STRATEGIC AIMS AND OBJECTIVES OF UNILEVER PLC

Strategic aims and objectives of Unilever plc



Strategic aims and objectives of Unilever plc

Introduction: Unilever

Unilever first began as a result of a merger between Lever Brothers, a British soapmaker and Margarine Unie, a margarine producer in the Netherlands, aimed at achieving cost reduction through economies of scale. The company grew by constantly acquiring businesses that produce various consumer goods. Unilever has its own plants, factories, distribution networks and supply chains, all of these added to the uniqueness of the company as none of the others in the market manufactures and sells like Unilever does.

The growth of emerging economies has made significantly impact to the growth of Unilever. They are growing so fast and dynamic. International trade analysts believe that these emerging economies will soon take up half of the world's total consumption of consumer goods. Being the world's second-largest consumer-goods company, Unilever operates in over 100 countries across the world and is experienced in starting businesses in emerging economies. It has approximately 180,000 employees worldwide with headquarters in Rotterdam and London. Unilever is one of the four market leaders for ready-meals and among the top three for foods and personal-care items. More than 150 million people consume its product daily.

Regardless to its great product range and in-depth knowledge of local culture, Unilever is constantly recognised as the second-largest after Procter & Gamble (P&G). The management of Unilever was forced to review its corporate strategies and has identified several issues causing this deficiency. Unilever has allocated too many resources to addressing cultural differences and differentiating products and over-autonomous in managerial levels created unnecessary complexity and duplication of procedures, which are seen to be the core factors leading to poor performance.

Unilever immediately put together a series of actions aimed at slimming corporate structure to simplify decision making process and minimise possible conflicts between the top management. The reforms led by Cescau were very effective; the company achieved higher sales figures in the following year and growth was expected to continue further. However, the battle for emerging-economies remains tough as competition is fierce.

Strategic aims and objectives of Unilever plc

Unilever's Strategic aims and objectives in the past decade can be summarised based on several key acquisitions and the removal of businesses that are not as profitable. Key acquisitions include Bestfoods, which is the second largest cash acquisitions of the company in history, Amora-Maille, Ben & Jerry's and Slim.Fast Foods. The portfolio, which originally consists of 1600 brands, has been reduced to 900 brands. €6.3 billion was injected to the company as a result of the sales of businesses without acceptable growth. The objective of the restructuring of portfolio led by the company's Chief Executive Patrick Cescau, is to ensure that constant focus is being placed on the company's core categories, i.e. food products as well as household and personal care items. Skin and body, hair and deodorant businesses gained impressive growth figures, constitute €2 billion in addition. This significant increase was largely attributed branded personal care items including Lux, ...