Business level strategy of LUX

A successful business model results from business level strategies that create a competitive
advantage over its rivals.
Customer Needs: Product Differentiation
LUX is a global brand that embraces differentiation strategy in order to remain unique in the
market and separated from its competitors. Through differentiation strategy, the company makes
unique and valued products for its customers. The company has unique capacities to customize
its products in order to ensure that they meet the wants and needs of its target markets. As it
deals with manufacturing and marketing of soap and related products, it keeps maximum rang of
different category to meet customers need. Its product range includes shower gels, beauty soaps,
hair shampoos, bath additives and hair conditioners. In terms of packaging, differentiation
strategy has and continues playing a significant role by helping LUX products continue
remaining adaptable to different market segments. For instance, Lux soap comes in packages of
40gm, 80gm and 120gm, colors like white, pink, blue, yellow and green and several fragrances.
In order to pricing method, it is very budget-friendly which maintains positive brand-equity. The
prices of the products are not specific; they gradually keep on changing and are different for
different products.
Competitive Positioning: Strategic Groups
Strategic Groups are groups of companies that follow a business model similar to other
companies within their strategic group, but are different from that of other companies in other
strategic groups. Lux faces competition from various brands like Dove, Santoor, Vivel etc in the
beauty segment and other brands like Lifebuoy, Medimix in other segments. This gives an
insight in the product portfolio in the marketing mix of Lux. Lux’s strategic managers map their
competitors according to their choice of business model. They use this knowledge to position
themselves closer to customers and then differentiate themselves from their competitors. LUX is
full of opportunities and it faces less threats regarding their competitive positions.
Failures in Competitive Positioning
Successful competitive positioning requires that a company achieve a fit between its strategies
and its business model. According to the study, there is no lose in Unilever’s position on the
value frontier. Today, in efforts of building brands with purpose, Lux pushes the boundary by
inspiring women to rise above societal judgement and express themselves unapologetically. Lux
communications now revolve around showcasing the different sides of women expressing their
femininity. This strategy of using femininity in their brand-equity lead them to be more
successful than its competitors. In Indonesia, Lux partnered with brand ambassador Maudy
Ayunda to launch a purpose driven award show "Lux Sound of Women" that celebrates female
musicians who inspire and create an impact in the community. In India, Lux celebrates women
with an annual "Golden Rose Awards" which joins together the female cinematic legends in
Bollywood.
There is the need to continually formulate and implement business-level strategies to sustain
competitive advantage over time in different industry environments. Different industry
environments present different opportunitiesand threats. A company’s business model and
strategies have to change to meet the environment. Unilever Bangladesh Ltd obtained a good
position in the buyers’ mind through better product attributes, price and quality, offering the
product in a different way than the competitors do. The company offers improved quality of
products in the industry at an affordable price with high branding. Different industry
environments present different opportunities and threats.
By changing the approach of the customers, the company can get better results in the future. The
requirements related to the products must be increased to enhance the commodities. Unilever
LUX is full of opportunities. It can easily widen its consumer base; its presence in dynamic
product sectors. It can produce products for an aging population; can have stronger, focused hair
care portfolio. It can create demands for mass-market products. LUX has potential of developing
markets with the help of building positive brand-equity.
Very tough competition is faced by the company because of the popularity of the brand. The
products related to stores must be increased to maintain the position of the company. LUX could
face some other threats because of intensifying competition, industry consolidation, private label
products, stagnation in North American region, retailing changes pressurize margins, niche brand
gain favor and negative publicity.
A company’s business model and strategies have to change to meet the environment. Also
companies must face the challenges of developing and maintaining a competitive strategy in:
Fragmented Industries
Mature Industries
Embryonic Industries
Declining Industries
Growth Industries
A growth industry is one in which first- time demand is expanding rapidly as many new
customers enter the market. Here Unilever LUX can be categorized under the feature of Growth
Industries. Under this feature, strategy is determined by market demand, Innovators and early
adopters have different needs from the early and late majority Company must be prepared to
cross the chasm between the early adopters and the later majority. The company of Unilever
LUX has both marketing demand. It has a strong portfolio, successful restructure, global brand
strategy. In order to maintain geographical and sectoral diversity, its market is in leading
position. Companies must understand the factors that affect a market’s growth rate – in order to
tailor the business model to the changing industry environment. Mass markets typically start to
develop when: Technological progress makes a product easier to use and increases its value to
the average customer. Key complementary products are developed that do the same. Companies
find ways to reduce production costs allowing them to lower prices.
The company maintain some mass marketing strategies keeping business model, brand equity
and value chain in mind. Some of the examples are,
Strong market research (Door to door sampling – once in a year – Rural and Urban area)
Many variants (Almond oil, Orchid extracts, Milk cream, Fruit extracts, Saffron sandalwood oil
and Honey)
Dynamically continuous innovations – New variants and innovative promotions (22 carat gold
coin promotion – “Chance Hai”)
Strong brand promotion but relatively lower prices – Winning combination
Lux soap brand is sold in over 100 countries.
Company totally owned, systematic distribution network, transparent communication system.
Participative management style.
Business-level strategy is a major determinant of industry profitability. The choice of business
model and strategies can accelerate or retard market growth.