Introduction:

“UNILEVER IS ONE OF THE WORLD’S LEADING CONSUMER GOODS COMPANIES, MAKING AND SELLING
AROUND 400 BRANDS IN MORE THAN 190 COUNTRIES.” Every day, 2.5 billion people use our products
to feel good, look good and get more out of life. In 2017 we had 13 billion euro brands. Our geographic
reach gives us an unparalleled global presence, including a unique position in emerging markets which
generate 58% of our turnover. In April 2017, we announced our intention to combine our Foods and
Refreshment categories (which took effect on 1 January 2018) and the divestment of our Spreads
business, which we expect to complete in mid-2018 after a €6.825 billion offer from KKR in December
2017. At the heart of our business is a workforce of 161,000 people who are driven by our Purpose and
empowered to excel in our fast-changing markets. Unilever’s Code of Business Principles (the Code), and
the 24 policies that support it (Code Policies), set out the standards required from all our employees. The
Code Policies cover a number of areas, including countering corruption (e.g. anti-bribery), respecting
people (e.g. respect, dignity and fair treatment) and safeguarding information Our new C4G organization
is now fully operational. We expect the benefits of C4G to be realized progressively during 2018 and 2019.

Uniliver Sustainable Living Plan

OUR BRANDS:

Strengthen connections between consumer and the product. Like Dove and Beauty Campaign.

Operations:

 Develop innovative product that address different consumer needs at different price points.
 Add value at every step in the value chain.
 Quality of consumer service rolling out our innovation faster.

Our People:

Sustainable, profitable growth can only be achieved with the right people working in an organization that
is fit to win.

SWOT ANALYSIS:

Strengths:

 Unilever operates in nearly 190 countries around the world and hence, has a global footprint
combined with top of the mind brand recall among consumers worldwide.
 It has a deep and broad portfolio of brands and a diversified product range, which makes it uniquely,
positioned to tap into the changing consumer preferences across the world.
 Its Research and Development initiatives are heavily funded and manage to bring to the market
innovative and cutting edge products in tune and in line with consumer preferences.
 Unilever has a distinct competitive advantage over its nearest competitor, Proctor and Gamble
because of its flexible pricing and expertise in distribution channels that manage to reach the nook
and the corner of the globe.
 The company finds its strengths in leveraging the economies of scale arising from its breadth of
operations as well as synergies between its many manufacturing facilities, which totaled 270
locations around the world at last count.
 Unilever combines global thinking with local execution, which means that it pursues Global
strategies that let it win the hearts and minds of consumers who would like to use its products that
are globally famous yet retain a distinct local flavor.

Weaknesses:

 The biggest weakness that Unilever faces is that it operates in an upper competitive market where
the other global giants like P&G and Nestle in addition to a host of local players challenge its
dominance at every turn and raise the stakes in the Trillion Dollar FMCG (Fast Moving Consumer
Goods) space.
 The other weakness is that its products can easily be replaced with substitutes especially in the
emerging markets in Africa and Asia where the rural consumers in the hinterland often use
traditional and natural alternatives to the products that Unilever markets.
 Threats:
A variety of external factors can limit or reduce Unilever’s business performance. The SWOT
Analysis model considers these external factors as threats that the company must strategically
tackle. The following are the threats relevant to Unilever’s consumer goods business:

1. Tough competitive rivalry

2. Product imitation
3. Increasing popularity of retailers’ house brands

Unilever faces tough competition, which is a threat based on the strengths of other firms in the
industry. Competitors threaten to reduce the company’s market share and corresponding financial
performance. Product imitation is also a major threat against Unilever. For example, local firms
can develop products highly similar to Unilever’s. Also, retailers impose a threat by selling their
own brands. These brands are known as house brands, store brands or generic brands. For
example, Costco uses Kirkland Signature as a house brand, and Walmart has its own house brands
that directly compete against Unilever’s products. Company’s competitive advantage.

Opportunities:
Unilever must take advantage of growth opportunities in consumer goods markets around the
world. This section of the SWOT analysis determines such opportunities or external strategic
factors that can facilitate business development. The following opportunities are significant in
Unilever’s external environment:

1. Business diversification
2. Product innovation for health
3. Business enhancement for environmental conservation
4. Market development

Unilever has opportunities to diversify by entering businesses outside the consumer goods
industry. Diversification reduces market-based risks and improves business resilience. On the
other hand, product innovation can increase Unilever’s product attractiveness by addressing the
needs of increasingly health-conscious consumers. Similarly, the company has an opportunity to
make its business more sustainable and environmentally friendly to attract and retain
environmentally conscious consumers. In addition, market development can grow Unilever’s
business by increasing revenues from the sale of its current products in new market segments. For
example, the company can market its Lipton products as health drinks for consumers with special
diets.
 ”Uniliver Strategies”
 WINNING WITH BRANDS AND INNOVATION:

Consumer preferences are changing and they are taking radically different paths when purchasing brands.
We must therefore innovate faster to respond to these changes. While the level of innovation will vary by
category, depending on market requirements and brand strategies we use 70:20:10 as a general
percentage guideline. The ‘70’ innovation projects are global roll-outs, such as Baby Dove which was
launched in 19 markets in 2017. Local innovations marketed through global brands make up the ’20’ part
of our portfolio, such as the launch of Comfort Sakura in Japan. The ‘10’ are hyper-local launches such as
the Sunsilk Yuya range in Mexico which respond directly to local requirements. To enable this, C4G has
created more than 200 Country Category Business Teams (CCBTs) which are multifunctional
entrepreneurial units which break down silos by combining marketing, R&D, customer development and
supply chain expertise. They have ownership of their own profit and loss account and are empowered to
take decisions for their local requirements. Through CCBTs, we are aiming for more relevant innovations,
which are rolled out faster. We are already seeing an improvement in time to market across our portfolio.
At the same time, we are seeing more rapid local innovations to meet local trends. CCBTs are supported
by 45 Brand Communities, which ensure global collaboration and best practice sharing. Consumers
increasingly seek brands that are authentic and which they can trust. Our Sustainable Living brands are a
key differentiator in this regard. In 2016, 18 of our top 40 brands were Sustainable Living brands which
combine a powerful purpose with products contributing to the Unilever Sustainable Living Plan

WINNING IN THE MARKETPLACE:

We reach 2.5 billion consumers every day through 25 million retail stores. We are constantly evolving our
portfolio through our C4G approach to reach consumers in all income brackets. This stretches from our
prestige range in Personal Care, built from carefully selected acquisitions such as Carver Korea and
Hourglass, down to Domex, a new toilet detergent innovation in powder format launched in just seven
months for the lowest income groups in India. But we also reach wide into new geographies, with brands
expanding to meet future pockets of growth such as Pure Leaf tea in North America and Sunlight dishwash
in Central & Eastern Europe. Data is key to informing innovation, gathered from publicly available
information, but also from our 25 People Data Centres around the world. These identify trends and
insights from social listening and engaging with consumers with ideas for new launches and formats.
Alongside innovation, customer development is a key driver of growth. Our Category Channel
Development Leaders sit on our CCBTs and work closely with our marketing professionals so products are
available when and where consumers want them, in the format they prefer, utilizing Net Revenue
Management, supported by compelling and relevant communications. E-commerce remains a key and
growing channel. Our online business is now close to delivering 4% of Unilever turnover. We have more
than 800 people dedicated to building our business through numerous online channels such as Amazon,
Taobao in China, online grocery websites, as well as direct-to-consumer models deployed by Dollar Shave
Club, T2 and a number of our prestige brands.

WINNING WITH PEOPLE:

At the heart of C4G is a founder’s mindset that will power long-term value creation. It involves more
collaboration, more experimentation through test and learn, embracing failure to gain insight and an
obsession with customers and consumers. An owner’s mindset empowers our people to take
responsibility for delivering business results. Through our CCBTs and Brand Communities, they take
innovations from global teams and land them in markets. But they are also empowered, and provided
with the resources, to develop local innovations with speed. C4G gives our people license to take
responsibility for resources, driving efficiency improvements through zero-based budgeting and
reinvesting the proceeds in higher growth areas. With a more entrepreneurial culture we are also
changing the way our people are rewarded, with more long-term share-based incentive schemes that
reward both business performance and progress on our Unilever Sustainable Living Plan (USLP) targets
(see page 7). To ensure we develop the right capabilities and skills needed for these different ways of
working and new entrepreneurial leadership qualities, we are investing in continuous, ‘always-on’
learning programmes that are available when people need them in the most relevant format. Attracting
and retaining the best talent is vital to value creation and our Purpose of Making Sustainable Living
Commonplace is a clear differentiator, with 72% of employees believing sustainability drives growth in
the business. In 2017 Unilever was the number one FMCG graduate recruiter in 44 countries.

WINNING THROUGH CONTINUOUS IMPROVEMENT:

C4G plays a significant role in driving competitive growth, but it is also responsible for margin expansion
to deliver profitable growth. Through sharper financial discipline governing overhead spending, and our
zero-based budgeting approach, we are reducing costs as well as uncovering new and innovative ways of
working. In the supply chain, we have rolled out the 5S: smart programme across all categories. 5S drives
cost savings, but it is more than a conventional cost saving exercise. It examines the business for
improvements more broadly across the entire value chain, driving savings through smart buying, smart
sourcing and smart product portfolio, all of which leverage our Partner to win programme. 5S also drives
revenue and margin through smart mix and smart pricing which we deliver through our Net Revenue
Management programme. In Home Care alone, the 5S programme has delivered material savings of €450
million in 2017. Customer development is using virtual reality tools to test ahead of new launches, savings
costs and cutting project times compared to traditional methods using physical store mock-ups. In
marketing, we are creating more of our own content in house while making existing assets go further. Our
17 U-Studios in 12 countries are creating content for brand teams faster and around 30% cheaper than
external agencies. In addition, we are using our global and agency networks in order to access efficient
production solutions and locations. We continue to apply zero-based budgeting to improve efficiencies in
areas such as brand and marketing investment.
 PESTEL ANLALYSIS FOR UNILIVER
Unilever’s ability to address external factors in its remote or macro-environment contributes to
business prominence in the global consumer goods market. This PESTEL/PESTLE analysis
identifies such external factors. The PESTEL/PESTLE Analysis model is a tool for managers to
understand the influence of the external environment on businesses. In the case of Unilever,
these external factors vary significantly, considering the international scope of the business.
Nonetheless, the company must focus on maximizing business performance. Unilever can
achieve higher business performance through strategies that overcome the most
significant threats and exploit the biggest opportunities shown in this PESTEL/PESTLE analysis.

Political Factors that Impact Unilever PLC

This PESTEL/PESTLE analysis of Unilever outlines growth opportunities in the international

consumer goods market. However the following political external factors are significant in
Unilever’s consumer goods business:

1. Political stability of most countries (opportunity)

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

Social/Socio-cultural Factors Influencing Unilever’s Business Environment

Sociocultural trends and issues affect Unilever’s business performance and the remote or macro-
environment. The socially driven behavioral aspect of markets is considered in this section of the
PESTEL/PESTLE analysis. The sociocultural external factors significant in Unilever’s consumer
goods business are as follows:

1. Rising health consciousness (opportunity)

2. Rising environmentalist behaviors (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 behaviors 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
technologies. Also, the company can grow through higher sales based on improving incomes
among female consumers worldwide. The external factors in this section of Unilever’s
PESTEL/PESTLE analysis show the importance of product innovation in growing the consumer
goods business.
 Technological Factors in Unilever’s Business
Unilever depends on available technologies to support its consumer goods business. This section
of the PESTEL/PESTLE analysis identifies the impact of technological trends on firms and their
remote or macro-environment. In Unilever’s case, the following technological external factors
are significant:

1. Rising business automation (opportunity & threat)

2. Rising R&D 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 (Read: Unilever’s Operations Management). 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 (R&D) 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. This section of the PESTEL/PESTLE analysis of Unilever highlights growth opportunities
and competitive threats based on technological trends in the remote or macro-environment.

Ecological/Environmental Factors Affecting Unilever

Ecological trends and conditions influence Unilever’s remote or macro-environment. The effects
of the natural environment and related issues are considered in this section of the
PESTEL/PESTLE analysis. The following ecological external factors significantly affect
Unilever’s 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. Unilever’s 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
environmental impact. These efforts should also support Unilever’s ability to satisfy increasingly
complex environmental programs. Such external factor is an opportunity for the company to
improve its competitive advantage through corporate responsibility. Based on the condition of
the remote or macro-environment shown in this section of Unilever’s PESTEL/PESTLE
analysis, there are opportunities to improve business performance by making the organization
more environmentally sustainable.
 Legal Factors Facing Unilever
Unilever must satisfy regulations to minimize barriers to its consumer goods business. This
section of the PESTEL/PESTLE analysis determines the impact of legal systems on firms’
remote or macro-environment. 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 organization’s
corporate social responsibility strategy with environmental regulations. In addition,
strengthening international patent laws can facilitate the company’s 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 Unilever’s brands in the consumer goods market.
The external factors in this section of the PESTEL/PESTLE analysis of Unilever indicate the
benefits of improving legal systems worldwide.

Conclusion
This PESTEL/PESTLE analysis reflects a number of opportunities and threats that
Unilever must prioritize in its strategies for growth and global expansion in the consumer
goods market. A recommendation is that the company’s strategies must include the
external factor of rising health consciousness among consumers. Unilever can take this
factor as an opportunity to improve its food products. It is also recommended that the
company must improve its sustainability programs to address opportunities regarding
business sustainability. Another recommendation is to take rising business automation
as a significant threat that empowers Unilever’s competitors, especially smaller ones in
local markets. For example, local companies can increase their competitive advantage
by automating their production processes. Given such issues based on this
PESTEL/PESTLE analysis of Unilever, global growth with innovation and business
sustainability require strategic focus.

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