Executive Summary
The
strategic management report prepared for Unilever, a renowned international
company in the fast-moving consumer goods (FMCG) sector, is summarized in this
executive summary. In order to improve Unilever performance and keeping its
competitive edge in the worldwide market, a thorough analysis and strategic
roadmap were produced for the study. The paper starts out by outlining
Unilever’s present strategic stance and examines the major strategic problems
the company is now dealing with. The paper examines internal and external
capabilities that affect Unilever operational efficiency and competitiveness
using qualitative and quantitative research. The analysis also looks carefully
at the organization business strategy and any potential future developments
that could affect its trajectory for growth. The paper makes recommendations
for approaches to deal with the noted obstacles and seize chances to create
long-term competitive advantages based on the strategic analysis. The emphasis is
on coordinating internal and external elements to effectively support Unilever
strategic goal.
The
main suggestions include an emphasis on effective communication, leadership involvement,
resource optimization and a client-centered strategy. The paper emphasizes the
significance of tracking the execution using performance indicator and feedback
systems in order to ensure successful strategy implementation. It pushes
Unilever to promote a culture of ongoing education, creativity and adaptation
in order to successfully navigate the dynamic business environment. Unilever
may maximize organizational performance, seize untapped market opportunity and
proactively address threats by following the strategy offered in this research.
The strategic insight and doable suggestions are intended to position Unilever
as a dominant force in the FMCG sector, generating value for its stakeholder
and uphold its status as a major player on the international stage.
Table of Contents
Human
Resource Management Challenges
Product
Innovation and Target Setting
External/Environmental
Factors Relevant to HRM and product Innovation Issues
Market
Competition and Consumer Preferences
Economic
Conditions and Market demand
Regulatory
Environment and compliance
Internal
Factors Relevant to HRM and Product Innovation Issues
Human
Resource Capabilities and Skill Development
Research
and Development Capabilities
Organizational
Culture and Leadership
Future
Trends and Opportunities
Sustainability
and Environmental Focus
Focusing
on Health and Wellness
Addressing
Competitive Challenges
Monitoring
through Key performance indicators
Unilever –
Business Strategy and Analysis
Introduction
In this strategic management study, Unilever, a preeminent international company active in the fast-moving consumer goods (FMCG) sector will be critically assessed and applied strategy concept and theories. As advisors to the board of directors of Unilever, it is our responsibility to solve a strategic issue or looking into a potential way to improve the organization performance. The board of Unilever is made up of primary shareholder representatives, executive director and independent directors with experience in business and education. The current strategic position of Unilever is thoroughly examined in this paper, along with important strategic concern and suggested approaches for achieving long-term competitive advantages. The assessment takes into account both internal and external elements that affect the performance of the organization.
Report
assesses the organization SWOT (strengths, weaknesses, opportunities, and
threats) to find possible areas for improvement through qualitative and
quantitative research. This analysis intends to provide actionable insights to
strengthen Unilever strategic purpose by investigating environmental conditions,
internal competency and the organization business model. The report also look
at prospective trend and openings in the future that Unilever can take
advantage of to strengthen its position in the market. To stay ahead in a
cutthroat market environment, the business will be able to make well-informed decisions,
allocate resources efficiently and promoting an innovative and adaptable
culture.
Human
Resource Management (HRM and Product Innovation are the two main areas in which
Unilever, the organization chosen for the case study, is currently experiencing
strategic issues.
Human Resource Management Challenges
Unilever
Indonesia's deployment of HRM practices to increase staff productivity has been
identified as a strategic challenge (Putri et al., 2022). For an organization
to succeed, increasing employee productivity is essential and Unilever
concentrate on creating successful HRM methods to accomplish this goal. This
problem emphasizes how crucial it is to deal with workforce issues, talent
management and employees engagement in order to maximize productivity and
creating supportive workplace culture inside the organization.
Product Innovation and Target Setting
Regarding
target planning and product innovation, Unilever is also facing a serious
strategic dilemma. Unilever is a consumer goods corporation that competes in a
fiercely cutthroat industry where ongoing innovation is crucial to staying
ahead. In order to efficiently meet consumer needs, the organization seeks to
identify pertinent target and optimizing product development (Peters et al.,
2017). Setting realistic and attainable goals for product development and
market penetration, as well as strategic planning to match product innovation
with market trend and consumer preferences, are necessary to address this
issue. Setting realistic and attainable goals for product development and
market penetration, as well as strategic planning to match product innovation
with market trend and consumer preferences are necessary to address this issue.
External/Environmental Factors relevant to HRM and product
Innovation Issues
Market Competition and Consumer Preferences
Unilever
competes in a market for consumer goods that is incredibly competitive, where
success depends on being aware of changing consumer preferences. External
factors, including as shifts in customer preferences, emerging trend and
technology advancements, can have a significant impact on HRM strategy and
product innovation decisions (Cheng, 2021). Businesses must understand and
adapt to customer demands in order to remain competitive in the market and
produce innovative products that satisfy customer needs.
Economic Conditions and Market demand
Unilever
HRM policies and product innovation activities are heavily influenced by market
demand and economic situations. Recessions and other economic downturns can
have an impact on consumer purchasing power and demand for particular goods. To
remain financially viable and relevant to market needs in the face of such
changes, product portfolios, workforce planning, and HR policies may need to be
adjusted (Seeberger & Sampietro, 2021).
Regulatory Environment and compliance
Unilever
operates in a number of nations with various regulatory frameworks. HRM
practises and the processes used to generate new products might be impacted by
changes in regulations relating to labour laws, environmental policy or product
standards. For Unilever to do business morally and preventing potential legal
issues, it is essential to ensure compliance with all applicable law and
regulations (Chebiego & Kariuki, 2018).
Internal Factors Relevant to HRM and Product Innovation
Issues
Human Resource Capabilities and Skill Development
The
capacity and skill development of Unilever's staff is essential to meeting HRM
concerns. To increase productivity and generate a trained workforce that can
foster innovation and product creation, organisations must invest in employee
training and development programs (Chebiego & Kariuki, 2018).
Research and Development Capabilities
Internal
R&D capabilities of Unilever are essential for product innovation.
Cutting-edge research, novel formula and market trends are all closely related
to the company's capacity for product creation and competitiveness (Cheng,
2021).
Organizational Culture and Leadership
Internal
Unilever culture and leadership behaviours have a big impact on HRM plan and
product development. An encouraging company culture encourages employee
involvement and creativity, supporting creative project and ideas (Seeberger
& Sampietro, 2021). In addition to advancing strategic goals, aligning the
workforce and foster an innovative culture, effective leadership is essential.
Future Trends and Opportunities
Sustainability and Environmental Focus
The
increased focus on sustainability and environmental responsibility is one of
the major future trends in the consumer products sector. Customers are becoming
more aware of how the products they buy affect the environment, which is
driving up demand for eco-friendly and sustainable goods. Unilever, a business
with a strong commitment to sustainability, is in a good position to benefit
from this trend by continuing to innovate and growing its line-up of
sustainable products (Bartlett & Ghoshal, 2017).
Digitalization and E-commerce
Unilever
has a lot of chances because of growing e-commerce sector and the ongoing
digitalization of the world economy. As more people shop online, the business
can use digital marketing technique and e-commerce platforms to reach more
people and improve client interaction .
Health and Wellness products
The
demand for health and wellness products is rising as people place more emphasis
on their own health and wellbeing. Unilever may take advantage of this opportunity
by creating and advertise functional products that are in line with shifting
consumer expectations and healthier alternatives (Ahmed, 2019).
Potential Threats
Intense Competition
Intense
competition exists in the consumer products sector, where a large number of
local and international businesses compete for market share. Rivals strong
competition poses a challenge to Unilever and could have an adverse effect on
its market position and profitability.
Economic Uncertainties
Unilever
competes on a global stage where the state of the economy can change suddenly.
Economic downturn or recessions in important markets may cause consumers to
spend less which would impair demand for the company goods (Bartlett &
Ghoshal, 2017).
Regulatory Challenges
Unilever
works in several nations with various legal systems, which might pose
difficulty and compliance problems. The company activities may be threatened by
modifications to regulatory regulations relating to product safety, labelling
and environmental norms (Ahmed, 2019).
Strategic Analysis
The
strategic analysis of Unilever has several implications for the strategic
purpose of the organization:
Leveraging Sustainability
The
report emphasises how important sustainability is as a major emerging trend in
the consumer products sector. The firm commitment to sustainability made by
Unilever is in line with rising customer demand for products that are both
environmentally and socially responsible. Unilever should keep funding research
and development for sustainable products and promote its current sustainable
activities to capitalise on this trend and enhancing its reputation as an
environmentally conscious business.
Expanding Digital Presence
The
report highlights e-commerce and the possibility of digitization as major
prospects for Unilever. The company has to improve its e-commerce and digital
marketing tactics in order to take advantage of these potential. Unilever may
more effectively communicate with its clients, comprehending their preferences,
and adapt its product offers to better suit their needs by utilising internet
platform and consumer data analytics.
Focusing on Health and Wellness
The
report pinpoints the rising demand for goods related to health and wellness. In
order to appeal to consumers who are concerned about their health, Unilever can
strategically diversify its product line to include more functional and
health-conscious items. To address certain health and wellness demands, this
may entail reformulating current goods or launch new product lines.
Addressing Competitive Challenges
The
report emphasises how fiercely competitive the consumer products sector is. To
keep ahead of its rivals, Unilever must continually innovate and differentiate
its products. To preserve a competitive edge, this may entail making
investments in R&D, researching new market or implementing disruptive
technology. The strategic analysis highlights both opportunity and risks that
Unilever should take into account when examining its strategic purpose, which
speaks to the need for a review. The company should frequently review its
strategies and making adjustments to account for shifting market circumstances.
To make sure Unilever stays relevant and competitive in the business as new
trends and challenges materialise, it is crucial that the company periodically
reviews its strategic direction.
Competitive Advantage
Based
on matching and converting internal and external factors, Unilever can
potentially develop a competitive advantage by focusing on following
strategies:
·
Product
Innovation: By aligning internal capabilities in research and development with
external market trend and customer demands, Unilever can continuously innovate
its product offerings. This involves identifying unmet consumer needs and
preference and developing new products that address these requirements
effectively. Product innovation can set Unilever apart from competitor and
enhance its market position.
·
Leadership
Sustainability: By further integrating sustainability practises throughout
Unilever supply chain and operations, company may use its dedication to
sustainability as a competitive advantage. Unilever can draw in customers who are
concerned about the environment and establish a reputation as an industry
leader in sustainability by aligning its internal belief and capabilities with
the rising demand for sustainable products.
·
Digital
transformation: Positioning Unilever as a digitally aware firm can be
accomplished by combining internal strengths in digital capabilities with
external opportunities in e-commerce and digital marketing. By embracing
digital transformation, an organisation may improve customer engagement, gather
insightful data and streamline corporate operations, give it a competitive
advantage.
·
Customer-Centric
Approach: Unilever may set itself apart from its rivals by focusing internal
resources and expertise on providing excellent customer experiences.
Understanding consumer preferences and feedback enables a firm to modify its
goods and services to better suit the needs of its target market, increasing
both market share and customer loyalty. In order to take advantage of the
potential mentioned, Unilever business model would need to embrace a more
flexible and customer-focused strategy. To support its attempts for digital
transformation, the organisation may need to make investments in new technology
and skills. Also every element of the business model should take sustainability
into account, from the sourcing of raw materials through the packaging and have
delivery of the products.
The
business model of the organisation could also need to change to accommodate
ongoing product innovation, resulting in the creation of an adaptable and
responsive framework for launching new products onto the market. Additionally,
Unilever should encourage a culture of innovation and cooperation, encouraging
cross-functional teams to cooperate in order to capitalise on the identified
competitive advantages, in order to ensure the successful implementation of
these plans. Unilever can create a strong competitive advantage that maintains
its market position and fosters long-term growth in the dynamic consumer
products sector by matching its internal strengths with external opportunity
and tackling potential threats.
Alternative Strategy
To
address the strategic issues identified and developing sustainable competitive
advantage, Unilever could consider the following alternative strategies:
·
Market
expansion and market diversification: By extending its product line and
investigating new markets, Unilever may want to think about market
diversification. By introducing creative products in a variety of market sector
and geographical locations, the corporation can reduce its dependency on
specific market and product categories. This helps spread out possibilities and
risks among a wider range of businesses.
·
Acquisitions:
To expand its current strengths and quickly enter new markets, Unilever may
consider strategic alliances or partnerships with other companies. Unilever may
gain access to cutting-edge tools and digital know-how through partnerships
with startups or technology companies, enable it to keep a lead in the process
of digital transformation.
·
Direct-to-consumer
(D2C) and e-commerce channels are highlighted: With the growing trend of online
shopping, Unilever can invest in building a solid e-commerce infrastructure and
focus on D2C channels. Selling directly to customers allows the company to get
vital customer information, improve relationships with customer and quickly
adjust to changing consumer preferences.
·
Leadership
in Sustainability: Based on its sustainability activities, Unilever can go
above and beyond compliance to establish more ambitious sustainability goals.
Emphasizing its dedication to responsible sourcing, eco-friendly procedure and
minimizing carbon footprint can boost the company brand image and attracting
sustainability-conscious consumers.
·
Creating
specialized innovation centers and boosting investment in research and
development can help Unilever establish a culture of constant innovation. This
tactic will enable the company to develop ground-breaking products, keep its
competitive advantage and successfully address market developments.
·
Employee
Development and Talent Retention: To keep top talent, Unilever can invest in
employee development initiatives and fostering positive workplace culture. A
company long-term performance is influenced by its workforce's ability to innovate,
increase productivity and sustain a positive corporate culture. Introducing
customer engagement effort and loyalty programs helps strengthen ties with
customers, promoting repeat business and brand advocacy. Unilever can
efficiently adjust its products and marketing activities to match consumer
expectations by analyzing client preference and feedback.
Monitoring through Key performance indicators
A
strategy map and key performance indicators can be used by Unilever to track
the progress of the chosen strategy implementation (KPIs). A strategy map is a
visual tool that aids in the alignment of business activities with strategic
objective and offers a clear picture of how different organizational parts
contribute to the achievement of the overall objectives. KPIs, on the other
hand, are precise measures that are used to gauge the strategy performance and
advancement.
To
monitor the execution of the selected strategy, Unilever can follow these
steps:
·
Create
a Strategy Map: Unilever needs to develop a thorough strategy map that details
the strategic goals, the connections between them and actions required to reach
them. To make sure everyone is aware of their involvement in the execution of
the strategy, the strategy map should be distributed throughout the
organization.
·
Determine
the Key Performance Indicators (KPIs): Unilever should choose pertinent KPIs
for each aim based on strategic objectives. For instance, if increasing market
share is one of the strategic objectives, relevant KPI may be "market
share %." Customer happiness, product innovation rate, employee
involvement and sustainability indicators are examples of other KPIs.
·
Set
Baseline and Targets: Prior to deployment, Unilever should set baseline data
for each KPI in order to gauge where things are at now. For each KPI, specific
goals or benchmarks should then be established in order to track development
and successes during the implementation of strategy.
·
Evaluate
the performance of the chosen approach: it is on a regular basis by conducting
periodic reviews. Key participants in these reviews, including senior
management and department heads, should be invited to discuss progress,
identify obstacle and make any required changes to strategy.
·
Build
a reporting system: It is to track and communicate KPI performance on a regular
basis. This can be accomplished by using dashboard or scorecards that offer
real-time updates on how each strategic aim and KPI is performing. Transparent
communication guarantees that all staff members are informed of the strategy
development and are able to make informed judgments.
·
Constant
Improvement: As the plan is put into action, Unilever needs to keep an eye on
how well it's working and how different efforts are having an effect. As a
result, the business is better able to decide how to proceed and modifying its
strategy in response to shifting external and internal factors.
Recommendations
To
implement the recommended strategy effectively at Unilever, the following key
recommendations and first-priority actions should be taken:
·
Alignment and Clear
Communication: Ensure that the plan is communicated thoroughly and clearly at
all organizational levels. This entails outlining the strategic
goals, providing justification for the method used and identifies roles and responsibilities
of various team and individuals in carrying out the plan. To make sure that
everyone is working toward the same goals, alignment across business is
crucial.
·
Build
Leadership: Get the commitment and buy-in of senior leadership and important
stakeholders in the organization. The plan should be actively promoted by
leaders, who should also show their support for it and assume responsibility
for its effective execution. Leaders who are involved in the process develop a
sense of accountability for the strategy success.
·
Budgeting:
Budgeting for and allocating sufficient financial, technological and human
resources is necessary to enable the implementation of the strategy. In order
to guarantee that relevant initiative and projects may be carried out without
obstacles, proper budgeting and resource allocation are essential.
·
Create
Performance Metrics: Create and put into place a solid system of performance
metric and Key Performance Indicators that are in line with the strategic
goals. These metrics will be employed to monitor development, gauge success and
pinpoint areas that require improvement. Keep an eye on KPIs and assessing them
frequently to make informed judgments.
·
Training
and Development: Provide employees the chance to receive the training and
development they need to develop the skill and competencies needed to support
the strategic initiatives. Employee development spending increases capacities,
raises overall corporate performance and encouraging a continuous improvement
culture.
Conclusion
This
strategic management study concludes with a thorough examination of Unilever
present strategic position and recommendations for solutions to major problem
and opportunities. We have learned a lot about the organization competitive
environment and market dynamics by analyzing its strengths, weaknesses,
opportunity and threats. Unilever strategic issues have been clarified via the
analysis of internal and external elements, providing a deeper grasp of opportunity
and challenges that lie ahead. The paper recommends making efficient use of
Unilever resource and competencies while anticipating market trend and
environmental changes in order to promote economic stability and
competitiveness.
By
coordinating internal and external elements, Unilever is able to create a
durable competitive edge. Clear communication, leadership involvement, resource
allocation and a customer-centric strategies are all advised. The business
model and market position will be strengthened by putting these plans into
practice. For an installation to be effective, monitoring performance metrics
and feedback is essential. To successfully navigate the rapidly changing
business environment, Unilever should embrace a culture of ongoing learning and
innovation.
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