Unilever's Global Business Environment: A Strategic Analysis

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Student Name ABDI MOHAMED HASHI
Student ID P1021853
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Qualification Pearson BTEC Level 5 HND Diploma Business (Management)
Unit Number & Unit
Title Unit 18:Global Business Environment(GBE)
Assignment Title Unilever
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Table of Contents
Task 1.........................................................................................................................................3
Introduction to the concept of globalization..........................................................................3
(You are required to define and explain what is globalization.)............................................3
1.1 An analysis of the key drivers of globalisation (P1)........................................................4
1.2 A critical analysis of the impact of the key drivers of globalisation on global businesses
in terms of benefit and challenges(M1).................................................................................5
2.0 An explanation of the complexity of the strategic challenges faced by global businesses
(P2).........................................................................................................................................8
2.1 A critical analysis of the strategic challenges caused by globalisation on risk,
diversification strategies and supply chain (M2)...................................................................8
2.2 A critical evaluation of the global business environment (D1)........................................9
Task 2.......................................................................................................................................11
3.0 (a) An evaluation of the influences of globalisation on organisational governance and
leadership(Part of P3)...........................................................................................................11
b) An evaluation of the influences of globalisation on organisational structure(Part of P3)
..............................................................................................................................................12
c) An evaluation of the influences of globalisation on organisational culture(Part of P3). .13
d) An evaluation of the influences of globalisation on organisational functions (Part of P3)
..............................................................................................................................................15
3.1a) An evaluation of the influences of ethics on organisational functions(Part of P4).....17
b) An evaluation of the influences of global sustainability on organisational function (Part
of P4 )...................................................................................................................................17
3. 2 (a) Application of McKinsey 7S Model on organisational structure in case the of
Unilever Plc (Part of M3).....................................................................................................18
b) Application of Hofstede's Cultural Dimensions theory in the case of Unilever Plc (Part
of M3)...................................................................................................................................19
4.0 (a) An evaluation of different ways decision making can work effectively..................20

in a global context (P5)........................................................................................................20
(b) Ways(strategies) to enter global markets(P6).................................................................20
(c) A critical evaluation of the significant barriers to globalisation and recommendations to
overcome them. (P6 & M4).................................................................................................21
(d) A critique of the strategies adopted when entering the global market and valid and
justified recommendations of how Unilever Plc should adapt its organisational structure
and decision-making processes (D2)...................................................................................22
References................................................................................................................................23

Task 1
Introduction to the concept of globalization.
(You are required to define and explain what is globalization.)
Globalisation is the increase in the level of dependence and integration between the different
people and the organisation throughout the world (Beck, 2018). Globalisation also refers to
the rise in the financial and economic activities, which takes place in different countries
around the world. The concept of globalisation is associated with the manufacturing and
processing of different products and sales involved with the delivery of numerous products
produced by the organisations. Globalisation is related to the growth recorded throughout the
world in terms of the proportion, which is received as the outcome. The concept of
globalisation helps in integrating the economy of the different markets, which exists.

1.1 An analysis of the key drivers of globalisation (P1)
(You are required to adequately examine each of the key drivers of globalisation adequately).
In the modern generation, people lead a fast-paced life and therefore, they require the
products as well as the services, which can meet their needs as well as requirements. Thus,
the limited public organisations such as Unilever have come up with excellent ideas of
globalisation. Globalisation enables the organisation to develop their respective products as
well as services suitably (Oliver et al., 2017). There are numerous key drivers of
globalisation, which affect the execution of globalisation in the organisational context. The
drivers of globalisation are as follows:
1) Technological drivers
The technology helps to provide a base with its modern innovations and concepts to establish
the idea of globalisation (Crane and Matten 2016). The changes which have brought forth
new ways of planning and designing of the products and services within the different
industries help in establishing the concept of globalisation. There is a significant development
in the processors as well as microprocessors, which has led to overall improved efficiency in
the communication as well as computing processes of the organisations. The important
development in the globalisation of the industries can be seen in the transportation sectors.
They have allowed organisations with revolutionary benefits. This includes the development
of the jet aircraft as well as containment. However, the introduction of the internet is regarded
as one of the most revolutionary changes in all sorts of industries as well as business. The
internet allows organisations with benefits such as E-commerce as well as E-services.
Market drivers
Due to the saturated domestic markets, the opportunities for the organisation to grow become
restricted. The development of the organisation highly depends on the domestic markets and
the needs as well as requirements of the customer. Therefore, the organisation uses the
globalisation to avoid the growth of circumstances like this.
Political drivers
There is an overall downfall in the tariff due to the liberalised rules of trading. Furthermore,
due to the deregulation of the market, the foreign direct investments are applied all over the
globe. The WTO or the World Trade Organisation as well as the institution of GATT or the

General Agreement on Tariff and Trade are some the recent examples. Moreover, the
openings, as well as privatisation of the ongoing opening in Eastern Europe, are the only
recent developments.
Competitive drivers
There is a significant rise in the entry of new competitors as a well as alliances in the global
market which is due to globalisation. With the step towards advanced globalisation, the chief
competitions towards battlegrounds are increasing as well. This allows the organisations to
gain several competitive advantages and an absolute increase in their overall revenue is
expected from the management of the respective organisations. FDI actions, big two-way
trades, as well as sustainable relationships between the countries support the driver as well.
Cost driver
There are significant advantages in the transportation sectors due to the cost drivers of
globalisation. Moreover, the improvements in the acceleration of the technologies are also
affected positively. The efficiency of sourcing, as well as cost, is different in the countries,
and therefore, the global firms receive significant advantages as well. Furthermore, the
opportunity to build the economies of global scale and high development in the products, as
well as the services, are considered to be within the cot drover of globalisation as well.

1.2 A critical analysis of the impact of the key drivers of globalisation on global
businesses in terms of benefit and challenges(M1)
(You are required to analyse/examine the impact/effect/influence of each of the key drivers
on global businesses in regard to benefits and challenges.
Globalisation allows the countries to receive several benefits as they allow the organisations
to expand their respective business, which results in the growth as well as the development of
the overall economy of the country. Globalisation has affected the organisation and allowed
them to receive significant increase in their overall revenue however; it affects the growth as
well as development of other under developed countries as well.
However, there are several challenges, which the organisation faces in order to make
changes within their business. Unilever has continued to grow due to their respective flexible
management as well as under the great leadership of Alan Jope, the CEO of Unilever. The
management of the organisation knows how to gain a competitive advantage from their
weaknesses, which is resulting in the fast-pace of change (Murphy et al., 2018). The
following describes the benefits as well as challenges faced by the organisations due to the
drivers of globalisation:
Technological drivers
Benefits: The technological driver of globalisation mainly includes the transportation. With
the development in the technological sectors, there are several changes in the transportation
system, which allows the organisation to export as well as import products much faster as in a
low cost at the same time. Furthermore, the development, as well as the growth of technology
sectors, has allowed the organisations to increase their overall productivity as well as
manufacturing processes significantly.
Challenges: The development in the technological sectors has allowed the organisations to
modify their respective operation. However, it has affected the high demands of the public as
well. There is a random change in the needs as well as requirements of the norms in the
market. Globalisation affects economic growth as well as the development of a country,
which does not always bring benefit. The depression of economic development can have a
severe effect on the development of other countries as well. Furthermore, the developed
country suppresses the growth of the under-developed countries as well.

Cost drivers
Benefits: Cost drivers enable the organisations to gain access to the human capital, and the
overall area of the cost advantage is achieved through the cost drivers of globalisation.
Furthermore, the sales growth of the companies allows the organisation to receive significant
economies, and in the course of outsourcing as well as importing, the advantages of low cost
production are explored by the organisations as well.
Challenges: The benefits of the cost drivers are widely used by the organisation to gain
competitive advantages. Henceforth, there is a fierce completion in the global competitive
markets. Due to the increased competition, the small firms, as well as industries, are receiving
fewer chances to expand their respective businesses as the large scale organisations have a
strong grip over the market.
Political drivers
Benefits: Due to the deregulations of the market, there is a significant effect on the FDI or the
Foreign Direct Investment. Due to the expansion of the business organisations, the
organisations are using their individual strategies to survive in the highly competitive market.
Therefore, the application of the FDI across the globe has allowed the organisation to receive
several benefits on their respective investments in the international markets. This allows the
organisation to expand and increase their overall revenue as well (Liu et al., 2016)
Challenges: Due to the positive effect of the FDI, there are a lot of business firms who are
dominating the markets. The use of FDI is also drainage the money of the respective foreign
countries as the main aim of the organisations is to earn a profit. Furthermore, there is an
exploitation of the workers due to the combination of unemployment with the taxing labour.
Market drivers
Benefits: Globalisation allows the organisations to increase the overall competitive advantage
to an organisation. The cost price, products, services, technological adaptations, quick
response, as well as the production of the companies allow the organisation to survive in the
market, which is affected by the marketing drivers of globalisation. Furthermore, in order to
increase the market share of the respective organisation, they tend to lower their price and
sells in an overall cheap cost.

Challenges: Due to the saturation of the domestic market, there is a formation of a
restriction, which resists the overall growth as well as the development of an organisation.
Furthermore, due to globalisation, there is a high competition in the market.
2.0 An explanation of the complexity of the strategic challenges faced by global
businesses (P2)
(You are required to explain the complexities/difficulties, which global businesses face
while planning in the global environment. You need to support your answer by giving
specific examples using Unilever Plc)
In the modern generation, there is an increasing demand of the customers, and therefore, the
organisations are applying several initiatives in order to meet the needs as well as
requirements of the customer and expand their business across the world. There are several
difficult situations, which the organisations have to face while planning in the global
environment. The challenge faced by the organisations affects the overall revenue and
includes the key parts such as currency rates, payment methods, accounting, as well as the
company structure (Laursen et al., 2016).
Paul Polman, the previous CEO of Unilever before Alan Jope, had several problems while
moving the HQ or the headquarters of Unilever to the Netherlands. In order to expand their
business, Unilever had to apply several initiatives in the new business environment of
different countries. The extensive sustainable plans used by Paul Polman within the
organisation for reducing the overall water consumption however by 2010, the company has
only reduced their water consumption by 2% for every customer. With the introduction of
Alan Jope as their new CEO, there are several roles as well as responsibilities, which he
needs to perform to meet the environmental promises of the company (Fleming et al., 2019).

2.1 A critical analysis of the strategic challenges caused by globalisation on risk,
diversification strategies and supply chain (M2)
(You are required to adequately analyse/examine the challenges/difficulties which global
businesses face when dealing with business risk, diversification strategies and supply
chain).
Every global organisation like Unilever faces several risks to diversify their respective
strategies as well as their supply chains. The development of the organisation depends on the
effective management of their business risks as well. The financial management of the
organisation requires professional CFOs in order to manage the internal procedures such as
cash flow, profit margins, financing as well as reducing the cost. According to Steger,
globalisation has significant benefits in the development of the organisation however, Ulrich
counter argued that globalisation pressurises the organisations in the competitive market.
Furthermore, there remains an uncertainty of the future of the organisation in the new
business environment.
The strategic supply chain management of the organisation needs to be diversified in order to
manage the risks as well as the costs of the respective organisation. Since Unilever is a global
business organisation, the organisation has to manage their respective costs as well as risks
through effective management of the supply chains. This is essential as the overall profit of
the organisation in the new environment. The problem faced by the organisation includes the
environment as well as choosing the appropriate shipment methods for global shipments
(Boonjing et al., 2017). The SCM of the organisation improves the overall marketing as it
includes the distribution, planning, storage, and transportation. Moreover, the overall
enhancement of the sales, as well as the maximisation of the profits of the organisation,
depends on the supply chain management. The issues faced by the organisations to establish
their business needs to be improved in order to bring suitable profits to the organisation. The
management of Unilever applies suitable strategies in order to expand their supply chains and
manage their respective risks (Pearson.com, 2019).

2.2 A critical evaluation of the global business environment (D1)
(You are required to critically evaluate/assess the advantages and disadvantages of operating
globally. Your answer should also include opportunities and challenges presented by
globalisation)
Globalisation has resulted in the growth as well as development in the well-developed
countries. There are several positive as well as negative effects of globalisation and the global
business such as Unilever deliberately applies strategies in order to mould them with the
global business environment. According to The advantages, as well as disadvantages of
globalisation, are as follows:
Advantages
Global market: Globalisation has resulted in the increasing rate of industries to go
international. This has enhanced the overall interest of the customers, which has allowed the
companies to increase their overall consumer demand by extending as well as expanding their
respective value chains to the international levels.
Culture: Globalisation has resulted in the building overall friendly ways of approach, as there
are different people who follow their own respective culture. There are several positive
effects of globalisation on culture as every single culture has their own negative practices.
Furthermore, the effect of globalisation on the culture has resulted in the development of new
cultures as well as the promotion of social growth.
Legal effects: Globalisation has improved human rights as the media covers the respective
violation of the rights, which are observed by the whole world. Furthermore, the legal rights
within the organisation including the inequalities. It enables the leaders of the organisation to
promote suitable regulations within the organisation in order to improve democracy as well
as the prosperity of the organisation.
Stable security: Several countries have an economic relationship between them, i.e. both of
the country's economy depends on each other. However, it is never to be noticed that both the
countries started a war among them, during the economic clashes. This is due to the stable
security from globalisation.
Disadvantages

Job insecurity: Due to globalisation, the job insecurities has developed which has impacted
highly on the developed countries mainly as there are more organisation as well as industries.
Environmental damage: The increased production of the industries due to globalisation
requires a greater amount of natural resources, which is damaging the environment.
Furthermore, globalisation has resulted in the changes in the climate and global warming
which is grave intimidation to humanity.
Fluctuation in the prices: The increased prices in the market due to globalisation have
resulted in the fluctuation of the prices as well. Therefore, the organisations on the developed
countries are lowering the prices in order to survive in the competitive market.