Get instant access to this case solution for only $15

Unilevers New Global Strategy Competing through Sustainability

Solution Id Length Case Author Case Publisher
2371 4567 Words (18 Pages) Christopher A. Bartlett Harvard Business School : 916414
This solution includes: A Word File A Word File

This report is a strategic analysis of Unilever from both external and internal perspectives. The company has incorporated Social and environmental value creation policy in its long term vision and has taken aggressive measures to achieve that. However due to external factors like consumer behavior, supply chain practices and country related factors it has faced challenges in implementation. Some internal factors like financial management, resource organization and organizational conflict of goals and rewards have also created problems for the company. It seems like a better alternative for the company to focus on its financial performance in the short run and achieve its sustainability targets in the long run  with the help if strategic alliances. It will help in maximizing the returns on investments, gaining investor’s confidence on company and will help Unilever in addressing its own weaknesses in the strategy implementation. 

Following questions are answered in this case study solution:

  1. Executive Summary

  2. External Analysis

  3. Internal Analysis

  4. Alternatives and Recommendations

  5. Conclusion

Case Study Questions Answers

2. External Analysis

i. Threats 
Threat 1: Consumers 

Porter 5 forces

As per Porter’s five forces, the first challenge regarding sustainability for the company was the consumer behavior which accounted for the majority of water consumption. Around 685 f its greenhouse gas emissions and 85% of water consumption was because of the consumers. This threat could offset the company’s sustainability targets and minimize the results of its initiatives.

PESTEL

Although the company uses both technology and social behavior modification for the cause of sustainability by introducing innovative products the limitations were there for both factors. The consumers preferred more wet hygiene products that increase the water consumption instead of the dryer versions bad technology can solve the problem to a certain extent. The threat cannot be encountered by these measures.

Threat 2: Suppliers 

Porter Five forces 

Unilever was trying to expand the breadth of its sustainability program b including social agendas and goals into its manufacturing and supply chain. However, being a global company it faced the problems that existed in different regions during its supply chain maintenance. The wage problems in developing world such as Vietnam was a threat for company’s reputation and brand name. Although it was paying above the market wages compared with other regions of the world these wages were far below the social equity standards. 

PESTEL

If the problem is analyzed with respect to PESTEL that it will fall under the economic, social, and legal conditions of the country. I majority of people are living below the poverty line in the country then they are forced to work under inequitable conditions. Multinational brands like Unilever tend to bring international standards and practices to these developing countries but ultimately the practices are subjected to environmental conditions. 

Threat 3: Competition

Porter’s five forces 

FMCG industry is extremely competitive and although Unilever was following an aggressive lead in the emerging markets its growth was stalled after the initial years. It was facing tough competition in those markets along with the growth stagnation to sales revenue and stock performance. The performance measured against P&G was not better in the financial market. These financial short falls in the performance were fueling the investors’ concerns regarding the long-term orientation of these ambitious sustainability targets.

PESTEL

As per PESTEL, the analyst can be characterized as an Economic threat for the company Lower revenues implies that the company’s profitability will be affected which can hit the research and development budgets as well as sustainability targets for the company. Lesser profits would make the investors’ concerns materialize regarding the company’s future and a significant impact it brand positioning and market reputation. In addition to that its financial market performance can have a serious impact on the future of the company. 

ii. Opportunities
Opportunity 1: Innovation

Porter’s Five forces

One opportunity that was disguised in the crisis was the company’s ability to innovate new products and product subtypes to meet the environmental challenge. It has already done that in some FMCG products. However, there is still more margin for innovative products lie plan based alternatives to food and beauty products which can help in tapping the new consumer segments. A company can also introduce innovative packaging which can reduce its solid waste which is still considered high and s often criticized. Instead of using Single used plastic, it can opt for paper based packaging.

PESTEL

Both technological and social changes make this opportunity realize for the company. The company s already investing in technologies and R&D to reach its target of 100% recyclable and reusable packaging by 2025. It can further collaborate with various innovative deco-based startups for leveraging their skills and expertise. The products can also be optimized. Since consumers are becoming more environmentally conscious especially the younger consumers including Generation and Z, it will help in strengthening the consumer base. 

Opportunity 2: Partnerships

Porter’s five forces

Unilever can form strategic partnerships in its operating countries. This step will help in maximizing the potential of the company and will also help in integrating the core strengths and expertise of other partners that can be utilized to have organizational goals and targets. Since the sustainability goals and targets are large scale and are beyond the current capabilities of the company. Strategic partnerships can be built with other competitors for the promotion of health collaborations instead of traditional rivalry. 

PESTEL

The opportunity lies with social, environmental, and technological domains. Multinational companies can join hands for a common social or environmental cause and can reap financial and non-financial benefits from the strategic partnerships. These companies can form partnerships for promoting equitable working conditions for workers across different borders for example. These initiatives can help in building a strong brand name and help in targeting more market segments.

Opportunity 3: Building stronger value chains

Porter’s five forces

Big companies like Unilever have an enormous impact on entire value chains as they exercise more power than local small suppliers. These companies can help in the incorporation of sustainability goals and targets in the entire value chain. The practice is especially helpful in the case of poor and developing countries where environmental concerns are most often ignored during the manufacturing process. Other than sustainability concerns, social and societal goals are another way of developing stronger and better supply chains.  Unilever can set certain standards for acceptable, healthy, and safe environmental conditions for works along with better wage rates. This can help in achieving the corporate social responsibility target of the company.

PESTEL

Although the impact of sustainability and social targets and goals in the value chain is mainly social and environmental it can ultimately translate into profits. If the company builds a strong positive brand image of an equitable organization, especially in the countries where these standards are not met in a corporate setting, it can reap financial benefits through a loyal consumer base. The corporate social responsibility standards and targets of the company will be achieved easily. In countries like Vietnam, the company can even impact the local regulations regarding employee safety, health, and wage conditions which could be truly remarkable in terms of its impact. 

Opportunity 4: Creating Jobs outside Unilever

Porter’s five forces

With increased automation and technological advancement, Unilever can continue to put people first through focusing on skill and job creation with partnering companies. The high bargaining power of the company in relation to its suppliers as well as presence of substitute products from local and global sources suggests that the company can enhance sustainability and help people remain fit for jobs through partnering with local manufacturers and suppliers for skill development and job creation. The social and societal goals of helping people maintain livelihoods and jobs will help the company build a more positive relation with the stakeholders, a and the societies in which it operates.

Get instant access to this case solution for only $15

Get Instant Access to This Case Solution for Only $15

Standard Price

$25

Save $10 on your purchase

-$10

Amount to Pay

$15

Different Requirements? Order a Custom Solution

Calculate the Price

Approximately ~ 1 page(s)

Total Price

$0

Get More Out of This

Our essay writing services are the best in the world. If you are in search of a professional essay writer, place your order on our website.

Essay Writing Service
whatsapp chat icon

Hi there !

We are here to help. Chat with us on WhatsApp for any queries.

close icon