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Company Profile
Overview
Unilever is a multinational corporation selling consumer goods including
foods, beverages, cleaning agents and personal care products. Unilever is a
dual-listed company consisting of Unilever NV in Rotterdam and Unilever PLC
in London.
Unilever owns more than 400 brands including 11 "billion-dollar brands",
which each achieve annual sales in excess of 1 billion.
Revenue (m and currency as quoted)
39,823 (2009)
Number of employees
163,000
Origin of ownership
UK/Netherlands
Geographical presence
Operates in 100 countries
Key contact
Santiago Gowland
Since 1995, Unilever has reduced the amount of water used per tonne of
production by 63% by minimising water use and maximising water recycling.
During 2008, there was a 3% reduction in water intensity compared to
2007 from 3.05 m3 to 2.96 m3 per tonne of production.
The water intensity of food production has dropped from 5.27 m3 in 2003
to 4.23 m3 in 2007 per tonne of production.
Products aimed at reduced consumer water consumption include the One
Rinse Comfort fabric conditioner. In Vietnam, One Rinse Comfort reduces the
water needed by two-thirds and sales rose by nearly 30% in 2008.
Waste
Waste intensity has reduced by 68% per tonnes of production between
1995 and 2008, despite a 4.3% increase in the last year (7.56 kg/tonnes in
2007 to 7.89 kg/tonne).
The company says this increase was due to:
- Legislative changes
- Under-capacity in effluent treatment
- Planned disposal of accumulated and inherited hazardous waste
Changing packaging design is one of the ways in which the company wants
to use to reduce waste impacts.
The PVC policy commits to replacing PVC in all packaging by the end of
2010, where there are viable alternatives.
Resources
Agricultural and forestry crops make up around half by volume of raw
materials used by Unilever.
Unilever buys approximately 12% of the world's black tea, 6% of the
world's tomatoes and 3% of its palm oil.
Unilever established guidelines for good agricultural practice based on 11
indicators including water, energy, pesticide use and animal welfare.
Growers and third-party suppliers are encouraged to comply.
Most of the world's oil palm is grown in South-East Asia where the
clearance and burning of forests contributes to global warming.
Following a public challenge by Greenpeace, Unilever has agreed to draw
all their palm oil from certified sustainable sources by 2015.
Unilever have also agreed to support a moratorium on further deforestation
in South-East Asia.
At the end of 2009 around 80% of Lipton Yellow Label and PG tips tea sold
in Western Europe came from Rainforest Alliance Certified farms.
Unilever also uses paper and board, plastic, glass, aluminium, steel and
mixed material laminates (for sachets and pouches) in its manufacturing
processes.
Relationships
Company Background
The company was formed by a merger of Dutch Margarine Union and British
soap-makers Lever Brothers in 1929.
Unilever was one of the worlds first genuine multinationals with operating
companies in more than 40 countries.
The company produces and distributes a vast number of well known brands
in the areas of nutrition, hygiene and personal care that are used by
consumers all over the world.
The history of Unilever dates back to 1885, William Lever established a soap
manufacturing company in the UK with his brothers and named the company
Lever Brothers in 1885.
William Hesketh Lever was born at Bolton, Lancashire in 1852 was the son of
grocer. Together with James Lever, William Lever opened soap factory at
Warrington, England, in 1885.
Their products, Sunlight, the worlds first packaged soap, was very
successful. The soup they made in ready moulded tablet.
Previously laundry soap was marketed in bars and grocers cut off pieces and
sold them by weight.
Until 1919 Lever was wholly own an controlled by the founder. By 1919, as a
result of ingle minded expansionist, commercial policies, his firm accounted
for 60 percent of soap production in Britain.
Two butter makers, Jurgen and Van den Berghs formed Margarine Union in
1927. The Dutch Margarine Union merged with Lever Brothers of United
Kingdom in 1929 to form Unilever.
During the 1930s, the structure and management do Unilever has been
describe as a professional largely non-family managed hierarchy.
For tax, purpose, two separate entities were established, one in London and
another in Rotterdam.
brands,
Unilever started to globalize their brands in the early and mid 1990s.
Known until the early 1990s as Philippine Refining Company (PRC), Unilever
Philippines started as an oil milling business which at its peak produced
nearly 100,000 tons of coconut oil annually. Today, the company is a leading
manufacturer of home and personal care products, foods, and ice cream. Its
roster of brands include Axe, Best Foods, Block & White, Breeze, Clear,
CloseUp, Cream Silk, Domex, Dove, Eskinol, Master, Ponds, Knorr, Ladys
Choice, Lipton, Rexona, Selecta, Sunsilk, Surf, Tresemme and Vaseline.
Recognised annually amongst the Top 20 Tax Payers in the country, Unilever
Philippines employs over 1,000 people directly, as well as provides jobs for
10,000 indirectly (i.e. distributors and suppliers), as a result of its business
presence in the country. Employees and business partners recognise that
energy, creativity, the resilience to face changes and make things better are
all needed for business and people to grow together.
Unilever is known to be one of the few companies in the industry that has
succeeded in keeping majority of its manufacturing base in the Philippines.
Its Personal Care unit made news by securing the right to manufacture
deodorant mini-sticks for local and export markets. It has succeeded in
entering the US market and achieved the milestone on producing its 100
millionth stick in 2004.
The company has been a leader in introducing new technologies into the
country since the early days of its existence - margarine production in the
1930s, non-soap detergents, shampoos and toothpaste in the 1960s and
1970s and state of the art sulphonation technology and cogeneration power
plant in the 1980s. The nineties has seen the company focusing on several
improvements in the Environment front one of which was the introduction of
the first 100% biodegradable detergent bar in the Philippines. Unilever works
closely with the community and other NGOs to protect and improve the
environment.
Unilever Philippines is also a leading company in the area of Human
Resources Management and Development. Unilever has for decades also
been known in the industry as a sound training ground for young Filipino
graduates. Some of its managers have progressed to senior levels in
government and public life. Unilever seeks to manage and grow its business
sustainably, focusing on three pillars as set out by the Unilever Sustainable
Living Plan Health & Well-Being, Environmental Impact and Enhancing
Livelihoods. We will develop new ways of doing business if we are to meet
the needs of the billions of people in the developing world who are yet to
become consumers and deserve a better quality of life.
sustainability to drive their growth. This was not an easy conversion and had
to start from the core. Not only processes and policies changed, but peoples
mindset changed, which is one of the most difficult challenges to accomplish
within an organization.
Their first key step was to incorporate sustainability as part of their long-term
strategy.
To reach where they are today, Unilever maximized their available resources
and went as far as creating a dedicated division that focuses on aligning
strategy to sustainability.
engineering and business, but also agronomists that can provide a different
perspective and add the necessary skillset variety to the team. In addition to
that, Unilever has also redesigned some of their transportation processes to
lower
shipping
and
handling
costs;
moreover,
they
also
modified
Last, but not least, they assigned a Chief Sustainability Officer and made
every effort to learn more about their suppliers business practices. The
latter helped them weed out those suppliers that were not aligned with
their vision of being sustainable and could hurt their reputation.
The
appointment of a CSO was crucial as this became a business unit that has
grown into the organizations core beliefs.
In sum, there were two main keys to success that Unilever adopted to
become a Sustainability-Driven grown company:
1
2
sure they all moved towards the same goals. Those who were not on board
were left behind.
Dove, Sunsilk, Rexona and Lux, Unilever firstly entered in foreign market to
compete internationally by entering just one or select few foreign markets.
Once successfully introduced its product in several market, Unilever expands
its success brand to many other markets and starting to compete globally.
In entering and competing in foreign markets for its cosmetics and toiletries
product, Unilever follows a global strategy, also called by a think-global and
act-global strategy, The strategy using essentially the same competitive
strategy approach in all country markets where the company has a presence
(with only minimal responsive to local conditions), sells much the same
products everywhere (make minor adaption to local countries where needed
to accommodate local countries preferences), strives to build global brands,
and coordinates its actions worldwide (centralized).
Once Unilever became one of the most successful global companies in the
world, it has many profit sanctuaries. By having multiple profit sanctuaries,
Unilever has strong competitive advantage over its competitor with a single
or few sanctuaries.
developing its products and maintaining its brands. The following diagram
shows the market performance of Unilevers skin care and hair care market
share:
To win customers and sales away from select rivals in country markets,
Unilever employ cross-market subsidization. This offensive strategy is
appropriate for Unilever which is compete in multiple county markets with
multiple brands and wide variety of products. Finally in entering the
emerging-country market Unilever prepare to compete on the basis of low
prices. Unilever pursued this strategy because consumers in emerging
markets are often highly focused on price, which can give low-cost local
competitors the edge unless a company can find ways to attract buyers with
bargain prices as well as better products.
On January 1st, 2013 Unilever released its results for the fourth quarter and
full year 2012 which show good quality, profitable growth ahead of our
markets. This underscores the good progress we are making in transforming
Unilever into to a sustainable growth company. The past year performance of
the company was as follows:
1.1%
Underlying sales growth 6.9% comprising volume growth of 3.4% and
55% of turnover
Core operating margin up 30bps to 13.8%; gross margin up 10bps,
ANALYSIS
Before analyzing the Unilever strategies for competing in foreign market, its
important to identify companys resource strengths and weaknesses and its
external opportunities and threats, commonly known as SWOT analysis. This
analysis provides a good overview of whether the companys overall
situation
is
fundamentally
healthy
or
unhealthy.
Therefore,
for
Based on the SWOT analysis we can infer that the company has very
healthy and strong condition in overall. Therefore, this condition provides
high capabilities to the company and offers wide opportunities for the
company to compete in foreign market. Based on this analysis, Unilever
firstly entered foreign market in the year of 1950 by offering its product to
European community.
From the Unilever mission statement, we can conclude that the company
expands into foreign markets in order to gain access to customers around
the world. Unilever recognized that its product is commonly used for all
people worldwide. The companys objective to bring their wealth of
knowledge and international expertise to the service of local consumer
pursues the company to produce many nutrition, hygiene and personal care
product with successful brands. Therefore, Unilever are moving rapidly and
aggressively to extend their market reach into all corners of the world.
For its cosmetics and toiletries product, Unilever start to compete
internationally by entering just one or select few foreign markets. Unilever
launched Axe/Lynx/Ego deodorant body spray in the US and Canada in
autumn 2002 and introduced Dove initially in Italy, France and Belgium in
2002. Once successfully introduced its product in several market, Unilever
expands its successful brand to many other markets and starting to compete
globally.
Through its successful growth strategy, Unilever has continued to build on
the strengths of its four key global brandsDove, Sunsilk, Rexona and Lux
and by doing so, created strong platforms for further growth in a number of
cosmetics and toiletries sectors. This has been particularly evident in
deodorants, mens grooming products and bath and shower products, with
strong growth for the Axe, Dove and Rexona brands. However, competition in
the cosmetics and toiletries industry remains tough, and while the current
strategy is providing results, greater product innovation and marketing
support, as well as further development of functionality in products will be
needed to keep up with the market. There are no doubt that Unilevers major
rivals over the next few years will be Procter & Gamble and LOral, both of
which give significant resources to new product development activity, and
respond to changes in the market faster than Unilever. LOral also has the
raising awareness for Unilever brands such as Close-Up and Dove. The
companys partnership with the World Dental Federation has seen it become
involved in oral healthcare projects in both developed and emerging nations,
including Austria and Brazil. In 2006, Unilever developed a low-cost
toothbrush, the Pepsodent Fighter, which retails at a price equivalent to just
EUR0.20 and is distributed in India and Indonesia.