Introduction

Unilever is one of the world's leading suppliers of fast moving consumer goods across Foods and
Home and Personal Care categories. Unilever's portfolio includes some of the world's best known
and most loved brands.

Unilever Bangladesh Limited

The Unilever Bangladesh Limited is consumer goods company based in Dhaka, Bangladesh and
founded in 1964 engaged in the manufacture and distribution of home care products, personal care
products, and foods. It is a joint venture of the Government of Bangladesh and Unilever. Unilever
holds 60.4% and Government of Bangladesh holds 39.6% of its share. The company was formerly
known as Lever Brothers Bangladesh Ltd. and changed its name in December 2004.
Unilever Bangladesh Limited is a subsidiary of Unilever, world’s one of the largest Household
and Personnel Care and Foods Manufacturer with an annual turnover of 47 Billion Euro or
approximately TK.320000crore.Unilever Bangladesh Limited is the leading Household and
Personnel Care product in Bangladesh with brands and a number of sub-brands.UBL is around
here in Bangladesh for more than four decades. The company has a huge manufacturing facility in
Kalurghat,Chittagong ;it also has 4(four) third party production facilities located in Gazipur.The
HQ of UBL is in Gulshan- 1,Dhaka.
In the 1890s, William Hesketh Lever, founder of Lever Bros, wrote down his ideas for Sunlight
Soap – his revolutionary new product that helped popularize cleanliness and hygiene in Victorian
England. It was ‘to make cleanliness commonplace; to lessen work for women; to foster health
and contribute to personal attractiveness, that life may be more enjoyable and rewarding for the
people who use our products’. This was long before the phrase ‘Corporate Mission’ had been
invented, but these ideas have stayed at the heart of our business. Even if their language – and the
notion of only women doing housework – has become outdated.
In a history that now crosses three centuries, Unilever’s success has been influenced by the major
events of the day – economic boom, depression, world wars, changing consumer lifestyles and
advances in technology. And throughout we’ve created products that help people get more out of
life – cutting the time spent on household chores, improving nutrition, enabling people to enjoy
food and take care of their homes, their clothes and themselves.
Over the last four decades, Unilever Bangladesh has been constantly bringing new and world-class
products for the Bangladeshi people to remove the daily drudgery of life. Over 90% of the
country’s households use one or more of our products.
When Bangladesh became an independent country in 1971, Lever Brothers Bangladesh Ltd was
constituted with Unilever owing 60.75% shares and the Government of Bangladesh owning the
remaining 39.25% shares. In 2004, Lever Brothers was renamed, “Unilever Bangladesh Limited”
in order to align its corporate identity and logo with that of the global Unilever.

Background of the study

The following study is a requirement for the course Strategic Management . We were advised
by our course instructor to choose two company, one local and one multinational but they have
to be from the same industry.
Accordingly, we chose Unilever Bangladesh Limited and Kohinoor Chemicals Company
Limited as both of them are from the FMCG sector and are also in rivals.

1.1 Objectives of the study

The objective of the study are as follows:

 Collect information about the business level strategy, functional level

strategy and corporate level strategy.

 Collect information through different books, internet, interview, etc.

 Draw conclusion and recommendations based on the collected

information.

1.2 Methodology of the study

This study is exploratory in nature. All issues intended from this study are to be explored through
assessing and analyzing information gathering from different sources.

Date source:

 Primary date: Primary data were collected through interview.

 Secondary data: Secondary data were collected mainly from websites.

The other sources were FMCG Guide and Kohinoor Chemical Co. (BD)
Ltd.
 1.3 Scope of the study
The main area of study was the focus on three things

 Functional Level Strategy

 Business Level Strategy

 Corporate Level Strategy

We used different models like SWOT, BCG Matrix and Porters 5 Forces theory to analyze the
organization and find out the impacts of these strategies.

1.4 Limitations of the study

Preparing a fully accurate and complete report requires a good amount of time and resources,
but we had a short amount of time and our resources were also limited. To overcome these
problems and considering our group of four members as our main resource, we divided the report
into somewhat equal parts and worked on it. We conducted regular group meetings to discuss
and compare our progress and helped each other out in our parts. This saved a lot of our time
and encouraged a great deal of group involvement. We used our team spirit to give our best and
prepare a quality report.
 Chapter 2
Basic Concept of Strategic Management
Strategic management is the ongoing planning, monitoring, analysis and assessment of all that is
necessary for an organization to meet its goals and objectives. Changes in the business
environment require organizations to constantly assess their strategies for success. The strategic
management process helps organizations take stock of their present situation, chalk out
strategies, deploy them and analyze the effectiveness of the implemented management strategies.
Strategy as action, inclusive of objective setting.
Strategic management is predicated on an organization's clear understanding of its mission, or
purpose for existing; its vision for where it wants to be in the future; and the values that will
guide its actions. It requires a commitment to strategic planning, the subset of business
management that involves an organization's ability to set both short- and long-term goals and
plan the strategic decisions, activities and resource allocation needed to achieve those goals.
A process for managing an institution's strategies helps organizations make logical decisions and
develop new goals quickly in order to keep pace with evolving technology, market and business
conditions. Strategic management can, thus, help an organization gain competitive advantage,
improve market share and plan for its future.

Unilever’s Vision Statement

Unilever’s corporate vision is “to make sustainable living commonplace. We believe this is the
best long-term way for our business to grow.” This vision statement puts emphasis on
sustainability, especially among consumers. The following components are notable in Unilever’s
vision statement:
1. Commonplace sustainable living
2. Best long-term way
3. Business growth
Commonplace sustainable living is a core component in Unilever’s corporate vision statement.
This component shows the company’s efforts in changing its products to suit current market
conditions. For example, through sustainable design for home care and personal care products,
Unilever helps consumers reach their goals to integrate sustainability in their lives. The corporate
vision also states that commonplace sustainability is the best long-term way for the business.
Unilever understands the importance of sustainability and other market trends shaping the industry.
Moreover, the vision statement reflects the company’s view of sustainability as a way to maintain
business growth.

Unilever’s Mission Statement

Unilever’s corporate mission is “to add vitality to life. We meet everyday needs for nutrition,
hygiene and personal care with brands that help people feel good, look good and get more out
of life.” This mission statement underscores how the company satisfies customers in various
aspects of their lives. The following are the significant components in Unilever’s mission
statement:
1. Adding vitality to life
2. Meeting everyday needs for nutrition, hygiene, and personal care
3. Helping people feel good, look good, and get more out of life
Adding vitality to life is a general indicator of business strategy in Unilever’s corporate mission
statement. Such vitality is the value that consumers can expect from the company’s products. The
corporate mission also specifies the aspects of life where such vitality is added. For example,
Unilever’s food products address consumers’ vitality needs in terms of nutrition. Furthermore,
through these products, the company attracts customers who want to feel good, look good, and get
more out of life.

Strategy Management Process

Strategic Management process of Unilever

Strategic Management Process

Constructing new ideas regarding any key goals and putting them into practices by the top level
executives may be regarded as strategic management process (Hitt, Ireland and Hoskisson, 1999).
This is wits shown by the company’s upper level managers representing the titleholders of the
entity. Business tactics also ponder about the possessions it possesses and also the surroundings
on which it will be operating its business. On basis of this evaluation, a greater scrutiny has taken
place and afterwards the entity perform activities with a view to generating as well as withstanding
comparative benefits.

The Strategic Management Process of Unilever

Undoubtedly Unilever is such a widespread company that has validated its supremacy over the
rivals and on their path of glory it satisfied almost all kinds of forecasting as well as the functional
goals set by the managements. At this time, we will confer about the predictions, operational goals
along with their undertakings.

Strategic Analysis Strategic Review Analytic Decision

Figure 1 Strategic analysis procedure.

In this segment we will define some tactical approaches set up by Unilever. Honestly, the long-
term targets and short-term objectives which are made to assist the prior one; is the core function
in terms of strategy. Some of the key approaches are portrayed hereinafter-

Strategies followed by the company

1) Functional Level Strategies:

Unilever Bangladesh Ltd follows different functional level strategies to gain competitive
advantages and sustain it in the long run in the matured industries.
They increase their efficiency through exploiting economies of scale and learning effects. For
example, 808,720 bars of soaps, 1,023,810 packets of detergent powders, 154, 430 toothpaste
tubes and sachets,329, 530 bottles and sachets of shampoo, 156, 910 tubes, jars, bottles and
sachets of creams and lotions, and 35,000 packets of tea are produced in one day in Bangladesh
by Unilever.

They adopt flexible manufacturing technologies, upgrade the skills of employees through training
and perform research and development function to design products that are easy to manufacture.

They have higher customer responsiveness rate. They carry out extensive research to innovate new
products and modify the existing products to better satisfy the consumers.

They continuously innovate products, promotional activities, packaging and distribution. This way
they can respond quickly to customer demands.

2) Business-Level Strategies:

Unilever’s strategic managers adopt different business level strategies to use the company’s
resources and distinctive competencies to gain competitive advantage over its rivals. These are:
They follow cost-leadership strategy as they have intermittent over capacity and the ability to gain
economies of scale. This way they can produce cost effective products and yet be profitable.

They also follow differentiation strategy for some products to meet the needs of the consumers in
a unique way.

They also target different market segments with different products to have broad product line. By
product proliferation they reduce the threat of entry and expand the range of products they make
to fill a wide variety of niches.

3) Strategy in the Global Environment:

 Unilever Bangladesh Ltd. is registered under Unilever. As a part of a global company it follows
some generalized strategies and principals of Unilever. However, they also modify different
strategies based on the national conditions. The different strategies that they follow in the
global environment are stated below:
As a worldwide famous company and comprising internationally renowned brands gives them
unique strengths that allow a company to achieve superior efficiency, quality, innovation, or
customer responsiveness. The different policies and strategies Unilever follows and their
experience is transferred to Unilever Bangladesh Ltd.

They import the raw materials from the places where it is less costly, thus achieve location
economy.

They are locally responsive. They are always ready to improve and modify their products to meet
the needs of the local customers.

UBL follows a multi domestic strategy where the companies extensively customize both their
product offering and marketing strategy to different national conditions.

4) Corporate strategy:

UBL carries out the following corporate level strategies:

They involve in short term contracts and competitive bidding for the supply of raw
materials.

They have a diversified business. UBL has both related and unrelated diversification. They
compete in nine different industries with various products from home care, personal care
and even food products. They have economies of scope as most of the products can share
the same manufacturing facilities, inputs and specially the distribution channels.

Internal Environment
Intimate relationship with suppliers and distributors.
Unilever treat its supplier’s fairly in purpose to create
loyalty among them like customers
Unilever has extensive distribution channel, spread
across the country. Therefore, for rural area in Indonesia,
Unilever could deliver its products.
Unilever divide their customers based on their product
division such as Personal Care, Foods, Refreshment and
Home Care. Most of their customers can be from any
ages and different demographic because they provide
many range of product to all ages.

External Environment
Market potential is quite large; approximately 250
million people live in Indonesia. These people are
attractive target market for consumer goods product
High satisfaction of consumers, proved by Indonesia
Customer Satisfaction Award (ICSA) 2010 and Indonesia
Most Trusted Company Award 2010, both from SWA
Sembada Magazine.
High dependence of consumer on some consumer goods
brands. This is reflected on consumer loyalty on some
brands consumer goods products such as Pepsodent and
Sariwangi.

SWOT Analysis

Strengths:

 Customer’s Loyalty.

 Latest state of the art facilities and technology for producing high quality products.

 International brand strength.

 Committed to business ethics, safety, health, environment and community.

 UNILEVER’s key competitive advantage over other market participants is the

retail reach of the company. UNILEVER services 500,000 outlets with 50 % through
direct distribution and remaining via wholesalers.

 UNILEVER is enjoying market edge of 41% in FMCG industry. UNILEVER is at

number one in ice cream segment and having 14% market share all over the globe.
Weaknesses:

 The biggest challenge in safeguarding market position is to become cost leader.

 Operational complexity due to a large number of products in portfolio and due to diverse
work force.
 Strategic alliance with other small mills for manufacturing purpose is the weakness as well
as a threat for UNILEVER. Although UNILEVER claims that it is a part of its cost
reduction strategy but it can not hide the reality that it shows weakness of UNILEVER.
Opportunities:

 Markets of developing countries can be proved a profitable segment because people are
consumption oriented rather than saving or investment oriented.
 UNILEVER can gear up its market share in the untapped rural market.

 Diversification in unrelated business.

Rapid increase in world population. World population is set to grow by 800m in 2010 and
almost all increase will be in developing countries.

Threats:

 FMCG market is highly responsive to economic conditions, inflation and social

disruptions resulting in variations in sales revenues and demand for the company.

 P & G is the major competitor and threat for UNILEVER. Other organized players
are Nestle and R & B.

 UNILEVER is facing intense competition from unorganized players i.e. cheaper

smuggled products and Chinese products. According to industry source, 40% of
tea consumed locally and a large portion of HPC products are smuggled into the
country.

 Legal, political and regulatory factors of host country. For example, supportive
Government policies for attracting FDI, 1% tax rate on corporate profit and
inability of Pakistan Government to control smuggled products etc.

 Although UNILEVER has a first mover advantage in ice cream segment but Engro
has announced to enter in ice cream segment and is considering a big rival post
CY2010.

Rapid increase in raw material cost and supply disruptions from suppliers of raw
material. The unprecedented surge in palm oil, tallow prices and other materials has
resulted in declining margins. Going forward, high raw material costs are a key risk to
UNILEVER’s profitability.
Rapid increase in raw material cost and supply disruptions from suppliers of raw
material. The unprecedented surge in palm oil, tallow prices and other materials has
resulted in declining margins. Going forward, high raw material costs are a key risk to
UNILEVER’s profitability.

Chapter-03

Benefits of Strategic Management to Organization

Strategic management allows an organization to be more proactive than reactive in
shaping its own future; it allows an organization to initiate and influence (rather than just
respond to) activities and thus to exert control over its own destiny.
Small business owners, chief executive officers, presidents, and managers of many for-
profit and nonprofit organizations have recognized and realized the benefits of strategic
management.

Historically, the principal benefit of strategic management has been to help

organizations formulate better strategies through the use of a more systematic, logical,
and rational approach to strategic choice.

Financial Benefits
Research indicates that organizations using strategic-management concepts are more
profitable and successful than those that do not.
Businesses using strategic-management concepts show significant improvement in
sales, profitability, and productivity compared to firms without systematic planning
activities.

Nonfinancial Benefits
Besides helping firms avoid financial demise, strategic management offers other
tangible benefits, such as an enhanced awareness of external threats, an improved
understanding of competitors’ strategies, increased employee productivity, reduced
resistance to change and a clearer understanding of performance-reward relationships.
Strategic management enhances the problem-prevention capabilities of organizations
because it promotes interaction among managers at all divisional and functional levels.
Firms that have nurtured their managers and employees, shared organizational
objectives with them, empowered them to help improve the product or service, and
recognized their contributions can turn to them for help in a pinch because of this
interaction.
Strategic management offers the following benefits:

 It allows for identification, prioritization, and exploitation of opportunities.

 It provides an objective view of management problems.
 It represents a framework for improved coordination and control of activities.
 It minimizes the effects of adverse conditions and changes.
 It allows major decisions to better support established objectives.
 It allows more effective allocation of time and resources to identified
opportunities.
 It allows fewer resources and less time to be devoted to correcting erroneous or
ad hoc decisions.
 It creates a framework for internal communication among personnel.
 It helps integrate the behavior of individuals into a total effort.
 It provides a basis for clarifying individual responsibilities.
 It encourages forward thinking.
 It provides a cooperative, integrated, and enthusiastic approach to tackling
problems and opportunities.
 It encourages a favorable attitude toward change.
 It gives a degree of discipline and formality to the management of a business.