Unilever stands out among consumer goods companies with its resilience and agility, making it one of the premier global consumer companies. Their management isn’t afraid to change course if necessary to stay ahead of rival companies.
Unilever has delegated significant decision-making power to local managers over time to strengthen its position across diverse markets, from running TV ads for Gibbs SR toothpaste to responding to postwar rationing.
The Company’s Strategy
Unilever has always taken risks and innovated its strategy with confidence. Constantly making adjustments, shifting roles and responsibilities and adapting its services, Unilever has managed to become one of the world’s premier consumer goods companies from being just a soap producer to becoming a consumer goods titan. This proactivity has propelled Unilever from being known solely as soap makers to an international consumer goods titan.
Unilever recognized that as the world shifted during the 1930s, global economy faced numerous challenges. They took proactive steps to address them and came out stronger than ever – taking advantage of free trade benefits and expanding into developing and developed countries alike.
The company capitalized on local markets by understanding customers in each region. This allowed it to sell its products at lower prices and attract more customers, while simultaneously developing tailored-made solutions like Whisk detergents and expanding tea brands such as Lipton.
At this crucial juncture in their company’s history, it was essential that they maintained their competitive advantage. A special committee was set up in order to achieve this aim.
Polman was determined to build purpose-led brands within his company. Sustainability must be prioritized; currently two-thirds of consumers choose brands based on how they stand for social issues while 90% of millennials favor brands that strive to elevate humanity.
Establishing strong partnerships with retailers is also vital for companies in order to efficiently test and introduce new products on time, ensuring their success on the market.
Lobbying politicians to influence and shape policies is also an integral component of long-term success for multinational corporations, so the company strives to foster an ideal business climate to allow it to expand operations.
The Company’s Management
Unilever’s management team strives to keep the company moving forward by making incremental changes to the structure and culture that yield large increases to shareholder value, such as cutting the number of companies within its group, increasing efficiency, cutting costs and prioritizing sustainable business practices for positive social change.
Unilever is one of the world’s leading consumer goods companies, producing more than 400 brands found worldwide and sold across more than 190 countries and reaching 2 billion consumers per day. Headquartered in London with 150,000 employees.
Our company features an extremely diverse management team consisting of over 190 senior executives who oversee various divisions within the organization. Furthermore, a board of directors oversees operations and strategy and includes experts from different industries and backgrounds on its board members. Furthermore, there are corporate responsibility committees as well as nominating and governance committees within our company to facilitate better governance processes.
Unilever’s Corporate Responsibility Committee oversees Unilever’s reputation as a good global citizen and prioritizes any risks related to its business, with at least two non-executive directors as members of this committee. Meanwhile, its Nominating and Governance Committee oversees director nominations, succession planning and diversity within their Board membership.
Unilever’s growth has recently stagnated due to increasing raw material, labour and transport costs, as well as its exposure to certain foods and emerging markets, making them more vulnerable to inflationary pressures that have reduced margins. How long this trend will continue remains unclear. It’s unclear if Unilever can reverse it – expectedly it will report lower profits this month.
The Company’s Products
Unilever offers a diverse array of products including soaps and detergents, margarines, cooking fats, salad dressings, ice cream, toiletries (toothpaste and hairspray), packaged and processed foods, beverages and cosmetics – each reaching millions of consumers globally every day.
As part of their first decade, the company expanded into new mass markets across Asia and Africa while diversifying into fast-moving consumer goods (FMCG). They rationalised their brand portfolio while expanding research capabilities with Port Sunlight Research Centre of Excellence as well as other centers of excellence.
In the 1940s, Unilever underwent significant structural change when Germany and Japan companies were separated from London and Rotterdam, creating more local market needs-focused management that granted greater independence to local managers. Lifebuoy soap became a public service product with vans visiting bombed out areas to offer free emergency washing services.
Unilever has managed to distinguish itself from competitors by marketing its brands in innovative ways, creating household names. Unilever advertises to attract women one year and men the following, and convinces consumers that its products are superior alternatives in local stores.
Unilever employs what is referred to as’market domination’ – in other words, the company controls 30-50% of its total product value by participating in every step of production from growing and harvesting raw material in tea plantations, to blending, packing and selling finished product in consumer countries – from growing and harvesting of the raw material in its tea plantations through its distribution to consumers across multiple consumer countries.
Unilever has historically backed economic liberalisation and privatization, believing these processes will enable it to take advantage of business opportunities across the world. Through its participation in the WTO and support for new rounds of global trade talks backed by other large businesses leaders, Unilever also advocates for economic sanctions on countries with poor human rights records such as Burma. Unfortunately, its lobbying efforts for sanctions may lead to criticism by rights activists.
The Company’s Sustainability
Unilever’s managers aren’t afraid to experiment when necessary in response to changing market environments, reshaping product groups, altering roles and responsibilities and trying out various operating styles in order to stay ahead of an industry that never stands still.
Unilever’s commitment to sustainability extends far beyond environmental concerns and includes improving workers and supply chain lives as well as contributing to society as a whole. One of its goals is helping a billion people improve their health and wellbeing while it aims to halve its environmental footprint by 2020 while also sourcing all agricultural raw materials sustainably (that means all products must meet criteria such as forest protection or pest control).
Unilever’s sustainable plans have distinguished them from competitors and been central to its overall success as a business. Furthermore, Unilever’s emphasis and funding of research & development has allowed the company to create products tailored specifically towards consumer needs that have propelled its global expansion into an impressive consumer goods powerhouse.
Unilever quickly recognized when expanding postwar that markets like India or Brazil differed significantly from European ones – customers had distinct needs while regional laws had different ramifications, leading it to delegate significant management decision making to local managers through “Indianization,” “Australianization,” or “Brazilianization.” This process became known as “Indianization.”
Unilever has also taken steps to engage with politicians in order to influence, direct and shape policies to create a more favorable business climate – something many multinationals employ as part of their approach; Unilever’s use of politicians has proven particularly fruitful.
As a result, the company is on track to reduce greenhouse gas emissions by two thirds by 2020 due to changes to production processes, water consumption and increasing renewable energy use.
