Strategic Analysis and Growth Strategy for Unilever UK Limited

Desklib provides past papers and solved assignments. This project analyzes Unilever's strategic position and proposes a growth plan.

Strategic Management Plan
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Table of Contents
Introduction................................................................................................................................3
1. Apply the PESTLE Analysis to assess potential scenarios for your organisation.................4
2. Analyse the organisation’s capabilities by using appropriate frameworks............................6
3. Apply the Five Forces model to analyse the competitive environment.................................8
4. Apply a SWOT analysis to the organisation and critically evaluate the external and internal
environment................................................................................................................................9
5. An evaluation of the different types of strategic directions available to the organisation...11
6. Justification and recommendation of the most appropriate growth strategies available
currently to the organisation.....................................................................................................13
7. Production of a strategic management plan that addresses one of the growth strategies,
inclusive of SMART objectives, tactics, implementation and control considerations............14
Conclusion................................................................................................................................18
References................................................................................................................................19
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Introduction
Business strategy stands for the set of actions that which are helpful for the entrepreneurs to
achieve the main objectives of the business (Burns, 2016). Business strategy is the master
plan to secure the position in the market, to have competitive advantage over the rivals, to
carry on the operations rightly, to serve the customers and to achieve a desire end in the
business. The Unilever UK Limited is a FMCG, based in UK, founded in the year 1929 is
headquartered in London (unilever.co.uk, 2019).Unilever is a Britain-Dutch transnational
company, which deals with consumer goods and has been continuously facing growth and
profits over many years. It owns almost 400 brands with a turnover of about 54 billion Euros.
The study deals with the external and internal situations that the company faces to move
forward.
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1. Apply the PESTLE Analysis to assess potential scenarios for your organisation
In the study below, a PESTEL analysis has been conducted to analyse the influences of the
macro environments on the Unilever UK Limited. This tool is used to understand the market ,
the challenges, the external influences of the country on the organisation as a whole.
Elements Influence
Political In the national premise of UK, Brexit is a
major political issue and it restricts the trade
routes and operations (Inglehart and Norris,
2016)
The political issues of the European Union
pose some threat on the business of Unilever.
However the all over stability in the
situations minimises the challenges in the
company’s strategic implementations
Economic The inflation and the consumer’s whim to
buy the product affect the company. If the
products are not in demand then cash flows
becomes negative (Bernanke et al., 2018).
The investment of the FDI directly influence
the company
Social The UK is the largest consumer country and
the demand for the consumer products is
never ending here (Bogers et al., 2016).
These create a positive social factor for the
company.
With many number of brands the notice on
the reputation is very important for their
image.
The company focuses on the well being as
well the care of the people. They try to give
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the best feeling and importance to human
image.
Technological The company is adopting the technological
advancement and they are selling products
online. This facilitates the customers to save
their time and help the company to save the
labour as well as the cost of time.
The company also focuses on the digital
marketing, which helps in reaching the mass
at one go.
Unilever also uses a high level of automation
(Agrawal, 2017), which is better than
competitors to reach the stores in the location
faster than others. Otherwise, there would
have been negative cash flows and very less
profit.
Environmental The Unilever UK has been very carefully
promoting the sustainable energy generation
and the recycling of the resources (Levänen
et al., 2016). They promote the renewable
resources too.
They use eco-friendly packaging materials.
Legal The consumer companies are liable to many
laws and regulations since they are related to
public health and Unilever abides by all the
laws (Jones and Pawlinger, 2017).
All the products are subject to copyright,
proper brands and they pay proper taxes.
Table 1: PESTEL Analysis
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(Source: created by the learner)
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2. Analyse the organisation’s capabilities by using appropriate frameworks
VRIO framework is used to illustrate whether the resources or the capability of a company is
valuable (Chatzoglou et al., 2018). The strengths, the internal capabilities of the Unilever can
be determined by using the VRIO framework. It helps in accomplishing the tasks and the
competitive advantage. The four dimensions of VRIO model are-
Value – If the resources are expensive, the value of the organisation is decreased.
Imitability – To determine the possibilities of the organisation imitability is used.
Rareness – It means if the resource is rare or easily available.
Organized– This implies the organisation’s capability to use the resources properly.
Resources Valuable Rare Costly to
imitate
Exploited by
Organization
Competitive
Implications
Competitors No - - No Disadvantage
Human
resource
Yes No - - Parity
Yes Yes No - Temporary
advantage
Value chain
network
Yes Yes Yes Yes Sustained
advantage
Table 1: VRIO Analysis
(Source: created by the learner)
Stakeholder analysis - Stakeholder is anyone who has interest in the business. There are
internal stakeholders who are owners and the external who are the communities.
Stakeholders can influence the company’s capabilities in both the positive and negative ways
(Martín‐de Castro et al., 2016).
In the affirmative nod, the internal stakeholders have large stake in their business. They can
help the company grow by guiding them properly. The negative aspect of the stakeholders
includes the fact when a company needs to cut the cost and plans a layoff. This negatively
affects the community of the workers in that arena.
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Stakeholders mapping is something, which means the understanding of the stakeholder’s
expectation and their power. This helps in knowing the political priorities. The Unilever
plays a crucial part in involving the stakeholders in their company and they engage with the
stakeholders in a very cordial manner.
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3. Apply the Five Forces model to analyse the competitive environment.
A team, when finds that it can do better and can meet its target more easily than the setup
process then it does the porter’s five forces analysis. It also helps the business to find the new
competitors, the new leaders in the market, the consumers, the rivalries and the whole
scenario.
Bargaining power of Consumer: The factor deals with ability of the customers to drive the
price down. It means how much customers, the company retains now. The business totally
depends on the significance of the consumer base that the company holds. The power of the
consumers force the companies to keep them contented.
Bargaining Power of Suppliers –With this power, they can easily drive up the price at their
own will. The fewer the number of suppliers about a product the higher the prices of a
product as they know that customers need to get the products and lack of suppliers would
force the consumers to buy the goods with high price. However, in the FMCG industry, the
suppliers are many and so the risk is low.
Threats of substitutes – When a company opens up there is always high chance that other
companies will also come up with the same product in the same arena (Crane, 2016). This is
called threats of the substitutes. In this case, they pose high risk for the company.
Threats of new entrants- This is highly risky for the growth of the companies. Company’s
position is weakened. To resist the new entrants the new pricing strategies might improve the
position of the existing company. However, for Unilever UK Limited, the demand for
consumer product is never ending. New entrants in the existing markets are threats for the
companies who are already operating.
Competitive Rivalry – There are large numbers of the competitors who pose risk to the
companies with the parallel products as well the same price. With the trust of customers on
brand image, the Unilever UK can fight the rivals. However, Competition is always a high
risk to a company.
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4. Apply a SWOT analysis to the organisation and critically evaluate the external and
internal environment.
Strengths Weaknesses
Brand image is the internal strength already
(Sasmita and Mohd Suki, 2015). Having a
stronghold in the market helps Unilever to
penetrate the positions, which might stand a
hindrance to others.
Moreover, Unilever has a wide range of product
availability, which makes it uniquely diversified
than others in its circle. Having a strong R&D
group and competition tracking is very important
for any business to grow.
Some researches show Unilever is dependent on
retailers, which pose a weakness to the business
Moreover, the products that Unilever markets
have found substitutes in some areas of Africa
and Asia in natural products.
Opportunities Threats
The consumers have become health
conscious now and that projects opportunities
to the company to come up with a wide range
of products especially geared up for health-
conscious consumers.
With the advent of globalization, the widely
spread range of operations in 190 countries is
an added advantage. They enhance their
business being socially and environmentally
responsible.
The major threat to the FMCG Company is
the Ayurveda products that are coming up in
the markets. With Ayush Lever, Unilever has
already started combating it.
There is a risk of imitations of the products at
low cost, when such a big company comes up
with an authentic product. Price competition
poses another threat.
Table 2: SWOT Analysis
(Source: Created by the learner)
The PESTEL Analysis gives an overview of all the external factors that are likely to affect
the company in both the positive and the negative manner (Wheelen et al., 2017). The
production, the economy, the social responsibilities all these depends on the PESTEL of a
company. When a company needs to understand the internal factors, the opportunities and to
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measure the threats it does the SWOT of itself which eventually gives the chances to analyse
the threats through other suitors whom they can outperform in the fracas with the help of
these analysis (Bell and Rochford, 2016). Porter’s Five Forces also helps to understand the
risks and challenges through competitors, suppliers and substitutes (Mathooko, 2015). VRIO
Analysis is also used to make some technical evaluations.
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5. An evaluation of the different types of strategic directions available to the
organisation
Ansoff Matrix
Figure 1: Ansoff Matrix
(Source: Hussain, 2013)
Market Penetration- Market penetration means that the enterprise has increased the sales of
the existing products through the enlargement of the existing market (Alkasim et al., 2018).
In fact, to make deep roots in the existing markets the company has to make many plans. It
keeps the risk low because the company already exists in the market and it launches various
existing plans and schemes in the market to penetrate the existing condition.
Product Development- Product Development is something, which a company looks after
when it needs to enhance the quality of the product and it wants to enter a market that is
existing but the product is new. Here the risk is moderate.
Market Development – When a company wants to enter into a new market but with the
existing product then the company is expected to face some risk, which is though moderate.
The company knows that the product it has been selling but the market is new for it. The
company knows it is aware of the choice of the consumers but the market, the competitors
and the whole challenges that are waiting.
Diversification – It is of high risk. When a company needs to enter a very new sphere with
new products it is unaware of the risks that are waiting for it.
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