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Assignment On Unilever
Assignment On Unilever
Name
Reg. No.
071-12-451
(i)
Signature
Acknowledgement
This report has been prepared for Md. Shahnur Islam, Course Instructor, Faculty of business,
ASAUB. i would like to thank you sir for guiding me with your superior knowledge, experience
and care.
I would like to thank all the people whom we interviewed at Unilever Bangladesh, for giving me
their time and providing the information we needed for primary data collection.
Thanking You
(ii)
Prepared For:
Md. Shahnur islam
Course instructor,
Faculty of business,
ASA University Bangladesh
Prepared By:
Imran Hasan Kibria
Section: A
071-12-451
Batch: 10
Date of Submission
24 July, 2010
Table Of Content
Introduction
COMPETITIVE BUSINESS ENVIRONMENT OF THE 21ST CENTURY
1
1
3
6
8
10
11
Corporate image
11
Environmental issues
13
Social issues:
Reformulating Unilevers products
Developing new products
Conclusion
Reference
18
19
20
II
(iii)
Introduction
Business environment is a set of political, economic, social and technological (PEST) forces that
are largely outside the control and influence of a business and that can potentially have both a
positive and a negative impact on the business. Today's world is a rapidly changing place.
Developments across a range of factors will have an impact on the business or industry. The
classic PEST framework (political, economic, social, and technological) identifies Unilevers
major categories of external factors that affect the ability of the organization to survive and
prosper.
If there's one word that describes the new economy, it's speed, or specifically, the faster
reallocation/rationalization of human, financial and physical resUnileversces. Due to the easy
and affordable availability of more, better and more timely information, businesses must now act
in hours, days and weeks - not months or years - to reverse bad decisions, correct mistakes,
abandon bad investments. As evidence of this revolution, consider the thousands of businesses
that now conduct inventory reports on an ongoing basis in real time, in contrast to the quarterly
inventory reports that once were the norm.
2 - THE NEW DEMOGRAPHY
The biggest global demographic trend of the 21st century will be declining fertility and growth
rates in all regions, and, in the second half of the century, declining populations in all of the
Western, advanced, industrialized, first-world nations, save one: the United States, Thanks to
relatively high fertility and relatively high levels of immigration, total US population will grow
(from 283 million today to 397 million in 2050), and not age as quickly (median age increasing
from 36 today to 41 in 2050, by which time the Western world's median age will have reached
49).
3 - THE NEW GEOGRAPHY
A major trend transforming American society is underway: Unilever are separating into two
nations. One nation is comprised of the ten states that contain the country's engines of population
growth, economic growth, demographic diversity, cultural dynamism, political power and market
opportunity. The other nation is comprised of the remaining 40 states.
Businesses that understand these trends will be able to exploit them, to base their strategies,
plans and actions upon a future whose components are already visible. To succeed in the
competitive environment of the 21st century, they know they will be required to:
* respond to marketplace conditions more quickly, structuring their enterprises for maximum
effectiveness and productivity;
* Design products and services that will be in demand by growing markets;
Sound institutions and a society fabric enjoying higher degrees of fairness, while
advocating that all individuals alike should gain access to the benefits of economic
development.
The type of policies concerned with the development of private business initiatives,
Chris D. Bull, Corporate Relations Manager Wojciech Tomczak, and all of the great folks at
Unilever, in making life in Poland better for everyone.
Restructuring at Unilever
In February 2008, Unilever's CEO Patrick Cescau had announced that it was streamlining its
management structure in keeping with its strategy of focusing on developing markets and
promoting executives with experience in those territories. Its Central and Eastern Europe
division would be included in an enlarged Asia, Africa and Central and Eastern Europe unit , thus
centralizing management of emerging economies that shared similar consumer traits and
potential for growth. Unilever also combined its home and personal-care and foods units into a
single division as a part of the company's continuing effort to raise its profitability by becoming
leaner and more agile.
Protecting biodiversity
The rich volcanic soils of Kenya's Rift Valley, coupled with the country's cool air and moist
tropical climate, create the perfect environment for tea to grow. Tea plants require regular rainfall
of 1200-2000 mm well distributed throughout the year to produce their best leaves. The country's
forests have always been one of the key factors in ensuring that Kenya's rainfall patterns remain
stable as they improve the efficiency of water catchments, so the risk of deforestation is a serious
one.
Trees 2000
To mark the millennium Unilever established Unilevers Trees 2000 project. This aims to
increase biodiversity, complement existing conservation and environmental protection
programmes, and provide an amenity for staff and the neighbouring community.
By the end of 2007, nearly 250 000 trees had been donated to the local community. Seven tree
nurseries, including one on Unilevers Kericho Chebown tea estate were set up to house over 320
000 seedlings. These were subsequently planted on Unilevers estates, where Unilever have set
aside 14% of Unilevers land as natural forest or conservation areas. Altogether, by the beginning
of 2008, Trees 2000 has contributed 620 000 trees to Kenya's landscape.
Prize-winning teams
The three most successful schools (for both elementary and junior schools) were announced last
month - securing prize money of IDR 18 million (approximately 1300). The judging was based
on student participation rates, greening, recycling and waste reduction.
As a city, Jakarta faces acute environmental problems, including poor air quality, traffic
congestion and flooding due to poor drainage - which means there's an urgent need for initiatives
like 'Jakarta Green School'.
Agents of change
"Understanding and concern for the environment should be developed from an early age so that
environmental problems can be recognised and prevented as early as possible," says Josef
Bataona, Director of Human Resources and Corporate Relations. "Unilever hope teachers and
students will become agents of change within the surrounding neighbourhoods, so that the
impact of their work can spread to more communities and schools."
The programme represents a natural extension of Unilever Indonesia's existing 'Jakarta Clean
and Green' initiative. Since 2006, the project has helped women become green entrepreneurs by
recycling waste into trendy accessories, as well as teaching local citizens composting techniques.
Corporate image
Unilever claims that corporate social responsibility is at the heart of its business.However, the
transition to a responsible and sustainable company is ongoing and Unilever has attracted a
variety of criticisms from political, environmental and human rights activists on not achieving
the high aims it communicaties on a number of topics.
Environmental issues
Palm oil
Unilever has been criticised by Greenpeace for causing deforestation, Unilever was targeted in
2008 by Greenpeace UK, which criticised the company for buying palm oil from suppliers that
are damaging Indonesia's rainforests. Unilever, as a founding member of the Roundtable on
Sustainable Palm Oil, responded by publicizing its plan to obtain its palm oil from sources that
are certified as sustainable. In Cte d'Ivoire, one of Unilever's palm oil suppliers was accused of
clearing forest for plantations, an activity that threatens a primate species, Miss Waldron's Red
Colobus. Unilever intervened to halt the clearances pending the results of an environmental
assessment. On 07/04/2010 Unilever announced that it has secured enough GreenPalm
certificates of sustainable palm oil to cover the requirements of its European business; as well as
those of its business in Australia and New Zealand. This is part of Unilevers overall
commitment to buy all its palm oil from certified sustainable sources by 2015.GreenPalm is a
certificate trading programme, endorsed by the Roundtable on Sustainable Palm Oil (RSPO),
which is designed to tackle the environmental and social problems created by the production of
palm oil. By selling certificates through the GreenPalm programme, palm oil producers can earn
more for their crop through sustainable farming.
Rainforest Alliance
Unilever, the world's largest tea company, is to revolutionise the tea industry by committing to
purchase all its tea from sustainable, ethical sources. It has asked the international environmental
NGO, Rainforest Alliance, to start by certifying tea farms in Africa.Lipton, the world's bestselling tea brand, and PG Tips, the UK's No.1 tea, will be the first brands to contain certified tea.
The company aims to have all Lipton Yellow Label and PG Tips tea bags sold in Western Europe
certified by 2010 and all Lipton tea bags sold globally by 2015. This is the first time a major tea
company has committed to introducing sustainably certified tea on such a large scale and the first
time the Rainforest Alliance, better known for coffee certification, has audited tea farms.It has
the potential to reassure consumers about the source of the tea they enjoy drinking so much; to
improve the crops, incomes and livelihoods of nearly 1 million people in Africa and, eventually,
up to 2 million people around the world; to protect the environment from a further drain on its
resource and to provide us with a means by which Unilever can differentiate Unilevers brands
from those of Unilevers competitors."
Greenpeace accused Unilver of double standards for allowing its Indian subsidiary, Hindustan
Lever, to dump several tonnes of highly toxic mercury waste in the tourist resort of Kodaikanal
and the surrounding protected nature reserve of Pambar Shola, in Tamil Nadu, Southern India.
The mercury is a rest product of the Hindustan Lever factory which manufactures mercury
thermometers for export, mainly to the United States.
Social issues:
Race and advertisements
Hindustan Unilever, had been showing television advertisements for skin-lightening cream, Fair
and Lovely, depicting depressed, dark-skinned women, who had been ignored by employers and
men, suddenly finding new boyfriends and glamorous careers after the cream had lightened their
skin. The Austrian branch of Unilever (Eskimo) is producing and marketing an ice-cream under
the name Mohr im Hemd. "Mohr" (moor), is a colonial German word for African or black
people, has a heavily colonialist and racist connotation., "Mohr im Hemd" (moor in the shirt) is a
traditional Austrian chocolate speciality which refers to naked, "wild" Africans. Unilever refutes
any racist intentions and claims that it has tested the name in broad market studies in Austria
without any critical feedback.On 22 April 2010, Unilever distanced itself from the far-right
British National Party, after a jar of Marmite was featured on a BNP election propaganda film.
The company statement said: "It has been brought to Unilevers attention that the British
National Party has included a Marmite jar in a political broadcast shown currently online.
Unilever want to make it absolutely clear that Marmite did not give the BNP permission to use a
pack shot of Unilevers product in their broadcast. Neither Marmite nor any other Unilever brand
is aligned to any political party. Unilever are currently initiating injunction proceedings against
the BNP to remove the Marmite jar from the online broadcast and prevent them from using it in
future."
Sexism in advertisements
The Campaign for a Commercial-Free Childhood criticized Unilever for the 2007 Axe marketing
campaign, which they considered sexist. Unilever's response is that the Axe campaign is intended
as a spoof and "not meant to be taken literally".
Unilever has launched the Dove "Real Beauty" marketing campaign, which encouraged women
to reject the underfed and hyper-sexualized images of modern advertising in 2007.
Child labor
Hindustan Unilever has been accused of making use of child labour, among others.
Relief support
On 15 January 2010, Unilever donated a $500,000 monetary donation to the victims of the
devastating earthquake in Haiti, through its global partnership with the United Nations World
Food Programme (WFP).
Material issues
Sustainability is now central to Unilevers business strategy. Sustainable sourcing of key
agricultural raw materials and designing products for a resource-constrained world are critical to
Unilevers continued business growth and success. Unilever are embedding the management of
sustainability issues within core business functions such as supply management, category
management and marketing. Unilevers activities and reporting focus on Unilevers most
significant or material issues. Unilever define materiality by the degree to which an issue is
aligned with Unilevers business, brand portfolio angiography the extent of Unilevers influence
on the issue the potential impact on Unilevers operations,
Sourcing or consumers the importance of an issue to Unilevers key stakeholders. This enables
us to develop appropriate strategies and policies based on Unilevers tracking of current and
emerging trends.
Executive management:
The Unilever Executive, led by Unilevers Chief Executive Officer, is responsible for
implementation of the codes, supported by the Corporate Code Committee and Unilevers global
code compliance organization. The Executive is supported in matters of sustainability by
Unilevers Corporate Responsibility, Issues, Sustainability and Partnerships (CRISP) leadership
team.
External insights:
Unilevers strategy benefits from the insights of the Unilever Sustainable Development Group
(USDG) five external specialists in corporate responsibility and sustainability who guide and
critique the development of Unilevers strategy. To ensure alignment between these groups, both
Unilevers CRISP team and the USDG are chaired by a member of the Unilever Executive.
Specialist input:
Specialist teams within Unilever support this work, such as Unilevers Environmental Impact
Team, Unilevers Safety and Environmental Assurance Centre, the Global Health Partnerships
Group and the Sustainable Agriculture Steering Group. These teams also obtain external input,
for example through the Sustainable Agriculture Advisory Board.
Responsible marketing
Unilever take a responsible approach to marketing and advertising. Unilevers Food and
Beverage Marketing Principles guide Unilevers communication to consumers. They prohibit
any advertising to children under the age of six and restrict advertising to children between the
ages of six and 12 to products that meet strict nutritional criteria. The principles apply across all
Unilevers markets and Unilever are making progress in implementing them. Unilever have
participated in industry-wide pledge son marketing to children in the EU, Canada, Mexico,
Australia, Brazil, Russia, Thailand and the US. These pledges are in line with Unilevers own
commitments. Accurate health claims on products are essential to building consumer trust.
Unilevers process for reviewing and making claims ensures that they are based on rigorous
scientific evidence. In 2009 the European Union formally approved two of Unilevers claims.
The first was that plant sterols, the active ingredient in Flora/Becel proactive products, are
proven to lower blood cholesterol, and that high cholesterol is a risk factor in the development of
coronary heart disease. Also approved was the claim that essential fatty acids are needed for
childrens normal growth and development, enabling products such as Rama and Blue Band to
reinforce this health message. However, Unilever did not gain approval for Unilevers claim that
black tea helps to focus attention. As the EU health claims process is new, Unilever are still
learning the best way to provide claims evidence and plan to re-submit strengthened data.
Unilevers approach to sustainable packaging involves:
The packaging
diverse network of retailers. Around a fifth of Unilevers sales are channeled through ten major
retail customers, such as Wal-Mart, Carrefour and Tesco. In developing and emerging markets
Unilever also rely heavily on distributors, wholesalers, small independent outlets and kiosks. In
these markets, Unilever have found that Unilever can serve more consumers and increase
Unilevers market penetration through innovative distribution channels. Shakti in India is one
such initiative. It is a micro-enterprise programme that creates opportunities for women to sell
Unilever products door to door in rural areas. By the end of 2009, over 45,000 entrepreneurs
were selling products to 3 million consumers in100,000 villages. Aparajita is a similar initiative
running in Bangladesh, in partnership with CARE International. In 2009 3,000 women sold
Unilever products to 1.8 million household sthrough sales hubs set up by CARE. In
2010,Unilever aim to increase this to 10,000 women covering a total of 6 million households.
Similar initiatives also run in Sri Lanka, the Philippines and Vietnam.
portfolio met Unilevers 2010 benchmarks. Unilever have made good progress, with salt content
reduced by: 10-15% in powdered soups in Europe and South America since 2005 25% in Knorr
Sidekicksside dishesin Canada25% across Unilevers Knorr recipe kits in South Africa. In
making these changes, Unilever cannot lose sight of consumer taste preferences. Blind tasting
shows that consumers often prefer well-salted products to those with reduced levels. If Unilever
do not take consumers with us, they may switch to competitor products with a higher salt
content. Gradual reductions may be one solution. In Israel, for example, Unilever have
successfully reduced sodium content in Unilevers products by 5-10% year on year since 2004.
CONCLUSION:
Unilever know that if Unilever are to achieve their ambitious growth objectives Unilever must
reduce the total environmental impact of the business. Our commitment extends right across our
value chain i.e. from the sourcing of raw materials through our own production and distribution
to consumer use and eventual disposal of residual packaging. Unilever fully recognize that
Unilever will need to develop a new model for business growth. Unilever are embarking on a
long-term programme of work with our suppliers, customers and other partners to realize this
goal. With our portfolio of strong brands, presence in emerging markets and long-standing
commitment to shared value creation, Unilever believe Unilever are well placed to deliver on
this ambition. Over 100 years ago, our founders not only created some of the worlds first
consumer brands, they also built a business with strong values. Unilever have continued to
update our vision as the world has changed. In the 1990s Unilever formally integrated
sustainability factors into our strategy. Then, in 2005, Unilever started to embed this agenda into
our product brands using a process called Brand Imprint. Since then Brand Imprints have been
completed across all our product categories. Social and environmental considerations are now
integrated into the innovation and development plans of our major brands. At the same time,
Unilever are also evolving our approach to corporate branding. Unilever are starting to consider
how they make Unilevers corporate commitments and activities more visible and relevant to
their consumers.
Reference: