Unilever: An Overview
Unilever is one of the biggest and richest FMCG manufacturers and marketers of the world. The multinational company has its headquarters in London, the United Kingdom and Rotterdam, Netherlands. The company operates in over a hundred countries through subsidiaries which gives it access to a global consumer base. The vision of the company is to operate in sustainable ways and bring about development of the stakeholders (Unilever global company website, 2017).
The product line of Unilever consists of food and drinks, personal care products, home care products and water purifiers. The company owns and markets brands like Ponds, Lakme, Axe, Domex and Aquaguard. The products of the companies are consumed by millions of consumers which generates colossal revenue for the transnational company. The subsidiaries of Unilever like Hindustan Unilever, its Indian arm maintain strong supply chain and distribution chain management which make Unilever products available to consumers at affordable prices. The company is stressing on sustainable sources of raw materials and manufacturing of sustainable products to contribute towards environment conservation (Hindustan Unilever Limited website, 2017).
Unilever is present in more than hundred countries in Europe, Americas, Oceania and Asia. The multinational company has occupies the top positions in its product segments in these markets leaving its competitors far behind. The company has current markets in developed countries of Europe, North America and Australia. The emergent markets like India, China and Brazil contribute to a huge portion of the revenue and their share is increasing with years. The company’s increase in sales is double the rate of P&G, its biggest competitor (Nisen, 2017).
Two opportunities to enter new market are expansion of consumer base and diversifying risks. It will enhance the competitive strength of Unilever and increase its profitability (Potrafke, 2015). Unilever can expand its market and enter Thailand which is one of the booming markets in Asia. The country’s 395 billion USD and its population is increasing. The country can provide Unilever with a huge consumer base which has the financial capacity to purchase its products. The country is capable of providing a profitable market which can reward the company with increased profits (Thailand, 2017).
The two opportunities to introduce new products in existing markets are to shift towards sustainability and compete with the multinational players already existent in the market (Salunke & Weerawardena, 2014). For example, Unilever is planning to introduce American skin and hair care range Alberto Culver in India. This will help the company to improve its competitive advantage and pose stiffer challenges to its nearest competitor, P&G. The company earlier introduced organic versions of Fair & Lovely, Clinic Plus and Tresemme shampoo in the market. This helped the company to add sustainable and organic products to its product line and increase its public image. The organic products are finding wide all over the world and customers are ready to pay higher prices for them. Thus, introduction of organic products provide opportunities of improving corporate image and earn more profits (McBride et al., 2015).
Unilever’s Product Line
New products will help Unilever to attract new customers which will contribute towards increase in revenue. The successful launch of new products which are likely to graduate into brands like Tresemme will generate profits for a longer period.
The per capita income and population of Thailand shows steady increase which means Unilever can find a huge consumer base with the monetary backing to consume its products. Thus introducing new products in existing markets and current products in new markets will contribute towards the growth of business.
Unilever can introduce new products in its existing markets and bring about more growth in its established business. The new products will allow Unilever to enter new markets and build relationship with new suppliers. The company can also acquire leading companies manufacturing the new products. These will allow the company to spread its supply chain and attain higher economies of scale. Acquiring leader companies in a market will allow Unilever to exercise greater control over the market. Both these strategies are capable of contributing to more business and profit generation (Sannajust, Roux & Chaibi, 2014).
The two strategies will have a great positive impact on the goals and capabilities of Unilever as a multinational company. The goal of the company is to grow its business, improve the quality of its products, improving employee facilities and reducing environmental pollution. The new market of Thailand will allow the transnational company to grow its business which goes well with its goals.
Introducing organic products in the existing markets will allow Unilever to attain higher degree of sustainability and reduce environment pollution. The increase in the growth of business and attainment of higher sustainability will allow the company generate more revenue and allow it to improve employee facilities. The increased revenue will allow the company to invest money in innovative researches to improve its products (Adams et al., 2015).
Entering new markets and introducing new products will positive impact on the current business and customers. The increase in market and product line will increase revenue generation of Unilever which will help it to expand its present business. The company will gain more competitive advantage due to this increase in profit and business expansion.
The increase in revenue will allow Unilever to invest more money towards research and innovation. The company will able to bring about new products and improve its existing products. This will benefit the customers as they will be able to get access to better quality products which will meet their new needs (Raja et al., 2013).
Expanding Market and Product Line for Growth
The entering new markets and introducing new products will expose the company before external influences which will affect the viability of the opportunities. Entering new markets will expose Unilever before new market influences like political and economic situations. The company will have to abide by the laws of the new host country like Thailand and accordingly operate in the country.
Introduction of new products will expose the transitional company to new external market influences. Introduction of new products will also encourage competitors like P&G introduce similar category of products. These products of rival companies compete with Unilever to attain maximum market penetration (Pan, Huang and Gopal, 2015).
Entering new markets and introducing new products will give positive return on investment to Unilever. Entering new markets will give the British Dutch company access to their consumer base and earn more revenue. The company will be able to invest its asset classes in new companies and earn high return on investment. The new market and new products will cater to new consumer base and earn higher profits. They will also allow the company to diversify its business risks and losses to increase its net revenue(Alessandri, Cerrato & Depperu, 2014).
The expansions of market and product line require changes in current operations. Unilever needs to expand its current business strategies and operations to adapt to the new market influences. For example, entering the market of Thailand will require the company to make policies according to the laws in the country. The market operations will have to be reformed according to the customer profile and competitors in the Thai market.
Unilever will require enhancing its current quality of customer services if it wants to expand its market and product lines. The customers in the new market will have their own queries regarding the products. The company requires training its customer service executives on the requirements of the market so that they are able to handle queries to customers’ satisfaction. The customers will have new questions regarding the new products and the company need to educate its customer care executives about the new products.
The multinational will require expanding its resources in terms of materials, technology, knowledge, employees and funds to make the necessary changes discussed above. The company will have to acquire more resources to enter new markets or introduce new products. For example, in order to enter Thailand, Unilever can acquire more resources like material and human resources from India, China and Malaysia due to their proximity to the country.
The chosen industry is FMCG industry which has players like Unilever which carry out aggressive marketing activities having a deep impact on the consumers. These companies are as a result come under purview of various legislations and ethical codes enforcing consumer protection and rights.
The Australian Competition and Consumer Commission protect consumer rights against unfair business practices like price monitoring by companies. The Competition and Consumer Act provides protection to consumers in Australian by penalising companies practicing misleading and fraud marketing activities and can even take the case to the Federal Court of Australia.
The European Union issues directives to the companies to abide by ethical practices while marketing in the European countries. The government of the United States provides protection to consumers through various acts like Food, Drug and Cosmetic Act, Fair Debt Collection Practices Act and Truth in Lending Act. The Uniform Deceptive Trade Practices Act in certain American states protection consumers from misleading advertising.
References:
Adams, R., Jeanrenaud, S., Bessant, J., Denyer, D., & Overy, P. (2015). Sustainability?oriented innovation: a systematic review. International Journal of Management Reviews.
Alessandri, T., Cerrato, D., & Depperu, D. (2014). Organizational slack, experience, and acquisition behavior across varying economic environments. Management Decision, 52(5), 967-982.
Hindustan Unilever Limited website. 2017. Supply Chain. [online] Available at: https://www.hul.co.in/careers/student-opportunities/uflp/supply-chain/index.html [Accessed 26 May 2017].
McBride, W. D., Greene, C., Foreman, L., & Ali, M. (2015). The profit potential of certified organic field crop production. US Department of Agriculture, Economic Research Service, ERR-188, July.
Nisen, M. (2017). How Unilever Is Using Incredibly Simple Strategies To Win In Emerging Markets. Business Insider. Retrieved 26 May 2017, from https://www.businessinsider.com/how-unilever-is-winning-emerging-markets-2013-1?IR=T
Pan, Y., Huang, P. and Gopal, A., 2015. New Entry Threats, Firm Governance, and Innovation in the US IT Industry.
Potrafke, N. (2015). The evidence on globalisation. The World Economy, 38(3), 509-552.
Raja, J. Z., Bourne, D., Goffin, K., Çakkol, M., & Martinez, V. (2013). Achieving customer satisfaction through integrated products and services: An exploratory study. Journal of Product Innovation Management, 30(6), 1128-1144.
Salunke, S., & Weerawardena, J. (2014). Examining the critical interplay of knowledge acquisition and integration capabilities in service innovation-based competitive advantage in project oriented service firms.
Sannajust, A., Roux, F., & Chaibi, A. (2014). Crowdfunding In France: A New Revolution?. Journal of Applied Business Research, 30(6), 1919.
Thailand. (2017). Data.worldbank.org. Retrieved 26 May 2017, from https://data.worldbank.org/country/thailand
Unilever global company website. 2017. Our vision. [online] Available at: https://www.unilever.com/about/who-we-are/our-vision/ [Accessed 26 May 2017].
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