customer’s Loyalty. 0.10 3 0.3
0
2 0.20
2 Micro level retail outlets 0.08 4 0.3
2
1 0.08
3
Latest state of the art
facilities and
technology.
0.07 4 0.2
8
2 0.14
4 International brand
strength.
0.06 3 0.1
8
2 0.12
7

5 Market share of 41% 0.06 4 0.2
4
1 0.06
6
Committed to business
ethics, safety,health,
environment and
community.
0.05 4 0.2
0
2 0.10
7 Financial Backing 0.05 3 0.1
5
1 0.05
8 Experience Top
Management
0.04 3 0.1
2
1 0.04
9 Supply Chain
Management
0.04 4 0.1
6
2 0.08
10 Number of Products 0.03 3 0.0
9
2 0.06
Weaknesses Weight AS TAS AS TAS
1 Strategic Alliance 0.08 4 0.3
2
2 0.16
2 Costly Products 0.05 4 0.2
0
3 0.15
3 Operational Complexity 0.05 3 0.1
5
2 0.10
4 Tall Organization 0.04 2 0.0 1 0.04
8

Structure 8
5 High Operating Expenses 0.04 4 0.1
6
1 0.04
6 High cost of production 0.04 3 0.1
2
2 0.08
7 Long term strategies 0.03 4 0.1
2
2 0.06
8
Emphasizing only few
products e.g. beverages
section
0.03 3 0.0
9
2 0.06
9 Indirect distribution
network
0.03 3 0.0
9
1 0.03
10 Many protests by labor
unions
0.03 3 0.0
9
2 0.06
Market Development Product
Development
Opportunities Weigh
t
AS TAS AS TAS
1 Market of developing
countries due to more 0.10 4 0.4
0
2 0.20
tendency towards
consumption
9

2 Rapid increase in world’s
population
0.06 4 0.2
4
2 0.12
3 Unrelated diversification 0.05 3 0.1
5
1 0.05
4 Rural area 0.05 4 0.2
0
2 0.10
5 Hygiene Consciousness 0.04 4 0.1
6
1 0.04
6 Innovation (R&D) 0.04 3 0.1
2
2 0.08
7 Exploring new markets 0.04 4 0.1
6
2 0.08
8 Could seek better
supplier deals
0.03 3 0.0
9
1 0.03
9 Support core business
economies
0.03 3 0.0
9
2 0.06
10 Could develop new
products
0.02 4 0.0
8
2 0.04
Market Development Product
Development
Threats Weigh
t
AS TAS AS TAS
1 Competition from
organized players, P& G
0.09 3 0.2
7
2 0.18
2 Inflation Rate 0.07 4 0.2 2 0.14
10

8
3 Smuggled products and
local competition.
0.07 4 0.2
8
1 0.07
4 Legal, political and
regulatory factors of
host country.
0.06 3 0.1
8
1 0.06
5 Rapid increase in raw
material cost
0.06 3 0.18 2 0.12
6 Increased demand for
antibacterial soap
0.06 3 0.18 2 0.12
7 Counterfeit products 0.05 4 0.20 1 0.05
8 International trends 0.03 3 0.09 1 0.03
9 Local competition 0.03 3 0.09 2 0.06
10 High taxation 0.02 4 0.08 2 0.04
TOTALS 6.98 2.82
3. PART B
3.1 Strategic position and action evaluation (SPACE) Matrix
SPACE matrix shows whether the company is better suited to conserve, offensive, defensive
and competitive strategies. The matrix shows that UNILEVER has an ambitious strategy that
ensures it is competitively placed well in the fast-growing industry. It must use its internal
strengths to establish a plan for market penetration and market growth. Other methods
11

possible include product growth, collaboration and diversification with other firms, (Yessenalina
et al, 2011).
Brand Production can be used to boost sales by changing the products slightly. It would remove
its threat from unorganized competition, which is very badly harming UNILEVER's market and
selling smuggled goods. Some considerations show why we have selected this UNILEVER
strategy:
 Current UNILEVER products worldwide are very popular. The number of happy
customers indicates its 41% market share.
 FMCD industry is rapidly developing technologically.
 FMCG is an industry with fast growth. High growth is characterized by rapid demand
growth due to factors like population growth, etc.
 UNILEVER has coordinated competitors as well as rivals. Organized competitors
compete with the introduction of similar prices and unorganized competitors hurt
UNILEVER by selling even less. We saw that Unilever is delivering high quality goods and
capturing the maximums of market share.
Market growth is another strategy proposed to UNILEVER. However, many people with lower
and medium incomes are still not in use with most goods as they are very costly. For UNILEVER,
rural areas are also an untapped sector.
12