COLLEGE OF BUSINESS AND ACCOUNTANCY

UNIVERSITY OF CALOOCAN CITY

CBA Bldg., Libis St. Camarin Caloocan City

STRATEGIC MANAGEMENT PLAN

OF
UNILEVER PHILIPPINES INC.

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS

FOR THE DEGREE OF BACHELOR OF SCIENCE
IN BUSINESS ADMINISTRATION MAJOR
IN FINANCIAL MANAGEMENT

BY:

JOHN ANTHONY C. VICERA

BSBA-FMGT 4C

PRESENTED TO:
ISAIAS L. BORRES

CHAPTER 1
 University of Caloocan City
College of Business and Accountancy

Company Background

In the 1890s, William Hesketh Lever, founder of Lever Brothers, wrote down his ideas

for Sunlight Soap his revolutionary new product that helped popularise cleanliness and hygiene

in Victorian England.

It was to make cleanliness commonplace; to lessen work for women; to foster health and

contribute to personal attractiveness, that life may be more enjoyable and rewarding for the

people who use our products.

That sense of purpose and mission has always been part of Unilevers culture. In the 21st

century, were still helping people to look good, feel good and get more out of life and our

purpose as a business is making sustainable living commonplace.

In the late 19th Century, at Oss in Brabant, the Netherlands, Jurgens and Van den Bergh

two family businesses of butter merchants have thriving export trades to the UK.

In the early 1870s, they become interested in a new product made from beef fat and milk

margarine which, they realise could be mass-produced as an affordable substitute for butter.

Later, over in the north of England in the mid-1880s, a successful wholesale family

grocery business run by William Lever starts producing a new type of household soap. The

product contains copra or pine kernel oil, which helps it lather more easily than traditional soaps

made of animal fats. Unusually for the time, Lever gives the soap a brand name Sunlight and

sells it wrapped in distinctive packs.

In the early part of the 20th Century, margarine and soap producing businesses start to

move further into each other's markets.

Competition and a sudden sharp rise in the cost of raw materials leads many to set up

associations, promoting their interests and defending themselves against supplier monopolies.

1 | Page
 University of Caloocan City
College of Business and Accountancy

With supplies of oils and fats struggling to meet the demand created by fast growing soap

and margarine production, the companies that will one day become Unilever focus on securing

stable sources of raw materials.

Meanwhile demand for margarine continues to escalate and Lever Brothers, Jurgens and

Van den Bergh increase their interests in the production of raw materials. Tough market

conditions also lead to the further growth of trade associations. When new technology is invented

to solidify whale oil, businesses join together in the Whale Oil Pool to regulate the distribution of

this important new commodity.

But the clouds of war are gathering. The First World War is set to make a big impact,

firstly through increasing demand for soap and margarine - vital wartime supplies - and secondly

through the intervention of British and German governments, which effectively place the oil and

fats industry under government control.

By the end of the 1920s Jurgens owns margarine factories in Scotland, Ireland and

England and Lord Leverhulme controls 60% of the output of UK soap manufacturing.

But during the decade the margarine market suffers declining demand as butter becomes

more affordable.

Before his death in 1925, Lever Brothers founder Lord Leverhulme builds up a private

portfolio of companies that include some dealing with produce from his newly acquired estate in

Scotland's Western Isles. Many of these, including Mac Fisheries Ltd, will eventually be bought

by Lever Brothers.

At the end of the decade alliances reach their ultimate conclusion and the official history

of Unilever begins. First, Jurgens and Van den Bergh join together to create Margarine Unie.

Then two years later - in one of the largest mergers of its time - Margarine Unie teams up with

Lever Brothers to create Unilever.

2 | Page
 University of Caloocan City
College of Business and Accountancy

The 1930s is a tough decade it starts with the Great Depression and ends with a new

world war. These conditions make the newly merged business's need to rationalise even more

urgent. So in the UK Unilever cuts its 50 soap-manufacturing companies to concentrate on fewer

brands, while governments in continental Europe protect local butter production through taxes,

excise duties and limits on production. The end result is that Unilever's margarine and edible fat

plants are cut from ten to five.

But despite the recession the business continues to expand: partly through the

development of new products in its established markets, and partly by acquiring companies to

take it into emerging categories like frozen and convenience foods.

During the war years Unilever is effectively broken up, with businesses in German and

Japanese-occupied territory cut off from London and Rotterdam. This leads to the development

of a corporate structure in which local Unilever businesses act with a high level of independence

and focus on the needs of local markets.

After the war, Unilever's interests in Eastern Europe are lost with nationalisation and the

control exerted by the Soviet Union. The Chinese market is affected in a similar way.

Yet throughout the 1940s Unilever continues to expand in the food market. New

businesses with a diverse range of products are acquired, and resources are put into research and

development for new materials and production techniques.

From the late 40s into the 50s the development of new mass markets for consumer goods

- including Africa and Asia - provide opportunities for expansion. Unilever's United Africa

Company grows fast, producing goods for sale in the newly independent African states, which

helps create new local manufacturing industries. Meanwhile post-war prosperity in Europe,

spurred by the start of the European Community, leads to a consumer boom and rising standards

of living.

3 | Page
 University of Caloocan City
College of Business and Accountancy

As new scientific advances come thick and fast, Unilever increases its focus on

technology, making Port Sunlight Research its Research Division with responsibility for both

UK and Dutch laboratories. It also establishes a nutrition research group in the Netherlands

which later becomes the Unilever Food and Health Research Institute - a centre of excellence in

nutrition.

During the 1950s new types of food most famously the fish finger are developed as a

direct response to the need for nutritious food that makes use of ingredients available in the wake

of post-war rationing. Some of these are then marketed through a promising new channel

commercial TV.

The 1960s brings optimism and new ideas as the world economy expands and standards

of living continue to rise. As a result Unilever expands and diversifies through innovation and

acquisition, setting up advertising agencies, market research companies and packaging

businesses. In 1968 it tries to merge with Allied Breweries in a truly ambitious acquisition bid.

But maintaining profit stability is difficult as the gap widens between best and worst performing

operations, and funds are invested to maintain low-yield businesses.

In the mid-60s, a restructure increases opportunities to grow brands internationally.

Control and European profit responsibility for the biggest brands are subsequently moved from

individual operating companies to category-focused teams called Co-ordinations.

During the 1970s, hard economic conditions including high inflation in the wake of the

1973 oil crisis leads to flat sales. The growth of large retailers including supermarkets also

starts a shift in negotiating power away from manufacturers.

So Unilever continues to build consumer goods businesses in sectors including transport

and packaging and has a major thrust into North America with the purchase of National Starch.

Fortunately the subsidiary United Africa Company yields large profits in oil-booming Nigeria,

helping balance out the costs of businesses in Europe and the United States.

4 | Page
 University of Caloocan City
College of Business and Accountancy

But while Unilever continues to diversify in the 1970s, it stops expanding along the

supply chain as third party suppliers become larger and better equipped to take over non-core

tasks.

At the start of the 1980s, Unilever is the world's 26th largest business. Its interests

include plastics, packaging, tropical plantations and a shipping line, as well as a wide range of

foods, home and personal care products.

Early in the decade in a bold change of strategy it decides to refocus on core product

areas with strong markets and equally strong growth potential. The necessary rationalisation

leads to large acquisitions and equally large divestments, including the sale of animal feeds,

packaging, transport and fish farming businesses. But by 1989 the resulting growth of core

businesses is clearly evident.

The new business focus continues with the number of categories in which Unilever

compete cut from over 50 to just 13 by the end of the decade. This includes the decision to sell or

withdraw many brands and concentrate on those with the biggest potential.

Restructuring creates four core business areas: Home Care, Personal Care, Foods and

Speciality Chemicals. The new structure is led by a new team, ExCo (the Executive Committee)

and includes 12 business groups, each responsible for a mix of geographical and product areas.

Also during this decade Unilever sets up a sustainable agriculture programme in light of

growing environmental pressures and consumer concerns about the food chain. Other initiatives

to preserve water resource and source fish from sustainable stocks soon follow.

As the challenges facing businesses, the environment and communities grow, Unilever

transforms organisationally and strategically to ensure we remain a sustainable business. As

peoples shopping and purchasing habits start to shift and consumers become more socially,

environmentally and civically motivated, Unilever also adopts change, both in the way our

business is structured and the way we think. Our Path to Growth strategy leads to more

5 | Page
 University of Caloocan City
College of Business and Accountancy

acquisitions and the rationalisation of manufacturing and production sites to form centres of

excellence. The One Unilever programme aligns the organisation behind a single strategy,

simplifying our business and leveraging our scale more effectively.

We also build on our long history of social purpose by embedding sustainable thinking

even further into our day-to-day activities.

In 2002, the Lifebuoy brand launches its hygiene education programme, Swasthya

Chetna, which will make a difference to the lives of 120 million people in rural areas of India,

while in 2004 we become a founding member of the Roundtable on Sustainable Palm Oil

(RSPO). In 2008, in an effort to help halt deforestation, we announce our commitment to draw

all our palm oil from certified sustainable sources by 2015.

As the decade draws to a close, the whole world is experiencing unprecedented economic

and environmental uncertainty. The changes Unilever has adopted result in the launch of the

Compass strategy in 2009, which prepares us to face the next decade with a truly sustainable

business model: to double the size of our business while reducing our environmental impact.

A. Vision and Mission Statements

Unilevers corporate vision is to make sustainable living commonplace. We believe this is

the best long-term way for our business to grow.

Unilevers corporate mission is to add vitality to life. We meet every day needs for nutrition;

hygiene and personal care with brands that help people feel good, look good and get more out of

life.

B. Analysis of Vision and Mission Statements (Old)

Unilevers vision statement puts emphasis on sustainability, especially among consumers.

The following components are notable in Unilevers vision statement:

1. Commonplace sustainable living

2. Best long-term way

6 | Page
 University of Caloocan City
College of Business and Accountancy

3. Business growth

Commonplace sustainable living is a core component in Unilevers corporate vision

statement. This component shows the companys efforts in changing its products to suit current

market conditions. For example, through sustainable design for home care and personal care

products, Unilever helps consumers reach their goals to integrate sustainability in their lives. The

corporate vision also states that commonplace sustainability is the best long-term way for the

business. Unilever understands the importance of sustainability and other market trends shaping

the industry. Moreover, the vision statement reflects the companys view of sustainability as a

way to maintain business growth. This vision statement aligns with Unilevers corporate social

responsibility strategy to address business stakeholders in the consumer goods industry.

Unilevers mission statement underscores how the company satisfies customers in various

aspects of their lives. The following are the significant components in Unilevers mission

statement:

1. Adding vitality to life

2. Meeting everyday needs for nutrition, hygiene, and personal care
3. Helping people feel good, look good, and get more out of life

Adding vitality to life is a general indicator of business strategy in Unilevers corporate

mission statement. Such vitality is the value that consumers can expect from the companys

products. The corporate mission also specifies the aspects of life where such vitality is added.

For example, Unilevers food products address consumers vitality needs in terms of nutrition.

Furthermore, through these products, the company attracts customers who want to feel good,

look good, and get more out of life. The mission statements specification of the types of

products provides a foundation for the product mix in Unilevers marketing mix.

C. Proposed Vision and Mission Statements

7 | Page
 University of Caloocan City
College of Business and Accountancy

Unilevers corporate vision is to make sustainable living commonplace. We believe this is

the best long-term way for our business to grow. And to be the most relevant and reliable

company that provides goods for everyone and make them satisfied.

Unilevers corporate mission is We will provide goods and services to consumer that will

add vitality to life. We meet every day needs for nutrition; hygiene and personal care with brands

that help people feel good, look good and get more out of life. As a result of this, consumer will

give us leadership sales and loyalty to our products.

D. Analysis of Proposed Vision and Mission Statements

Unilevers vision statement implies the desired condition of being a leader in bringing

sustainable living to customers through consumer goods. However, the statement does not

specify the desired condition of the company as a business organization. A sound corporate

vision statement contains details on the desired future situation of the organization. For example,

it is necessary to specify the companys market position in the future, to guide organizational

development. Thus, a recommendation for Unilevers vision statement is to improve it by

including additional information about market position or a leadership role in the consumer

goods industry.

Unilevers mission statement includes detailed information of what the business does and

must do. For example, the company adds vitality to life through products that address

consumers needs in nutrition, hygiene, and personal care. In this regard, the corporate mission

statement satisfies standards that require specificity on general strategic approaches. However, a

recommendation is to enhance Unilevers mission statement by adding more information on how

the company strategically achieves its aims in adding vitality to consumers lives.

8 | Page
 University of Caloocan City
College of Business and Accountancy

CHAPTER 2

Audit

In Unilever Finance, were serious about our peoples careers and development. We have a

big agenda and we need the best talent to help us achieve our ambitions. To ensure this, we have

a focused people agenda that embraces diversity and balances bringing in the best outside talent

with developing individuals who have already chosen to build their career with us. We take

calculated risks on our key talent, so a career with us can help you build up the right experiences

and progress fast in line with your potential. Our robust careers and learning programme is

managed by our own Finance people, and youll be empowered to drive your own career. We

know broad skills and experience are increasingly important, so we encourage our employees to

explore opportunities that help them build the right profile for themselves. This means taking on

wider spans of responsibility and ultimately makes our people attractive, not just within

Unilever, but to the outside world as well.

A. PESTEC Analysis

The following political external factors are significant in Unilevers consumer goods

business:

1. Political stability of most countries (opportunity)

2. Political issues in the European Union (threat)
3. Growing free trade relations (opportunity)

The political stability of most countries presents opportunity for Unilever to grow in these

markets. For example, the political stability of the United States helps minimize challenges in the

9 | Page
 University of Caloocan City
College of Business and Accountancy

companys strategic implementations in the country. On the other hand, the political issues in the

European Union are a potential threat against Unilevers operations in the regions consumer

goods market. Nonetheless, the company has opportunity for global growth based on the

expanding free trade relations, especially those involving developing countries.

The following economic external factors are determinants of Unilevers performance in the

consumer goods industry:

1. Increasing wages in developing countries (opportunity & threat)

2. High growth of developing countries (opportunity)
3. Economic stability of developed countries (opportunity)

The increasing wages in developing countries present the opportunity for Unilever to profit

more from higher potential sales, as consumers gain higher disposable incomes. However, the

same external factor is a threat in terms of increasing costs, considering that the company has

many manufacturing facilities located in developing regions. Nonetheless, Unilever can expect

business growth, as these countries grow in terms of consumer goods market size and value. For

example, China presents major growth opportunity for the company. Moreover, the economic

stability of developed countries cushions the business from risks in other markets, while

facilitating gradual but steady growth

The sociocultural external factors significant in Unilevers consumer goods business are as

follows:

1. Rising health consciousness (opportunity)

2. Rising environmentalist behaviours (opportunity)
3. Gradual dismantling of the gender divide (opportunity)

Unilever can grow through products that directly address consumers increasing interest in

healthful products. In addition, rising environmentalist behaviours present an opportunity for the

company to attract more consumers by improving its environmental impact. For example,

Unilever can minimize its energy consumption by adopting new and more energy-efficient

10 | P a g e
 University of Caloocan City
College of Business and Accountancy

technologies. Also, the company can grow through higher sales based on improving incomes

among female consumers worldwide.

In Unilevers case, the following technological external factors are significant:

1. Rising business automation (opportunity & threat)

2. Rising Research and Development investments (threat)
3. Decreasing cost of transportation based on technological efficiencies (opportunity &

threat)

Rising business automation is an opportunity for Unilever to increase operational efficiency.

For example, new business processing equipment can enhance inventory monitoring to support

supply chain and distribution efficiencies. However, the same technological external factor is a

threat because it increases the competitiveness of other firms, including small ones in local

markets. On the other hand, rising research and development investments threaten Unilever

because it also increases the competitive advantage of other firms in the consumer goods

industry. Nonetheless, the decreasing cost of transportation leads to lower operating costs, which

contribute to business growth. Still, the decreasing cost of transportation is a threat because it

contributes to the competitiveness of other firms.

Ecological trends and conditions influence Unilevers remote or macro-environment. The

following ecological external factors significantly affect Unilevers consumer goods business:

1. Rising interest in business environmentalism (opportunity)

2. Increasing business efforts on sustainability (opportunity)
3. Increasing complexity of environmental programs (opportunity)

The rising interest in business environmentalism is an opportunity for Unilever to improve its

environmental programs to attract consumers concerned about the environment. In relation, the

company can enhance its sustainability programs to strengthen its competitiveness against other

firms in the consumer goods industry. Unilevers corporate social responsibility strategy must

effectively implement these programs throughout the organization. For example, the strategy

must consider product innovation and internal business processes to further reduce business

11 | P a g e
 University of Caloocan City
College of Business and Accountancy

environmental impact. These efforts should also support Unilevers ability to satisfy increasingly

complex environmental programs. Such external factor is an opportunity for the company to

improve its competitive advantage through corporate responsibility.

Unilever must satisfy regulations to minimize barriers to its consumer goods business.

Unilever must satisfy the issues based on the following legal external factors:

1. Increasing complexity of environmental regulations (opportunity)

2. Strengthening international patent laws (opportunity)
3. Strengthening consumer rights laws (opportunity)

Unilever has an opportunity to enhance its corporate image by matching the

organizations corporate social responsibility strategy with environmental regulations. In

addition, strengthening international patent laws can facilitate the companys growth. For

example, new patent laws in developing countries help reduce patent-related issues Unilever

experiences in its remote or macro-environment. Furthermore, stronger consumer rights laws

create an opportunity for the company to improve its customer-service quality, along with

product quality standards. These efforts can increase the attractiveness of Unilevers brands in

the consumer goods market.

B. External Audit

The Committee reviewed the quarterly financial press releases together with the associated

internal quarterly reports from the Chief Financial Officer and the Disclosure Committee, and

with respect to the half-year, and full-year results the external auditors reports, prior to their

publication. They also reviewed the Annual Report and Accounts and Annual Report. These

reviews incorporated the accounting policies and significant judgements and estimates

underpinning the financial statements. Particular attention was paid to the following significant

issues in relation to the financial statements:

1. revenue recognition estimation of discounts, incentives on sales made during the year;
2. direct tax provisions and contingencies; and
3. indirect tax provisions and contingencies

12 | P a g e
 University of Caloocan City
College of Business and Accountancy

The external auditors have agreed the list of significant issues discussed by the Audit

Committee. For each of the above areas, the Committee considered the key facts and judgements

outlined by management. Members of management attended the section of the meeting of the

Committee where their item was discussed to answer any questions or challenges posed by the

Committee. The issues were also discussed with the external auditors. The Committee was

satisfied that there are relevant accounting policies in place in relation to these significant issues

and management have correctly applied these policies. At the request of the Boards the

Committee undertook to:

1. Review the appropriateness of adopting the going concern basis of accounting in

preparing the annual financial statements; and

2. Assess whether the business was viable in accordance with the new requirement of the

UK Corporate Governance Code. The assessment included a review of the principal risks

facing Unilever, their potential impact, how they were being managed, together with a

discussion as to the appropriate period for the assessment. The Committee recommended

to the Boards that there is a reasonable expectation that the Group will be able to continue

in operation and meet its liabilities as they fall due over the three-year period of the

assessment.

At the request of the Boards the Committee also considered whether the 2015 Annual Report

and Accounts was fair, balanced and understandable and whether it provided the necessary

information for shareholders to assess the Groups position and performance, business model and

strategy. The Committee was satisfied that, taken as a whole, the 2015 Annual Report and

Accounts is fair, balanced and understandable.

C. External Factor Evaluation (EFE Matrix)

Key External Factors Weight Rating Weighted score

Opportunities
Hygiene Consciousness 0.2 4 0.8
Increasing Population 0.15 3 0.45
Innovation (R&D) 0.10 2 0.2
Product Diversification 0.10 4 0.4
Explore New Markets 0.05 4 0.2

13 | P a g e
 University of Caloocan City
College of Business and Accountancy

Treats
Product Smuggling 0.15 1 0.15
Increase Demand for Antibacterial Soaps 0.05 3 0.15
Imitation of Products 0.10 3 0.3
International Trends 0.05 3 0.15
Local Competition 0.05 4 0.2
Total 1.00 3.10

D. Porters Five Forces Model Analysis

Competitive Rivalry or Competition with Unilever (Strong Force)

Competition is a major force in Unilevers industry environment. This section of the Five

Forces analysis identifies the external factors that present the impact of firms on each other. The

strong force of competitive rivalry against Unilever is based on the following external factors

and their intensities:

1. High number of firms (strong force)

2. High aggressiveness of firms (strong force)
3. Low switching costs (strong force)

There are many firms operating in the consumer goods industry. This external factor imposes

a strong force on Unilever. In addition, these firms are generally aggressive, further adding to the

intensity of competition. Unilever also experiences tough competition because of low switching

costs. For example, it is easy for consumers to switch from one firm to another. Thus, a high

level of competition is shown in this Unilevers Five Forces analysis, highlighting the need to

consider competitive rivalry as a high-priority force in the companys industry environment.

Bargaining Power of Unilevers Customers/Buyers (Strong Force)

Unilevers business and industry environment depend on the response of consumers to its

products. The influence of buyers on business performance is considered in this section of the

Five Forces analysis. Unilever must address the following external factors that lead to the strong

force of the bargaining power of customers:

1. Low switching costs (strong force)

14 | P a g e
 University of Caloocan City
College of Business and Accountancy

2. High quality of information (strong force)

3. Small size of individual buyers (weak force)

The low switching costs make it easy for consumers to transfer from Unilevers products to

other companies products. This external factor contributes to the strong intensity of the

bargaining power of buyers. In addition, consumers have access to high quality of information

about consumer goods, making it even easier for them to decide when transferring from Unilever

to other providers. For example, buyers can compare products based on online information. The

small size of an individual consumers purchases has minimal impact on Unilevers profits.

However, the low switching costs and high quality of information outweigh this third external

factor in the industry environment. Based on this section of the Five Forces analysis, the

bargaining power of customers is one of the strongest forces affecting Unilevers consumer

goods business

Bargaining Power of Unilevers Suppliers (Moderate Force)

Suppliers impact Unilevers industry environment by affecting the level of supply available

to firms. This section of the Five Forces analysis presents the influence of suppliers on

companies. The following are the external factors that contribute to the moderate force of the

bargaining power of suppliers on Unilever:

1. Moderate size of individual suppliers (moderate force)

2. Moderate population of suppliers (moderate force)
3. Moderate overall supply (moderate force)

While Unilever has large suppliers like foreign firms that supply paper and oil, the average

supplier is moderate in size. This external factor imposes a moderate intensity force on the

consumer goods industry environment. In addition, the moderate population of suppliers enables

them to impose significant but limited influence on firms like Unilever. Similarly, the moderate

level of the overall supply adds to such significant but limited influence of suppliers. For

example, any suppliers change in production level leads to significant but limited change in the

availability of raw materials used in Unilevers business. Other firms in the industry are similarly

15 | P a g e
 University of Caloocan City
College of Business and Accountancy

affected. As shown in this section of the Five Forces analysis of Unilever, the bargaining power

of suppliers is a significant but moderate consideration in the consumer goods industry

environment.

Threat of Substitutes or Substitution (Weak Force)

Substitutes can reduce Unilevers revenues and the strength of firms in the consumer goods

industry environment. The impact of substitution is determined in this section of the Five Forces

analysis. In Unilevers case, the following external factors are responsible for the weak force of

the threat of substitution:

1. Low switching costs (strong force)

2. Low substitute availability (weak force)
3. Low performance to price ratio of substitutes (weak force)

The low switching costs enable consumers to easily use substitutes to Unilevers products.

This external factor imposes a strong force on the company and the consumer goods industry

environment. However, the overall impact of substitution is weakened because of the low

availability of substitutes. For example, it is easier to access Unilevers Close-Up toothpaste

from grocery stores than to obtain substitutes like homemade organic dentifrice. In relation, most

substitutes have low performance with minimal or insignificant cost difference when compared

to consumer goods readily available in the market. This condition makes Unilevers products

more attractive than substitutes, thereby further weakening the intensity of the threat of

substitution. This section of Unilevers Five Forces analysis shows that the threat of substitutes is

a minor issue in the business.

Threat of New Entrants or New Entry (Weak Force)

Unilever competes with established firms as well as new firms in the consumer goods

market. This section of the Five Forces analysis considers the influence of new firms on the

industry environment. The following external factors create the weak force of the threat of new

entrants against Unilever:

16 | P a g e
 University of Caloocan City
College of Business and Accountancy

1. Low switching costs (strong force)

2. High cost of brand development (weak force)
3. High economies of scale (weak force)

The low switching costs enable new entrants to impose a strong force against Unilever. For

example, consumers can easily decide to try new products from new firms. However, it is costly

to build strong brands like Unilevers. This external factor weakens the intensity of the threat of

new entrants against the company. Also, Unilever takes advantage of high economies of scale,

which support competitive pricing and high organizational efficiencies that new firms typically

lack. As a result, the company remains strong despite new entrants. Based on this section of the

Five Forces analysis, the threat of new entry is a minor concern in Unilevers industry

environment.

E. Comparative Profile Matrix (CPM)

Unilever Nestle
Critical Success Factors Weight Rating Score Rating Score
Advertising 0.10 3 0.30 2 0.2
Product Quality 0.20 4 0.80 4 0.8
Price Competitiveness 0.15 3 0.45 4 0.6
Management 0.10 4 0.40 3 0.3
Financial Position 0.15 4 0.60 4 0.6
Customer Loyalty 0.05 2 0.10 3 0.15
Global Expansion 0.20 4 0.80 3 0.6
Market Share 0.05 4 0.20 3 0.15
TOTAL 1.00 3.65 3.4

17 | P a g e
 University of Caloocan City
College of Business and Accountancy

CHAPTER 3

Internal Audit

This section shows how Unilever being examined, monitored, and analysed the activities

related to a company's operations, including its business structure, employee behaviour and

information systems. Internal audit regulations, such as the Sarbanes-Oxley Act of 2002, have

increased corporate requirements for performing internal audits. Audits are important

components of a company's risk management as they help to identify issues before they become

substantial problems, such as attempts to steal intellectual property.

A. Value Chain Analysis

18 | P a g e
 University of Caloocan City
College of Business and Accountancy

PRIMARY ACTIVITIES

Inbound Logistics

*Unilever works with the agriculture industry to get the raw materials

*Raw materials enter the manufacturing site

Production and operation

*Raw materials are processed to add more value

*End products are packaged. Ready to be shipped

Outbound logistics

*Products are shipped to distributors

Marketing and sales

*The product is promoted through different media such as television, social media, magazine,

etc.,

Service

19 | P a g e
 University of Caloocan City
College of Business and Accountancy

*Theyre collecting complaints from customers or distributors

SUPPORT ACTIVITIES

Procurement

*Unilever works with the agriculture industry to get the raw materials

Technology Development

*They spent a lot of capital on Research on Research and Development to reduce

environmental impact

Human Resources Development

*Because they are in manufacturing industry, they rely on machine and their employees.

Thats why they have so many employees and take care of their employees

Firm infrastructure

*The good management of Unilever planning and financing also add values for their

customers and stakeholders.

B. Financial Ratio Analysis

20 | P a g e
 University of Caloocan City
College of Business and Accountancy

C. Internal Audit

Shareholders approved the appointment of KPMG as the Groups external auditors at the

2015 AGMs in April. On the recommendation of the Committee, the Directors will be proposing

the re-appointment of KPMG at the AGMs in April 2016. Both Unilever and KPMG have

21 | P a g e
 University of Caloocan City
College of Business and Accountancy

safeguards in place to avoid the possibility that the external auditors objectivity and

independence could be compromised, such as audit partner rotation and the restriction on non-

audit services that the external auditors can perform as described below. The Committee

reviewed the report from KPMG on the actions they take to comply with the professional and

regulatory requirements and best practice designed to ensure their independence from Unilever.

Each year, the Committee assesses the effectiveness of the external audit process which includes

discussing feedback from the members of the Committee and stakeholders at all levels across

Unilever. Interviews are also held with key senior management within both Unilever and KPMG.

The Committee also reviewed the statutory audit, audit related and non-audit related services

provided by KPMG and compliance with Unilevers documented approach, which prescribes in

detail the types of engagements, listed below, for which the external auditors can be used:

statutory audit services, including audit of subsidiaries;

audit related engagements services that involve attestation, assurance or certification of

factual information that may be required by external parties;

non-audit related services work that our external auditors are best placed to undertake,

which may include:

Tax services all significant tax work is put to tender;

Acquisition and disposal services, including related due diligence, audits and

accountants reports; and

Internal control reviews.

Several types of engagements are prohibited, including:

bookkeeping or similar services;

design and/or implementation of systems or processes related to financial information or

risk management;
valuation, actuarial and legal services;
internal audit;
broker, dealer, investment adviser or investment bank services;
transfer pricing advisory services; and
staff secondments of any kind.

22 | P a g e
 University of Caloocan City
College of Business and Accountancy

All audit related engagements over 250,000 and non-audit related engagements over

100,000 required specific advance approval by the Audit Committee Chairman. The Committee

further approved all engagements below these levels which have been authorised by the Group

Controller. These authorities are reviewed regularly and, where necessary, updated in the light of

internal developments, external developments and best practice.

The Committee confirms that the Group is in compliance with The Statutory Audit Services

for Large Companies Market Investigation (Mandatory use of Competitive Tender Processes and

Audit Committee Responsibilities) Order 2014. The last tender for the audit of the annual

accounts was performed in 2013.

D. Internal Factor Evaluation (IFE Matrix)

Key Internal Factor Weight Rating Weighted Score

Strengths
Contribution of home and personal care to net 0.12 4 0.48
sales is 72.9%
Marketing and selling expenses increased by 0.08 2 0.16
12.5% to Rp6. 6 trillion
Strong portfolio of brands and diversified 0.09 3 0.27
product range
Contribution to Total Turnover is 27% in 2013 0.08 3 0.24
Holding 15% Shares of total in Philippine Stock 0.11 4 0.44
Exchange
Cash position in 2014 increased by 13.7% or 0.09 4 0.36
Rp31.5 billion

Weaknesses
Finance income decreased by 61.5% to Rp14.5 0.11 4 0.44
billion
Sales growth for the year was 12.7%, lower than 0.05 2 0.10
previous year growth of 16.3%
The Companys collection period weakened from 0.06 3 0.18
30 days in 2012 to 33 days in 2013
No direct connecting with customer 0.08 4 0.32
Excellent in R&D lead to high in price 0.06 3 0.18
Employ 6,719 employees in 2013 0.07 2 0.14
Total 1.00 3.31

23 | P a g e
 University of Caloocan City
College of Business and Accountancy

CHAPTER 4
Matching
A. SWOT Matrix

STRENGTHS
1. Contribution of home and personal care
to net sales is 72.9%
2. Marketing and selling expenses
increased by 12.5% to Rp6. 6 trillion
3. Strong portfolio of brands and
diversified product range
4. Contribution to Total Turnover is 27%
WEAKNESSES
1. Finance income decreased by 61.5% to
Rp14.5 billion
2. Sales growth for the year was 12.7%,
lower than previous year growth of
16.3%
3. The Companys collection period
weakened from 30 days in 2012 to 33

24 | P a g e
 University of Caloocan City
College of Business and Accountancy

in 2013 days in 2013

5. Holding 15% Shares of total in 4. No direct connecting with customer
Philippine Stock Exchange 5. Excellent in R&D lead to high in price
6. Cash position in 2014 increased by 6. Employ 6,719 employees in 2013
13.7% or Rp31.5 billion
OPPORTUNITIES THREATS
1. Hygiene consciousness 1. Product Smuggling
2. Increasing Population 2. Increase Demand for Antibacterial
3. Innovation (R&D) Soaps
4. Product Diversification 3. Imitation of Products
5. Explore New Markets 4. International Trends
5. Local Competition

B. Internal-External Matrix

C. Boston Consulting Group (BCG) Matrix

The Boston Consulting Group a leading management consulting firm develops and

popularized the growth share matrix as shown in this figure.

25 | P a g e
 University of Caloocan City
College of Business and Accountancy

Conclusion:
There are the conclusions for Unilever products, how they are lying in the BCG matrix is

given below:
1. Surf Excel & Lux:
The market share value of Surf Excel and Lux are high and relative market growth rate of

Surf excel and Lux are low, that is why Surf Excel and Lux are lying in the BCG Matrix

at Cash Cow Point.

2. Broke Bond Supreme & Knorr Noodles:
The market share value of Broke bond supreme and Knorr Noodles are high and relative

market growth rate of broke bond supreme and knorr noodles are high, that is why broke

bond supreme and knorr noodles are lying in the BCG Matrix at Star Point.
3. Lifebuoy Shampoo
The market share value of Lifebuoy shampoo is low and relative market growth rate of

Lifebuoy shampoo is high, that is why Lifebuoy shampoo is lying in the BCG Matrix

at ??? Point. At this point, Company makes their investment on this product to to get the

point of Cash cow and Star point in BCG Matrix.

4. Rexona Deodorant

26 | P a g e
 University of Caloocan City
College of Business and Accountancy

The market share value of Rexona deodorant is low and relative market growth rate of

Rexona Deodorant is low, that is why Rexona Deodorant is lying in the BCG Matrix at

Dog Point.
D. Grand Strategy Matrix
The Grand Matrix helps us to determine the strategy that firm must pursue, based on its

competitive position and market growth. Unilever lies in Q1 which represents excellent strategic

position of company. For these firms, continued concentration of current market and products is

an appropriate strategy. Unilever has abundant resources so backward, forward and horizontal

integration may also prove effective.

E. Strategic Position and Action Evaluation (SPACE) Matrix

27 | P a g e
 University of Caloocan City
College of Business and Accountancy

28 | P a g e
 University of Caloocan City
College of Business and Accountancy

Conclusion:
Financial Position average is 4.00
Industry Position average is 4.25
Stability Position average is -3.00
Competitive Position average is -1.75
Directional Vector Coordinates:
X-axis (CP + IP) : -1.75 + (4.25) = 2.50
Y-axis (SP + FP) : -3.00 + (4.00) = 1.00

F. Summary of Matrices
Nowadays, competing to other company is now the basis for them in able to survive the

market competition. Having the expected life span depends on how you played the volatility

29 | P a g e
 University of Caloocan City
College of Business and Accountancy

changes in the market. Also competition inside a company is usually stimulated with the larger

purpose of meeting and reaching higher quality of services or improved products that the

company may produce or develop.

As we can see at the matrices above, it shows how Unilever excels in their performance in

the year 2015. Unilever as one of the international company known all over the world has being

competitive whether it is an old company or new company. Although Unilever has some

weaknesses and threats, they work for it to have a better service and improved product. Excellent

innovation regarding the Research and Development brought them to make the customers

satisfied. Unilever also have some opportunities and strengths that will help them to grow and

build according to the Internal-External matrix. Unilever products show how powerful and very

satisfying to the customer. BCG matrix will tell us why some Unilever products being consumed

by the consumer. Grand Strategy matrix and Space Matrix tell how Unilever good at competing

to other companies internationally. Overall in the matrices above, it shows that the performance

of Unilever in the year 2015 is good as it is.

CHAPTER 5
Decision
A. Quantitative Strategic Planning Matrix (QSPM)
The Quantitative Strategic Planning Matrix is a strategic tool which is used to evaluate

alternative set of strategies.

30 | P a g e
 University of Caloocan City
College of Business and Accountancy

CHAPTER 6
Conclusion and Recommendation
A. Conclusion

This analysis found that, Unilever is globally successful company. They create brands for

specific countries and regions. Products for example, found in South Americas will not be found

in South Asian countries. Since different in culture exists worldwide, the creation and supply of

brands have to be taken seriously. Unilever Bangladesh is the market leader in home and

personal care products. The Unilever products are able to gain customer satisfaction and trust.

Their production and distribution is expanding rapidly. Unilever is starting to consider how they

31 | P a g e
 University of Caloocan City
College of Business and Accountancy

make Unilevers corporate commitments and activities more visible and relevant to their

consumer.

B. Recommendation

Make an initiative to create an overall umbrella brand across all Unilever's brands that will

eventually consolidate various businesses under one name.

Unilever Plc
Unilever NV
One Unilever

Unilever must provide a greater clarity of leadership, responsibility, and accountability. They

must allow Unilever to focus on the needs of their customers and consumers thus reigniting

growth and increasing sales potential. Unilever must provide the ability to leverage scale of

operations. Create a strategic platform for brand management.

It should implement "Unilever Believer" product and brand extensions. The related example

in this case is of 'Lipton tea'. It should try and create an extension to this famous brand by

focusing on energy drinks.

CHAPTER 7
End Matters
A. Bibliography

2015 Annual Reports and Accounts of Unilever Philippines Inc.

Unilever Strategic Report

https://www.unilever.com.ph/about/who-we-are/our-history/

http://panmore.com/unilever-vision-statement-mission-statement-analysis

https://www.unilever.com.ph/careers/professionals/finance/

http://panmore.com/unilever-pestel-pestle-analysis-recommendations

32 | P a g e
 University of Caloocan City
College of Business and Accountancy

http://panmore.com/unilever-five-forces-analysis-porters-model-recommendations

https://www.unilever.com/Images/annual_report_and_accounts_ar15_tcm244-

478426_en.pdf

http://panmore.com/unilever-five-forces-analysis-porters-model-recommendations

https://www.slideshare.net/DhaifinaIdznitia/unilever-strategic-management-assignment

https://www.slideshare.net/Farooque_Ahmed/unilive-bcgmatrix

B. Appendices

33 | P a g e
 University of Caloocan City
College of Business and Accountancy

34 | P a g e
 University of Caloocan City
College of Business and Accountancy

35 | P a g e
 University of Caloocan City
College of Business and Accountancy

C. Curriculum Vitae

John Anthony C. Vicera

#2933 A. Bonifacio St. Bagong Pag-asa Camarin Caloocan City
Contact No.: 09460708041
B- Day: December 30, 1996
E-mail Add.: johnanthony_vicera@yahoo.com

Objective
36 | P a g e
 University of Caloocan City
College of Business and Accountancy

Seeking a position where I can maximize my knowledge and skills as a productive

individual giving quality performance at all times for the attainment of the goal of the
organization I aim to be part of.

Educational Qualification

UNIVERSITY OF CALOOCAN CITY

Bachelor of Science in Business Administration
Major in Financial Management 2013 - Present

Researches Done

Strategic Financial Management (Unilever)

Financial Marketing Plan for MetroBank
Industry Analysis (Banking)

Seminars and Professional Training Attended

Seminars:
Organization Date
INVESTMENT101 AND VALUEOF SAVINGS Financial Management March 2016

Training: NATIONAL HOUSING AUTHORITY On the Job Training (OJT) October 2016

Work Experience

MCDONALDS Service Crew June 21, 2015 Present

Competencies

Oriented in Microsoft Office Applications such as Microsoft Word and Microsoft

PowerPoint.
Language/Communication: Able to speak and write in English and Filipino and also a
good listener

Character Reference
Janet Badua
Chief Internal Control Officer Audit Div.
Treasuer Department
National Housing Authority
09178199172

Isaias Borres Ph.D, DBA

37 | P a g e
 University of Caloocan City
College of Business and Accountancy

Chairperson of Graduate School in BusinessPublic Administration, Hospitality and Travel

Management OLFU
Program Coordinator HRDM UCC
09175116869

38 | P a g e