Diversity in Business
Diversity plays an integral part in the overall world of business. This essentially lays emphasis on the fact that diversity for business, especially in the service and product range, play a pivotal role. This evidently brings to light the fact that diversity within the services of an organisation enables it to cater to a wider range of customers and also provides it with the opportunity to penetrate multiple markets (Gachugi 2017). This is beneficial for the company as it can create a name for itself all around the world. It is also imperative to note that diversity in products evidently enable a company with the ability to not only penetrate newer markets but also widen the horizons of their targeted customer demographic. In addition to this, it is also pivotal to understand the concept of market penetration. This primarily lays emphasis on the idea that a company enters newer markets in order to create goodwill in regards to its brand. Therefore, it can be said that market penetration enables a company with the opportunity to create a reputation in a global market, expand their customer demographic, elevate their overall profit margins and flourish in a completely different country which allows them global recognition.
Unilever is a multinational consumer goods company with its headquarters located in London, England. The company not only sells food products but also creates other products such as condiments, vitamins and minerals, supplements, ice cream etc. This evidently lays emphasis on the fact that Unilever as a company creates a wide variety of products that range from beauty and personal care to food and health (Tien 2019). However, in recent times the company has been facing an imminent strategic issue. This essentially lays emphasis on the fact that since the company conducts business in a global sense it is not unlikely for it to undergo strategic challenges in different countries. This mainly suggests that Unilever as a company has been recently facing a strategic challenge in successfully penetrating certain markets (Ullah 2021). This means that the company has been struggling with its customer diversity when it comes to selling its standardised products to them. Customer diversity plays an integral part in the development and success of an organisation. This is because the success of an organisation such as Unilever is measured on the basis of sale that they make. However, the company has been facing challenges in regards to selling its standardised products to new markets in different countries such as the United States of America (Dawes 2018). This evidently lays emphasis on the fact that since the United States of America has a different range of customers, it is extremely hard for Unilever as a company to make sale of standardised products. This means that the company sells its products within the host country by marketing the product in a way that the customers of the country would be driven to purchase. This paper evidently endeavours do present Porter’s five forces analysis as well as a PESTEL analysis of the market that the company wants to penetrate. In addition to this, the paper will also present a SWOT analysis that will help analyse the internal environment of the company and the various ways in which it is falling short in terms of fulfilling its purpose in the United States of America. Finally, the paper will also present a number of recommendations that will enable the company to overcome their strategic challenge and eventually accomplish their target which is to successfully sell its standardised products in a diverse customer demographic.
Unilever’s Wide Range of Products
In regards to competitive rivalry, Unilever faces a high rate of competition. This primarily elucidates the fact that the company faces a strong force of competition within its designated industry. This is because the industry is full of companies who operate in consumer goods and are extremely aggressive with their promotion of products (Gichuki 2017). This means that Unilever faces a high level of competition from its fellow competitors as they are more in number and have low switching costs. This also contributes to the company’s strategic challenge as it makes it harder for the company to sell its standardised product to a diverse customer base since the potential customers have the option of turning to different brands present within the market
This evidently lays emphasis on the fact that Unilever as a company faces an extremely high level of bargaining power from its buyers. This is because the company primarily calculates its success on the basis of the sales it makes in terms of its customers (The World Bank 2022). This also lays emphasis on the fact that since the company is mainly service based, the power of buyers is extremely high.
This essentially elaborates the fact that the since Unilever is at the top of its industry, suppliers prevalent within the industry want to work with the company. However, since the industry also has a variety of other consumer good companies, suppliers have an option to work with other companies (Saha et al 2016). This means that the bargaining power of suppliers is moderately high.
This mainly sheds light upon the fact that irrespective of the company being at the top of the industry, it faces a high threat of substitution. This primarily lays reference to the fact that the company faces threats from its fellow competitors who would copy its products and sell it to the customers for a cheaper price (Sohir 2021). This contributes to the strategic issue as Unilever faces difficulties in selling standard products while other companies copy the product and sell it to the diverse market in ways that the customers would accept.
In regards to the threat of new entrants, Unilever faces an extremely low risk of threat. This is because the company has successfully created an identity and a name for itself which means that new entrants within the industry do not have the capability to affect a company as vast as Unilever. This also lays emphasis on the fact that in terms of competition, while new entrants in the market bring in a level of freshness, people tend to trust brands such as Unilever that have been around for a long time to be tried and tested (Cui and Wu 2017). This mainly focuses on the fact that since the company has been around for a long time, it has successfully achieved the trust and loyalty of its customer base which means that the threat from new entrants is extremely low when it comes to Unilever.
In regards to the political factors, Unilever as a company must be able to assess the political rules and regulations prevalent in the United States of America this would not only enable the company to successfully penetrate the American market but would also provide it with an idea about the way they can introduce the standardized products so that they can make sale.
Unilever’s Strategic Challenge
In regards to economic factors, the company must calculate the profit it might make from the diverse customer base in the United States of America. This evidently lays emphasis on the fact that the company must ensure that it earns lucratively from the market it is about to penetrate (Financial Times 2022). In terms of launching the standardized product to a diverse customer base, the company must evaluate the currency exchange value so that it can plan the launching of the product accordingly and hence succeed in making sale. It is also imperative to note that the GDP of the United States of America increased by a total of 5.7 per cent in the year 2021. This evidently suggests that for Unilever to flourish within the market, it must price its standardized product at an accurate price that not only aligns with the GDP of the nation but also appeals to the customer base of the market.
In terms of social factors, Unilever must ensure that it releases its standardized product in such a way that it adheres to the norms of the society prevalent in the United States of America. This means that the company must research the likes and dislikes of the society and evidently launch its standardized products in accordance to those preferences. This will enable the company to successfully launch its product as well as make sale in a new and diverse market (Wani et al 2021).
In terms of technological factors, Unilever must ensure that it follows the latest technologies in the creation of its product. This will essentially enable the company to not only attract traffic in a new customer base but will also enable it to create products that are standardized but also in alignment with the new age technology. This elevates the chances of the company appealing to its new customer base imminently and hence flourish in its designated purpose
In regards to environmental factors, Unilever must ensure that not only is it sustainably sourcing the ingredients for its product but it is also contributing to the development of the environment that it is a part of. This will enable the company to promote its product in an attractive and appealing way to its new customer base while also being mindful of the impact it is having on its environment (Jeevan 2016). In addition to this, the company is likely to attract more customers within the American market by ensuring that it fulfills the environmental needs of the world. This also contributes to the company elevating its chances of attracting more customers in a diverse market who value the environment (Chernobay et al 2020).
This lays emphasis on the fact that the company must ensure that it follows the laws set by the government in regards to its products in the United States of America. This means that Unilever must ensure that before entering the market, it must thoroughly research the laws and regulations set by the American government in regards to the product that it plans on launching. This enables the company to ethically and lawfully penetrate the market as well as cater to the demands of its new and diverse customer base (Zhou 2021).
Porter’s Five Forces Analysis
This essentially provides a detailed view in terms of the internal environment of the company.
This evidently suggests that in terms of strength factors, Unilever’s brand reputation and identity makes market penetration extremely possible for the company. This means that since the company has created a reputation and an identity for itself in a global sense it is easier for it to reach out to new markets and customers (Cheng 2021). In addition to this, the company also enables itself with the ability to earn the loyalty and trust of its customers in a global range because of its stellar reputation in the consumer goods industry. Unilever as a company enhanced its underlying sales by a total of 1.9 per cent. This also includes volumes which grew around 1.6 per cent and 0.3 per cent in terms of pricing. This evidently justifies the fact that that the company has only grown in its industry and hence has successfully created an identity for themselves in their designated market and targeted customer base.
In terms of weakness factors, the company faces an imminent strategic challenge. This evidently lays emphasis on the fact that since the company faces severe drawbacks in terms of researching the new market, it has been failing in executing certain penetration strategies. This means that in terms of releasing its standardised product, the company is struggling to penetrate the American market successfully as its research department has been struggling to thoroughly look into the demands of the customers within the diverse market of the United States of America (Jain and Sharma 2018)
The company faces the exemplary opportunity of catering to a wide range of customers due to its product variety. This means that since the company has a variety of different products both in the food sector as well as in the beauty and personal care sector, it faces an incredible opportunity to reach out to a diverse range of customers in the American market and cater to their demands as well as their needs. This also lays emphasis on the fact that the company faces the opportunity of venturing out into newer markets in order to earn lucratively from them (Abrahams 2018).
In regards to threat factors, Unilever faces a high competition in terms of product substitutes. This evidently lays emphasis on the fact that since the company faces a high rate of competition in its designated industry, it also faces the threat of product substitution by its competitors. This is detrimental for the company since its competitors have the chance to take advantage of the fact that Unilever is struggling to execute its plan of releasing standardised products successfully in diverse markets. This means that the company faces the threat of having its products copied and sold for cheaper rates while it struggles to release its standardised product successfully in the American market (Sakyi et al 2021).
The main strategic issue that is being faced by Unilever is that of product standardization in all its markets. In the context of this assignment, the company is aiming at expanding itself from London to America (Henfrey et al 2018). Even though one of the unique value propositions of the company is that caters to the culture of various nations across the globe when it sets itself up in various nations, the issue of product standardization has prevented the brand from creating a strong brand name with a strong and unique go to product. Therefore, the valuable customers of Unilever are confused as to what product they should choose that stands out among all the product ranges of the company (Formanek 2021).
PESTEL Analysis
The first recommendation for Unilever is to conduct thorough research and development across the various markets that it wants to establish itself. The company wants to conduct thorough market research, not only from the potential leads but also from the existing loyal customers. This survey must contain open as well as closed ended questions as feedback from the customers in order to gain a holistic approach on what is the perceived performance of the company, the expected performance of the company, and the view as well as the brand image that has been developed in the minds of the customers (Hallak 2016). This will help Unilever to understand some of the major loopholes that exist within the target markets. Thorough research and development will help the brand to create a generalized and standardized product that will be suitable for all cultures, habits, and ways of life (Kartawinata et al 2020).
A uniform way of marketing will help the brand achieve its strategic goal of product standardization. Therefore, the company is required to conduct its target segmentation, market positioning as well as targeting in a standardized manner (Mutembei and Njuguna 2019). This means that the company is required to target a particular age group from all its markets, and also cater to their needs uniformly. this will be done by identifying a common problem that exists in that particular demographic customer segment and catering to the issues of this segment. the company is also required to establish a common marketing make and product image that will be sold internationally in order to maintain a uniform image of the product as well as the brand among varying markets (Mazon 2019).
The last recommendation is the standardization of the business processes. The company must establish a uniform statement of procedure that will help in the formulation of the product starting from sourcing its raw material to its manufacturing and delivering (van Berkel 2019). This will help the customers to create a uniform image of the brand in their heads across various markets and will also help the customers to associates Unilever with a particular product that is available across markets. The standardization of business processes will help in the creation of the product in a uniform manner that will be seen in both London as well as the United States of America, creating a standard and uniform image and quality of the brand across the globe (Farhana 2016).
Conclusion
Therefore, in conclusion, it can be said that diversity is extremely important when it comes to penetrating a market. This mainly lays emphasis on the fact that for a company to imminently succeed in its purpose, it is extremely imperative that it incorporates diversity in its conduction of business. The above paper sheds light on the fact that Unilever as a company has been facing the strategic challenge of not being able to launch standardized products successfully in new and diverse markets. This refers to the fact that the above paper discusses how Unilever has been unsuccessful in releasing standardized products in a diverse customer base in new markets such as that of the United States of America. The paper also presents Porter’s five forces analysis and a PESTEL analysis in order to analyze the external environment of the company. In addition to this, the paper also elaborates on the internal environment of the company by presenting a SWOT analysis. Finally, the paper also presents a few recommendations that will enable the company to eventually succeed in launching standardized products to a diverse customer base in new markets such as that of the United States of America.
SWOT Analysis
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