Unilevers Strategies for Competing in Foreign Markets

As one of the strong and healthy companies in the world with many successful brands, Unilever has an opportunity to expand into foreign markets in order to gain access to customers around the world. Supported by strengths of its four key global brands 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). A global strategy used by the Unilever is preferable to localized strategies because Unilever can more unify its operations and focus on establishing a brand image and reputation that is uniform from country to country. It strategy implies to the Unilever success in building strong character brand such as Dove, Sunsilk, Rexona and Lux. Moreover, with a global strategy Unilever should coordinated its marketing, operational and distribution worldwide. Unilever is increasing its efforts to build on its long-established local roots in developing regions. Through its well-established distribution network in both the traditional and modern retail outlets and with a good ability to adapt successful global brand concepts to suit local markets, Unilever is in a good position to be able to capitalize on the growth forecast in these regions. 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. In the cosmetics and toiletries globally competitive industry, 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 benefit of being exclusively involved in cosmetics and toiletries, unlike both Unilever and Procter & Gamble which both have cross-industry involvement, such as in packaged food. Much the same group of rival companies competes in many different countries. Therefore, the competition pursues the company to be more innovative in developing its products and maintaining its brands. 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. All strategies executed by Unilever for competing in foreign market resulting in moderate 5% sales growth in 2006 just above market performance ensured that Unilever kept its position as third largest player in cosmetics and toiletries with a 7% market share. Second-placed LOral fared a lot better, increasing the gap between the two companies in part thanks to its acquisition of The Body Shop. Market leader Procter & Gamble remained over five percentage points ahead of Unilevers share. In 2006, Unilever remained comfortably ahead of Colgate-Palmolive in fourth place. Unilever decision to introduce its product on emerging market such as Asia-Pacific, Latin America and North America implies to the high contribution of Unilever total revenue by 26%, 21% and 16% respectively. Muhammad Fikri