Unilever's Competitive Advantages and Strategic Growth Directions

This report provides a comprehensive strategic analysis of Unilever, a multinational consumer goods company. It begins with an examination of Unilever's internal and external environments using PESTLE and SWOT analyses, followed by an evaluation of its competitive landscape using Porter's Five Forces model. The report identifies and justifies Unilever's existing and potential competitive advantages, such as its research and development department, pricing strategies, supply chain distribution system, marketing efforts, and diversified product range. It then evaluates different types of strategic directions available to Unilever, including low price strategies, hybrid approaches, and differentiation strategies, ultimately recommending the most appropriate growth strategy. Finally, the report assesses ways to ensure the success of the selected strategies and achieve Unilever's overall business objectives. Desklib offers a variety of study tools and solved assignments for students.

BUSINESS STRATEGY

Table of Contents
.........................................................................................................................................................1
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PART A...........................................................................................................................................3
1.3 Identifying and justifying Unilever's existing and potential competitive advantage-...........3
PART B............................................................................................................................................4
2.1 Evaluating different types of strategic directions that are available to Unilever-..................4
2.2 Justifying and recommending the most appropriate growth strategy for Morrison's. ..........6
2.3 Evaluating some ways that will ensure success to Unilever-................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1

INTRODUCTION
Business strategy refers to and can be defined as an identified set of clearly laid out
business tasks and activity framework that need to be planned beforehand (Abdulwase and et.al.,
2020). These business strategies are varied in nature and require to be performed so that certain
general and specific organizational goals and objectives can be achieved and accomplished. The
leader plan is essential for the accomplishment of such strategies that vary such as corporate,
business, operational, and departmental. A particular business organization independently selects
its own preferred needs and requirements so that the follow up strategies could revolve around
the set instructional framework that defines what is to be done and what not to be done. For this
precise purpose the Unilever organization has been chosen on which the following report is
based. Unilever organization is a large scale public limited business firm that deals with a variety
of consumer products (Habep, 2021). This report will provide a strategic plan in two parts the
first part of which will critically analyte the company's internal and external status followed by
an evaluation of its competitive market environment. It will also explore strategies for business
success and the second part will examine the provided options and strategic directions and will
assess whether they are justified or not. The report will also recommend suitable growth
platforms for the organization and will analyse ways with which the selected strategies will be
measured.
MAINBODY
PART A
1. Analysis of PESTLE and SWOT of the organization
along with an evaluation of the organization’s resources and capabilities
Unilever is a multinational organization who deals in clothing, food items, footwear and
even beauty and personal care as well. To run any business, it is important for the management
to identify the internal and external factors which influences their company in wider manner and
results accordingly (Robertson, 2021). However, there are mainly two models for the analysis of
macro and micro environment which are pestle and swot. Pestle analysis stands for political,
social, economical, environmental, legal and technological whereas swot for strength, weakness,
opportunities and threat. Thus, it is important for Unilever to identify and analyse the external
and internal both environment for the betterment of the company.

Pestle Analysis
Political Political factor includes the areas of government rules and regulations
which is essential to be followed by an individual. After the Brexit, there
are many changes and modifications has been done by the government
including the tax charges which affects Unilever in wider manner.
Economical This factor involves the inflation rates, interest and exchange rates,
employment wages and such more. Unilever can get impacted by the
changes in economical factor due to large number of employment rates
all over the world.
Social Social factor considers the age, education, gender, religion and
demographics of the population which puts the impact over the
organization (Chitzos, 2018). Unilever can built their reputation and
image in the market by providing the goods and services as per the
needs and desires of the population of particular age and gender which
deliver appropriate outcome.
Technological Technology is increasing day by day in rapid manner where Unilever is
also using the technology in definite manner for the promotional
activities such as television, radio and even social media for the better
advertisements of the brand of a company.
Legal Legal factor includes the law and regulations which also puts the great
impact over the organisation. Each and individual country has its own
laws and legislations which the company needs to know and follow from
which Unilever can diversify their products in various countries as well.
Environmental Unilever encourages the sustainability at their company which supports
them to increase their business sale and influences the customers at the
store in effective manner.
Swot analysis

Strength
 Unilever operates in 190+ countries and
diversified their products all over the
world which provides the effectiveness
in their business sales and productivity.
 The company also encourages the
sustainability at their place which
motivate and influence the people to
save the natural surroundings from
which they can easily customer's can
get influenced respectively.
Weakness
 The retail industry is growing and
developing in rapid manner where the
competition is also increasing day by
day (Cools and Terry, 2018). However,
due to high competition in the market,
Tesco is not able to deal with all the
companies in effective way where they
put their best efforts and hard work to
stay at the higher position than other
retail companies.
Opportunity
 With the development of the
digitalization and technologies, the
retail industry is growing in wider
manner where Unilever can get the
opportunity to grow and develop by
increasing their promotional channels
which help to build the business in
successful way.
Threat
 The company have a threat because of
global economic pandemic like
Covid19 which puts a great impact over
the Tesco and can make them to obtain
the ineffective outcome and results
which makes the company to obtain
lower productivity.
2. Critical evaluation of the competitive environment using Porter’s Five
Forces model
Threat of New entrants: Today, in this growing and developing world the retail industry is able
to grow at definite level where Unilever is having a great competition and even a threat from the
new entrants retail organization who can take the higher place in the market. Establishment and
increase number of different retail organizations is providing a great impact over the Unilever

and leads them to offer better and affordable range prices of the products so that they can
maintain and influence the customers at their store respectively.
Power of suppliers: Power of supplier simply means where the suppliers are dominated upon
the buyers. Unilever has many suppliers at their business that supply oils, papers and much more
which is moderate. However, power of supplier can easily decrease the revenue of the company.
Unilever has many suppliers, but they have higher power compare to others from which dealing
with this type of suppliers becomes a difficult task for the business. Company can deal with
different suppliers to avoid these kinds of situations accordingly.
Power of buyers: As, it has been already known that customer's have the higher power of
bargaining where it can put the impact over the organization. Unilever is required to understand
the power of buyers and should keep the prices and products in effective manner from which
they can obtain the profitable outcome and results (Nwachukwu and Chladkova, 2019). Unilever
can adopt the way to survive bargaining power of the consumer by innovating unique products
and streamline those products by using different ways of promotion techniques.
Competitive Rivalry: The retail industry is developing in wider manner where the competition
is also increasing day by day. There are many firms who operate in consumers good industry
where it can impact the company in highly manner. Unilever also can experience tough
competition in the market because of low switching costs. Tesco is one of the competition for the
Unilever which is providing the tough competition to Unilever.
Threat of substitution: Threat of substitution is very low for Unilever because the company
operates in 190+ countries and have a great demand of their brands in the overall marketplace.
However, Unilever is able to increase their sales and productivity level with the help and support
of their uniqueness which drives their business at successful level.
1.3 Identifying and justifying Unilever's existing and potential competitive advantage-
Unilever company operates in 190+ countries and this is the because of the reason that
company offers something unique to the consumer. The uniqueness of the company has given it
an competitive advantages and that competitive advantage are as follows-
 Department of research and development is the biggest competitive advantage that
Unilever has. From starting Unilever has always invested heavily into the research and
development in order to create those products and services that are way above their

competitors. Company has high tech team that research different markets and their trends
in a way that it feels the gap between the demand and supply of that market.
 The prices of the products that company offers are different in different countries. Prices
of product and services differs in different countries according to the demand of the
products. Company tries to leverage prices when demand of products are low in order to
raise the products demand. Different prices are set according to the situation and the
economies of different countries.
 The supply chain distribution system of company is best as there are many suppliers in
market that are interested in selling products that are been produced by the company.
Unilever also has its own retail stores in many country in order to reduce the cost of
mediators (Kumar and et.al., 2020).
 Offline and online marketing of company has always been the best. Marketing has given
company an advantage over the other companies that are operating in market. Online and
offline both has given presence to the company. Online marketing is done through
various social media platforms while offline includes TV, newspaper, Billboards etc.
(Ugolkov and et.al., 2020).
 Diversified product ranges and almost 400 + is the another competitive advantage that is
available to the company. Global footprint of company has given company large
consumer section with higher profits and engagement towards the products and services
that Unilever sales in market (Tanasiichuk and et.al., 2019).
Company already has an edge over the other competitors and this has been the reason behind the
success of the company in market. Business strategy of Unilever has always been best since the
starting of it in 1992.
Strategies to achieve overall strategic objectives
The strategies that should be used by the Unilever Plc. within their organization in order
to achieve the overall business objectives of the company are as follows:
Low price and low value added
One of the leading strategy that can be used by the Unilever Plc for the purpose of
enhancing its profitability within the market (Tien, 2019). In this strategy, the company aims to
provide its customers with products and services that have low quality and offers the same at low

pieces in the market. This helps the company in saving the cost and thus increase the profit
margin.
Low price
This strategy suggests the company to offer a range of products and services within the
market at highly competitive prices within the market. In this strategy, the company aims to
deliver the products and services at low prices with premium quality.
Hybrid
The hybrid refers to combining the low cost with the differentiation in the market. In this
strategy, the Unilever can provide the customers with a range of products and services within the
market that are different from each other at the lowest possible price in the market.
Differentiation
The Unilever Plc can also make use of the option to differentiate their product offerings
within the market as compared to other existing brands (Papadas, and et.al 2019). When the
customers will get products and services that are not available within the market with other
brands, then the Unilever Plc. will get an opportunity to attract a number of customers towards
the business operations of the company and help the company in increasing their profitability and
revenue within the market.
Focus differentiation
The Unilever Plc can also opt for the strategy of Focused differentiation approach in
order to achieve the overall business objectives of their brand within the market. In this
approach, the organization aims to attract a wide range of consumers towards the company by
offering them with new and different products at premium prices in the market.
PART B
2.1 Evaluating different types of strategic directions that are available to Unilever-
The term strategic direction is referred to the plan that should be implemented and
applied in the organization for fulfilling the goal of the organization (Direction, 2020). As the
word itself is strategic direction which simply means that it give direction to the company for
achieving goal of the company. There are various kinds of strategic direction available to the
company but it depends on company what strategy is pursued in order to gain that level of

competitive advantage. Unilever can opt any of direction what suits for the organization the
most. The strategic direction are as follows-
Mission-
Mission helps company to organize plans accordingly. Mission helps company to frame
plans according to it. The strategies are always formed according to the goal of the company.
Unilever already has mission that is to create a better planet for the society as they are ultimate
goal is to serve consumer better products and services in market than other competitor that are
serving.
Culture-
offering cultural environment to the organization is another important thing as cultural
environment provides better services to the consumer. The diversity that company has is going to
satisfy consumer as culture involves every employee in it. Culture is referred to the behaviour of
the employees that will create an positive environment in the Unilever. Unilever is operating in
192+ countries and this is the reason behind the success of company today. Unilever has
diversity and different employees that belong to different cultures that is the best direction to
survive in international environment today.
Outsourcing-
Strategic direction also includes outsourcing which simple says outsourcing those
activities that give brings cost- efficiency in the organization. It is not possible at the company's
end to create all the products by their own and this is the major reason many companies have
started outsourcing. Outsourcing will cut the cost of the products in order to attain a good level
of competitive advantage.
Competition-
choosing the right competition that will enhance the productivity of the company is an
utmost important thing. This is best strategic direction as it give chance to company to improve
products in marker. This is because only unique products will give chance to company in order
to survive in the market. Market survival is essential for companies and Unilever already exist in
market that has higher competition. This has become reason behind the success of the company.
Elimination-
Eliminating unnecessary activities is also an important strategic direction that will give
higher profits to the company. Identifying unnecessary actions is the prime task involved in

eliminating. Unilever is already trying to eliminate all the task that are decreasing their profits in
the market and is also building brand image of the company.
2.2 Justifying and recommending the most appropriate growth strategy for Morrison's.
This has been identified that Unilever can utilize some strategic direction in order to grow
and diversify its business. It is important to develop an organization that survive in every
condition and at the end gives profit to the company. By applying Ansoff Matrix company can
grow into the market. Ansoff matrix is as follows-
Market Penetration-
This strategy of Ansoff matrix defines that company can increase its profits by launching
existing products and services with some variations into the existing market. This strategy says
that Unilever can increase market share by introducing current products and services with some
variations that will ultimately be increasing market share of the Unilever. The company can also
focus on reducing prices of the current products in order to attract new consumers and new
market segment that will be increasing margins of the company.
Market Development-
This factors help companies to enter new market with the same existing products. This is
also defines as enhancement of market segment that will be increasing revenues of the company.
Unilever is already operating in 190 + countries and has almost 400 + brands that means
company already has a good market share and that market is already been developed for the
Unilever. There is no opportunity for the company in this strategy of Ansoff (Alkasim and et.al.,
2018).
Product Development-
product development strategy of the company simply says to invest in research and
development activities in order to launch new products. Company can introduce those products
and services that are unique and new as this will give company an chance to increase its market
share. The more the products the company have, the more promotion technique company will be
requiring and this promotion technique will ultimately give good results to the company.
Demands of goods produced by the company must be raised in market by using various
promotion and marketing techniques. This will create a drive in mind of the people to purchase
that particular product.
Diversification-

diversification is related to launching new product into the new market (Oladimeji, and
Udosen, 2019). This strategy of Ansoff is most risky as here both product and market are new to
the company. Unilever is already trying to create new products as the market area of company
has already become wider because of its operations in 190 + countries.
By applying Ansoff matrix it has been clear that the company should focus on product
development strategy in order to gain higher profits. This is the best strategy for Unilever as
company have large market size and large consumer base. This strategy requires investment into
research and development departments to innovate new products and new services for its
consumer base.
2.3 Evaluating some ways that will ensure success to Unilever-
Unilever is a successful company but still there is lot that can be done. The below things can be
adopted by company to create that environment which will ultimately give more benefits to the
company. This benefits will ensure success of the company in coming times they are as follows-
Creativity-
The more the products the company creates the more consumer will be attracted towards
the company. Being creativity is the main demand of the market today and specially in
businesses as competitors are increasing day by day it has become more important to generate
unique products and sale them to their ultimate consumer. Unilever has almost 400+ brands but
every brand has some or other competitors that provides substitutes for the products that
Unilever is offering in market. So being creative is only thing that will ensure success to the
company (Reiter-Palmon, Mitchell and Royston, 2019).
Financial management-
the company that focuses on financial management system has the capacity to become
the highest profit making company in the market. Unilever already has good financial resources
with them that has enables company a higher level of profits. It is difficult to manage finances in
any organization as they are many financial activities that are happening simultaneously.
Managing all those financial activities will cut the cost of the product that the company is selling
in the market.
Training and development –
Training and development is define as the process that helps company to enhance skills
of the employees that are working in the organization. It is very important step as skills that

develop during the process of training will benefit company in the future. Moreover, company
needs those employees that innovate new products and provides same constant services to its
consumer in the market. Training and developing all the employees definitely ensure success to
the company (Burhan and et.al.,.2021).
By using this measures Unilever company can ensure its success. Company is already
been running on good platform but still this above techniques will become the reason behind
product and market expansion of the company.
CONCLUSION
From the report above, it has been concluded that forming a business strategy in order to achieve
goal of the organization is a very important process as it not only helps company to maximize
profits instead it will give competitive advantage to Unilever as well. This report has been
discussed in two parts where part A deal with SWOT, PESTLE, PORTER' 5 FORCES and
different type strategic direction that are available with the company. Moreover, the report has
also discussed Part B by evaluating different strategic direction that are available to Unilever and
justifying most appropriate strategy for the company to achieve its goal. Lastly, the report has
also discussed some ways that by which the performance should be monitored in order to ensure
success in the organization.

REFERENCES
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