Strategy in the Current Business Environment - Research Paper Example

Program Capstone Task 1 In the current business environment, the pace of progress and growth is increasing and the organizations are attempting to become more resilient and flexible with the changing times. The attain such characteristics through analyzing their legal, economic and other internal and external environments along with overseeing their operational and decision making activities. This paper will elaborate upon the business analysis of Unilever and will relate it to its competitors in the same industry. Unilever This paper researches the business elements of Unilever extensively and compares it to one of its major competitors, Proctor and Gamble. Unilever is a British–Dutch multinational and a large-scale company offering consumer goods. The products offered by the organization include the beverages, foods, personal care products and cleaning agents. Unilever is the third-largest consumer goods company in the entire world in terms of its 2011 revenues. Procter & Gamble and Nestlé follow the company with respect to their profits and sales generation. Proctor and Gamble Proctor and Gamble is a consumer goods company listed in the Fortune 500 list of the companies and is an American multinational corporation headquartered in downtown Cincinnati, Ohio. The company, according to the 2011 statistics, witnessed $82.6 billion dollars in sales. In the list of “World’s Most Admired Companies” in Fortune magazine, the company is graded sixth in 2010, and has come up to the fifth place in 2011. The huge sales for Proctor and Gamble come from more than 160 countries all over the globe and this amount is balanced between the domestic and international markets of the company. Proctor and Gamble markets and sells over 300 brands in its product line. The company has more than 120,000 employees who are divided into the three business units of the organization worldwide. These business units include the P&G beauty, P&G household care, and P&G family health. The company produces a wide variety of deodorants, colognes, skin care brands, personal cleaning and other products. Business Environment The business environment of any organization refers to the micro and macro environment in which it undertakes its operational and functional activities. This might include the basic legal, social and economic environments of the business at broader levels. The current section discusses the business environment of Unilever with particular attention to its basic legal, economic and social environments. The company is associated with the lives of people living around the world by offering them over 400 brands (Unilever, 2012). Economic environment Regarding the economic footprints of Unilever in the global markets, the company has been becoming extremely competitive particularly in the western part of Europe. The competition of the company has grown in EU and Unilever is seen countering some crunches in a few places including Netherlands and France. The company, being in the consumer goods industry, relies heavily on the demands of consumers for its brands. Increasing inflation, unemployment, economic recession, and reduced wages in the labor market have resulted in the consumers become unable or less willing to make purchases for the Unilever products. This has, in turn, affected the turnover, cash flows, and profits of the organization negatively. However, in some Asian and African countries, the company’s statements depict a robust top-line growth of 17% during the year 2010. Social environment Unilever has been able to develop a corporate reputation strong enough to focus on its social and environmental issues. The company has decreased the rate of employee accidents by 9%. Socially, the organization is committed to its vision of helping the people look and feel good and get the most out of their lives by utilizing the sophisticated products and brands of the company. Moreover, the company also works on various projects for the welfare of society like World food program and safe drinking water. Legal environment Unilever has to be accountable for the regional, local and global rules, regulations and laws. These laws apply to the safety, trademarks, claims, copyrights, taxes, employment and other related aspects of the company and its products. Some of the significant regulatory bodies include the US Food and Drug Administration and the European Commission which the company has to adhere to. Company Culture and Performance Every organization has a corporate culture which guides the patters of beliefs, behaviours and the employee performance at the workplace. For Unilever, the corporate behavior plays a significant role in its progress, and these standards are encompassed in the code of company’s business principles. The company is trusted for it products by billions of customers around the world and carries with the philosophy of ‘doing well by doing good' (Unilever, 2012). Moreover, the company possesses a friendly corporate culture towards it employees and stakeholders and tends to establish and maintain personal networks. Unilever believes that everyone in the organization possesses the ability to grow and develop both personally and professionally. Thus, it provides it employees the opportunities to build their careers and progress in the organization. Moreover, proper trainings and performance appraisals are offered to the workforce so that they are able to identify their needs for further growth. Promotion Policies Unilever adopts various promotion policies for its products and services. The company promotes itself through the various promotional strategies including coupons, gifts hampers and wonder bags. Being a world leader in the consumer foods industry, the company advertises in order to inform its consumer regarding the availability of the innovative products. For instance, the Campaign of Dove for the Real Beauty effectively counters the existing typecasts regarding beauty. Omo/Persil's 'Dirt is good' campaign promotes getting dirty as a natural and positive part of growing up for children – all part of their learning and development (Unilever, 2012). The company indulges in responsible marketing and all its communications and interactions with the customer are claimed as being honest, legal and decent. In contrast to its competitor, Proctor and Gamble initially adopted the concept of ‘soap opera’ to advertise its brands and products through the television dramas and radio by targeting women in particular. Procter & Gamble has currently sped up its Olympic sponsorship activation of the London 2012 games by preparing for the campaigns of Games-themed product for Gillette and Duracell (Marketing Week, 2012). Strategic Decision Making Unilever makes faster decisions in an environment of uncertainty and they are often complex in nature. The company’s decisions are usually routed through the selection of a right path and assist in the proactive management of the opportunities and risks running on the path. While making the strategic decision, the organization is clear on all that it needs to focus on and are realistic regarding the available resources and timescale to the company. A cultural change is made to Unilever in terms of its adoption with the decision analysis techniques. Leadership Style The company exhibits high profile leadership competencies within the organization and its functions. The leaders for the human resource management at the organization posses value-based and charismatic styles while, the team-oriented leaderships are considered to be the pat of the organization worldwide. Besides this, the company considers its brands to be the global leaders at the marketplace. The company’s priorities regarding its research and development include the leaders who are creative and flexible to the changing business environments. The leadership style of Proctor and Gamble is much more successful reagrding the sense of responsibility, increased innovation and a shared vision amongst the members of the organization. Just like Unilever, P&G has also attained the leadership of the 50 brands that have gained popularity on the global level. The company has adopted the new business and leadership strategy with the application of values and sense of purpose. According to them, the money will follow once the human beings are invoked and cared for. There is a heavy investment in polishing up the leaders for increased innovation, hiring expert staff and investing and outspending in the Research and Development department. In this way, the company’s targeted markets have emerged with further potential for growth. SWOT Analysis SWOT analysis of any organization refers to the strengths, weaknesses, opportunities and threats which are posed to the organization through its internal or external environment. The SWOT analysis for the Unilever is provided below: Strengths The major strength of Unilever is its growing market share in the present and coming years around the globe. The familiarity of the company’s products amongst its customer market has grown. The consumers of the Unilever’s products depict relatively high product and brand loyalty. The diversified management structure of the company along with a high portfolio of 400 products across the globe is its major strength. Weaknesses A highly complicated organizational structure makes the decision making process slower. The competition among the brands of the company and its SBUs create duplication of resources. High advertising and promotion costs increase the expenditures of the company. Opportunities Increasing urbanization and globalization results in innovation and creativity. Various trade agreements and economic liberalization have opened up new trading avenues. Threats The major rivals including Nestle and Proctor and Gamble are posing threatening competition to the company. The consumer goods industry offers better profits and chances for the new entrants in the industry. Increasing media advertisements and advancements in technology have increased the brand awareness (Dhanushka, 2009). Changing External Conditions The present age is the age of technology, advancements and innovation. The organizations are moving towards resilience and attempt to keep themselves updates with the fast changing world of business and thus, quickly shifting preferences of consumers are responded promptly. For this purpose, the big organizations, such as Unilever and its competitor, both are providing a cutting-edge competition to each other in the consumer goods industry. Regarding the innovation and further introduction in the field of technology, Unilever has adopted sensible approach in the integration of such element in its business strategies. The company has adopted the increasing advancements and development which are taking place in the science of microbiology and have potentials to boost the abilities of human beings to control the microbial contamination of food products. Moreover, the organization is adamant to integrate the means of enhancing the safe, healthy and hygienic manufacturing. The new developments and scientific methodologies and technologies assist Unilever to improve the production and manufacturing systems on a constant basis. Besides this, the company has adopted methods of novel processing, product preservation, safety by design, the structuring of product, and the generation of flavor and delivery of the preferences of consumers and their behavior. In order to meet the changing customer demands and preferences, Unilever maintains the stability and safety of the services and products through the application of its concepts of "Safety by Design", which ranges from the research-to-retail continuum. Besides this, since the company is a consumer goods organization, it meets the growing demands of consumers for the mildly processed and fresh quality products and guarantees the deliverance of the Unilever Vitality thrust "Foods You Can Trust”. This delivery ensures the company’s portfolio of the growing product portfolio. The consumer research for the Proctor and Gambles products have attempted to match the revolutionary world of progress and growth. The toothpaste brands of the company has marked the product in the price-driven category, in which the customers will add value and trade-up since the product uses finest technology and is supported by a trusted and strong brand. The oral products of the company are produced using the best technologies. P&G, the cutthroat competitor of Unilever proudly claims the first and only toothpaste in the world having the polyphosphate stain management system and stannous fluoride complex. This product, due to the utilization of advanced technologies, is the market leader in fighting cavities, plaque, staining and sensitivity. The adoption of social media as a strategy for the product marketing is one of the other factors which have been appropriated by P&G in advertising, promoting and placing its products. According to the company’s management, the technology has been converging through the use of social interactions and marketing on web 2.0 which is a strong binding force for the people nowadays. Task 2 Since, the present age has shifted the preferences, demands and selection of the consumers broadly and has provided them with various alternatives; there are certain products of Unilever the demand for which is declining badly. This might hurt the profitability, revenue generation and the customer retention in the industry while hurting the market share and growth at the same time. One of the major reasons for the declining demand for the Unilever’s products is the strong competitors of the company in the consumer goods industry. For instance, the demand for Knorr and Fair and Lovely Lotions have declined in the Asian markets. This is due to the fact that Maggie and Knorr have proven to be big competitors and Maggie owns the price leadership. Moreover, the luxury and cosmetic product of other companies like L’Oreal have seen dynamic changes in the business environments and catered to the shifting preferences of consumers successfully (Business Library, 2012). L’Oreal has depicted a strong growth in the luxury and consumer products along with showing boosted performance in the American states leading to a strong competition and becoming a sophisticated beauty giant in the industry. The ongoing vigor in the moving consumer preferences as well as shifting demands has backed the growth of the company. Besides this, Unilever is a potentially profitable company, but still faces competition in the business segments. However, the company has rooms for improvement and can easily aim for expansion and diversity. It can avail the opportunities of becoming a market leader in the new business avenues. REFERENCES Task 1 Unilever, 2012, Introduction to Unilever, Web, Retreievd on April 20, 2012 Dhanushka Ariyawansa, 2009, Management Report on Unilever and Procter & Gamble Case Study, Web, Retreievd on April 20, 2012 Marketing Week, 2012, P&G plans upsurge in Games-led marketing, Web, Retreievd on April 20, 2012 Unilever, 2012, Our culture, Web, Retreievd on April 20, 2012 Unilever, Advertising & marketing, Retreievd on April 20, 2012 Task 2 Business Library, 2012, A demand for luxury gets L'Oreal off to a good start, Web, Retreievd on April 20, 2012 Read More