33083121 Strategic Management Project on Unilever by Saad Ali

8/13/2019 33083121 Strategic Management Project on Unilever by Saad Ali

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ntrodu tion

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Background of Unilever Pakistan Ltd Co.

Unilever Pakistan Ltd., a subsidiary of the Unilever Group is operating in

Pakistan since 1948. he !o"pany#s "ain business lines are $oaps and

%etergents, Personal Products, !ooking &ils and 'ats, Packed eas, and (ce

!rea"s . Unilever has a long list of brands such as $urf, )i", *in, Lifebuoy,

$unlight, Lu+, *e+ona, $unsilk, !lose Up, -lue -and, %alda, Planta, Lipton#s

ello/ Label, aa0a and *ichbru, -rook -ond#s $upre"e and enya 2i+ture

etc. /hich are co""on household na"es in Pakistan.

he !o"pany#s factory at *ahi" ar han /as one of the first industrial

units to be constructed after the creation of Pakistan. 3s the consu"er base

e+panded over the years and the !o"pany entered into ne/ product lines

like Personal Products and 2argarine, it invested further in the installation of

"odern "anufacturing facilities including a factory at arachi. oday, the

!o"pany is using latest state of the art technology for producing high ualityproducts.

(n 1995, the !o"pany established a ne/ factory near Lahore to "anufacture

the 6all#s range of ice crea"s, /hich have beco"e popular /ithin a short

ti"e. (n 1997, the present group Unilever U ac uired the Polka Group that

produced ice crea"s. (n 1999, Pakistan industrial pro"oters Private:

Li"ited, o/ners of ;Polka# brands of (ce !rea" /as "erged /ith Lever.

(n order to leverage the synergies of Unilever#s international brand strength,

"arket edge and corporate i"age, Lever -rothers Pakistan Ltd. changed its

na"e to Unilever Pakistan Ltd., in 3ugust


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Vision Statement:

We meet everyday needs for nutrition, hygiene and personal care with brands thathelp people feel good, look good and get more out of life

Mission Statement:

6e are ai"ed to be leading products co"pany in Pakistan, a

"ultinational /ith deep roots in the country.6e /ill attract and develop highly talented people, /ho are

e+cited, e"po/ered and co""itted to deliver double digit gro/th.

6e are co""itted to serve the everyday needs of all consu"ers

every/here for foods, hygiene and beauty through branded

products and services that deliver the best uality and value.

6e strive to re"ain an ever si"ple and enterprising business.

6e /ill use our superior consu"er understanding to produce

breakthrough innovations in brands and channels.

hrough "anaging a responsive supply chain, /e /ill "a+i"ise

value fro" $uppliers to !usto"ers.

6e /ant to be e+e"plary through our co""it"ent to -usiness

>thics, $afety, ?ealth, >nviron"ent and involve"ent in the

!o""unity.

.

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Introduction - Unilever Pakistan

(ncorporated in 1948, /e, Unilever Pakistan Li"ited, are one of the "ost

pro"inent "ultinationals in the country today. 6e are proud of being a part of

Pakistan#s history, contributing to/ards the gro/th and prosperity of the

nation, providing 15= "illion people /ith a better future, a better to"orro/.

&ur passion for understanding people@s concerns and desires, our ability to

create products that fulfill those needs and our skills in getting those productsto "arket drives our gro/ing success and has "ade us one of the /orld#s

leading consu"er goods co"panies.

he present co"pany has co"e about through the original Lever -rothers

"erging /ith Lipton 1988:, -rooke -ond 199A:, Polka (ce !rea" 1998:,

presently /e are operationally "erged /ith -est 'oods since


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1. HOME & PERSONAL CARE:Personal Wash (PW)

Toilet Soaps Li e!"o#

Li e!"o# $ol% ( 'ariants)

L" (in 'ariants)

Re ona (in * 'ariants)

+ree,e

S"nli-ht +ar

La"n%r# Care: S"r E el

S"nli-ht /ashin- po/%er

$unlight bar Wheel /ashin- po/%er

?ouse ?old !aringB )i" dish /ash bar 0i s o"rersMa-i !ar

Personal pro%" ts:

Hair Care S"nsil2 Sha poo (in 3

'ariants)

Li e!"o# Sha poo

$kin care 'air C Lovely skin crea"Pon%s

4ental are Close "p toothpaste (*

'ariants)

Pepso%ent

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. SPREA4 & COO56N$ PRO47CTS CATE$OR8

Coo2in- pro%" ts:

Ne/ 4al%a

4al%a Coo2in- Oil

4al%a S"n lo/er Oil

Planta Coo2in- Oil

Crisp 9N 4r#

4al%a La#a/a#

Sprea%s:

-lue -and

*. +E0ERA$ES

Lipton -rands -rooke -ond-rands

Leaf eas8ello/ La!el S"pre e

8ello/ La!el;4ane%ar Re% La!el;4ane%ar*ichbru -- ipsTop Star A;1

Taa,a Lea Ti-er

LaoDee

#


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%ust eas

Pearl 4"st Re% Rose5en#a Mi t"re

3. 6CE CREAM

WALLS POLKACornetto (* 'ariants) Pop Cone


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INTERNAL A ND E XTERNAL

A SSESSMENT

1%


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EFE MATRI

Key External Factors Weight Rating Weighted Score

O ort!nities

?ygiene !onsciousness =.< 4 =.8

(ncreasing Population =.15 E =.45

(nnovation *C%: =.1= < =.+plore Fe/ 2arkets =.=5 4 =.+perience op 2anage"ent =.< E =.7

Wea(ness

all &rgani0ation $tructure =.1 < =.+penses =.=5 < =.1

?igh !ost of Production =.=5 < =.1

Long ter" strategies =.1 < =.+penses?igh !ost of ProductionLong ter" strategies&nly fe/ products

T&REAT! Product s"uggling(ncrease de"and for

3ntibacterial $oaps!ounterfeit Products(nternational rendsLocal !o"petition

6NTERPRETAT6ON:

STREN$HTS

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unlevel *akistan +imited is the largest producer of consumer products in

*akistan and has strong brands in every field such as &lose p, -alda, )urf,+ifebuoy, +o(, etcunlevel *akistan +imited is the only company in *akistan which has its owncorner research department

.t has the largest and efficient distribution network then any its competition

/he company is very strong financiallyunilever *akistan +imited en0oys the services of highly professional

management in the area of sales, marketing, technical and production

WEA5NESS-ue to tall structure it is difficult to handle the organisation easily

o doubt its sales are large but in same time its operating e(penses are hugeAs in the production unilever keeps its environment very neat and clean, and

produce high uality products so cost of production is very high .ncreasedimport duties are also adding to the prices of the productsunlevel *akistan +imited go for long term strategies for all their productcategories which prove to be a weakness with change in the circumstancesand taste, trends of people

mphasi ing only few products while ignoring others which could give them potential market shares e g beverages section

OPPERT7N6T6ES

*eople are becoming more conscious about their health and are becomingmore conscious about brands As unlevel has good positioning in consumer smind so it can increase their market share to launch products in hygieniccategoryAs population is increasing it may lead to create valuable opportunity toenhance the growth of unlevel

.nnovation in unlevel may create opportunity to more penetrate in the market

/hey have capital to invest they can e(plore new product categories e g infood and beverages they can develop new products like 6ofan has launched

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custard, 0elly, cheer mi(, rasmalai mi(, etc/hese products can prove a 7cash

cows8 as customer in *akistan always welcome food items especially theywill welcome due to brand image of 9lue 9and and -alda ghee in foodcategory and due to +ipton and )upreme in beverages category

nilever *akistan has opportunity to develop new markets by identifying theneeds of customers

THREATS

nilever *akistan +imited has not been able to place any check on itssmuggling shampoos into *akistan e g .ndonesian )unsilk is made accordingto the demographic of .ndonesia, when it will be used in *akistan it willdamage the hair of people, which deteriorate the brand image Which create

problem on local sales of *akistan -emand for antibacterial soaps like safeguard is increasing while unilever hasnot yet been produced any antibacterial soaps, it may switch the brand loyalof unilever/heir may be imitation of products in *akistan which may damage thegoodwill of unilever *akistan lmtd*eople of *akistan prefer to purchase the products of foreign companies , itmay be prove to be a threat for unilever *akistan lmtd

umber of local companies producing detergents and market them at verylow prices which is a threat to unilever *akistan lmtd

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T#"! A$AL%!I!

".E"OWS

MA"R'/

Strength0S Wea(nesses0W

Fu"ber of Products all &rgani0ation$tructure 3dvance echnology ?igh &perating >+penses$upply !hain2anage"ent

?igh !ost of Production

'inancial -acking (ncreasing Fu"ber of$"all !o"petitors

>+perience op2anage"ent

Unbranded Products

O ort!nities0O SO Strategies WO Strategies?ygiene !onsciousness !reate a/areness

a"ong custo"ers abouthygiene.

(nitiate catering ne/"arkets and ne/seg"ents

(ncreasing Population 3cco""odate ruralde"and by your supplynet/ork

3cco""odate localde"and by Doint ventures

(nnovation *C%: Launch ne/ productsfor lo/er class

Product %iversification>+plore Fe/ 2arkets

"hreats0" S" Strategies W" Strategiesall &rgani0ation

$tructure!ontrol !ost 2ake creative and

co"petitive strategies?igh &perating >+penses !ost reduction?igh !ost of ProductionLong ter" strategies&nly fe/ products

1#


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1$


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BC( MATRI

RELAT60E MAR5ET SHARE POS6T6ON 6N THE 6N47STR8

:igh

1 %

'edium

% 5%

+ow

% %

@

(F >*P*> 3 (&F

U>$ (&F 23* B&il products of unilever co"e in this region /hich has lo/ "arket

share but yet co"peting in high gro/th industry. cash need is high and cash

2%

:igh ;2%

'edium %

+ow


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generation is lo/. its up to the organisation /hether to strengthen this $-U

by an intensive strategy or to sell the".$ 3*B

(ce crea" of unlevel Pakistan co"es in this region as it sho/s bestlong run opportunities for gro/th and profitability. it has high "arket gro/thas /ell as high "arket share. (ntensive and integration strategies are suitablefor this $-U.

!3$? !&6$B%etergents co"es in this $-U.they create cash in e+cess of their

needs, they should be "anaged to "aintain their long position. Product

develop"ent and diversification are suitable strategies.%&G$B

Fo $-U of unilever co"es in this region.

I$TER$AL-E TER$AL MATRRI

/: .= />/A+ W .?:/ - )&>6

4 %% 3 % 2 %1 %

21

3 %

2 %

1 %

/:=

totalweightedscore


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I$TERPRETATI#$ nilever s strategy is to invest and hold it can use intensive and integration

strategies

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)ecision !tage

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!PACE MATRI

Financial Strength

1. Fet revenue


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!PACE MATRI

25

@ a(is 2 5 ; B


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(RA$) !TRATE(% MATRI

2!

6A*.-'A6F /?6>W/:

B"a%rant 66 B"a%rant 6

7N6LE0ER

W AF&>'* /./.G )/6>1?*>)/.>1 &>'* /./.G

*>)./.>1

B"a%rant 666 B"a%rant 60

)+>W'A6F /?6>W/:

2 'arket penetration3 *roduct development4 =orward integration5 9ackward integration

:ori ontal integration &oncentric diversification


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*!PM

Key Factor 'ntegration 'ntensi1e

Weight AS "AS AS "ASO ort!nities:

?ygiene !onsciousness =.< < =.


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Key Factor 'ntegration 'ntensi1e

Weight AS "AS AS "ASStrengths:

Fu"ber of Products =.1 < =.


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2$


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Conclusion + Reco,,endation

3fter the analysis of the (>'2 and >'>2, /e see that the

co"pany is above average. 6ith respect to $P3!> and G*3F%

"atri+ analysis, Unilever is placed in aggressive uadrant and it

can follo/ any of the strategies e.g. "arket penetration, for/ard

integration, back/ard integration etc.

3ccording to the analysis in $P2, /e /ould like Unilever to

pursue !ost *eduction strategy /hich is a "arket develop"ent

strategy. 3lthough the current business strategy of Unilever is

Product %evelop"ent as they are bringing different product like

Green ea in the "arket. hey are also "odifying their products

for e.g. Lipton in ne/ round tea bags and Lo+ by adding a

different ingredient.

$o"e reco""endations are follo/ings :

*educe packaging e+penses

*educe international purchases of ra/ "aterial cost as

Unilever purchases 9=J ra/ "aterial fro" international

suppliers.

*educe retailer#s co""ission cost

*educe transportation cost

*educe inventory holding cost

3%


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33083121 Strategic Management Project on Unilever by Saad Ali

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