Unilever's Approach to Innovation: Models, SWOT, and Industry Impact

This report provides a comprehensive analysis of Unilever's approach to managing innovation in its business operations. It explores the company's innovation history, highlighting key milestones and the evolution of its strategies. Various innovation models employed by Unilever, such as radi...Read More

Managing Innovation in Business
Managing Innovation in Business; Unilever Plc
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Managing Innovation in Business
Executive Summary
Managing Innovation in Business for cognitive formulation of this report has been centred on
Unilever Company. The company’s innovations have extensively been brought to book in
line with customer satisfaction. Moreover, the genesis and progression of innovation history
is accounted for accordingly. Consumer needs and demands steers the establishment of
innovation in the company by a larger extent. The Unilever Foundry, Open sustainability
innovation as well as collaboration with research and development centres across the globe
have helped realize a significant change in operations at the organisation. Furthermore, a
number of innovation models have been applied in the innovations as founded by Unilever.
Radical innovation, the innovation matrix, business model, technological, and marketing
models have been applied extensively in structuring and sustaining innovation in the
organisation. Equally, the vast consumer product industry has adopted innovative
technological advances in meeting the demands of consumers in line with the disruption of
economies due to Covid 19 pandemic.
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Managing Innovation in Business
Table of Contents
Executive Summary.............................................................................................................................2
Introduction.........................................................................................................................................4
Purpose of the report & structure....................................................................................................4
Unilever and Industry Overview........................................................................................................5
Unilever Innovation History...............................................................................................................5
Unilever existing Innovation Models, Performance and Capabilities..............................................7
Unilever capabilities using SWOT analysis...................................................................................8
Consumer goods Industry in 2021......................................................................................................9
Conclusion..........................................................................................................................................11
References..........................................................................................................................................12
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Managing Innovation in Business
Introduction.
Innovation is a major concern in any organisations that offers products or services to its
customers. It plays a significant role in the coordination and development of the market for
the produced products and services. In addition, innovation is generally applicable right from
the developmental stage of a product, management mechanisms as well as operations in an
organisation. For its inception, a plan has to be hatched pertaining to an idea and subsequent
transformation of the idea to reality follows. By this, innovation is regarded as different from
creativity and its role in growth, success and sustainability of an organisation is impeccable.
Purpose of the report & structure
This report extensively captures the innovative practices of a household name company based
in the UK, Unilever Plc. Background information regarding the company is expressed in the
beginning of the report as well as history pertaining to innovation. Ability of the company in
terms of innovation in the present running is also discussed in the report. Besides, the
innovative practices as well as performance in the industry in the year 2021 are equally
discussed. A summary of the report is provided at the end highlighting the findings covered
by the report.
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Managing Innovation in Business
Unilever and Industry Overview
Unilever company has been operational for over a century now with it service and product
delivery aligned to the consumer products industry. It is a household name company with
great brands that sets the company to be the largest consumer products organisation. The
company’s global estimation of product users is 2.5 billion people on a daily basis. Across
the globe also, the company has established a network of 25 million retailers. Further,
Unilever provides over 400 brands to households in over 190 countries worldwide (Unilever,
2021).
The consumer product industry includes personal care products, clothing, food and
beverages, cosmetics among others. Brands in the industry have to be marketed and promoted
individually as applications may differ from one individual to another. The market is highly
competitive and thus products have to be designed in a manner that provides ultimate
consumer satisfaction. The industry is conventionally structured into manufacturing,
marketing of products as well as retailing of sales (Unilever, 2021).
Unilever Innovation History
Unilever is a business organisation established on grounds of service for purpose. Its heritage
is unique and forms the driving force in the manner in which the company conducts its
business. The history of Unilever in regard to innovation dates back to its incorporation and
the established art, archives and records for collection of innovation practices. Collections in
the archives located in Port Sunlight, contain vast original documents that were the primary
innovations. Printed sources, images as well as films are contained in the historic home.
Interestingly, Unilever Plc still holds an advert for S.R Gibbs toothpaste that was the first to
be aired on television (Unilever, 2021).
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Managing Innovation in Business
Furthermore, there exist small books that document essential information for the company in
the past years. The company’s board meeting records, records on financial statements as well
as advertising samples for packaging are documented in the minute books at the historic
home. Also, former and current architectural plans for sites of Unilever Company are stored
in the historic facility. All these tools and information includes top brands such as Lipton,
Persil, Lux, and Marmite among others. Information from the art and archives has shaped
innovative practices and performance of the company in the quest of achieving sustainability
in customer satisfaction and environment protection (Unilever, 2021).
In the past years the company’s innovation process was merely for primary purposes.
However, with changes in technology new innovations led to diversity of brands in the
consumer products. For instance, in a global campaign in the advertising of products from the
Dove brand, impacted greatly in the sales of the brand. Dove was shifting from production of
basic cleaning products such as soaps and shower gels to deodorants, hair care products and
the most significant being the skin firming creams. Traditionally, models were used in the
advertising but with innovation in technological advertising real women were used in the
advertising in other to add a personal touch to the products.
Innovations in the advertising of products has changed the methods chosen by the company
in advertising. In the past, the company used promotional methods for marketing that had a
little impact on the sales. However, with innovation in place, customers can search their
preferences on the company’s website and make their orders at the comfort of their seats. In
addition, customers in the past had to go to the stores of the company in order to pick their
commodities. This has changed as product delivery is now done at the doorstep of consumers
thanks to innovation on marketing strategy on improving customer satisfaction (Unilever,
2021). The advances in innovation have steered sustainability in Unilever through its global
brands that satisfy customers in their diverse needs.
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Managing Innovation in Business
Unilever existing Innovation Models, Performance and Capabilities
Effective implementation of innovative ideas is critical and comprehensive models have to be
put in place. Focus should thus be put in creation of value-addition mechanisms in the
framework of identification, advancing and implementing ideas. Technological innovation
model in Unilever has successfully been implemented in meeting consumers’ needs and
wants. (Ricciardi, 2014). The organisation has combined advances in technological research
in an effort to colonise new markets, sustain products produced and effectively meet demands
of consumers. These activities are also realised through assembled data on consumer demand
changes, techniques in science and technology as well as digital platforms in delivery of
services.
Furthermore, Unilever has embraced the business model innovation through the Unilever
Foundry platform. Through the Foundry, the organisation has established collaborations with
start-ups in tackling innovation. Engagement with innovators and collaborators has aided in
solving challenges in the business in the over 400 brands internationally and thus perceived
as a radical innovation model. The platform attracts innovation from start-ups and at the same
time uses the platform as a gateway to the market. Unilever Foundry also work closely with
programmes established such Unilever Ventures which caters for young companies that have
a promising future (Unilever, 2016).
In addition, Unilever has embraced the marketing innovation model through its Open
sustainability innovation (Shin, Kim and Yang, 2018). This has resulted in changes in
products design pricing and even packaging to suit customers’ demands. The significant
implication of such is reduction in the operation cost involved in the marketing process as
well as the impact of the organisation on consumer products and environment. The Open
Innovation Platform available on the company’s website has facilitated launching of projects
targeted at achieving sustainable goals for a number of factors. Salt-sugar reduction, drinking
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Managing Innovation in Business
water, oral care, shower products, natural food preservatives among others are factors that the
company strive to achieve sustainably for better customer experience (Seebode, Jean Renaud
and Bessant, 2012).
Unilever also operates its innovation process in world-class facilities through its research and
development centres. Globally eight research and development centres exist in the US, UK,
Netherlands, India, Italy and China and collectively they apply the innovation matrix in their
operations. Major players in the research programme include partnered scientists, higher
learning institutions, suppliers of raw materials as well as specialists in the business sector.
The pool of individuals generates innovative ideas and projects that are geared towards
improving the standards of people and a safe planet. Over time, Unilever has established a
record of significant simplified innovations through technological methods of meeting
consumer needs in a convenient manner that is unmatched to anything (Unilever 2016)
Unilever capabilities using SWOT analysis
Unilever is a worldwide player in the consumer products industry and it enjoys a variety of
opportunities and strengths at equal measure. Both parameters are crucial in the mitigation of
risks that arise within the organisation. Sustainability and consideration of consumer
developing trends also depend on effective address of opportunities and strengths. Unilever
plc strengths include possession of over 400 brands globally, dominating business in over 190
countries as well as massive investment on research (Unilever, 2021).
Weaknesses that Unilever encounters include the high possibility of substitution or imitation
of products manufactured. This is evident in countries with availability of cheap raw material
and labour. In addition, cheaper natural products are gaining significance in the Western
countries thus posing a shift from the manufactured products. Most recent corona virus
pandemic has led to a decline in volume of sales in low-income earners.
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Managing Innovation in Business
Unilever being one of the largest companies across the globe, enjoys a number of
opportunities. Expansion of stores worldwide can be attributed to the company’s financial
strength that favours diversification. Majority of individuals prefer healthy products and
Unilever can utilise this opportunity to come up with new products that are suited for the
health specifications. Further, the company can utilise its vast financial resources to invest in
advanced technologies that provide convenience to customers.
There is an emergence of global competitors and they serve as threats to Unilever plc by
mounting pressure in product development and pricing (Unilever, 2021). High competition
impacts on pricing and eventually the profitability of the business. Also, the economic
downturn due to the pandemic is forcing the company to come up with strategies that would
secure a positive outlook.
Consumer goods Industry in 2021
The year 2021 has shaped the consumer product industry in a number of ways the basis being
on the existing Covid 19 pandemic. Safety restrictions, vaccine development, support from
local and national governments in various states across the world have played a centre stage
role in the formulation of trends in the industry. Also, consumer psychology, adapting to
new habits, conducting business and schooling through virtual means, has helped steer the
new habits in the consumer product industry (Deloitte, 2021).
Consumers shifted their preferences with the onset of the pandemic (Walter and Chang,
2019). As a result, companies in the industry are resetting their entry to market strategies in
order to reach the consumers in various households. Many organisations now rely on the
online platform as the advertising means and order placement, unlike the physical market, to
reach potential consumers. For instance, Unilever has established the “Ice Cream Now’’ that
has significantly gained acceptance through sales in popular application-based delivery
services (Unilever, 2021).
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Managing Innovation in Business
Digital acceleration in the industry has gained momentum in 2021, with almost every
consumer product company coming up with sustainability. Internal abilities have been
transformed, and user-friendly technologies have been developed to create efficiency in
business. Moreover, companies have invested in the robotic process automation in
conjunction with artificial intelligence technologies. This are aimed at achieving customer
experience and at the same maintain customer safety. Besides, organisations are investing
heavily in ensuring that customer data is protected and that cybersecurity is at the topmost.
Business foundation for the future survivability of business enterprises, rely on the strategic
shaping during thus pandemic. Organisations were forced to lay out some workers at the
onset of the pandemic in order to meet the running costs of the entities. Some facilities were
closed, assets were closed and the working capital was equally reduced. This led to the
consideration of mergers and acquisitions as a mechanism of forming a stronger foundation
in the continuity of the business organisations. This opportunity has played a significant role
in the supporting of the unstable organisations in that were hit hard by the pandemic
(Deloitte, 2021).
Feedback from consumers in regards to the pandemic indicate that the pandemic gives an
opportunity for big corporates to shift and focus on in conducting better business. This is
achieved through the workforce in the particular organisations, engaging the communities,
consumers and at the same time protecting the surrounding environment. Strategies have thus
been put in place to address consumer satisfaction, social equality and environmental
awareness from various stakeholders. Collective application and integration of the mentioned
factors are a great driving force to profitability despite the prevailing pandemic.
The marketplace has evolved with effect from the pandemic and businesses in consumer
product industry have put up counter mechanisms (Deloitte, 2021). Trends, challenges as
well as opportunities that affect businesses have formed the basis of major strategies.
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Managing Innovation in Business
Businesses have embraced the impact of the pandemic and acted according in order to fulfil
and satisfy the varied consumer demand on product goods.
Conclusion
In conclusion, innovation is critical tool in ensuring sustainability of corporates in meeting
consumer demands. The report has focused on the management of innovation in the business
world with a case study on Unilever company. History of establishment of innovation ideas
and technologies in the company have been elaborated. Equally, the innovation applied in the
company at the present moment has also been discussed and a relevance report on the global
innovation matrix has been analysed. Suggestions from the GII report discussed have
indicated the path to be followed for the future of innovation.
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Managing Innovation in Business
References
Deloitte (2021). 2021 Consumer Products Industry Outlook. [online] Available at:
https://www2.deloitte.com/us/en/pages/consumer-business/articles/consumer-
products-industry-outlook.html [Accessed 15 Apr. 2021].
Ricciardi, F. (2014). Innovation Processes in Business Networks Managing Inter-
Organizational Relationships for Innovational Excellence. Wiesbaden Springer
Fachmedien Wiesbaden, Imprint: Springer Gabler.
Seebode, D., Jeanrenaud, S. and Bessant, J. (2012). Managing innovation for sustainability.
R&D Management, 42(3), pp.195–206.
Shin, J., Kim, C. and Yang, H. (2018). The Effect of Sustainability as Innovation Objectives
on Innovation Efficiency. Sustainability, 10(6), p.1966.
Unilever (2013). Unilever: Rotterdam becomes centre for marketing and innovation. Focus
on Surfactants, 2013(2), p.7.
Unilever (2016). The State of Innovation; Unilever Foundry. pp.3–6.
Unilever (2021). Our history & archives. [online] Unilever. Available at:
https://www.unilever.com/our-company/our-history-and-archives/.
Unilever (2021). Unilever at a Glance. Available at: https://www.unilever.com/our-
company/at-a-glance/ [Accessed 15 Apr. 2021].
Walter, J.M. and Chang, Y.-M. (2019). Product Innovation with Industry Leaders and
Consumer Switching Costs. SSRN Electronic Journal.
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