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UNIVERSITY OF LAHORE UNIVERSITY OF LAHORE UNIVERSITY OF LAHORE

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Subject: Strategic Marketing L

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 1. How would you evaluate Paul Polman’s 2010 decision to implement a
new strategy based on the Unilever Sustainable Living Plan? What
benefits did it offer? What risks did it present?

Ans: Unilever’s CEO Paul Polman has shown great potentials in making perfect decisions to
achieve the goal and to lead the company towards its ultimate destination. Polman and his
ULE team have mainly focused on influencing people through innovations in business
strategies as they started recognizing people as individuals, instead of consumers. Unilever’s
CEO has also shown great initiatives in an intensive communication campaign to make
people aware of their new innovative strategies. Polman and his ULE team have successfully
led the company towards its goal to be achieved gradually. Finally, we can say those zero-
waste policies, reducing energy and water consumption, improving the health of workers – all
these things promote the wellbeing of the environment and society, and they also improve
efficiency, reduce costs and ensure viability in business. While Polman has extremely moral
intentions, he is also a businessman, and as Young noted, ‘Unilever’s attempt to cut
resources, while still growing, is the holy grail of the industry.’ Polman certainly is an
ambitious leader, even a radical some may say, yet the world needs radicals like him –
radicals who never stop striving for the Holy Grail.

Major issues in Unilever

When Unilever got their first-ever profit warning in 2004, it thought about implementing new
business strategies and also thought to bring changes in the company. That’s the reason to
bring an outsider into its leading position. Unilever board decided to make up their financial
performance with a new CEO and a new Strategy.
New CEO and New Strategy
Unilever brought their first-ever outsider CEO and he introduced a new plan for Unilever.
Mr. Paul Polman introduced Unilever Sustainable Living Plan (USLP), a commitment that
placed three "sustainability" goals at the core of the company's strategy: to help one billion
people in improving their health, to halve the environmental footprint of making and using
Unilever products, and to enhance the livelihood of those in its value chain.
Paul Polman is a Dutch business leader who started his career at Procter & Gamble where
from 1979 he worked for 27 years and Paul had reached P&G most senior level within few
years. Paul then joined Nestlé in 2006 as chief financial officer and head of the Americas. On
1 January 2009, he succeeded Patrick Cescau as chief executive officer of Unilever.
Breaking Conventional Rules
The new CEO Paul Polman admitted that there are some problems in the way Unilever doing
business. Therefore, he wanted to break the typical rules of business and also want to connect
the people with this new strategy who are facing problem with surviving their life, go to bed
hungry every night. The environment was another priority for Polman and that’s why he
wanted to make the business environment friendly and also create products that will reduce
the uses of water. Polman offered a different vision, as according to him, most businesses think
about how they can use society and the environment to be successful, while he thinks about how he
can contribute to society and be successful.

Accepting the Challenge as a Successful Leader

The company experienced a major shakeup as Paul was ready to challenge much of the
conventional wisdom in the business arena. He also brought huge changes in the management
as within a year Paul had changed a third of the top executives of the company and he has
also created a ULE (Unilever Leadership Executive) team.
Polman has used this sustainability program to make an impact on the environment and also
as a marketing strategy to connect with consumers because he believes that for consumers,
Unilever is here, not for the shareholders. He has succeeded with his marketing strategy and
Unilever has got back to its form and made good profit also.
But the question is that, is he tried enough to reach the goals of sustainability or it was just a
strategy to reestablish the financial and market performance of Unilever?

Benefits
Unilever’s CEO Paul Polman has the quality of leadership to take action according to the
situation. The actions taken by him and by his team were effective for the company and also
create high motivation in the employees’ minds. CEO Paul Polman’s high motivation is
evident in his success story. As a successful leader, Paul Polman has always been confident
enough to face the challenges with the implementation of new strategies.
Job Engagement
Polman invested his physical, cognitive, and emotional energies into his performance. He
knew that USLP required a radical new way of thinking not only from Unilever’s 165,000
employees, but also by the 5 million people in its supply chain, and eventually by the 2
billion people worldwide who used one of its products on any given day. It was a huge task,
and internally the new strategy was greeted with nervous anticipation. While the idea of
doubling revenues seemed exciting, some found USLP’s less familiar environmental and
social goals harder to grasp. To engage employees in the company’s sustainability journey,
he took a few significant initiatives such as defining the company’s long-term purposes,
spelling out the economic case for sustainability, creating sustainability knowledge and
competence, etc.
‘Sustainability’ in Policy
Ever since Polman took the reins at Unilever, sustainability has been at the core of the
company’s corporate strategy. Not only is sustainability perfectly compatible with
commercial success, but Polman has also claimed that the company can halve its
environmental impact while ‘growing the businesses at the same time. In addition to
internally executing its sustainability

Thinking Long Term

It is perfectly possible, today, to be commercially successful and think short-term. Many
businesses are in this camp – fuelled by a fascination with short-term profit maximization.
But this short-termism means that businesses are missing out on an opportunity to build
resilience into the business and secure its medium and long-term success. If a business hasn’t
thought about the impact of these long-term trends, then its ability to deliver long-term value
creation is seriously compromised. Unilever has worked through the longer-term implications
of global trends for its business. The USLP targets are responded to these implications and
are designed to ensure that Unilever is in business next year, and into the next decade.
Cultural and Management Change
He brought huge changes in the management as within a year Paul had changed a third of the
top executives of the company and he has also created a ULE (Unilever Leadership
Executive) team. He created a new role in the Unilever Leadership Executive (ULE)
combined with Chief Marketing Officer (CMO) with responsibility for the leadership of both
Communications and Sustainability.
After that, he redefined his marketing strategy and introduced an environmental issue of
sustainable development in the business arena. Sustainability means “Development that
meets the needs of the present without compromising the ability of future generations to meet
their own needs.” He said that sustainability gives support to Unilever’s commercial interests
and its mission of “doing well by doing good.”
Widening the Focus on Consumers Rather Than the Shareholders
Polman made, and not for the first time, two interesting comments about the relationship with
shareholders. First, he’s not working for the shareholders, but for the consumers, or in his
words, “we are not out there just to make money, but to satisfy consumer needs and doing it
well, we will make money.” Second, he wants to have only shareholders that are interested in
the long-term.
Innovative Marketing Strategies to Compete Globally and New Invention
For its marketing strategy, Unilever combines its strategy with a social project along with
USLP priorities in many countries. For example, the laundry brand Persil was no longer built
on the platform that “Persil Washes Whiter”, but instead developed a brand love key linked to
mother’s strong interest in her child’s development by campaigning that ‘Dirt is Good’,
which reversed the traditional fear-based laundry detergent advertisement. It was projecting a
positive life-celebrating message inspiring mothers to encourage their children to play
outside.

Educational campaigns have been important tools for raising awareness for Unilever brands
such as Close-Up and Dove. The company’s partnership with the World Dental Federation
has seen it become involved in oral healthcare projects in both developed and emerging
nations, including Austria and Brazil. The company also has more directly brand-related
programs, including Life buoy’s hand wash program in schools, Close-Up’s Project Smile in
Nigeria, which used small kiosk outlets to showcase both its products and oral hygiene
information, and the Dove Self-Esteem Fund, which has joined with organizations such as the
Girl Scouts of the USA and the UK’s Eating Disorder Association to fund educational Body
Talk programs in schools to improve body-related self-esteem.
There were two shortfalls among the USLP defined targets: Greenhouse Gas emissions and
water usage. Management emphasized the need for impactful innovations. After that,
Unilever introduced laundry detergents that required shorter wash cycles, minimum rinse
fabric conditioners, and dry shampoos.
Intensive Communication Campaigns and New Partnership Programs
The new CEO and his management teams held meetings, hosted forums, and visited
operations to outline the vision, answer questions, and celebrate early achievements.
Externally Polman Gave interviews to the media, met with analysts, and spoke at meetings
from UN conferences to the World Economic Forum at Davos. Within a year, few in the
business world were unaware of Unilever’s USLP Strategy.
Polman understood that it could not achieve its bold objectives by itself, so Polman had
emphasized the partnership with governments, NGOs, suppliers, and others to address the big
challenges. The company started the “Partner to Win” program resulted in hundreds of
agreements being signed by the suppliers. It also partnered with scores of NGOs including
Oxfam, Unicef, Save the Children, WWF, and Rainforest Alliance. And it had dozens of
collaborating programs with governments at national and local levels worldwide. Unilever
partnered with NGOs, social entrepreneurs, academics, and other businesses because the
CEO believed it could lead to changes in the broader system to improve health and hygiene,
particularly for the 2.5 billion people sanitation, safe drinking water, hand washing.
Gaining Market Leading Positions and Quicker Product Development
Unilever is the leading bath and shower products and deodorants marketer in the world, as
well as in its domestic Western Europe, Eastern Europe, Latin America, and Africa, and the
Middle East. Unilever is very advanced in its advertising and marketing program and very
active in in-store displays, which is a must for success in cosmetics and toiletries. In many of
Unilever’s largest sectors, the company’s wide presence has been built on successful product
innovation with the timely introduction of brand extensions well suited to changing consumer
preferences.

Unilever stands out as an exception and has managed to sustain a wide variety of products as
part of its inclusive business activities and core business model. The expansive size of
Unilever’s customer base allows it to scale new products more quickly than competitors.
Shortfalls of Unilever’s Strategy
The strategy of Unilever was very effective and got the popularity day by day. Many
consumers especially from Least Development Countries (LDC) connect themselves with this
outstanding business strategy. There is no doubt that Unilever’s CEO Paul Polman was
targeting the consumers from developing countries and spread his business according to that
way. Now his strategy is not successful in all sectors. Maybe he reestablished the growth of
financial performance again but shortfalls are there because he promised many things.
Failure in Reduction of Greenhouse Gas (GHG) Impact and Water Footprint
Despite every possible effort, the company couldn’t reach its defined target regarding GHG
emission and water usage. The analysis had shown that Unilever’s footprint per consumer use
had increased to some extent. Unilever’s GHG impact per consumer use had increased by 4%
since 2010, and consumer water use impact had been reduced by only 2%. The CEO
acknowledged that because both of the “off-track” USLP pillars were linked to consumers’
use of its products, they would be hard to fix. In contrast to a goal of halving its
environmental footprint, in part due to its merger and acquisition activity.
Changing People’s Behaviors is the Hardest Challenge
It will not be possible to meet its goals without changing customers’ behavior, which is an
extremely difficult job. Three years ago the company measured the carbon footprint of 2,000
products and found that on average 68% of greenhouse-gas emissions in their life cycles
occurred only after they got into the hands of consumers, mostly through the energy-intensive
process of heating water (eg, for tea bags or washing powder).

2. What actions should the company take now? Which of the three
options identified at the end of the case would you recommend
management take?

Ans: Alternative Solution of this New Strategy:

The CEO of Unilever is a great motivator and can divert problems into solutions. This type of
great leader motivates others to be like him and follow his footprints. Now the USLP sets the
target for 2020 and this is the right time to analyze the shortfalls of the strategy and make
solutions for them. And it’s also important to acknowledge the shortfalls of internal
management to fulfill the target.
More Focus on Research and Invention
USLP’s implementation has been characterized by continuous adaptation, adjustment, and
learning. So once again the company has an opportunity to explore further innovations with
the necessary adjustments. To produce more sustainable products, they should go through
more innovations and researches.
More Focus on Developed Countries
Unilever is more focused on developing countries because the consumers of these countries
are not much aware of sustainability. And Polman has used that thing to make Unilever
products famous in those countries but this could be harmful because the economic and
political situation in developing countries is not so well which may slow down its growth. As
developed countries have economical and political stability, so Unilever can make a
dedicated strategy for developed countries.
Introducing More Campaigns to Raise Awareness
To make people aware of Unilever’s sustainable programs and the importance of them, they
can think about more innovative strategies to change people’s behavior such as they can
arrange more workshop programs at the ground level. But all these possible initiatives require
a long period and these can be identified as time-consuming processes.