Unilever: An Analysis of International Business Strategies

This report offers a comprehensive analysis of Unilever's international management strategies and operations. It begins with an introduction to Unilever, outlining its background and current performance in the global market, emphasizing its diverse product portfolio and financial growth. The report then delves into Unilever's strategic approaches, including corporate-level, business-level, and growth strategies like market penetration and diversification. It explores how Unilever addresses cultural differences through cross-cultural training and management, emphasizing the importance of corporate social responsibility (CSR) in its operations. The report also examines Unilever's entry mode choices, its efforts to balance globalization and localization, and provides recommendations for sustainable development, concluding with a summary of the key findings and insights into Unilever's global business practices.

Running head: International management
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Table of Contents
Introduction.................................................................................................................................................3
Background and current performance of Unilever......................................................................................3
Unilever strategies.......................................................................................................................................5
Cultural difference management.................................................................................................................7
Corporate social responsibility....................................................................................................................8
Entry mode choices.....................................................................................................................................8
Balancing the tension between globalization and localization....................................................................9
Recommendations to improve the sustainable development...................................................................10
Conclusion.................................................................................................................................................11
References.................................................................................................................................................12
Appendices................................................................................................................................................14
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Introduction
The report focuses on the trading activities and operations of Unilever which has been
selected in the report. Unilever is one of the largest companies in the food and beverage industry
in the world. It deals with various food and personal care products in the market. Further, the
report outlines the several strategies which are used by the organization in order to eliminate the
cultural differences within the organization. The strategies also help to increase revenue and
profit of the firm. It explains that how the firm is using strategies to maintain a balance between
globalization and localization. Unilever uses corporate-level strategies, business level strategies
and growth strategies in order to overcome the competitors in foreign countries. Further, the
company uses various approaches to improve CSR, entry mode options and cultural differences
within the organization.
Background and current performance of Unilever
Unilever is a Dutch British transnational consumer’s products corporation with its
headquartered is located in London, United Kingdom. The company renders various food,
beverages, and personal care products. It is the biggest manufacturer of the food spreads like
margarine. It is one of the largest corporations measured by revenue and profit. The company
was founded in 1930. It is the seventh most valuable firm in Europe. Unilever offers its products
in more than 190 countries with employed approx 169,000 employees in the organization. The
firm manages and operates its trading activities and operations in China, India, Netherlands and
the United States. The main aim of the company is to provide unique and delicious food and
beverage products to the consumers with maintaining sustainability in the organization
(Unilever, 2017). The organization is delivering its products in the global market with reducing
environmental footprint. The firm works with a large number of suppliers in order to attain the
long-term goals and objectives of the firm. In today’s era, the firm is increasing and maximizing
its revenue and profits globally. It is the dual listed company in the UK.
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Revenue of the Unilever group worldwide from 2007 to 2016
(Source: Statista.com, 2007)
The above diagram shows that Unilever is maximizing its revenue day by day. In this
way, the current performance and strategies of the organization have been improved. The
operating profit of the firm has increased by approx 1,922 million to 7,167 with including a
higher level of profit within the organization. The net profit is 28% higher than the previous year
and net cash flow from operations has also increased. The company follows a four-step approach
for outsourcing in order to attain the growth and success of the organization. In addition
outsourcing increases and maximizes the organizational success and growth worldwide. The
four-step approach includes prioritizing, trust, monitor, and select. The functioning areas of the
organization divided into four departments such as consultation, maintenance, distribution, and
operation department. Unilever uses licensing, alliances, franchising and foreign direct
investment strategies in order to expand and flourish its business globally. Now it is assumed that
financial position of the company is very strong and dynamic. The financial objective of the
company is to increase the profit of the firm with improving capital and tax efficiency. The firm
is able to attract more consumers worldwide by rendering delicious and high quality of the food
and beverage products. The firm maintains a sustainable human resource management to run the
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business activities and operations smoothly. The top management and managers also focus on
the needs, desires, wants and requirements of the employees in order to increase the efficiency
and effectiveness within the organization. Apart from this, effective and dynamic leadership
styles are used by Unilever to maintain a control over the subordinates. The leaders motivate and
encourage employees for doing work in a hassle-free manner. Now it can be said that the
company is successfully exploring its business activities worldwide (Sim, King, and Price,
2016).
Unilever strategies
The company uses various types of strategies in order to attain the long-term mission and
vision of the firm. Therefore, various business level strategies and corporate level strategies are
used by Unilever. Along with this, the firm uses direct exporting strategy, franchising, licensing,
corporate level strategy and joint venture strategy. The generic strategies are used by the
company to stand out against the competitors in the global market. The strategies of Unilever
have been discussed below (Spry & Lukas, 2016).
Unilever generic strategy: The Company uses generic strategy to beat the competitors in the
global market. The firm focuses on the products to stand out against the competitors in the world.
Further, it also focuses on the needs, requirements, and expectations of the consumers in order to
accomplish the goals of the organization. Further, the generic strategy also helps to grow and
increase Unilever revenue and profit in developing countries. The company also uses pestle
analysis to evaluate and identify the strengths and weaknesses of the competitors globally. The
generic strategy also helps to improve and enhance the financial performance of the firm globally
(Merchant, 2014).
Intensive growth strategies: Unilever uses several types of the intensive growth strategies to
gain the competitive benefits in the market. The intensive growth strategies have been discussed
below.
 Market penetration strategy: The Company uses market penetration strategy to
increase the sales volume and growth of the business. Unilever sells its food and
beverage products in the current markets such as Canada and United States. In this way,
the firm is able to differentiate its products from the competitors by using intensive
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growth strategy. This strategy leads to strategic goals and objectives of the company
through product innovation. The product innovation and technology improves and
enhances the product mix in Unilever (Baker, 2014).
 Diversification strategy: It is also known as the supporting strategy which helps to
expand the business activities worldwide. To achieve diversification, the company
acquires various other businesses such as personal care business and other food business.
Unilever is able to manufacture several food and beverage products by using
diversification strategy. This strategy plays a vital role in order to determine the behavior
of the people within the organization (Tanwar, 2013). It also helps to attract more
consumers in the global market.
 Market development: This strategy is used by Unilever as a supporting intensive growth
strategy. In this strategy, the firm expands and grows its business by entering the new
market segments. It helps to fulfill the needs and requirements of the consumers in the
global market. Along with this, the firm implements marketing campaigns and programs
in order to increase the sale and revenue of the organization.
Corporate level strategy: The corporate level strategy is used by the company in order to gain
the long-term success and growth in the market. The human resource management, financial
performance, mergers, and acquisitions are the important part of the corporate level strategy.
Unilever also monitors on internal development and enhancement in order to provide the best
quality to the consumers. The company has various research and development centers which
located in several countries in the world. These R&D centers help to identify and evaluate the
needs, trends, and tastes of the customers (Hrebiniak, 2013).
Business level strategy: The business level strategy helps the company to achieve the core
competencies of the company and it also helps to fulfill the needs and preferences of the
customers. It also helps to gain the competitive position in the company by utilizing the core
values and competencies within the organization. The business level strategy is developed by the
Michael Porter in order to hit the competitors globally. This strategy also helps to improve the
overall market performance as well as business performance. The business level strategies
include cost leadership, differentiation and focus strategy (Campbell, Edgar, and Stonehouse,
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2011). The business level strategies help to reduce the cost of the firm and to maximize the profit
in the international market. It also provides support to maintain a brand loyalty in the world.
Cultural difference management
The cultural difference management is the important and essential management in a
cross-cultural context. Unilever provides cross-cultural training to the employees to eliminate the
cross-cultural differences within the organization. Such type of training is essential to expand the
trading activities and operations in various countries. None of the company can survive its
business globally without providing cross-cultural training to the employees. The cultural
difference management evaluates and examines the human behavior to understand the culture of
other countries. Unilever uses corporate level strategies to overcome the cultural issues within
the organization. The cross-cultural management is implemented by the company to reduce and
eliminate the cross-cultural barriers in the organization. It also helps to build and develop
effective and dynamic communication with customers in the market. The cross-cultural
management helps to maintain coordination and cooperation in the organization (Rosinski,
2010).
Apart from this, the firm needs to promote and enhance the open communication within
the organization. It also maintains a strong and effective relationship with customers in order to
increase the sales of the food and beverage products in the global market. The corporate level
strategies provide knowledge of the foreign culture. By using cross-cultural management, the
company is able to carry its business activities and operations in US, China, India, Canada and
some other countries (Barak, 2016). Apart from this, managers need to deal with complex cross-
cultural issues and barriers in order to gain the competitive benefits in the market. It helps to
motivate and encourage workers to do work in foreign countries with more efficiently and
effectively. Now it is assumed that Unilever can use various strategies to reduce and prevent the
cross-cultural differences within the organization. It also helps to make a good and dynamic
financial position in the foreign country (De Mooij and Hofstede, 2011).
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Corporate social responsibility
Corporate social responsibility is the business approach and strategy which contributes to
sustainable development by rendering social, environmental and economic benefits for all the
stakeholders. It helps to maintain sustainability in the environment as well as the organization.
CSR is the obligation and responsibility to consider the interest of the customers, communities,
shareholders, employees, and ecology. Unilever implements a systematic strategy in order to
fulfill the corporate social responsibility (Galpin, Whitttington, and Bell, 2015). It also helps to
satisfy the needs and requirements of the consumers in the market. The company uses several
strategies in order to carry the CSR and sustainability within the organization. CSR address the
interest of the stakeholders such as suppliers, communities, employees, investors, and consumers
(Peloza & Shang, 2011). Various strategies are used by the company in order to conduct CSR
activities globally. Unilever uses business-level strategies to enhance and increase the CSR
activities in the organization. Thus, the firm is able to fulfill the corporate social responsibilities
by improving and enhancing productivity and efficiency of the employees (Urip, 2010). If the
company wants to explore its business in several countries then it should maintain a strong and
effective relationship with suppliers, business partners, and consumers. Along with this, the firm
can use strong and effective brand image to increase consumer’s awareness in the organization
(Ditlev-Simonsen, & Wenstop, 2013).
In addition, the accurate assessment and transparency are needed to improve the CSR
practices in Unilever. Further, local community plays a vital role to improve and enhance the
CSR practices. In today’s era, Unilever tries to produce new and innovative products to attract
more consumers. Therefore, it helps to maintain sustainability within the organization. CSR is
one of the significant parts of the Unilever. It also tries to improve the performance and
productivity of the firm to enhance the CSR activities in the firm. The company uses growth
strategies to find out the CSR activities of the company in the world (Peloza & Shang, 2011).
CSR and sustainability help to reach its potential consumers in the international market. Unilever
develops and builds effective and dynamic processes for employees to raise and increase CSR
issues and concerns to take appropriate decisions. Training is provided by the company to
enhance and increase CSR activities within the organization.
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Entry mode choices
The company uses various types of strategies to enter into a foreign market. Unilever uses direct
marketing strategy for entering a new market and it is more appropriate and unique strategy to
attract more customers in the global market. Further, the firm needs to set up a joint venture to
enter into a foreign market. But there are numerous factors which affect the entry mode strategy
within the organization (Nielsen and Nielsen, 2011).The company uses several strategies for
entering new markets which have been discussed below.
Direct marketing: It is the important strategy to enter into the new market. The companies
establish sales programs under this strategy to gain the competitive advantages in the market.
The distributors and agents work together with the company to increase the revenue of the firm.
Thus, agents and distributors monitor and identify the needs and desires of the customers in the
global market (Peter, and Donnelly, 2011).
Licensing: It is the complicated option where a company transfers the rights to use the products
and services of other companies in the foreign country. For example, Hindustan Unilever
operates and manages its trading activities and operations in India as the same name of Unilever.
The company uses this strategy to expand its business globally.
Franchising: It is the North American process to expand the business operations in foreign
marker. Under this strategy, the company uses various types of business model to enter into a
new market. It also helps to build and develop a good image in other country.
Joint venture: The firm uses joint ventures to enter into a foreign market. Under this strategy,
two companies agree to work together in a specific market in order to gain the long-term mission
and vision of the firm. It is very effective and dynamic strategy to set a new business in a foreign
country (Ripollés, Blesa, and Monferrer, 2012).
Turnkey projects: Turnkey projects are important for providing services such as environmental
consulting, engineering, architecture and construction. The government provides support to
implement the turnkey projects in the foreign country.
Greenfield investment: Greenfield investment is done by the company to enter into an
international market. A Greenfield investment is an option where the company buys land and
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operates the trading activities and operations in the foreign country. It helps to reduce the risks
and key challenges of the market. Now it is assumed that Unilever uses various types of
strategies to enter into the foreign market. It also helps to maximize and increase the revenue of
the company with maintaining sustainability within the organization (Meyer et al, 2009).
Balancing the tension between globalization and localization
Globalization may be defined as a process to increase the interaction of the people
through the growth and success of the international flow of money, culture, and idea. It is the
economic procedure of integration which has cultural as well as social aspects. It also includes
goods, services, technology, data and economic resources. It is the free movement of the goods,
products, services, and people across the world. On the other hand, localization is the practice
and process of adjusting a product’s functional assets and characteristics to accommodate the
cultural, political, language and legal differences of a foreign country or market. Unilever uses
business level strategy and corporate level strategy to reduce the negative impact of the
globalization and localization. By using corporate-level strategies, the company is able to
maintain corporation and collaboration within the organization. Thus, various strategies are used
by the firm in order to reduce the risk and challenges of the market. Localization helps to
increase and enhance the market share of the company in the global market. Further, the
organization is able to stand out against the rivalries globally by maintaining a balance between
globalization and localization (Kraidy, 2017).
The main advantage of the localization is to avoid the cultural and caste taboos in the
foreign countries. Further, it also improves the ranking and position of the company by using
effective and unique globalization as well as localization strategies. Along with this, it helps to
popularize the brand of the firm globally. On the other hand, globalization promotes and
encourages the internal cooperation in the global market. It also reduces the international poverty
and also helps to spread and expand the technology and innovation. It increases the profitability
and revenue of the company. There is a close relationship between localization and globalization
in the market. The corporate level strategies help to increase and promote the globalization and
localization (Mishkin, 2009). The company also uses standardization strategy to eliminate and
reduce the adverse impact of the localization and globalization.
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Recommendations to improve the sustainable development
Sustainable development is essential for every company in order to increase and enhance
the goals and objectives of the firm. Thus, it is recommended that environmental law must be
implemented to enhance and increase the sustainable development of the organization. It also
reduces the negative impact of the toxic chemicals and materials in the global market. Along
with this, the government should initiate the programs and plans to create public awareness and
to enhance the sustainable development (Epstein and Buhovac, 2014). Along with this, effective
and dynamic strategies must be used by the firm to maintain sustainability at the workplace.
Unilever must conduct programs and campaigns to increase and enhance the awareness of the
people in the global market. In addition, the environmental objectives must be kept in mind
while improving and enhancing the sustainable growth and progress in the foreign market.
Further, leadership styles should be used and implemented by the company in order to build and
enhance the sustainability of the organization. The sustainable development helps to utilize the
natural resources in the organization. Along with this, economic growth can be achieved by
enhancing and improving the sustainable growth and progress (Bass and Dalal-Clayton, 2012.).
In addition, the company should focus the advertisement and distribution strategies in order to
increase and enhance the sale and revenue in the international market. It should build and
develop effective and dynamic human resource management in order to build and enhance
sustainable development.
Conclusion
On the above aforesaid information, it has been concluded that Unilever is one of the
significant brands in the international market. The company uses several strategies and
approaches to address and reduce the various key issues and challenges in the organization. CSR
and sustainability are maintained by Unilever to provide satisfaction to the shareholders in the
global market. The firm maintains a balance between localization and globalization and it also
manages the cultural difference by using effective and dynamic strategies in the global market.
Along with this, recommendations and suggestions have been given in order to improve and
enhance the sustainable development in the foreign country as well as the home country. In this
way, the company is becoming a global leader in the market.
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Appendices
Unilever generic strategy
SWOT analysis of Unilever
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Unilever products
Unilever vision
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