Strategic Management Report: Unilever's Adaptive Systems & Strategies

This report provides a comprehensive analysis of Unilever's strategic management practices. It begins with an introduction to strategic management and its importance in a rapidly changing business environment. The report then delves into Unilever's external environment using PEST analysis, examining political, economic, social, and technological factors. It also explores Porter's generic strategies and the Five Forces model to assess Unilever's competitive position. The McKinsey 7S model and Ansoff Matrix are applied to analyze Unilever's internal structure and growth strategies. The report concludes with a summary of findings and references, offering valuable insights into Unilever's strategic decision-making and its approach to achieving sustainable business success in the global consumer goods market.

STRATEGIC
MANAGEMENT
USE OF ADAPTIVE
SYSTEMS

Table of Contents
INTRODUCTION...........................................................................................................................3
Evaluating External factors with Pest Analysis..........................................................................3
Porter's Generic Strategies of Unilever.......................................................................................5
PORTER'S FIVE FORCES of UNILEVER ..............................................................................6
McKinsey 7s Model of Unilever.................................................................................................8
Ansoff Matrix of Unilever..........................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategic management is a process which do no stop as in involves planning, controlling,
analyzing, observing, evaluating the various factors of the organization which can increase or
decrease the growth of the organization. The business environment is changing rapidly and to
tackle these changes in the environment the organization follow strategic planning to ensure its
competency in the market. There are many concepts of the strategies which help the organization
to set their mission, vision and core values in order to achieve their success. As these strategic
plan is divided in 5 stages which are assessment, analyzing internal and external strength and
weaknesses, formulating plans , implementing the plans, checking on implemented plans. The
report will have a brief about different stages of strategic management of Unilever to analyze all
the factors which can increase the productivity of the organization. Unilever is global consumer
goods company, which was established in 1929 in London,UK. Unilever have always focused on
the customer satisfaction and quality of products which will increase the goodwill and consumer
base to increase the market of the company. Unilever is doing its business in around 190
countries with the whooping yearly revenues of 50 billion Euros.
Evaluating External factors with Pest Analysis.
The HR of Unilever have analyzed the external factors as that will help the company to
increase their efficiency. Unilever have to male many strategies which will help them to exploit
those factors for benefits of the company. As Unilever is operating in many countries in the
world there is a major risk of external environment on the business of Unilever. The company
have estimated the positive and negative criteria which the company should accept or avoid
accordingly.
Political Factors
Political factors are the factors which are affected by the government of the country and
the Unilever have analyzed the importance to understand this factor. (Zhang and et.al., 2016) The
market the company will ensure the political stability of the country to make sure that there is no
possible threats from the policies and laws of the government which would hinder the strategies
and policies of the company. The company will change them strategic plans to increase their
efficiency In the particular country keeping in mind various political factors, marketers will also
evaluate the corruption level in the government as it may also lead to unstable government.

Various rights and acts which help the company to secure there business nature from the
competitors. The company will also analyze the taxation policies of the countries and make the
pricing policies of the product in that particular country which will them to attract their
customers and improve their situation I the market.
Economic Factors
Unilever have to analyze the economic condition of the country before investing in it as it
will give them loses and will also decrease the growth of the company. The marketers are
supposed to analyze the GDP , inflation rate, Loan interest rates, Commercial banks all types of
interest rates and also the growth and death rates of the population of the country. The company
will also develop a marketing plans ans strategies according to the disposable income and per
capita income of the population of the country. They will also analyze the labor skill level in the
country. This will help them to attract more customers and also increase their sales and stabilize
in the market firmly.(Barile and et.al., 2016)
Social Factors
Unilever is based on consumer satisfaction so the company have to analyze the consumer
behavior in order make a concrete strategy which will help the company to attract more
customers and also provide them more satisfaction. The marketers will analyze the education
level of the demographic distribution. They will also analyze the social class of the society and
beliefs, cultures of the society of that country. The income level of the consumers is also very
important and the company make the strategies according to the behavior so that the consumer
become loyal and company is successful in retaining them or switching to alternative products
which will increase the sales and also customers satisfaction.
Technological Factors
Technology is also a major external factor which is changing very rapidly and with the
change of the technology new strategies are also made by the rivals to compete with Unilever.
Unilever have analyzed the importance of technology. Marketers will also analyze the need of
technology change in the company and how will it increase the productivity of the company. The
marketers will also understand the technological changes impacting the whole industry and the
country as a whole. The company have also adopted many new advanced machines in production
of their products which will decrease the cost of the product and give the maximum output.

Porter's Generic Strategies of Unilever
This strategy helps Unilever to compete by making new strategies and also innovating
their products to attract new customers. The Porter's generic strategy focuses on low cost leaders,
concentrated to the mission of the company and also focus on creating new products and
innovating the old products to reach the satisfaction level of the consumers and increase the sales
of the company.
Cost efficient
Unilever have analyzed this aspect of cost efficiency of the company and have adopted
many new techniques and methods which will help the company to lower he cost. The company
have adopted the new high efficient machineiries which will help the company to produce their
products more effectively and also increase the economies of scale of the company. Unilever
have also plated many energy generation projects which help the company to decrease the fixed
expenses and increase the profits ,like solar energy which is in abundance and can be used how
much they can. Company have also invested in the research and development of the products and
the consumer behavior to increase the sales and also increase the efficiency of the workforce of
the company by training and development. This will increase the company's overall productivity
and will reach the leadership level in the industry.
Differentiation
Unilever have always thought innovative to attract their customers, the company have
also analyzed the customer behavior and also made many strategies to increase the customer
base. The company have emphasized on providing with unique products and their uses that not
any competitor offers which give the company a competent advantage in the market.(Weyns and
et.al., 2017) As product differentiation also increase the varieties for the customer to choose in
different price ranges and also attract more customers. Product different ion target on different
customers at the same time and give a better sale response to the company. The company have
also differentiated their customers on various basis as they want to penetrate in the market with
more impact and this will help the company to increase their efficiency.
Focus
The generic strategy of Unilever have also used this strategy to ensure the successful
business in all the markets worldwide. In this the company have also divided their market in
segments so that they can easily understand the market and provide with the better products to

their customers. And the company have to determine which above strategy should be used by
which the company can increase the reach in the market and gain maximum profits from it.
Unilever have come up with new marketing strategies like online stores and many home services
which will increase the customer base and help the company to know more about the customer
preferences and quality taste. (Weyns and Calinescu, 2015) Company have also targeted their
customers on gender, age so that they can focus only on that segment and make their strategies to
attract those customers. Another focus of the company is to decrease the cost of the company by
doing segmentation. As segmentation will help the company to determine the delivery services
and also focus on cost-efficient delivery of the goods to their stores. Unilever also developed
several manufacturing units according to the demand of that market so that there is no extra cost
added on the product and the company can gain more profits.
Porter's Five Forces Analysis of Unilever
Competitive rivalry
In Unilever’s Five Forces Analysis, competitive rivalry is viewed as one of the strongest
external forces. The competition of Unilever is very intense and the factors affecting the intensity
of the competition are high number of firms, high aggressiveness of firms and low switching
cost. The number of the firm operating in the same sector as Unilever are too high so there are lot
of substitute available for the customer so Unilever has to provide qualitative goods to continue
surviving in the market. Also, the firm uses aggressive techniques to market their product. Lastly
the switching cost for customer are too low or nil for them so Unilever cannot even increase its
product price to compete as their customer will easily switch.
Bargaining power of Unilever’s customer
The bargaining power of customer are strong in Unilever sector of industry, these are
because of the following factors which are low switching cost, high quality of information and
small size of individual buyer. (Schmitz, Teng and Webb , 2016) The main factor which
increases the bargaining power of customer is low switching cost as they can easily switch over
other products. Also, the information available to the customer is vast and the customer have
easy access to this information making it more easy for the customer to switch over other
product.

Bargaining Power of Unilever’s Suppliers
Unilever has moderate bargaining power over their supplier. The factors affecting the
bargaining power of the supplier are medium size of individual supplier, medium population of
supplier and moderate overall supply. Since Unilever has large suppliers the average supplier is
moderate. Also, the number of supplier are not too much so this also contributes to the overall
moderate bargaining power. Similarly, the moderate level of overall supply results in limited
influence of the supplier over Unilever.
Threat of substitute
Unilever has a low level of threat of substitute, the factors affecting the threat of
substitute are low switching cost, low substitute available and low performance to price ratio of
substitute. The low cost of switching between products possess a strong force on the threat of
substitute, but other substitute are low performance as compared to Unilever’s products so this
makes Unilever’s product more favourable, and in turn reduces the threat of substitute. Also, the
substitute available are of the same cost as provided by Unilever’s so customer will obviously
prefer Unilever’s product over local products.(Romero and et.al., 2016)
Threat of New Entrants
Again the threat of new entrants in Unilever’s sector is low, this is because of the
following factors low switching cost, high cost of brand development and high economies of
scale. The low switching cost enable the new entrants to impose a strong force against Unilever
thus increasing the threat of new entrant. Although the cost being incurred to establish brand
image is very high, this factor is acts as a barrier to the new entrants reducing the threat of the
new entrants. Also, Unilever have advantage of high economies of scale, the new entrants
require large amount of capital to gain such advantages therefore it reduces the threat of new
entrants.(Messier and et.al., 2015)
McKinsey 7s Model of Unilever
Unilever have adopted the McKinsey model to attain the effectiveness by analyzing the
internal factors of the company which will help the company to determine the best policies and
regulation. (Janssen, Van Der Voort and van Veenstra, 2015) Company have also emphasized on
their employees to motivate them, increase their efficiency and also improve their potential by
training and development of them by various methods and techniques which will in return

increase the productivity of the company. The internal factors which are impacting the growth of
the company are briefly analyzed to resolve the problems and increase the efficiency of the
company. The company have divided these internal factors in hard and soft elements to analyze
the factors better.
Hard Elements
Strategy
Strategies are the path made by the company to reach to its destination which is
company's objectives. As strategies make the work easy and more effective. Unilever have to
strategise it policies and marketing tactics to reach the organization objectives aster and with
more efficiency. The company have also subdivided the strategies of all the department which
will make the all the department proper supervision and it will also allow all the managers to
analyze the internal flaw.
Structure
this element is also very crucial internal factor which help the business grow effectively
and grow its market rapidly. Structure of Unilever is product type divisional organizational
structure which help the company to analyze the internal aspects of the company at every level.
(Grishko and et.al., 2016) The company have also divided their management into hierarchy to
provide proper knowledge and authorities to every manager. This will provide a better problem
solving techniques which they can analyze to increase the efficiency of the company and also
improve the workforce of the company.
Systems
This is the last hard elements of the company and in this element Unilever evaluate the
potential of the employees. The system is the backbone of the company as it creates a guideline
to do work like the production department employee is supposed to do the production related
work and also report to production manager and all the other activities which run in the company
is due to the system which the company made in the beginning.(Ginter, Duncan and Swayne ,
2018)
Soft Elements
Shared values
In this element the company have to analyze the culture and values of the work
environment of the employees and what is the common though process all the employee are

sharing is that in the favor of the company or against. The company have to make sure that their
employee always have the same values which is reaching the company's objectives. As
Unilever's shared value is quality of business and responsibility, respect, integrity, pioneering.
Styles
Unilever have used the unique management style by which all the employee are managed
effectively and also they have ensured the employee safety and security. The company have
divided these style into three levels charismatic leadership level, demographic leadership level
and transformational leadership level.
Staff
Unilever have focused on the efficiency of their employees as the employee are the
lifeline of the company, and they have also ensured their well-being and safety. The leadership
style used by the company help the company to analyze the weaknesses of the employees and
also help them to achieve their efficiency by various methods. This will in return in crease the
productivity of the company.
Skills
Skills is the part of staff but a detailed description about what skills Unilever have
adopted in their selection procedures to hire the young talents. The company have analyzed the
need of specific skills due to various interviews and tests of the candidates which help the
interviewer have a knowledge about the market trends and also give them different innovative
ideas which will help the company to increase their productivity and lower the cost. (De Roo
and Hillier, 2016)
Ansoff Matrix of Unilever
Market penetration
This strategy is considered as the primary strategy, under this strategy, Unilever try to
increase its sales volume to improve revenues under the current market with its existing
products. This is done mainly by using aggressive marketing techniques to sell their product in
the existing market. Such aggressive marketing efforts helps in capturing customer attention
which results in growth of our market share. This strategy is being implemented by the company
by using the generic strategy of differentiation to make its products more competitive and
attractive than others as this will help Unilever to gain an extra edge over its competitor. This

strategy is used to grow the business through aggressive marketing Unilever product in the
global consumer goods market. These techniques had been used by Unilever in United States and
Canada.
Product development
This is considered as a secondary intensive strategy that Unilever uses for its growth of
the business. Under this strategy, the intensive growth is done by introducing a new product in
the market which will satisfy the current needs of the customers. In this strategy Unilever tries to
differentiate their product through introducing a unique product which will give a tough
competition. This mainly involve products innovation or modification of an existing products
and will lead to improves the product mix In Unilever’s marketing mix. This is mainly done to
satisfy the need of the new customers. Product development include Unilever introducing a
completely new line of product to increase its market share.
Market development
This is one of the supporting strategy for the growth of Unilever. Under this strategy, the
company grow by introducing its product to a new market. Although, Unilever has a significant
presence in almost every consumer goods. Therefore, this strategy is considered as a supporting
strategy for Unilever. This strategy supports the intensive strategy by creating a competitive
advantage based on the uniqueness of the product being entered into a new market segment. This
is done by marketing campaign that will gain the attention of the customer into the new market.
These new market may have some entering barrier but for Unilever they are easy to tackle.
Unilever can grow by marketing its current products as a new solution to unaddressed needs in
certain market segments, such as infant care needs. (Baggio and Sainaghi, 2016)
Diversification
This is again a supporting strategy for the growth of Unilever. Under this strategy, the
company new product to a new market. This basically means establishing a new business for the
growth of the company. Unilever may use diversification growth by merger or acquisitions of
other company this is a speedy process and help to explore new business opportunities and reach
the customer all over the world. Unilever’s has diversified into new business by acquiring Sara
lee corporation in the year 2009-10 to introduce Unilever’s products in personal care business.
The generic competitive strategy of differentiation supports this intensive growth strategy by
ensuring that Unilever’s acquired brands offer unique features that attract target consumers.

CONCLUSION
This report had a detailed information about how Unilever have analyzed the various
factors which are present in external and internal environment. The report had shown the
importance of analyzing these factors to compete in the market and also increase the productivity
of the company to lead the industry worldwide. Pest Analysis have provided an information to
the company about the external factors which can impact the company's growth, porter's five
forces model helped the company to understand the different threat which are present in the
market, and they can overcome those threats with different strategies. Porter's generic strategy
help Unilever to gain the knowledge about what strategies will be best to be applied in the
company by keeping all the factors in mind. McKinney 7s model helped Unilever to understand
the internal factors of the company.

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