Business Strategy Report: Analyzing Unilever's Competitive Advantage

This report provides a comprehensive analysis of Unilever's business strategy. It begins with an introduction to business strategy and Unilever, followed by an examination of the external and internal business environments using PESTLE, SWOT, and VRIO analyses. The report then delves into the comp...Read More

Business strategy
TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3

PESTLE and SWOT analysis as well as VRIO analysis for understanding internal and external
business environment-.................................................................................................................3
Competitive environment analysis using the Porter's Five Forces Model-.................................6
Identification and justification of the Unilever’s existing and/or potential competitive
advantage.....................................................................................................................................8
Analysation of the valid strategies and tactical objectives to achieve overall strategic
objectives:....................................................................................................................................8
PART B............................................................................................................................................9
1.Different types of strategic directions available.......................................................................9
2.Justification and recommendation of the most appropriate growth strategies........................10
3. Ways in which the chosen strategy can be monitored in order to ensure success.................11
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

INTRODUCTION
Business strategy can be defined as the clear set of the plans, actions as well as the goals which
outlines how will the company in the specific market going to provide the competition with its
products and services. It is very important for the organisations as business strategy helps them
in defining the business, provides the clear set of the values as well as the purpose to the
company (Olson and et.al., 2021). Basically, as this level the leaders plans for the achievements
of the organisational mission by providing efforts. Unilever company is UK based consumer
goods organisation which is headquartered in London. This company considered as the
manufacturer as well as the supplier of the fast moving consumer goods. This report will consist
of part A and Part B in which Part A will discuss the SWOT and PESTLE analysis of the
organisation as well as the strategic objectives. The Part B will discuss the generic strategies
which will provide success and competitive advantage to the organisation.
MAIN BODY
Part A
PESTLE and SWOT analysis as well as VRIO analysis for understanding internal and external
business environment-
PESTLE Analysis of Unilever:
Political Factors:
The company has to regulate
the laws which are made
related to the European and
American Laws ans this hit the
company's performance. The
trade protectionist policies
which are farmed by the
government has very large
impacts on company.
Economic Factors:
There are various conflicts
with the distributors as this is
the consumer goods company
and has to supply the goods.
There is conflict related to the
product price due to the
impacts on currency. This is
creating very large fluctuations
in the currency markets of the
country.
Social Factors:
It has been identified that the
demand of the products are
getting very dynamic and this
is becoming very difficult for
the company to adopt it. Such
as the increasing demand for
the skin care products among
the customers.

Technological Factors:
The country is highly
advanced in adopting the
advanced technology such as
implementation of the
integrated supply chain within
the company as well as
leveraging of the people data
centres for better
understanding the needs and
ants of consumers.
Legal Factors:
There are various regulatory
approvals which are getting
delayed and this is impacting
the business growth due to the
changes in the tax laws as well
as the regulations of the
country (Ullah, 2021).
Environmental Factors:
It has became very important
for the businesses to shift
towards the sustainability for
saving the planet. This has
impacted the performance of
the company as the consumers
are preferring those companies
who are using the
sustainability within the
company.
SWOT Analysis of Unilever:
Strengths:
 The company is having very strong
financial performance as well as the
business strategy which makes it lead
the market.
 Variety of the popular brands
 Very unique and different portfolio as
well as developing the different new
networks and connections.
 Giving focus towards the research and
development department as well as
integrated supply chain.
Weaknesses:
 There are very less items of the grocery
segments which is making this
company somewhere lack in the
market.
 This company is consumer goods
organisation so this company has to
highly depend on the distributors as
well as the retailers for making reach to
the consumers.

Opportunities:
 The company is producing variety of
goods which is satisfying the needs and
wants of the consumers. The demand for the product is growing
which is creating the opportunity for
the company and this will increase the
sales of the products and ultimately the
revenue of the organisation (Cheng,
2021).
Threats:
 There are number of the global as well
as the regional competitors of the
company which is creating threat.
 The global market environment is very
dynamic and so it is very difficult for
the company to adopt new strategies.
VRIO Analysis for resources and internal capabilities of the company:
Valuable:
The competencies which are valuable enables
the company to provide the opportunities
which will help them in neutralising the threats
of the business environment.
 Brand image in the context of social
responsibility.
 Good relationship with the suppliers
 Propensity of the innovation
 Has the ability of raising the capital
Rare:
The competencies which are rare in the nature
are developed as these helps in the building the
competitive advantage.
 The company has the international
presence.
 They are having the characteristic of
taking risks.
 Adaptability with the dynamic business
environment.
Inimitable:
These inimitable competencies enables the
company to add the value and the competitive
edge to the company as well as the long term
Non- substitutable or organisation:
These are the resources which are only
developed by the company and cannot be used
by the other companies within the overall

sustainability for the company.
 Providing the quality products to
consumers.
 The location of the stores is at very
good places. The company uses the marketing
communication which enables them to
maintain the long term competitiveness
of the organisation.
industry.
 The strong financial position of the
company.
 They are consistently adopting the
advanced technology.
 Providing proper training to the
employees which makes them highly
talented and skilled.
 Huge amount of investments in the
research and development department
of the company.
Competitive environment analysis using the Porter's Five Forces Model-
The Porter's five forces is the framework or the tool which is for analysing the competitive
environment of the company. Basically, this is the model which helps in identifying the five
competitive forces which shapes the overall industry as well as enables to determine the
weaknesses and strengths of the company (Hole, Snehal and Bhaskar, 2019). This is frequently
used for identification of the industry structure for determining the strategies of the company.
This model can be applied to any of the industry of the economy for understanding the
competition level within the industry as well as it also boosts the long profitability of the
organisation. The porter's five forces of the Unilever plc. Covers the firm's competitive landscape
and the factors that affecting the sector of the firm (Ferrarini, 2021). The analysis focus on
getting the company's position based on the forces like threats of the new entrants, substitutes,
bargaining power of buyers, suppliers and competitive rivalry in the market. The porter five
force of the firm “UNILEVER Plc.” is as follows:
Threats of the new entrants: Unilever by operating as the one of the multinational company the
threats from the new entrants of the fast moving consumer goods in the industry will be giving
the huge legacy of the brands in extreme difficulty. The reason behind this is the requirement of
the high capital and resources for the start up. These products are scalable and mass produced.
The company by having high brand value is located in more than 190 countries. The switching

cost in the industry is very low. The firm is the market leader in the firm thus it will be difficult
for the new entrants for getting the market share. Issue that the new entrants in the run face
would be rules and the regulations in the country that they will be operating and legal
requirements would be another problem for the new entrants.
Threats of substitutes: the firm operates in many of the different segments and every market
have its own leaders. The switching cost in the FMCG products is very low, so the threats of the
substitutes is always high. Organization is the market leader in many of the segments, thus new
substitutes can hamper the leadership. Every different brand operating under the organization
have to differentiate the products produced under them. The differentiation is based on the price,
product, quality, or the packaging done by them. Different brands operating under the firm are
known and are not just the FMCG products. The other issue that can arise in front of the firm is
that the business of the organization might have different product in same segment. So, it
becomes an responsibility for the firm to place its brands at different levels to avoid the
cannibalism of the brands (Chang, 2022). There are the possibilities that cheaper products can be
placed in the market and can become market leader. This all threats can put impact on the sales.
Bargaining power of customers: customers of the organization come from different base. The
company provides the goods form the mass merchandize, drug stores, e-commerce retailers,
grocery store, and distributors. The organization is located in around 190 countries with huge
customer base that are using their products. Switching cost in the firm is still low or almost at
zero, the customers find it easy to switch the products. The company tried to increase their sales
by providing the customers with offers and discounts. To entice more of the customers, the firm
have to innovate on continuous basis in the terms of products and packaging in keeping
themselves relevant in the market. The customer do not have bargaining power as they cannot
influence the prices, can only switch.
Bargaining power of suppliers: the firm have around 56000 suppliers in the world operating in
150 countries. The firm present rewards to its top business partners. In FMCG products, role of
the distribution system plays an important role in the sales. This generates the possibilities of the
forward integration due to the low cost of the research and development. The suppliers provide
the firm with raw materials and technology that is required in the manufacturing process. If there
are issues with the suppliers and there is increase in the price from the side suppliers and the
company will increase the cost of their products. After, facing the problems the company can

easily replace the suppliers and solve the issue. Thus, the suppliers' compliance with the firm's
regulations is important.
Competitive rivalry: the competitors of the firm are procter and gamble, Johnson and Johnson,
da-bur, and many more. The firm have many of the company that are against the organization
and those have large number of variety in them. The products have little differentiation in them
and the switching cost is very low. There are many companies in the FMCG group those
operating with the low switching cost. The presence of different rivalries prevents of the
monopolistic environment and generates healthy competition. To compete and be relevant in the
industry the organization have to launch the products time to time.
Identification and justification of the Unilever’s existing and/or potential competitive advantage
The competitive advantage can be defined as the favourable factors and position that an
organization aims to acquire within the market (Murphy and Murphy, 2018). Similarly, the
competitive advantage that the Unilever Plc gets within the market is as follows:
Flexible pricing
It has been identified that many consumers buy and purchase their required products from
the Unilever as compared to other brands because the Unilever Plc offers flexible pricing to its
customers within the market. The flexible pricing allows the consumers to negotiation with the
seller in terms of lowering down the prices offered by the company within the market. This
ability to be able to purchase the required product through flexible pricing allows the company to
enhance the customer base of the organization within the market.
Expertise in distribution
Another competitive advantage that the company gets the benefit of within the market is
the expertise of the Unilever Plc in the distribution of its products within the different markets
belonging to different nations across the world. The Unilever Plc. is efficient in distributing and
availing its goods in each and every location all over the globe (Bruijl and Gerard, 2018). When
the customers of different countries easily get the products offered by the Unilever Plc. within
the market, the customers prefer purchasing from the Unilever Plc as compared to any other
company within the market.
Analysation of the valid strategies and tactical objectives to achieve overall strategic objectives:
The strategy of the firm is to make the sustainable living common place. The belief of firm is in
wining the business of tomorrow. Business of the firm have the greatest success with capitalize

power of data and bio-technology (Lawrence, Rasche, and Kenny, 2019). Firm's strategic choice
to achieve the overall objective of the organization is stated in the following factors like:
 Acceleration of the development of the company's portfolio in high growth spaces.
 Win with the brand as force for good.
 Acceleration of the company's growth in India, china and us.
 Leading the channels of the future.
 Building the purpose led and future fit organization with the growth culture.
PART B
1.Different types of strategic directions available
Market Penetration
The company implements the strategy of the market penetration as the main intensive growth
strategy and this type of the intensive strategy the firm increases the volume of the sales in order
to enhance the revenues along with the related growth of the business. The company implements
the intensive growth strategy in a successful manner with the help of the generic strategy of
differentiation in order to create its products more appealing and competitive than the other
firms. The main strategic goal which is related to the intensive strategy is to enhance the business
with the help of the improved marketing products of the company in the consumer goods market
across the globe.
Product development
The functions of the product development acts as the secondary intensive strategy which the
company uses in order to increase the growth of the business. The company also implements the
growth strategy with the help of introducing the latest products which helps in solving the needs
of the consumers. This type of the intensive growth strategy aligns with the differentiation
generic strategy of the company for the purpose of competitive benefit in the industry of
consumer products (World Health Organization, 2021).
Diversification
The company uses the strategy of the diversification as a type of the supportive intensive strategy
for the growth of the firm. This type of the intensive strategy emphasizes on creating the latest
business in order to improve the company’s performance. The generic competitive strategy for
the differentiation helps in supporting the intensive growth strategy by making sure that the
company is gaining the offer of the brand with the different features that draws the target

audience. A strategic goals related to the intensive strategy is to fulfil the growth by increasing
the trends of acquisitions along with the mergers of the company. This type of the trend helps in
making the reach of the company in a strong manner across the global consumer products
industry.
Market development
This strategy is being used at the main supporting intensive strategy of growth in the business of
the company. In this specific strategy, the company enhances by making the entry into the new
markets as well as the new segments of the market. The company can also improve by marketing
its existing products as the latest solution to the unaddressed products in particular segments of
the market like the infant care needs. Although the company has important presence in each
consumer products market segment all over the world. That is why this type of the intensive
growth strategy takes the assisting role in the business of the company. The generic strategy for
the differentiation encourages the intensive growth strategy with the help of developing the
competitive benefit on the basis of market development is to enhance the company by executing
the campaigns of marketing that outline other possible benefits of its existing products (Rigby
and Ryan, 2018).
2.Justification and recommendation of the most appropriate growth strategies
Unilever is known as one of the most popular international corporations which tackles with
selling the consumer products such as the food, beverages along with the products of personal
care like the cleaning agents. One of the recommendation of the growth strategy for the company
is to make sure that the supply chain management of the company continues to be success for the
company for a longer period of time and also there is the execution of the most accurate
information technology practices that is very crucial in the execution of the supply chain
management in the past few years because of the digitalisation for the company in order to have
more globalised stance in comparison to the competitors as the increased returns on ;the
investments with the help of competitive benefit. From the systems of the enterprise resource
planning the supply chain management of the company is changing drastically in the intranet as
well as the internet which is a better way of supporting the supply chain management. That is
why the Unilever company should make sure that the use of the modern or the contemporary
data along with the technology systems in the supply chain management that will helps in
acquiring the various benefits consisting of the quality improvement, increases competitive

advantages along with the cost savings and the correct support and offering or delivery of the
goods to the consumers. The company implements the standard process of supply chain that
starts from the acquiring of the materials to the marketing of the goods till the end consumers
across the globe. The materials are being acquired inform of the raw materials along with the
resources from booth the farmers as well as the suppliers after which they are being used for the
manufacturing and production of the goods which are wanted from the particular customers. The
Unilever company with the help of its supply chain is able to present the products in the market
that afterwards assists in the creation of income (Fahy and Jobber, 2019). Although the company
is needed to emphasize on the improvement of sustainability of its supply chain for the purpose
of leveraging the process of supply chain and then coming up to the demands of the consumers.
One of the segments which could create the benefit for the business from the improvement of
sustainability is the logistics. Emphasizing on improving the logistics operations that would
create an impact on the performance of the company in a positive manner. The management of
the logistics in a sustainable manner will make the company to tackle with the effective as well
as efficient management of the daily routine activities in the generation of the finished services
and products. Although with the help of the improvement in the sustainability, the company will
be able to maintain the speed of the demands of the global and advanced economy. That is why it
must be kept in account the sustainable improvement of the company that will assist in using the
fuel in an efficient manner for all the activities by keeping the emissions from the transport of
road as least as possible (World Health Organization, 2021).
3. Ways in which the chosen strategy can be monitored in order to ensure success
The balanced scorecard
The main role of the balanced scoreboard is to assists the business in managing the growth, plans
as well as the objectives in the future with the help of measuring the needs in order to set the
goals.
Authorise and correct staffed structure of the supply chain
In order to enhance the capability along with the efficiency, the supply chain management will
be analysed and staffed and this kind of the structure relies upon the strategies along with the
implementations of the company and then it will result into the improved facilities. Staffing is
the main source for the success of the supply chain management (Otto and Jarke, 2019).
Customer service levels

In order to get the customer centric approach some things need to be followed such as the
providing with the proactive service to the customers, easy working with the customer and the
company, offering the strong logistics with increased analytics and reporting, giving priority to
the customer feedback and enhancing the relationship with the provider of logistics (Basu, 2021).
Maintaining healthy relationship with supplier
In order to maintain the healthy relation with the supplier it must be made sure that are the
communication taking place from both sides between the seller and the customer. In the todays
era it is important to maintain a healthy relationship with the supplier (Kim, 2019.).
Outsourcing the operation of supply chain
Outsourcing the operational activities of the supply chain is one of the most important ways in
which the performance of the supply chain can be monitored. The most costly aspects of this
function are the transportation and the warehousing
Selection of the suppliers along with their collaboration in a strategic manner
The four main fundamentals that are needed to be implemented in the improvement of the
performance of supply chain are the talent technology, internal collaboration, change
management and the external collaboration. The strategic selection when it comes to the
suppliers is one of the most hardest tasks for the managers for the management of supply chain.
Standardisation
The various of the standardisation is that it helps in the enabling of the mass production, enables
the customisation, enhances the coordination of supplier, improves the quality, enables the
delayed differentiation along with the simplification and decreases the inventories (Tintarev and
Masthoff, 2022).
Optimising the inventory for reduced cost
The main things included in this are the recording as well as the monitoring of the data for the
quick performance of supply chain.
Checking regular reviews to make sure the risk rate and efficiency
This can be done by selecting the right supplier. Being focused on the strategies, taking benefits
of tools.
Logistics metrics and facility
The various attributes of the better metrics are that the metrics must be easy to understand and
collect. It must lead to the right behaviour and action, take the necessary decisions and measures

and must be quantitative which means they must be acquired from the actual data (Greenhow
and Galvin, 2020).
CONCLUSION
The above report based on the business strategy have concluded about the internal and external
analysis that provides the platform for the strategic decision making. The report have shown the
pestle, swot and the vrio analysis for the evaluation of the organization's resources and
capabilities. The report have also shown the porter analysis and identification and justification
have been provided. The report also concluded about the critical evaluation of the justification of
the strategic options for the organization.

REFERENCES
Books and journals
Basu, S., 2021. Personalized product recommendations and firm performance. Electronic
Commerce Research and Applications.48. p.101074.
Bruijl, D. and Gerard, H.T., 2018. The relevance of Porter's five forces in today's innovative and
changing business environment. Available at SSRN 3192207.
Chang, Y.Y., 2022. Research on ESG Strategy of Fast Moving Consumer Goods Company—
The Case of L’Oréal and Unilever.
Cheng, Y., 2021, February. Analysis on the Opportunities and Challenges of Unilever’s
Differentiated Competition by Using SWOT and PEST. In 6th International Conference
on Economics, Management, Law and Education (EMLE 2020)(pp. 280-284). Atlantis
Press.
Fahy, J. and Jobber, D., 2019. EBOOK: Foundations of Marketing, 6e. McGraw Hill.
Ferrarini, D., 2021. Purpose-Driven Marketing as a successfull Corporate Strategy-A Case
Study Analysis based on Unilever(Doctoral dissertation).
Greenhow, C. and Galvin, S., 2020. Teaching with social media: Evidence-based strategies for
making remote higher education less remote. Information and Learning Sciences.
Hole, Y., Snehal, P. and Bhaskar, M., 2019. Porter's five forces model: gives you a competitive
advantage. Journal of Advanced Research in Dynamical and Control System, 11(4),
pp.1436-1448.
Kim, Y., 2019. Developing a Work‐Ready Social Media Marketing Analytics Course: A Model
to Cultivate Data‐Driven and Multiperspective Strategy Development Skills. Decision
Sciences Journal of Innovative Education.17(2).pp.163-188.
Lawrence, J., Ayan, A. and Kenny, K., 2019. Sustainability as opportunity: Unilever’s
sustainable living plan. In Managing Sustainable Business(pp. 435-455). Springer,
Dordrecht.
Murphy, P.E. and Murphy, C.E., 2018. Sustainable living: unilever. In Progressive Business
Models (pp. 263-286). Palgrave Macmillan, Cham.
Olson, E.M., and et.al., 2021. Business strategy and the management of digital
marketing. Business horizons, 64(2), pp.285-293.
1

Otto, B. and Jarke, M., 2019. Designing a multi-sided data platform: findings from the
International Data Spaces case. Electronic Markets.29(4).pp.561-580.
Rigby, C.S. and Ryan, R.M., 2018. Self-determination theory in human resource development:
New directions and practical considerations. Advances in Developing Human
Resources.20(2). pp.133-147.
Tintarev, N. and Masthoff, J., 2022. Beyond explaining single item recommendations.
In Recommender Systems Handbook (pp. 711-756). Springer, New York, NY.
Ullah, N., 2021. A Comparative Analysis between Unilever and Johnson & Johnsons.
World Health Organization, 2021. Stronger collaboration for an equitable and resilient recovery
towards the health-related sustainable development goals: 2021 progress report on the
global action plan for healthy lives and well-being for all.
World Health Organization, 2021. WHO Global Benchmarking Tool (GBT) for evaluation of
national regulatory systems of medical products: revision VI.
2