Strategy Evaluation and Restatement of Business Operation - Case Study Example

of the Assignment Number Module Number, Module Word Count (2064 words) Re ment of business operation There are immense challenges facing the world population in terms of personal care and hygiene. Lack of safe water to drink, poor sanitation and hygiene resulting to unending deaths culminated to the introduction of the personal care department in Unilever. Its aim is to: Expand their firm in overseas’ markets reaching the maximum possible turnover covering men’s hygiene needs and personal care needs. To stand apart from their competitors as they promote personal care To formulate objectives mostly focused on their customers – to keep them satisfied providing them health and beauty care The mission determines the strategies and positioning in the marketplace suggests that Unilever role is to add vitality to life with brands aiding people to feel, look good and access the best in life (Unilever, 2014). Analysis and categorization of the business strategy Unilever remains a world second largest producer of goods and products with the aim of promoting personal hygiene. It has remained a close competitor of Colgate-Palmolive through the production of the diverse products. Essentially, its products range from personal care products such as soaps, deodorants, skin beauty products, surface cleaners, and oral care products. Additionally, it is also key in producing food products such as soups margarine, cheese and ice creams, ushering in another key competition level with other companies such as Nestle. Several factors have been beneficial in beating up the competition. First, its geographical distribution, market penetration strategies and market study portfolios remain key to its consistent growth. Its major sales lie on its robust distribution of the product sin the new markets (Marketwired, 2014). In both developed and emerging economies, Unilever has taken a huge toll on the marketing of their beauty and personal care products. The company has seen intensive domination of its sales with some of their products such as Dove, Lux and Vaseline. Vaseline remains one of its leading sale product in its market globally. The department has remained the foundation of the company, fetching more income than the rest of the departments (Shah 2011). Unilever has been key in tapping the emerging economies. Their financial forecasters are keen in detecting any promising region in the world, calculating its potential and investing their products there. With such a trend, Unilever has experienced widespread distribution of their goods even to the smallest and most remote village in there are of operation. Their competitors find it hard to keep in line with such production. Through mergers and acquisitions strategy, Unilever has managed to beat some of its competitors. The company has managed to acquire other small companies focusing at production of similar products. With such, they have displaced some competitors in their market. A classic example is in 2011, when it did acquire Alberto Culver, a European personal care company. The acquisitions have led to the escalation of their personal care products returns, making it remain the world top producer in hair conditioning, second largest shampoo producer and third in styling. Utilization of low prices segment has led to the public embracing their products in comparison to other companies. Their personal care products are relatively low priced. Their products have a target on all life classes, be it middle class, low class or high class. In the current economic times, Unilever is gaining a lot from the strategy, where the product consumers are conscious of the prices. Smaller packaging has also attracted huge desire to purchase their products since any person can afford them. A study of the market via the Porters five forces have been crucial in the thriving of the firm. Through it, Unilever personal care department has been in a position to learn about its internal and external environment hence strategies well in its operations. It encompasses analysis of the buyers’ power, the competitive rivalry, substitution threat, new entry threat and suppliers’ power. All these components have been crucial in the study of their market, hence enhancing consistent market domination (Mishra, A.S.; Muthukumar 2011). Through the differentiation model, the firm has always been striving to provision of valued products to its consumers. Unique features characterize their products. They do prioritize all the needs of the clients. All that is done through production of high-quality goods, excellent customer care services, continuous product innovation, technological utilization and management of their products images (Maljers 1992). The firm has managed to create the value of their personal care product through price lowering, response and focus on sustainability issues, barriers preparation-vial reputation creation and uniqueness of their products. Most significantly, they have managed to operate in many countries worldwide hence a well-distributed market. The focus has been on a portion of the demography. Careful study of their personal care product does reveal that it does target all the age groups, offering diverse products hence satisfaction of their needs. It also does focus on the market, ensuring that their core goal is customer satisfaction. Their value chain protocol even attracts more consumers (Mintel Academic, 2014). Long-term objectives and competition analysis Unilever has adopted a sustainable Living Plan, with which it is pursuing daily to enhance sustainable growth. Is integral long-term goal is to create some positive social impact. To ensure that it achieves the target, it has rolled out some ambitious objectives. By year 2020, they aim at ensuring that they do improve the health of the populations. With their concentration on health implementation plan, the incidences of diarrhoea and other life-threatening conditions will be reduced considerably. Their brands such as Lifebuoy, Pureit and toothpaste have influenced considerably on the affected populations Unilever enjoys a bountiful competitive advantage over the rest of the companies producing similar products. The SWOT analysis will do aid and help the firm to focus more on the service delivery charter. It does guide in continuous maintenance of competitive edge in the industry through fulfilment of the industry. The foundation to success of any firm is inauguration of a customer service delivery strategy. In the personal care department, business strategy has played a detrimental role in the success achieved so far. All that does focus on the products branding, market performance, financial analysis, client needs and tastes, personality traits and the consumption consistency. The company enjoys diverse advantages over other firms. They include financial, marketing, informational systems, human resources systems and operational systems. The firm does possess a strong cash reserve, a well-established global purchasing as well as international exchange rate. Furthermore, the marketing patterns are invincible. Its brand images are well known even to the smallest village in any nation. The patterns of advertisements creation and promotions have left a mark in the products consumers, who always find pleasure on affiliating with their products. Moreover, its products supply chain portfolio is admirable, ensuring a consistent supply of the product at all times. Most significantly, their staff have enriched skills in marketing, public relations and customer care. They have achieved high-level training in recognised institutions. Professional development is well actualized to ensure that they do not remain obsolete in their service delivery processes. Lastly, Unilever does enjoy a digitalized communication web. They have embraced the latest technology, which is quite promising. It does aid them in quick analysis of their returns. Branding is a component that personal care department has not left behind in its operations, and it has contributed significantly to the ultimate success. The products in this category have received international recognition as super-brands. There are at least 400 brands worldwide, and all of them come with different packaging. The target clients have demonstrated consistent loyalty and trust to their products. Unilever enjoys renowned competitive advantages over the rest of the industries. First, there is a wide variety of products produced, effective marketing and promotional strategies, economies of scales, research and development utilization and customer trust. There are many opportunities the business unit has embraced to ensure branding in its personal care products. One, the demographics study has paved a great way to influence their production. They can produce products worth fitting all the age groups who owe allegiance and loyalty to the firm throughout its generations (The Week, 2007). Additionally, all their products are health conscious. In the recent times, the incidences of obesity, hypertension and diabetes are on the rise. Unilever has taken a role to ensure that they do educate its consumers on the caloric content of every consumable product. The increase in their products demand has also led to escalating sales volumes (Collis and Rukstad, 2008). There are several threats the personal care products department is working on to ensure that the success story is worth a lifetime. The department has carved out a strategic plan to combat competition in case of any economic turmoil it may experience. The innovation trend is a key area of focus, and that is made possible through research. Unilever is also key to identify emerging markets. Local companies do pose a threat to Unilever personal care products with their subsidized prices (Anderson & Woolley, 2002). Strategy evaluation As outlined in the Unilever website; “By 2020, we will help more than a billion people to improve their health and hygiene. This will help reduce the incidence of life-threatening diseases like diarrhoea (Unilever, 2014).” The department has maximized on the achievement of the set strategies. This can be deducted from its desire to better its services and improve lifestyles. Key of its achievements is the number of people it has aided; “303 million people reached by end 2013. 183 million† people with Lifebuoy; 55 million† with safe drinking water from Pureit; 52 million with our toothpaste brands; and 13 million through Dove self-esteem programmes (Unilever, 2014).” The firm has adopted various programs to ensure that unacceptable and less suitable programs do not thwart its personal care performance trend. First, community involvement strategy has led to the success of the practises. In such a way, the society do own up the projects, and the result is success (Mishra, A.S.; Muthukumar 2011). Unilever personal care department did commence a hand washing campaign in various continents such as Asia, Latin America and Africa through its brand Lifebuoy. Hand washing remains the single most important cross-infection preventive practise. The firm has tapped and collaborated with the government and non-government to raise awareness of the same (Mostert 2007). Additionally, the integrated approach towards the program has borne more fruits than expected. For instance, Lifebuoy, Pureit and Domestic have conjoined to form a programme famous known as WASH-water, sanitation and hygiene. Through hand washing, communicable diseases have been reduced considerably across the Asia, Africa and Latin America. More than 183 million people have been beneficiaries of the program. The pureit home purifier has made safe water consumption possible. It aims to target more than 1 billion water consumers by year 2015 (Bell 2013). The target on oral health has been progressing well through its branded toothpaste and toothbrush. Nutrition wise, Unilever focus on the provision of recommended dietary options has been a success with reference to dietary recommendations. The target is on salt, sugar and fat regulation, hence a streamlining the calories consumption. With such in mind, most lifestyle-related diseases such as diabetes will be reduced considerably. The salt levels reduction program has been a success, with 55% of the foods having complied with the international standards (Jones 2002). The department has registered a considerable reduction in the fat content, provision of healthy eating information and education to adopt healthier lifestyles (Unilever, 2012). The plan adopted by the firm are easily achievable, suitable and well acceptable. However, the firm has trained other areas in its corporate social responsibility and sustainability achievement. The sustainability performance is evident; hence, they are doing the best in personal care initiation programs. Unilever has featured on media and press for its unsustainable practises (Robinson 2005). For instance, it has been involved in waste products dumping in Indian rivers, usage of talc in its beauty products and utilization of child labour in developing countries as they try to market their products. It is alleged that Unilever has been involved in the illegal use of talc in products, which does give their beauty products some cosmetic stability, water resistance ability, skin adhesion and good texture. Talc mining have had negative implications on the environmental patterns in India. Talk is also toxic to the skin with close association to cancer due to traces of mercury contents. Therefore, it needs to do more than expected (Monahan & Nardone 2007). Reference list Anderson, J, & Woolley, M 2002, Towards Strategic Sourcing: The Unilever Experience, Business Strategy Review, 13, 2, p. 65, Business Source Premier, EBSCOhost, viewed 1 December 2014. Bell, G. (2013). Want to change the world? Think differently: An interview with Paul Polman, CEO of Unilever, part 2. Strategic Direction, 29, 36–39. doi:10.1108/02580541311316613 Collis, D., J. and Rukstad M., G. (2008). Can You Say What Your Strategy Is? Harvard Business Review, pp. 1-9. Jones, G. (2002). Control, Performance, and Knowledge Transfers in Large Multinationals: Unilever in the United States, 1945–1980. Business History Review. doi:10.2307/4127795 Maljers, F. A. (1992). Inside Unilever: The Evolving Transnational Company. Harvard Business Review, 70, 46–52. Marketwired 2014, Unilever Trading Statement Third Quarter 2014, Marketwire (English), 23 October, Business Source Premier, EBSCOhost, viewed 1 December 2014. Mishra, A.S.; Muthukumar, R. Unilever´s ´Power Brands´ Strategy, October (2011). Mintel Academic (2014). Men’s Toiletries – UK – October 2014. [online] Available at: http://academic.mintel.com.oxfordbrookes.idm.oclc.org/display/718648/ [Accessed 1 Nov. 2014]. Monahan, S., & Nardone, R. (2007). How Unilever Aligned its Supply Chain and Business Strategies. Supply Chain Management Review, 11, 44. Mostert, N. M. (2007). Diversity of the Mind as the Key to Successful Creativity at Unilever. 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