Strategic Management Analysis: Unilever's Competitive Advantage

This report provides a comprehensive analysis of Unilever's strategic management, focusing on its development, implementation, and outcomes. It begins by examining the similarities and differences between strategy development and implementation, followed by an identification of the strategic approach in relation to Porter's Generic Model, specifically cost leadership and differentiation. The report then identifies and discusses Unilever's future strategic direction, justifying the actions taken using Porter's Generic Strategy. Furthermore, it delves into the implementation challenges faced by Unilever, such as employee resistance to change and communication issues, and concludes with recommendations for overcoming these obstacles. The report highlights Unilever's expansion, brand image, and global revenue, emphasizing its ability to adapt and achieve competitive advantage in the market, and discusses the need for a blue ocean strategy.

Strategic Management

Table of Contents
INTRODUCTION................................................................................................................................3
TASK 1 ................................................................................................................................................3
Similarities and differences in strategy development and Implementation ....................................3
Identification of strategy approach in relation to Porter's Generic Model ......................................4
Identification of the outcomes of the selected strategy....................................................................4
TASK 2.................................................................................................................................................4
Identification and discussion the possible future strategic direction ..............................................4
Justification of actions using Porter's Generic Strategy..................................................................5
TASK 3.................................................................................................................................................6
Implementation challenges faced by Unilever.................................................................................6
Recommendations............................................................................................................................7
CONCLUSION....................................................................................................................................7
REFERENCES.....................................................................................................................................8

INTRODUCTION
Strategic management is the process of planning, monitoring and analysing the tactics
formulated by the company. This is done so as to assess whether the goals and objectives envisioned
by the organisation are achieved or not (du Toit, 2016). Pre plan of the strategies are prepared to
analyse the internal and external environment. This is done with the objective of achieving
competitive advantage for an organisation over their rivals. Formulation of schemes is done to
enhance the current performance and skills of the employees as well as the company. The report
studies to how Unilever achieved competitive advantage by designing and bringing strategic
developments in an organisation.
TASK 1
Similarities and differences in strategy development and Implementation
Strategy development is the first phase of the tactical process. It refers to evaluation of the
policies currently been used by Unilever. This is because only after evaluation certain measures can
be created to improve the current potentials of the organisation (Kumari, Pundir and Ganapathy,
2016). On the other hand, strategy implementation is the final phase of this process. While
implementing these policies management make sure to put the designed strategy to its action.
Similarities Differences
 Strategic development and
implementation are done to design a
structure in Unilever so as to handle
tactical change in the organisation
(Ertek, Tokdemir, Sevinç and Tunç,
2015).
 Other then this, implementation and
development is done to achieve
competitive advantage over
competitors.
 Tactical improvements refers to
designing whereas implementation deal
with execution of strategies in
Unilever.
 Apart from this, this is a logical
process. Thus, it is done by the top
management (Heiyantuduwa,
Wannisingha and Rupasinghe, 2015).
In contrast to this implementation is an
operational process so, it is initiated by
the functional management of the
organisation.
 The process of strategy development
emphasis on generating effectiveness.
On the contrary part, mainly
implementation emphasises on

bringing efficiency in Unilever.
Identification of strategy approach in relation to Porter's Generic Model
The Porter Generic strategic model was created by Michael Porter in the year 1980. As per
this model, a company must create strategies that encompasses a competency aspect in them.
Unilever have adopted this model to achieve competitive advantage over its opponents. Porter sub
divided its strategies into different layers. They are, cost leadership, differentiation or focus. The
main aim of Unilever PLC was to become better by bringing product development and innovation
in the company (Unilever in the UK, 2016). In order to do that company tried to enter into the
market and on the same times focused on expanding it in the domestic market as well. This tactic
was exponentially huge due to the large economic size. It is evident that expansion is a very time
consuming and expensive method to achieve market size. In contrast to this, Unilever kept on
endorsing and marketing on a huge level. In addition to this, the company also made new product
development with the existing goods. It can be argued that company faced huge deficits. In order to
cover the cost of strategy employed by the company, Unilever's product were much more costly
than its competitors (Top 10 FMCG Companies in the World 2015, 2016). However, companies
branding and loyalty helped Unilever to grow exceptionally well in both the domestic and in the
international market.
Identification of the outcomes of the selected strategy
Unilever PLC was able to expand itself in various new markets. This gave Unilever PLC a
good brand image. Unilever is present in more than 160 counties with a market capital of $72.6
billion. The global revenue of the personal food segment was €17,739bn and revenue of food
segment was €3,607m (Statistics and facts on Unilever, 2015). This is because the company not
only developed its products by itself but also simultaneously increase in its market from one
country to other. The positive outcome for Unilever was that it soon became a household name not
only in United Kingdom but worldwide. The strategy developed by the company provided
customer's with more choices which led to increase in revenue for Unilever.
TASK 2
Identification and discussion of future strategic direction
Unilever is famous for its uniqueness to provide multiple products, each highly qualitative
from one another. The company is making numerous goods in this sector. These product varies from
Surf, Dove, Vaseline, Bovril, Cif, Cornetto, Lipton tea and many more (Kaifeng, Xiaoqing and
Jianping, 2015). Although the company has a range of goods, it is important for the enterprise to
identify as to how they could improve their strengths over their competitors. This identification
helped the organisation in evaluating its current market position with its contenders. Unilever found

that although all the products were doing successfully it still has a hope of increasing its strength in
the market. Strategist at Unilever found that enterprise could manufacture low cost product with the
help of cutting edge technology. This innovation would helped the company to achieve USP in the
market. This will also help them from distinguishing itself from its competitors. The Procter &
Gamble Company, Reckitt Benckiser Group PLC and Nestlé s.a. are one of the top competitors of
Unilever (Rabe, Sari, Fechteler and Ruini, 2015). Although, the new entrants are rising day by day,
it is important for the company to bring a cutting edge differentiation among its product. This is
important so as to create differentiation among its image in the company.
After identification of the strategic direction, Unilever had to bring cost leadership as an
advantage for it. In order to do this, the business would have to bring innovation in its product. This
will help the company to manufacture goods with low cost (Gould, 2012). In order to produce low
cost products corporation will have to acquire skilful innovators. These employees would help
Unilever in achieving innovation in the technology. Improvement in machinery refers to adopting
methods that will help the organization in reducing cost of manufacturing products. In order to
achieve the above, organization first made its internal structure strong by enhancing its capital
structure. This was done so as to raise investment and to support engineering and operational
activity. The organization will be successful in implementing this strategy. The main advantage for
the company is to be able to reduce the cost and simultaneously achieve reasonable profit margins
(Fuchs, Bender and Glen, 2015). Being technologically advanced and strategically smart, Unilever
will also be able to achieve greater market share. There are many potential market which served to
be a beneficial source of revenue for the firm. This multi folded company not only achieved market
share in United Kingdom but also acclaimed to achieve superior customer support from various new
countries.
Justification of actions using Porter’s Generic Strategy
The application of above strategy is justified with the success of Unilever all around the
world. This organization will not only be able to improve its presence in United Kingdom. It is now
able to enter into new market and various new countries (Eden and Ackermann, 2013). Low cost is
considered to be an ideal of reducing cost of the product. It should be noted that tumbling
expenditure does not mean reducing sale price even. Cost and selling price are two different
component. By reducing cost and maintaining stagnant market price, the company made it possible
to improve its global revenue model. As Unilever was able to achieve higher and denser market,
with this its supply system also improved. Company was able to focus in improving its internal
capacity to meet with the rigid components of the external environment. By reducing the cost of its
manufacturing product, Unilever maintained its growth factor as well. Saving money by reducing
the cost helped the company in diverting its financial resources to development and research

(Swayne, Duncan and Ginter, 2012). Unilever conducted new research to bring new innovation in
its technology and product.
This firm was also able to improve its performance by refining the functionality of various
departments. As cost reduced, the company enhanced its ability to focus on advertising and
marketing products (Hitt, Ireland and Hoskisson, 2012). Marketing and advertising helped Unilever
in getting more customer base. As customer increased companies sales also improved
simultaneously. In order to handle this, Unilever brought improvement in its supply chain.
Enterprise was also able to improve its logistics so as to deliver goods in a faster time. By doing so,
Unilever improved all of its operational process. Thus, it can be said that strategic development not
only brought revenue but also improved the structure and capabilities in its internal departments.
Blue ocean strategy: It is evident that Unilever lies in red ocean that is it focuses on achieving
competition based advantage in the market. Currently, this firm is exploring new demands of
potentially new market. Where as after analysing this situation it is vital for Unilever to adopt blue
ocean strategy. According to this strategy a firm must develop innovative ideas to achieve
competitive advantage in the market. In this context, Unilever is playing with the same strategies to
provide differentiated products to the masses. In order to come in a blue ocean firm is suggested to
develop innovative ideas that will distinguish it forms current position. This it will achieve more
profitability and growth prospect. Thus, it will increase more market share for the organization at
domestic as well as international market.
TASK 3
Implementation challenges faced by Unilever
While implementing strategies, there are various challenges and issues faced by the
organisation. These challenges are referred to as implementation issues as they creates barrier for
the company to apply its strategic decisions in its internal structure. This is also due to the fact that
strategic decision brought change in the organisation (Hill, Jones and Schilling, 2014). Change of
any form affects the work culture and environment of the country. The main issues faced by the
enterprise was making its employees resistance to change. Bringing low cost strategic development
led to decreased worker participation. Employees were not able to accept the new developments
that were brought in the firm. This in turn affected the company in a negative and chaotic way. It
was difficult for the managers to make employee accept the changes that were incorporated in the
structure. Due to innovation and technological advancements, Unilever, was forced to write off its
human resources. The above decision of the management made many employees dissatisfied. As the
management decided to retain only the most skilled employees. . Another barrier was implementing
strategic change in the allotted time frame (Kaifeng, Xiaoqing and Jianping, 2015). Each
department was provided with a set of guidelines in which they have to achieve their targets. It was

difficult for the manager to motivate all the employees so that they could achieve the targets and
objectives of the company.
Another barrier that brought major challenge for the organization was to effectively manage
the issues that were arising due to the lack of communication problems. Personnel’s were eager to
know as to what is happening in the enterprise. This created an environment of commotion and
myths. The flow of communication disrupted when management failed to provide complete
information about decision making to the employees (du Toit, 2016). Employees felt as they were
not a part of the process which de-motivated them. The main barrier was to successfully exercise
application of technological developments in the organisation. It was very difficult for the manager
to provide training and development to teach them about the new technology been implemented in
the organisation. Employees felt overburdened to learn new technology that was implemented in the
organisation. Another issue that was, to conduct effective monitoring in the organisation. Nursing
was important part as to check the effectiveness and success factor of the strategies selected by
Unilever. This was due to the fact that a lot of chaos was happening at the time of implementation
(Heiyantuduwa, Wannisingha and Rupasinghe, 2015). It was lengthy and chaotic procedure. It was
very difficult for the manager to control activities through each employee.
Recommendations
It can be said that, to improve efficiency of the implementation programme Unilever must
exercise few recommendation. Proper mentoring can be given to the employees to make them
technologically capable. The manager can introduce training and development programs to raise
awareness about the changes been brought up in the organisation (Fuchs, Bender and Glen, 2015).
Apart from this, Unilever can also try to conduct analysis to identify strengths and potentials of the
employees. This will be helpful in accessing delegation of authority. Unilever can also access
performance analysis to motivate and inspire staff working under strategic change. The performance
results can be used to develop the skills and capabilities by enhancing the work quality of the
employees in Unilever.
CONCLUSION
From the above report it can be said that strategic management played an important role in
bringing revenue advantages for Unilever. The company was able to make tactics that would
enhance its market space and development of the product. Tactical planning not only improves the
growth of the organization but also brings competitive advantages. By improving the internal
capacities it brought advancements that can help the enterprise to grow over its rivals. Thus, it can
be concluded that strategic management helped Unilever to achieve cost advantage by reducing the
expenditure and achieving customer support.

REFERENCES
Books and Journals
du Toit, A.S.A., 2016. Using environmental scanning to collect strategic information: A South
African survey. International Journal of Information Management. 36(1). pp.16-24.
Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management.
SageAmit, R. and Schoemaker, P.J., 2012. Z STRATEGIC ASSETS AND
ORGANIZATIONAL RENT. Strategische Managementtheorie, . 14. pp.325.
Ertek, G., Tokdemir, G., Sevinç, M. and Tunç, M.M., 2015. New knowledge in strategic
management through visually mining semantic networks. Information Systems Frontiers.
pp.1-21.
Fuchs, J.E., Bender, A. and Glen, R.C., 2015. Cheminformatics Research at the Unilever Centre for
Molecular Science Informatics Cambridge. Molecular Informatics.
Gould, G.W., 2012. New methods of food preservation. Springer Science & Business Media.
Heiyantuduwa, M., Wannisingha, W.M.N.N. and Rupasinghe, T., 2015. December. A Strategic
Analysis of the use of Third Party Logistics Providers (3PLs) in Fast Moving Consumer
Goods (FMCG) Industry: A Systematic Review of Literature. In 12th International
Conference on Business Management (ICBM).
Hill, C., Jones, G. and Schilling, M., 2014. Strategic management: theory: an integrated approach.
Cengage Learning.
Hitt, M., Ireland, R.D. and Hoskisson, R., 2012. Strategic management cases: competitiveness and
globalization. Cengage Learning.
Kaifeng, M.A.O., Xiaoqing, C.H.A.I. and Jianping, O.U., 2015. On the Reform of FMCG
Customer-Oriented Marketing Organization. Management Science and Engineering. 9(3).
Kumari, M., Pundir, A.K. and Ganapathy, L., 2016. Managing Demand Variability at Customer
Level in a FMCG Company. In Managing Flexibility. pp. 323-331.
Rabe, M., Sari, M.U., Fechteler, T. and Ruini, L.F., 2015. Discrete event simulation as a strategic
decision instrument for a CO2–and cost-efficient distribution chain applied in the FMCG
sector. International Journal of Advanced Logistics. 4(1). pp.47-53.
Swayne, L.E., Duncan, W.J. and Ginter, P.M., 2012. Strategic management of health care
organizations. John Wiley & Sons.
Online
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<http://www.statista.com/topics/1397/unilever/>. [Accessed on: 30th January, 2016].
Top 10 FMCG Companies in the World 2015., 2016. [Online]. Available through:
<http://www.statista.com/topics/1397/unilever/>. [Accessed on: 30th January, 2016].
Unilever in the UK., 2016. [Online]. Available through:
<http://www.unilever.co.uk/aboutus/introductiontounilever/Unilever_in_the_UK/>. [Accessed
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