unilever case study 2021

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The Net Positive Manifesto

• Paul Polman
• Andrew Winston

Both practically and morally, corporate leaders can no longer sit on the sidelines of major societal shifts or treat human and planetary issues as “someone else’s problem.” For their own good, they must play an active role in addressing our biggest shared challenges. The economy won’t thrive unless people and the planet are thriving.

In this bold manifesto, consultant and author Andrew Winston and former Unilever CEO Paul Polman describe their vision of a “net positive” company—one that grows by helping the world flourish. Drawing on examples from Unilever and other leading companies, they outline four critical paths businesses can take to prosper today and win in the future. They can operate first in service of multiple stakeholders—which then benefits investors (as opposed to putting shareholders above all others); take full ownership of all company impacts; embrace deep partnerships, even with critics; and tackle systemic challenges by rethinking advocacy and the relationship with governments.

No company has yet reached the ambitious goal of becoming net positive. But a growing number have begun the journey—unlocking greater value for their businesses while helping solve larger problems for the benefit of all.

Is the world better off because your company is in it?

Idea in Brief

The problem.

Current efforts by business to address planetary challenges such as climate change are inadequate.

The Solution

Corporations should strive to become net positive, improving well-being for everyone they affect—every product, operation, and stakeholder, including future generations and the planet itself.

First Steps

No company is yet net positive. To get started, firms should think about stakeholders, not just shareholders; take full ownership of all company impacts; embrace partnerships and work with critics; and rethink their approach to lobbying and other forms of advocacy.

Society’s expectations of business have changed more in the past two years than in the previous 20. A pandemic, expanding and ever-more-expensive natural disasters, George Floyd’s murder, attacks on democracy, and more: All moved us past a tipping point. Both practically and morally, corporate leaders can no longer sit on the sidelines of major societal shifts or treat human and planetary issues as “someone else’s problem.” For their own good, companies must play an active role in solving our biggest shared challenges. The economy won’t thrive unless people and the planet are thriving.

• Paul Polman was the CEO of Unilever from 2009 to 2019 and helped develop the UN Global Goals. He is a coauthor of Net Positive .
• Andrew Winston is one of the world’s leading thinkers on sustainable business strategy. His books include Green to Gold , The Big Pivot , and Net Positive . AndrewWinston

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Unilever: Enhancing Investor Engagement

Unilever is a British multinational consumer goods company - one of the world’s largest, with over 400 brands and products available in over 190 countries. In 2020, Unilever announced the ‘Unilever Compass,’ their new integrated strategy. Made up of five strategic priorities, they use multiyear metrics and targets to show investors what these mean and how they plan to measure progress. 

This case study shows how to communicate with investors effectively and how effective investor engagement can be instrumental to supporting a company’s successful journey to net zero. By viewing sustainability as integral to value creation, embedding it into their business model and putting it at the core of their strategy, Unilever has consistently delivered financial results in the top third of their industry.

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Enhancing investor engagement guidance.

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Now it’s personal: Unilever’s digital journey leads to real results for consumers and employees

What does “digital transformation” mean for an established global manufacturing enterprise like Unilever, maker of iconic brands such as Dove, Vaseline and Ben & Jerry’s?

For Unilever CIO Jane Moran, it means empowering employees to carry out the company’s mission of meeting consumers’ rising expectations.

Unilever CIO Jane Moran. (Photo courtesy of Unilever)

“What’s transformative is the way we’re connecting people, making data accessible to a broader employee base and giving them the skills to analyze the data to make better informed decisions,” Moran says. “That can have obvious benefits, like increasing efficiency, but also an impact on topics that are central to our business, such as sustainability.”

From project to platform

One of Unilever’s major goals in its digital journey is to become driven by data insights to predict the future — no mean feat for a global giant worth $55 billion, operating in 190 countries.

To realize this change, Unilever shifted from a project-based approach to a platform strategy, supported by Microsoft technology and hands-on support. Azure, Microsoft’s cloud computing service, provides the architectural backbone for the company’s digital transformation.

“That has allowed us to be much more agile and much more scalable,” says Moran. “We can’t deliver unless we have a platform-based approach and it’s very powerful. We’re really exploiting that now at Unilever.”

Digitally rewiring the supply chain

For Unilever, the capabilities of digital technology offer an opportunity to transform its supply chain to meet the needs of customers who “expect customization, on-demand products and brands with purpose,” Moran says.

“We are digitally rewiring our supply chain, focusing on generating real-time, democratized information, artificial intelligence planning, capitalizing on robotics and building digitally connected factories. All this will allow us to readily predict and respond to whatever the future throws at us,” adds Dave Penrith, Unilever chief engineer.

Unilever chief engineer Dave Penrith. (Photo courtesy of Unilever)

Unilever is using IoT (Internet of Things) and intelligent edge services in the Azure IoT platform to enable its digital twin, which is a next-generation digital model of a physical environment — in this case, a Unilever factory. The machines and equipment in the factory are connected so that they can send a mass of data — everything from temperatures to production cycle times — into the model.

This creates a representation of every machine and process, offering visibility across all levels of the plant. The collected data is mined for insights and patterns using advanced analytics and machine learning algorithms, which can predict outcomes based on historical data.

“The more data it gets, the more it learns. The more it learns, the faster it learns, and it starts to learn at an increasingly exponential rate,” Penrith says.

The algorithm can reach a level of accuracy where it can be allowed to directly control part of a machine or process. This allows operators to make better-informed decisions and frees them up from repetitive manual tasks for more value-added functions.

The digital twin has already had an impact on operations. Once Unilever switched control of moisture levels in a soap-making machine to the digital twin algorithm, operators did not want it switched off because it gave them so much control over consistency.

In another instance, the digital twin has used data on how long it takes to produce one batch of liquid, such as shampoo or detergent, to predict the correct order of processes in order to get the most efficient batch time. The less time each batch takes, the higher the production capacity of the plant, fully utilizing the asset and avoiding having to invest in capability elsewhere.

The digital twin solution was custom-built by Unilever’s engineering team in partnership with The Marsden Group, a Microsoft partner, and is hosted on Microsoft’s Azure platform.

Right now, Unilever is operating eight digital twins across North America, South America, Europe and Asia. The company is streaming data from 15 of its 300 global plants, with plans to connect 70 factories by the end of the year and another 100 or so in 2020 – “everything from soap to soup,” Penrith says.

Digital tools allow employees to easily visualize and interpret data.

Diving into data

In its mission to become data-insights driven, Unilever is using Power BI, a business analytics tool, to help employees access the data they need. Employees can use Power BI to visualize data in whatever way works for them to solve the problem they’re facing, and it also allows them to create their own reports, rather than relying on a technology team.

Being able to uncover data and visualize it in Power BI has allowed Unilever to increase productivity by eliminating false or unimportant alerts on production lines. Previously, operators were responding to 3,000 alerts every day in this complex site, each of which took a few minutes to assess, acknowledge and clear. This put operators into constant reactive mode and slowed down production lines. Unilever has been able to reduce the number of alerts requiring action by 90% per day, ensuring far fewer interruptions and more timely interventions.

Power BI is just one tool in an interconnected system that cultivates the “democratization of data,” says Penrith. “With Power BI connected to all our historical data, live data, analytics and models, our people get real-time intelligence, all sitting in Microsoft Teams, with conversation happening all the time so our employees and factories can support and collaborate with each other.”

Empowering with PowerApps

A big part of that interconnected system is finding ways to help people fix their own issues. One tool the company is using to achieve this is Microsoft PowerApps, which allows employees to build custom apps themselves, without a developer.

For example, one Unilever factory quality assurance employee saw a demo for PowerApps — and then created a quality assurance PowerApp herself.

The app is now available in all of Unilever’s factories, a vast upgrade from the manual process that was previous used for quality checks. The app enables real-time adjustment to the manufacturing process and saves time, freeing up employees for more valuable tasks. It also saves paper, contributing to Unilever’s sustainability mission.

A Unilever factory in Valinhos, Brazil.

Connecting a global team

Unilever also wanted to offer its people — nearly 155,000 employees worldwide — the tools to further connect with one another and share lessons and ideas. Unilever uses Microsoft 365, a bundle of services that includes Windows 10, as well as productivity apps such as SharePoint, Outlook, Word, PowerPoint and Excel, and collaboration and communication tools such as Teams and Yammer.

This suite of tools has made a big impact on productivity and collaboration, according to Moran.

“Using digital tools like Teams and Yammer have really helped our organization to collaborate and share, and you can’t appreciate how great that is,” she says. “It’s taken off at the top of our company, and now everyone is using this to share wonderful stories about what they’re doing every day. It has allowed everyone to have a voice.”

For Penrith, Microsoft Teams has had a major impact on communication. The company created a global Teams environment for all Unilever engineers that allows them to connect and share knowledge.

“That’s been a real game changer,” he says. “Overnight, we connected 2,000 engineers, most of whom may never really have spoken to each other before … it takes away any false boundaries that people may have, and it links colleagues from around the whole world.”

Penrith has a blog area within Teams where everyone can reply to everyone else, and they can also contact him directly on the platform. Penrith now spends more time on Teams than on email and has seen a 60% to 70% drop in the number of emails arriving to his inbox.

Unilever’s digital transformation empowers employees to carry out the company’s mission of meeting consumers’ rising expectations.

Digital enables sustainability, too

Unilever’s digital conversion has also helped to support the company’s commitment to sustainability, particularly in terms of energy efficiency.

One example is the amount of energy used at factories that make Dove soap. Unilever has used Teams to set up a community for Dove factories where they can access energy usage data for all factories, as well as share best practices for conserving energy. Everyone in the community can see how much energy each factory uses per batch of Dove soap and work together on reducing that usage.

Data-driven decisions

Unilever’s technological transformation has already resulted in substantial success across the organization, from the supply chain to research and development, human resources, sales, finance, logistics and more, supporting the company’s ultimate goal of serving consumers.

“We are creating a culture and organization which is data-intelligent across our end-to-end supply chain, supported with the data, analytics and insights to make smarter, faster decisions to understand, anticipate and exceed consumer expectations,” says Penrith.

At the Microsoft Inspire 2019 conference , Microsoft’s executive vice-president of Worldwide Commercial Business, Judson Althoff, spoke to Unilever executives about how Microsoft technology is fueling Unilever’s digital transformation. Above, Althoff greets employees at a Unilever factory in Valinhos, Brazil .

Future of Work and Agility

Blog: The Future at Work: A Unilever Case Study

• June 28, 2022

What lessons can be learned from their change in strategy?

Nick Dalton, former Executive Vice President of HR at Unilever, attended a CRF Talent, Leadership and Learning Community event and shared several insights into their Future of Work projects.

Unilever found itself facing a paradox: how could it be a purpose-driven organisation, speaking out about sustainability and purpose to investors on a Tuesday, but then on Thursday potentially making thousands of redundancies as the company adapted to technology-driven changes?

They wanted to address this, and thinking eventually aligned around three themes:

• Changing the way they change – the company moved from a more paternalistic to a more adult-to-adult approach, with a focus on involving employees earlier.
• Future-fit planning/lifelong learning – the company sought to align learning, development opportunities and future skills. Key questions included: what are the changes and how do we prepare the workforce well in advance? How do we become more anticipatory and strategic?
• New models of employment – the company asked what new employment contracts would look like. Unilever was clear that it did not want to move into a gig economy model that was fundamentally exploitative; instead, they sought ways to have flexibility with security.

More broadly, Nick shared his thinking on how change management has evolved over time: “we used to have a paternalistic strategy – ‘don’t worry, we’ll look after you’. Then we moved to a power strategy – ‘do as you’re told’. There was then a shift to a process strategy, wherein the emphasis was on following procedures to manage change. This shifted to a transformational strategy – ‘I will share my vision and you will follow me’ – but this strategy inspires little trust when ‘change’ means losing one’s job.”

Putting people in the spotlight

Nick argues that companies are now moving toward a people-centred strategy – starting with the individual rather than the organisation in order to build trust.

Unilever realised this approach by helping its people develop individualised future-fit plans. The step beyond this is more systemic – asking, “how we can work with others in our ecosystem to potentially guarantee people future opportunities. How can we enhance the skills of the community more generally?”

This more systemic approach to change is slowly emerging, but it is proving challenging as it asks leaders to give up control, works councils to adapt, and requires trust in organisations to vastly increase.

Unilever took a two-pronged approach to this dilemma of how to make systems more dynamic than static. The company took a top-down approach of merging future skills with workforce planning and big restructuring projects, looking at job design, and involving employees as early as possible. At the same time, the company took a bottom-up approach.

As Unilever’s Future of Work vision is centred on purpose at all levels, the company put 65,000 of its people through purpose workshops that enabled them to develop personal future-fit plans. The programme gave the company a much better understanding of the motivations and capabilities of its workforce. This approach recognises that the skilling agenda goes beyond Unilever.

It asks: how can you be prepared for jobs anywhere with your skillset?

Aligning with HR

Nick closed the session by highlighting that the future of work agenda has the potential to integrate things in HR.

After all, this is not merely a rebranding of lifelong learning or workforce planning; rather, the reality is that the agenda is about integrating leadership, skills, change management, learning and development, and employee relations. Understanding this as integration is the key to success; without integration, the skills agenda risks ending up as old wine in new bottles.

To find out more about CRF’s research on reskilling, check out our report: Building a Future-Fit Workforce .

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Business Strategies that set FMCG giant “Unilever” a class apart

The first name that comes to mind as soon as somebody talks about the FMCG industry is Unilever. A century ago no one would have predicted that a company founded by a margarine owner and a soapmaker would years later become one of the most established and famous companies and one of the most desirable employers in the world .

As of 2020, it has a turnover of around €50.724 billion and has approximately 155,000 employees worldwide. Apart from financially doing well, it has also progressed towards achieving sustainable development goals. Unilever is one of the few companies which have achieved gender equality in the workplace (as of 2020).

Transformation of a merged operation to a renowned brand

Unilever was established in September 1929 by merger of Dutch-based company Margarine Unie and British soapmaker Lever Brothers. The name Unilever came up by blending the names of both the companies. It has emerged as one of the largest consumer brands owning around 400 brands. It is primarily known for its diversification and has three main divisions. 

1) Food and Refreshments

2) Home Care

3) Beauty and Personal Care

It was only in the late 20th century; the organization increasingly diversified from making oils and fats products to expanding its operations worldwide. It has made numerous corporate acquisitions with brands like Dove, Omo, Knorr, Lipton, Lux, Magnum, Rexona/Degree, Sunsilk, etc. 

We're proud to say our brands are known for being widely used around the world. Check out some of our leading products: https://t.co/xRZwMakuFM pic.twitter.com/d91MmjipCw — Unilever Global Careers (@CareersUnilever) January 5, 2018

Unilever is famously known for its U-Shaped logo. It was only in 2004 that the current logo was established, which was designed by Wolff Olins. The current logo is made up of 25 icons which represents an aspect of the company. 

View this post on Instagram A post shared by Unilever Global #StaySafe (@unilever)

Unilever’s Marketing Strategy: A brand with a purpose

One of the best business strategies used by Unilever is that it integrates its global strategies with the local community to attract consumers who are attracted to the products that are famous worldwide; however, it can hold on to its local essence.

For example, Hindustan Unilever, a subsidiary of Unilever in India, has established itself as one of the most loved brands by the Indian audience. For decades it has been one of the top five most valuable companies in India . The reason for the success of HUL in the Indian market is its association with middle-class values and old-fashioned essence. Although it has been changing with time simultaneously, HUL’s philosophy has remained rooted in the purpose and values of the consumers.

While promoting these brands, Unilever also focuses on achieving the upper hand in communication to the audience without compromising these brands’ delivery.

For instance, the Surf Excel tagline has been ‘dirt is good and has portrayed it in various forms. At the same time, the case of Brooke Bond Red Label depicted how a social conversation over a cup of tea (or perhaps just a sip) could bring a change in the social views of the tea lover. Therefore, due to such creative methods, Unilever’s brands, despite being one of the oldests, have continued to gain consumers’ confidence.

Unilever: A company that keeps sustainability at the heart of its business strategy

As of 2020, Unilever celebrated 10 years of the Sustainable Living Plan . The company had committed to providing sustainable living for 8 billion people worldwide and decided to address social inequality and climate changes. The company did not neglect these goals despite the occurrence of COVID-19. 

Unilever worked on the longer-term implications of global trends for its business. Thus, the adoption of the Sustainable Living Plan has been a game-changer. It understood the importance of Sustainability and accepted it as a cultural transformation journey by integrating the USLP targets into its core working practices and procedures.

At the corporate level, Unilever has been committed to gender equality for a long time. As of 2020, 50% of managerial positions are held by women as compared 2010 to 38%. The organization had set a goal in 2010 to have a 50/50 split in the employment and added a women-leadership program . It collected, reviewed, and analyzed the data for the past 10-years and used it to battle gender stereotypes every month.

Unilever focuses on eliminating inequality at the global level by removing stereotypes in its advertising and showing how fathers or husbands could contribute to society 

Even during COVID-19 for 3-months, it did not stop working on its sustainable development plan and gender equality. It stated that organizations measuring inequality now would be better positioned to improve business and equality post-Covid. It made progress slowly over the years and was one of the few companies to achieve a balance. In 2020 Unilever won the ‘Catalyst Award’ for achieving gender equality 

As of 2021…..Unilever is using sustainability as an opportunity…

Unilever has been honored as being the most environmentally responsible companies and topped the list back in 2017.

In its latest goals, Unilever further added that it would reduce food waste from the factory to the shelf by half by 2025, which is five years earlier than what the organization has committed as part of the 10x20x30 (i.e 200 companies pledge to reduce wastage by 2030) initiative. It further added to increase the plant-based sales to around 1 billion euros ($1.2 billion) by the next 5-7years to reduce greenhouse gas emissions from traditional animal-based agriculture.

Unilever : Building a customer-centric business strategy

The organization has a competitive advantage due to its continuously enhancing values amongst consumers globally. Furthermore, it possesses a diversified portfolio of the top brands, thus achieving a unique position and innovating with the consumers’ preferences globally.

It has also taken up initiatives in its Research and Development, which are heavily funded to align with changing consumer needs. It has its R&D operations in China, India, UK, the US, and the Netherlands. Due to its manufacturing facilities in around 270 locations globally, Unilever has been able to cut costs and achieve expertise in its distribution channels.

Unilever has been able to establish itself as the most significant FMCG due to its direct-to-consumer business model, i.e. by extensively understanding the needs of the consumers. Unilever also started its marketing campaign by forming a relationship between the consumer and the brand.

The most crucial element in the business strategy of Unilever is the R&D in its product development, while being on par with its marketing activities. Unilever understood changing needs of the consumers and implemented them in their development. In 2017 alone, Unilever invested more than 900 million euros in its R&D. 

It’s not easy to be a market leader for a century and that too by winning the hearts of its consumers. With its dedicated sustainable yet customer-centric business strategy, Unilever would continue to do so.

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Unilever Change Management Case Study

In today’s fast-paced business environment, change is inevitable.

Companies need to evolve and adapt to remain competitive, but managing change is not an easy task. Effective change management is crucial to the success of any organizational transformation, as it ensures that the changes are implemented smoothly and effectively.

In this blog post, we will examine a case study of change management at Unilever, one of the world’s largest consumer goods companies.

We will explore the challenges faced by Unilever, the change management approach it took, and the results of its initiatives.

Brief History and Growth of Unilever 

Unilever is a British-Dutch multinational consumer goods company that was founded in 1929 through a merger between Dutch margarine producer Margarine Unie and British soap maker Lever Brothers.

Unilever has a long history of growth through mergers and acquisitions, with notable acquisitions including Bestfoods, Ben & Jerry’s, and Dollar Shave Club.

The company operates in over 190 countries and has a diverse portfolio of products, including food and beverages, cleaning agents, beauty and personal care products.

Unilever has also been committed to sustainability and social responsibility, and in 2010, it launched the Unilever Sustainable Living Plan, which aims to reduce the company’s environmental impact and improve the health and well-being of its customers.

Today, Unilever is one of the world’s largest consumer goods companies, with a revenue of over €50 billion in 2020.

External factors that led to organizational changes at Unilever

Unilever is a multinational consumer goods company that has undergone several organizational changes over the years. Here are three external factors that led to organizational changes at Unilever:

• Changing Consumer Preferences: The changing preferences and behaviors of consumers can have a significant impact on a company’s strategy and operations. For example, as more consumers started to prioritize eco-friendliness and sustainability, Unilever had to shift its focus towards more sustainable products and packaging. This led to the introduction of products like the “Dove Refillable Deodorant” and “Omo EcoActive” laundry detergent, as well as a commitment to reduce its plastic packaging by half by 2025.
• Competitive Pressure: Competition is another external factor that can force companies to make organizational changes. For example, when Unilever faced increasing competition from other consumer goods companies in emerging markets like India and China, it had to restructure its operations to be more efficient and cost-effective. This led to the consolidation of its global supply chain, as well as a greater emphasis on localizing its products and marketing strategies to better appeal to these markets.
• Technological Advancements: Advances in technology can also lead to organizational changes, as companies need to adapt to new ways of doing business. For example, as more consumers started to shop online, Unilever had to develop a strong e-commerce presence and optimize its digital marketing efforts. This led to the creation of Unilever Digital, a team dedicated to digital marketing and e-commerce, as well as a partnership with Alibaba to expand its online distribution in China.

Internal factors that led to organizational changes at Unilever

In addition to external factors, internal factors can also lead to organizational changes at Unilever. Here are three examples of internal factors that have led to organizational changes at the company:

• Management Changes: Changes in top management can often lead to organizational changes. For example, when Paul Polman became CEO of Unilever in 2009, he initiated a major restructuring of the company that aimed to streamline operations and focus on sustainable growth. This led to the consolidation of Unilever’s foods and personal care divisions, as well as a greater focus on emerging markets and sustainability.
• Financial Performance: Poor financial performance can also prompt organizational changes. For example, in 2017, Unilever reported slower-than-expected sales growth, leading the company to undertake a strategic review of its operations. This resulted in a decision to sell or spin off Unilever’s spreads business and focus on higher-growth areas like beauty and personal care.
• Organizational Culture: Organizational culture can also drive organizational change. For example, when Unilever identified a need to become more agile and innovative, it undertook a major cultural transformation initiative called “Connected 4 Growth.” This involved restructuring the company into smaller, more autonomous business units and giving employees greater freedom to experiment and take risks. The initiative aimed to foster a more entrepreneurial culture within the company and enable faster decision-making and innovation.

05 biggest steps taken by Unilever to implement changes

Unilever is a multinational consumer goods company that has undergone several organizational changes over the years. Here are the five biggest steps taken by Unilever to implement changes:

1. Sustainable Living Plan

In 2010, Unilever launched its Sustainable Living Plan, a comprehensive sustainability strategy that aimed to reduce the company’s environmental footprint, improve social impact, and drive profitable growth. The plan set ambitious targets for Unilever to achieve by 2020, such as reducing greenhouse gas emissions by 50% and improving the livelihoods of millions of people in its supply chain. The Sustainable Living Plan has been a driving force behind many of Unilever’s organizational changes, such as the introduction of sustainable products and packaging and a greater emphasis on transparency and accountability.

2. Organizational Restructuring

Unilever has undertaken several major organizational restructuring initiatives over the years to streamline its operations and focus on high-growth areas. For example, in 2016, Unilever announced a plan to consolidate its foods and personal care businesses into a single division, with the goal of achieving greater efficiency and cost savings. Similarly, in 2017, Unilever announced a strategic review of its operations in response to slower-than-expected sales growth, resulting in a decision to sell or spin off its spreads business and focus on higher-growth areas like beauty and personal care.

3. Digital Transformation

As more consumers started to shop online, Unilever recognized the need to invest in its digital capabilities to stay competitive. In 2017, the company launched Unilever Digital, a team dedicated to digital marketing and e-commerce, and entered into a partnership with Alibaba to expand its online distribution in China. Unilever also invested in technology startups and acquired several digital companies to enhance its digital capabilities and drive innovation.

4. Cultural Transformation

Unilever recognized that its organizational culture needed to change to foster greater agility and innovation. In 2016, the company launched its “Connected 4 Growth” initiative, which involved restructuring the company into smaller, more autonomous business units and empowering employees to take more risks and experiment. The initiative aimed to create a more entrepreneurial culture within the company and enable faster decision-making and innovation.

5. Portfolio Transformation

Unilever has undergone several portfolio transformations over the years to focus on its core brands and divest non-core businesses. For example, in 2018, Unilever acquired the personal care and home care brands of Quala, a Latin American consumer goods company, to strengthen its presence in emerging markets. At the same time, the company divested its spreads business and announced plans to exit its tea business to focus on higher-growth areas. These portfolio transformations have helped Unilever to stay agile and adapt to changing market conditions.

05 Results of change management implemented at Unilever

The change management initiatives implemented at Unilever have had several positive outcomes and impacts. Here are some of the key examples:

• Increased Sustainability: The Sustainable Living Plan has been a key driver of Unilever’s sustainability efforts, and the company has made significant progress in reducing its environmental footprint and improving social impact. For example, by 2020, Unilever had achieved its target of sending zero non-hazardous waste to landfill from its factories, and had also reduced its greenhouse gas emissions by 46% per tonne of production.
• Improved Financial Performance: Unilever’s focus on portfolio transformation and strategic acquisitions has helped the company to improve its financial performance. For example, in 2020, the company reported a 1.9% increase in underlying sales growth and a 2.4% increase in operating profit margin.
• Enhanced Digital Capabilities: Unilever’s investments in digital transformation have enabled the company to stay competitive in a rapidly evolving digital landscape. For example, Unilever’s partnership with Alibaba has helped the company to expand its online distribution in China, while its investments in technology startups have helped to drive innovation and enhance its digital capabilities.
• Improved Organizational Agility: Unilever’s organizational restructuring and cultural transformation initiatives have helped to create a more agile and entrepreneurial company culture. This has enabled Unilever to make faster decisions and respond more quickly to changing market conditions.
• Increased Customer Satisfaction: Unilever’s focus on innovation and product development has resulted in the launch of several successful new products and brands, such as the plant-based meat alternative brand, The Vegetarian Butcher. These products have helped to increase customer satisfaction and drive growth for the company.

Final Words

Unilever’s successful implementation of change management is a testament to the company’s commitment to innovation, sustainability, and organizational excellence. By undertaking a variety of initiatives, such as the Sustainable Living Plan, organizational restructuring, digital transformation, cultural transformation, and portfolio transformation, Unilever has been able to adapt to changing market conditions and position itself for long-term success.

One key factor in Unilever’s success has been its ability to align its change management initiatives with its overall business strategy. By focusing on high-growth areas, investing in sustainability, and enhancing its digital capabilities, Unilever has been able to drive growth and improve profitability while also achieving its sustainability goals.

Another key factor has been Unilever’s emphasis on collaboration and stakeholder engagement. By working closely with suppliers, customers, and other stakeholders, Unilever has been able to create a shared sense of purpose and drive greater alignment around its sustainability and innovation goals.

About The Author

Tahir Abbas

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How oxfam has worked with unilever to enhance its social impact.

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This case study is notable for how one of the UK’s foremost companies, Unilever, engaged with Oxfam’s request to conduct a ‘gap analysis’ between the company’s labour rights policies and the reality on the ground for workers. Following the research in Vietnam, for which the company provided unprecedented access to its staff and suppliers, Unilever adopted a Framework for Fair Compensation covering all of its direct employees globally and strengthened its sustainability plan and supply chain policies. A progress review in 2016 documented positive changes in policy and practices. Factors contributing to success included prior campaigns by unions and nongovernment organizations, Unilever’s openness to listen and learn, and Oxfam’s ‘critical friend’ style of engagement, which built on relationships of trust established over time and at multiple levels.

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Is Crowdsourcing a Sustainable Value Proposition For Innovation: A Unilever Case Study

Point of view on the impact of open innovation on Unilever's sustainability agenda

Has crowdsourcing turned into a barrier for transformative thinking and operational excellence? Many open innovation and crowdsourcing examples have been documented across fast moving consumer goods (FMCG) and are credited with sparking innovation spurring the development of new products, services, and business lines. Over time, crowdsourcing has been leveraged across many traditional organizational functions from R&D to marketing to supply chain and manufacturing.

Partnering for  Sustainability :

With the stated goal that ‘By 2020 we (Unilever) will help more than a billion people take action to improve their health and well-being’ 1 , Unilever has turned to the crowd for assistance with their sustainability agenda.

Through the Unilever Foundry 2 , Unilever has developed a platform to collaborate with innovators globally in developing opportunities across six distinct areas:

Pathways to Just Digital Future

• Products & Ingredients
• Consumer & Market Intelligence
• Marketing, AdTech, & e-Commerce
• Social & Sustainability Tech
• Enterprise Tech
• Disruptive Business Models

Given the magnitude of this task, conventional wisdom holds that although Unilever is one of the world’s leading FMCP companies, making and selling around 400 brands in more than 190 countries 3 , it needs to rely on the input of willing partners. Unlike traditional crowdsourcing prompts focused on a specific task, as seen by Frito-Lay’s Do Us a Flavor Contest 4 , Unilever is looking to connect and collaborate with mature startups working on industry-disrupting business models.

Setting Up for Success:

As a result, Unilever has shifted steps of their product development process (ideation, concept, and prototyped) to external partners while focusing efforts on commercializing proven applications. It can be argued that this change in innovation responsibility frees up internal resource capacity to focus on Unilever’s core competency, which is to bring high quality consumer friendly products to market at scale. On the contrary, this may be viewed by outsiders as an apparent step to removing some of the innovation responsibility from internal personal, which in turn decreases the overall culture of innovation.

In the short term (next two years), my belief is that Unilever will use this open innovation platform as a pipeline to generate ideas, business models, and ventures that will connect Unilever with entrepreneurs around the world determined to improve consumer’s health and well-being. However, I am not as bullish on their ability to achieve the stated goal of helping a billion people act on their health by 2020 because it requires the following factors to hold true:

• Large and consistent pipeline of sustainable ideas that enable individuals globally to act in a dynamic marketplace
• Rapid commercialization or implementation of these ideas and opportunities
• Tight portfolio management, resource allocation, and project prioritization
• Incremental opportunities which drive additional action as compared to the status quo

To counter these concerns, Unilever has encouraged both brand and function teams to add briefs to the Unilever Foundry which ‘outline problems that need solving, or opportunities we are seeking to grasp.’ 5 Likewise, in order to encourage entrepreneurial talent to work on these briefs they are engaged typically in paid pilot programs that are refined and built through in an incubator approach.

In the medium term (two to ten years out), in order to maintain and expand this open innovation capability Unilever must become proficient in a handful of areas. First, the corporate, innovation, and sustainability strategies must be aligned and integrated in order to continue to fund and allocate resources to open innovation. Second, managing an open innovation platform long-term requires a dedicated team of resources skilled across a handful of fundamental competencies including – innovation, consumer insights, technology, and market trends. These skills are essential to being able to develop a criterion for vetting news ideas, prioritizing partnerships, and ensuring alignment to Unilever’s mission and culture.

Future of Open Innovation:

While largely successful since it’s inception in 2014, the Unilever Foundry has ‘launched over 100 pilots with start-ups and Unilever brands’ 5 , it brings to question whether this approach to innovation is sustainable or rather a short-term enabler. Considering the cost benefit trade-offs, between creating a world-class innovation organization with the supporting tools and capabilities in house to one that manages and encourages external innovation, I am curious to see which approach is more advantageous in the long term.

In reflecting on Unilever’s approach to solving their sustainability agenda, I am left asking myself the following questions:

• Is crowdsourcing an enabler or impediment to innovation and what are the constraints?
• Is there ever too wide a net (brief/question) for open innovation?
• Is the power of many truly greater than the power of one, when the ‘one’ is an industry leader?

(764 words)

1 For the Unilever Sustainable Living Plan outlining the goal of separating growth from the environmental footprint, see Sustainable Living. Available at: https://www.unilever.co.uk/sustainable-living/.

2 To view the Unilever Foundry crowdsourcing platform, see Innovation Through Collaboration – Foundry Unilever. Available at: https://foundry.unilever.com/#Home.

3 For Unilever 2017 10k, Available at: https://www.unilever.com/Images/unilever-annual-report-and-accounts-2017_tcm244-516456_en.pdf.

4 To understand the impact of targeted crowdsourcing though Frito-Lay’s Do Us a Flavor Contest, see Forbes (2014). Crowdsourcing campaign appears to boost brand perception for Lay’s. Available at: https://www.forbes.com/sites/brandindex/2014/10/11/crowdsourcing-campaign-appears-to-boost-brand-perception-for-lays.

5 For a series of successful pilots launched in conjunction with Unilever through the open innovation platform, see Consumer and Marketing – Foundry Unilever. Available at: https://foundry.unilever.com/case-studies.

Student comments on Is Crowdsourcing a Sustainable Value Proposition For Innovation: A Unilever Case Study

Thank you for providing insight into Unilever’s approach to innovation and crowdsourcing tactics. I was surprised to learn that Unilever outsources their product development process to external partners, and instead has decided to focus on commercializing proven applications. Given that information, I found your question, “is crowdsourcing an enabler or impediment to innovation and what are the constraints?” to be thought provoking.

In response, I would argue that crowdsourcing is an enabler to innovation. The value of crowdsourcing is the ability to generate a large quantity of diverse product ideas. It also allows Unilever to leverage the flexibility of its partners, mainly mature startups, who are focused on developing disruptive products. In addition, by outsourcing this component, it gives Unilever the capacity to pressure test the various ideas it receives while focusing on its core competency, which is bringing products to market on a global scale. While a possible constraint is that this may lead to a less innovative culture at Unilever, I believe this can be avoided as long as Unilever continues to emphasize a partnership structure and collaborative nature with these external third party startups.

As you mentioned, Open innovation proved to offer Unilever a cost-efficient solution to leverage on the company’s core capabilities of commercializing proven applications. However, regarding the three interesting questions you posted, I believe the main question to answer is what kind of innovation Unilever wants to apply. In other words, is Unilever looking for really groundbreaking solutions that open “blue oceans” spaces or, as most CPG companies, are they looking for incremental and fast innovations (i.e., product improvements, packaging re-designs, etc.)? If they are targeting groundbreaking solutions, I believe that, as you stated, crowdsourcing would limit the innovation capabilities due to the difficulties of aligning an externally sourced radical innovation with the company’s structure and of equalling the power of the solution offered by “one” industry leader. For incremental and fast innovations, I think that crowdsourcing, especially when sourced by mature start-ups, is a perfect way to reduce the time-to-market and to reliably develop products at a lower cost.

I really like this idea, but why would someone with an idea go to Unilever? Would the individuals be rewarded in any specific way?

How would they filter these ideas if they have such a huge inflow? What type of constraints would they put on the application process?

As one of the oldest FMCG companies out there, I find this topic of Unilever outsourcing their product development process very interesting. Companies like Unilever have traditionally tightly held their secrets. It’s great to see them out there collaborating with startups to come up with new ideas. I agree with your point about alignment between innovation and strategy. Without direction, these products could very well end up in the zone. One way to make this work, to your question about crowdsourcing being an enabler/constraint, is to buy ideas that are already developed and fit on the broader strategy map. Unilever’s purchase of Dollar Shave Club illustrates a way to bring more developed ideas in house ( http://fortune.com/2016/07/19/unilever-buys-dollar-shave-club-for-1-billion/ ). This way, a smaller, more nimble team can source the idea, take on the risk to develop it, and Unilever can bring it in house in order to apply their management expertise at scale. There seems to be a lot more growth left in this space!

Great article! To your question about constrains and open innovation as a enabler, I believe that even though there are several benefits in using crowd-sourcing as an innovation driver, I believe that innovation, in this case, can be somewhat limited. Open innovation can generate a lot of new insights and good ideas that increment the company and product strengths but rarely produces disruptive changes insights to true innovative processes/products.

Example of crowd-sourcing limitations: https://hbr.org/2016/12/a-case-study-of-crowdsourcing-gone-wrong

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Hindustan Unilever Limited (HUL) Case Study 2021 – Industry, SWOT, Financials & Shareholding

by Team Trade Brains | Mar 3, 2021 | Case Study , Stocks | 0 comments

HUL Case Study and analysis 2021: Hindustan Unilever Limited (HUL) is India’s biggest fast-moving consumer goods company . In this article, we will look into the fundamentals of HUL, focusing on both qualitative and quantitative aspects. Here, we will perform the SWOT Analysis of HUL, Michael Porter’s 5 Force Analysis, followed by looking into HUL  key financials. We hope you will find the Hindustan Unilever Limited (HUL)  case study helpful.

Disclaimer: This article is only for informational purposes and should not be considered any kind of advisory/advice. Please perform your independent analysis before investing in stocks, or take the help of your investment advisor. The data is collected from Trade Brains Portal .

Table of Contents

About HUL and its Business Model

With a legacy of over 80 years, Hindustan Unilever Limited (HUL) is India’s biggest fast-moving consumer goods company. Actually, the very first product of the company was launched in 1888 named Sunlight Soap. In 1931 Unilever set up its subsidiary in India and in 1956, its subsidiaries consolidated to form Hindustan Leer Limited.

In 2007, the name was renamed Hindustan Unilever Limited. In 2013, the parent company Unilever increased the market stake in HUL to 67% and in 2018, the market cap of HUL passed $50bn.

 HUL primarily has three divisions:

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• Beauty and Personal Care
• Food and Refreshment

Hindustan Unilever has a pan India access and it is found that more than 9 out of 10 households in India use a brand of HUL. Currently, the company has 14 brands in 44 different categories including Skin Cleansing, Tea, Deodrants, HFD, etc. Famous Brands like Surf Excel, Rin, Wheel, Vaseline, Pepsodent, Clinic Plus are included in the portfolio of the company.

On April 1, 2020, HUL also acquired leading brands like Horlicks and Boost. The company has 21,000 employees working under it with 31 factories, more than 1150 suppliers, and the products are available at more than 8million outlets in India.

HUL Case Study – Industry Analysis

FMCG sector is the fourth largest sector in India, which has surged from 840 Billion USD in 2017 to 1.1 Trillion USD in FY20 and is expected to grow at 10% a year. Personal Care and Household dominates with 50% of FMCG sales in India. Rapid urbanisation, increasing disposable incomes and better lifestyles have been the main growth drivers for the FMCG sector.

55% of the sales come from the urban segment, however, for the last few years, it has witnessed faster growth in the rural segment as compared to the urban segment. In rural India, the sector grew at 10.6% in the Q3 FY20, majorly due to better agricultural output.

It is expected that the rural FMCG market will rise to USD 220 billion by the end of 2025, at the same time, the market share of the unorganised market is expected to fall rapidly.

Michael Porter’s 5 Force Analysis of HUL

1. rivalry amongst competitors.

• FMCG industry is a very competitive one with many brands available, and new products coming in each quarter make innovation very important. FMCG business is highly dependent on advertisement and companies spent a big percentage on it.
• The switching costs for the customers are very low in this sector as the product differentiation is moderately low, which intensifies the competition.

2. A Threat by Substitutes

• Substitute in the FMCG sector is highly dependent on the particular product. For example, it is way easier to find Colgate toothpaste at a local shop than a homemade organic dentifrice. On the other hand, the substitute product for biscuits is rusk which is easily available. Since switching costs are very less, the threat of substitutes is relatively on the higher side.

3. Barriers to Entry

• Barriers to entry in the FMCG sector are far less as compared to the others. FMCG business is majorly dependent on brand identification and this can be developed with unique qualities, logo, advertisement; basically, proper market strategy.
• The distribution network is very large and branched in the FMCG sector, which further eases out barriers of entry.

4. Bargaining Power of Suppliers

• In FMCG business, companies have long term business with the suppliers, which helps them to negotiate the price. Moreover, the number of suppliers is ample; hence, decreasing the bargaining power of suppliers. However, companies need to make sure that they are getting the supplies at the cheapest possible prices as the industry is a high-volume, low-margin business.

5. Bargaining Power of Customers

• Factors like a high number of similar product companies available, very low switching costs and similar products available at similar quality and in almost the same price range increase the bargaining power of customers. The only thing that can make them stay is brand loyalty for a product.

HUL Case Study – SWOT Analysis

Now, moving forward in our HUL case study, we will perform the SWOT analysis.

1. Strengths

• HUL has a strong brand equity and a large legacy as it is a very old and well-rooted company with a variety of popular brands and products.
• The company has its presence across the length and breadth of India with over 8 million+ retail stores where its products are available.

2. Weaknesses

• HUL runs in a very competitive environment and there are highly established and rising companies that are little product-focused and hence, eat up the market share of the company.
• HUL currently doesn’t have any ayurvedic or natural products in their portfolio, which is a negative aspect of the company as the current population’s trend is shifting to herbal products and many focused companies are making the best use of it.

3. Opportunities

• With increasing disposable incomes, education and youth population, the FMCG sector in rural and semi-urban areas is expected to grow very rapidly as compared to urban areas. The company can use this very well as it already has a brand image and a wide chain of distributors.
• The company can use its healthy cash reserve position and brand image legacy to acquire various products to diversify its portfolio.
• HUL runs in a highly competitive environment, with 100% FDI allowed by the Govt. of India and new multinational companies setting their feet, the company faces a high threat from its competitors.
• The company is highly dependent on raw material prices. Inflation can shrink the margins for the company as it runs in a sector that is a high-volume, low-margin one.
• Population’s shift to organic and healthy products can help some unorganized and small companies to increase their market share, which can be a threat to HUL.

Asian Paints Case Study 2021 – Industry, SWOT, Financials & Shareholding

HUL’s Management

There are 9 members in the board of directors committee of the company, out of which 6 are Independent Directors including one female member.

Mr Sanjiv Mehta has been serving as the Chairman and Managing Director of the company since 2018. Chartered Accountant by degree, Sanjiv Mehta is also the President of Unilever South Asia (Pakistan, Bangladesh, Sri Lanka and Nepal). In 2019, he was awarded the “Business Leader of The Year” award by the All India Management Association.

Mr Willem Uijen is the Executive Director, Supply Chain of Hindustan Unilever Limited. He has been with the company since 1999 and was a part of various demographical projects of the company, especially in Latin America. In January 2020, he joined his current position.

Financial Analysis of HUL

• 44% of the company’s revenue comes from Beauty and Personal Care, followed by Home Care (34%). Foods & Refreshment contributes 19% and only 3% comes from others.
• In terms of Operating profit, Beauty and Personal care products contribute the maximum (55%), 29% comes from Home Care, 14% and 3% from Foods and others respectively.
• The company has a 54% market share in the Skin Care Segment, which makes it the market leader. In Dishwashing Detergents, 55% of the market share is dominated by the company. 47% and 37% is the respective market share which company owns in Shampoo and Personal Care Segment.
• As of Sept’20, the company spent 9.79% on advertisements as a % of total sales, which has shown a good rise from 7.46 of June’20.
• Net Profit Margin for the company is 14.77% as of FY20, which has surged from 13.59% as that of FY19. Current NPM is the highest of that in the last 5 financial years and the 3 Yrs. Avg. Net Profit Margin is 14.26%. Source: Trade Brains Portal ]

• In FY20, HUL showed a Revenue Growth of 1.2% from the previous FY. 3-year CAGR is 6.16%, which means that in recent years, the revenue growth has been subdued. A similar trend is visible from Net Profit Growth, 1-year CAGR is 11.46% whereas 3-year CAGR (14.66%) is higher.

• The company has a very healthy and consistent cash flow from Operating Activities. Outflow in cash flow from financing activities surged in FY20 as the company paid a higher dividend than the previous year.

HUL Case Study Financial Ratios

1. profitability ratios.

• EBITA Margin for the company has been increasing for the last 5 financial years except for FY19, in which it witnessed a small dip from 20.7 to 19.91. As of FY20, EBITDA Margin is 21.54%.
• Hindustan Unilever has the premium RoE of 84.15 (FY20), and a consistent rise in the same has been visible for the last 4 years. The 3 years avg RoE is 79.76%.
• The company enjoys 3-digit RoCE, which is very well respected by the market and a similar rising trend is visible in RoCE as that of RoE. As of FY20, RoCE is 114.67% and the Avg ROCE for 3 years is 110.16%.

2. Leverage Ratios

• As of FY20, Quick Ratio and Current Ratio for the company are 1.02 and 1.32 respectively, which indicated its good liquidity position. These levels have been more or less the same for the last 5 financial years, which is a positive sign for the company.
• HUL is a 100% debt-free company and its Interest Coverage Ratio is 48.69% as of FY20. Although this level is very good currently, it was 261.73 in FY19.

3. Efficiency Ratios

• Currently, the asset turnover ratio for the company is 2.4, which is slightly lower than the previous year but this figure has been almost constant in the recent financial years.
• The inventory turnover ratio witnessed a continuous rise from FY16 (12.04%) to FY19(17.53%), which later dipped to 17.18 in FY20 due to virus outbreak disruptions.
• The number of receivable days has decreased (12.79% in FY19 to 11.83% in FY20) and the number of payable days has increased (90.77% in FY19 to 92.86% in FY20), indicating the company’s increased bargaining power over the buyers and suppliers.

Shareholding Pattern of HUL

• Promoters own 61.9% of the company as of December quarter 2020. Although it has been the same for the last 3 quarters, a fall was seen from the level of 67.18% in March 2020. The best part is that promoters do not pledge a single share.
• FIIs hold 14.92% of shares of the company as of December 2020, which has surged from the level of 12.32% in the same period the previous year.
• DIIs own nearly 10.72% shares of the company, which was around 6.68% a year back. Both FIIs and DIIs have increased their shareholding in the previous years.
• Public shareholding has witnessed a fall in the recent quarters, from the level of 14.95% in Jun2020 to 12.46% in Dec 2020.

Closing Thoughts

In this article, we tried to perform a quick Hindustan Unilever Limited (HUL) case study. Although there are still many other prospects to look into, however, this guide would have given you a basic idea about HUL.

What do you think about HUL fundamentals from the long-term investment point of view? Do let us know in the comment section below. Take care and happy investing!

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Unilever Case Study: Marketing Strategy of the Products

Introduction, strengths and opportunities, keys to success in the consumer product manufacturing industry, unilever’s strategies for competition in global markets, lessons learnt from unilever case study.

Unilever is a global company that deals with manufacture of consumer products. The company manufactures a wide range of products ranging from food to personal and home categories. The company’s engagement in production of different commodities has largely contributed to its growth in most parts of the world. The success of Unilever company relies on the ability to market its products and strategies to penetrate the market. This mainly involves proper marketing research and the need to meet customers’ requirements. Various aspects that contribute to the growth of Unilever as a consumer product company are discussed in the paper.

The growth of Unilever entirely depends on both the company’s internal and external analysis. The company’s prevalence in the consumer products market owes credit to the internal strengths and ability to utilize the opportunities in the outside environment. One of the major strengths for Unilever’s penetration in the global market is diversification of consumer products in markets all over the world. Diversification is the production of several varieties of goods with the aim of expansion to enjoy the market share of most product consumers in different regions (Graham, 2007).

The idea of diversification entitled the products managers in different regions with powers to make decisions on the marketing strategy of the products. This enabled proper distribution of products since the managers on the ground knew the most consumed products hence increasing its supplies in the regions. An additional strength of the company dwells in Unilever’s capability to foresee customers’ ways of product purchase and consumption of goods. This enables them to supply products according to market demand and needs of customers.

The ready market for consumer product purchase all over the world offers a great opportunity for Unilever company products. According to Fletcher (2010), new markets provide greater potential for an immense growth in product sales. Therefore, the introduction of Unilever products in new markets provides the opportunity for potential growth in sales. Such opportunities offer the advantages of enjoying the global market share of the product before other companies in the same category.

The success in consumer products industry owes credit to well planned marketing strategies, proper coordination between the internal and external factors of the company in the market share. Since the industry is very competitive, customer relationship also accounts for the growth and expansion in this industry. Consumer research is a vital subject for success in this industry. For the case of Unilever, extensive research is done to enable innovation of fresh products and improvement of existing products to fit the consumers’ needs. This involves rebranding and getting to customers in both local and international markets by smooth relations between the company and its customers. To achieve this, the company has to implement appropriate customer relationship management strategies (Waarts, 2005).

Implementation of culture difference strategy is another important factor towards success in consumer product industry. Unilever applies this strategy to penetrate into local markets. This contributes to expansion in different markets at a faster rate than companies that do not apply the strategy. The company combines this strategy with building correct leadership behavior to produce competent employees and managers. These produce responsible staff which engages in socio-cultural promotional programs in order to win the customers hence consumption of their products. Moreover, success in this industry requires efficient transformation in information technology (Hoskinsson, 2009). With the fast changing technology, companies need to keep track in order to apply e-commerce which enhances efficient and quick transactions between the consumers and the organization.

The main important strategy used by Unilever to compete for the market share in the industry is the global strategy. The strategy involves marketing of brands in local environments and maintaining the supply of similar products in these regions. The company also applies this strategy to produce new brands for marketing in different regions all over the world. This strategy is of benefit to the company since it improves the uniformity in the marketing operations at the same time building the product’s brand equity.

Unilever employs the cross- market strategy to succeed in getting customers from their competitors. This is done by providing their products in the market at a subsidized price which is normally lower than that of other competing companies. These strategies work for Unilever because most companies find it difficult to offer these services while maintaining high quality of products (Jones, 2002).

From the case study, it is observed that Unilever is a multinational company in production of consumer commodities. The ability of Unilever to use its strengths such as involvement in variety of products enables the company to utilize the available opportunities in expansion to international markets. Further more, the company’s strategies in market entry show that for success in such a business, one needs to use appropriate and effective marketing strategies in order to succeed in a competitive market (Fletcher, 2010). Therefore, it is important to plan well and carefully follow the appropriate strategies for success in the industry.

The success of Unilever in this category is based on the company’s marketing strategies. The ability of the company to introduce its commodities in new and emerging markets give it an advantage to grow in most parts of the world. The growth of the company is also observed as a result of its engagement in manufacture of different products. These strategies teach us the importance of well planned market strategies and the importance of diversification in brand marketing.

Fletcher, C. (2010). Unilever’s volume beats estimates, aided by Europe. Business Week, 6. Web.

Graham, J. L., & Cateora, R. P. (2007). International marketing . London: McGraw-Hill.

Hoskinsson, R. E., Ireland, D. R., & Hitt, A. M. (2009). Strategic management: competitiveness and globalization: Concepts & cases . Cambridge: Cengage Learning.

Jones, G. (2002). Control, performance, and knowledge transfers in large multinationals: Unilever in the United States. Business History Review, 76 (43-45).

Waarts, E. (2005). Competition as an inspirational marketing tool. European Business Forum , 12 ,(3-6).

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Unilever PESTEL/PESTLE Analysis & Recommendations

Unilever’s ability to address external factors in its remote or macro-environment contributes to business prominence in the global consumer goods market. This PESTEL/PESTLE analysis identifies such external factors. The PESTLE/PESTEL analysis model is a tool for managers to understand the influence of the external environment on businesses. In the case of Unilever, these external factors vary significantly, considering the international scope of the business. Nonetheless, the company must focus on maximizing business performance. Unilever can achieve higher business performance through strategies that overcome the most significant threats and exploit the biggest opportunities shown in this PESTLE analysis.

This PESTEL/PESTLE analysis of Unilever outlines growth opportunities in the international consumer goods market. While the company faces threats in its remote or macro-environment, growth is achievable by focusing on product innovation. Unilever’s generic competitive strategy and intensive growth strategies include product innovation goals to take the opportunities noted in this PESTLE analysis.

Political Factors Affecting Unilever’s Business

The political landscape affects Unilever’s performance. This section of the PESTLE analysis identifies the impact of governments on firms’ remote or macro-environment. The following political factors are significant in Unilever’s consumer goods business:

• Political stability of most countries (opportunity)
• Political issues in the European Union (threat)
• Growing free-trade relations (opportunity)

The political stability of most countries presents opportunities for Unilever to grow in these markets. For example, the political stability of the United States helps minimize challenges to the company’s strategic implementations in the country. On the other hand, the political issues in the European Union are a potential threat against Unilever’s operations in the region’s consumer goods market. Nonetheless, the company has opportunities for global growth based on expanding free-trade relations, especially those involving developing countries. Based on the external factors in this section of the PESTEL analysis, there are opportunities available in the market, although Unilever must address the challenges linked to the political condition of the European Union.

Economic Factors Important to Unilever

Unilever’s business performance depends on economies around the world. This section of the PESTLE analysis outlines the influence of economic conditions on firms and their remote or macro-environment. The following economic factors are determinants of Unilever’s performance in the consumer goods industry:

• Increasing wages in developing countries (opportunity & threat)
• High growth of developing countries (opportunity)
• Economic stability of developed countries (opportunity)

The increasing wages in developing countries present the opportunity for Unilever to profit more from higher potential sales, as consumers gain higher disposable incomes. However, the same external factor is a threat in terms of increasing labor costs, considering that the company has many manufacturing facilities located in developing regions. Nonetheless, Unilever can expect business growth, as these countries grow in terms of consumer goods market size and value. For example, China presents major growth opportunities for the company. Moreover, the economic stability of developed countries cushions the business from risks in other markets, while facilitating gradual but steady growth. Thus, this section of the PESTEL analysis of Unilever highlights opportunities for global growth. These opportunities align with the ones noted in the SWOT analysis of Unilever . Strategic success in taking these opportunities can boost the consumer goods company’s financial performance despite challenges linked to the economic situation depicted in this section of the PESTEL analysis.

Social/Sociocultural Factors Influencing Unilever’s Business Environment

Sociocultural trends and issues affect Unilever’s business performance and the remote or macro-environment. The socially driven behavioral aspect of markets is considered in this section of the PESTLE analysis. The sociocultural factors in Unilever’s consumer goods business are as follows:

• Rising health consciousness (opportunity)
• Rising environmentalist behaviors (opportunity)
• Gradual dismantling of the gender divide (opportunity)

This PESTLE analysis shows that Unilever can grow through products that directly address consumers’ increasing interest in health and wellness. In addition, rising environmentalist behaviors present an opportunity for the company to attract more consumers by improving its environmental impact. For example, Unilever can minimize its energy consumption by adopting new and more energy-efficient technologies. Also, the company can grow through higher sales based on improving incomes among female consumers worldwide. The external factors in this section of the PESTEL analysis show the importance of product innovation in growing the consumer goods business. The goals linked to Unilever’s mission statement and vision statement support business growth based on the opportunities noted in this section of the PESTEL analysis.

Technological Factors in Unilever’s Business

Unilever depends on available technologies to support its consumer goods business. This section of the PESTEL analysis identifies the impact of technological trends on firms and their remote or macro-environment. In Unilever’s case, the following technological factors are significant:

• Rising business automation (opportunity & threat)
• Rising R&D investments (threat)
• Decreasing cost of transportation based on technological efficiencies (opportunity & threat)

Rising business automation is an opportunity for Unilever to increase operational efficiency. For example, new business processing equipment can enhance inventory monitoring to support supply chain and distribution efficiencies (See Unilever’s Operations Management ). However, the same technological external factor is a threat because it increases the competitiveness of other companies, like PepsiCo and Procter & Gamble (P&G) , as well as smaller ones in local markets. On the other hand, rising research and development (R&D) investments threaten Unilever because it also increases the competitive advantage of other firms in the consumer goods industry. Nonetheless, the decreasing cost of transportation leads to lower operating costs, which contribute to business growth. Still, the decreasing cost of transportation is a threat because it contributes to the competitiveness of other firms. This section of the PESTLE analysis of Unilever highlights growth opportunities and competitive threats based on technological trends in the remote or macro-environment.

Ecological/Environmental Factors Affecting Unilever

Ecological trends and conditions influence Unilever’s remote or macro-environment. The effects of the natural environment and related issues are considered in this section of the PESTEL analysis. The following ecological factors significantly affect Unilever’s consumer goods business:

• Rising interest in business environmentalism (opportunity)
• Increasing business efforts on sustainability (opportunity)
• Increasing complexity of environmental programs (opportunity)

The rising interest in business environmentalism is an opportunity for Unilever to improve its environmental programs to attract consumers concerned about the environment. In relation, the company can enhance its sustainability programs to strengthen its competitiveness against other firms in the consumer goods industry. Unilever’s corporate social responsibility strategy must effectively implement these programs throughout the organization. For example, the strategy must consider product innovation and internal business processes to further reduce business environmental impact. These efforts should also support Unilever’s ability to satisfy increasingly complex environmental programs. Such an external factor is an opportunity for the company to improve its competitive advantages through corporate responsibility. Based on the condition of the remote or macro-environment shown in this section of Unilever’s PESTLE analysis, there are opportunities to improve business performance by making the organization more environmentally sustainable.

Legal Factors Facing Unilever

Unilever satisfies regulations to minimize barriers to its consumer goods business. This section of the PESTEL analysis determines the impact of legal systems on firms’ remote or macro-environment. Unilever ensures compliance based on the following legal factors:

• Increasing complexity of environmental regulations (opportunity)
• Strengthening international patent laws (opportunity)
• Strengthening consumer rights laws (opportunity)

Unilever has an opportunity to enhance its corporate image by matching the organization’s corporate social responsibility strategy with environmental regulations. In addition, strengthening international patent laws can facilitate the company’s growth. For example, new patent laws in developing countries help reduce patent-related issues Unilever experiences in its remote or macro-environment. Furthermore, stronger consumer rights laws create an opportunity for the company to improve its customer-service quality, along with product quality standards. These efforts can increase the attractiveness of Unilever’s brands in the consumer goods market. The external factors in this section of the PESTLE analysis of Unilever indicate the benefits of improvements in legal systems.

Insights – PESTLE/PESTEL Analysis of Unilever

This PESTLE analysis reflects opportunities and threats that Unilever must prioritize in its strategies for growth and global expansion in the consumer goods market. A recommendation is that the company’s strategies include the external factor of rising health consciousness among consumers. Unilever can take this factor as an opportunity to improve its food products. Based on this PESTEL analysis, it is also recommended that the company improve its sustainability programs to address opportunities regarding business sustainability. Another recommendation is to take rising business automation as a significant threat that empowers Unilever’s competitors, especially smaller ones in local markets. For example, local companies can increase their competitive advantages by automating their production processes. Given such issues based on this PESTEL/PESTLE analysis of Unilever, global growth with innovation and business sustainability requires strategic focus.

• Martinez-Contreras, R. M., Hernandez-Mora, N. C., Vargas-Leguizamon, Y. R., & Borja-Barrera, S. M. (2022). PESTEL Analysis and the Porter’s Five Forces: An Integrated Model of Strategic Sectors. In Handbook of Research on Organizational Sustainability in Turbulent Economies (pp. 292-314). IGI Global.
• U.S. Department of Commerce – International Trade Administration – Consumer Goods Industry .
• Unilever PLC – Form 20-F .
• Unilever PLC – Our Approach .
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