Modern Management – Unilever

1.      How effectively do you think Unilever’s mission statement establishes the Company’s direction and important values?  What changes, if any would you recommend and why?

Unilever’s new mission statement was ‘Add vitality to life’.  They were considering making people feel that with their personal care products, they could look and feel good, and get more out of life.  The managers and employees which were working for Unilever could now do their work activities in wellbeing of the clients that belong to the communities the products are sold in.

Through this mission statement Unilever tried to differentiate its products from its competitors in a global market.  Fitzgerald, the outgoing Chairman of Unilever, took into consideration several factors including the fast rate of urbanization, the constantly increasing age of the people and healthy living strategy adopted by people.  He decided to use this strategy for his nutrition, personal care and hygiene items.  The strategy adopted by Unilever was quite unique and was keeping in tune with the needs of the people.  The “Unilever 2010 Strategy” was appearing on the products and promotional of the company.  To some extent, the strategy adopted by Unilever was effective and good for its growth.

As it was keeping in tune with the changing needs of the people, it was a step ahead of other companies such as Proctor and Gamble, Nestle and Reckitt Benckiser.  However, if this strategy could enable a high growth rate of the company was doubtful.  This was because the company had to take care of other strategies such as effective brand-building, marketing and product innovation.  Several assumptions over sales, growth, profit, cost debt, etc, were made.  The company was competing against 20 other companies and had to ensure that their new mission statement was supported by sound development in the other areas.

2.      Identify one or more Unilever strengths, weaknesses, opportunities, and threats.  How might Cescau use the strengths to counteract the threats?

Unilever strengths

1.      The company was formed by a merger of two giants, namely the British Lever Bros and the Dutch Margarine Unie, and had a stronghold in both these nations.

2.      Unilever established itself as an MNC in about 150 different countries.

3.      It had a very good human resource team (about 234, 000 employees).

4.      In 2004, it had about 12 products which were in the $ billion-brand mark.  This was up against it 4 such brands in the year 1999, suggesting growth of the company.

Unilever weaknesses

1.      In the year 2004, the revenue growth of the company, was far below the targeted 5 to 6 % mark.

2.      The company did not apply a strategy that would thrive in the market environment of its 2000-2005 strategy.  Hence, this strategy adopted by the company did not work on past experiences and could have been risky to adopt.

Unilever Opportunities

1.      The company began to realize the changing needs of the people and the situation of the market whilst adopting its 2005 to 2010 strategy.  They realized that people were becoming more and more health consciousness and were getting older.  They also realized that the urbanized areas of the World were becoming larger and more populated.

2.      The company was now working for the well-being of the people and the communities, which could help differentiate the company from their rivals.  This was a unique feature of their strategy.

Unilever Threats

1.      Unilever was making assumptions of the sales, growth rate, profits, debt and costs.

2.      They were competing against 20 other companies that had sound finances.

3.      The other companies were adopting strategies that were based on market research

As the company adopted a unique strategy that helped it to be differentiated from other companies by the people and the society, the chances of the company growing were high and realistic.  Besides, Unilever were selling their products in tune with the changing needs and ideas of the population.  Hence, there were chances of it surviving and becoming successful in the Market.

3.      Where on the BCG matrix would you place Unilever’s 400 remaining brands?  Where would you place any newly developed products being introduced? Explain.

The 400 remaining brands of Unilever were “Stars” as they had a high-growth rate and required huge amounts of investments in the long-term.  The new range of products from Unilever were “Question Marks” as they had a high-growth rate but doubts whether the management would invest in them in the future existed.

References:

Cresto, S. C. and Cresto, S. T. (2006). Chapter 3: Planning, Modern Management, (10th ed), New Jersey: Upper Saddle River, pp. 199-200.