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Department of Commerce Bahauddin Zakariya University Multan: Report of Stratgic Management
Department of Commerce Bahauddin Zakariya University Multan: Report of Stratgic Management
At
Unilever Pakistan
Presented to
By
DEPARTMENT OF COMMERCE
BAHAUDDIN ZAKARIYA UNIVERSITY MULTAN
1
Acknowledgement
We would like to pay our praises and humblest thanks to AL-MIGHTY Allah, the most merciful
and beneficent. It gives us immense pleasure and honor to extend our thanks to our kind &
This report is all about the Matrices. Eight different matrices are to be filled according to their
Unilever a leading multinational corporation has multifarious brands that inherent consumer
products on a large scale and involve in manufacturing gigantic operating in hundred countries
all over the world. Unilever's has been moved by the significant circumstances of the day like
economic boom, rapid change in technology, depression, people's lifestyle, and recession.
Unilever has been operating in Pakistan since 1948.Unilever's have five laboratories all over the
world, which scrutinize new techniques to make more improve. Unilever's purpose is to set the
Unilever is one of the world’s leading suppliers of fast moving consumer goods (FMCG) across
Foods and Home and Personal Care categories. Unilever’s portfolio includes some of the world’s
best known and most loves brands.
Mission Statement:
We are aimed to be leading products company in Pakistan, a multinational with deep
roots in the country.
We will attract and develop highly talented people, who are excited, empowered and
committed to deliver double-digit growth.
We are committed to serve the everyday needs of all consumers everywhere for foods,
hygiene and beauty through branded products and services that deliver the best quality
and value.
We strive to remain an ever simple and enterprising business.
We will use our superior consumer understanding to produce break through innovations
in brands and channels.
Through managing a responsive supply chain, we will maximize value from Suppliers to
Customers.
We want to be exemplary through our commitment to Business Ethics, Safety, Health,
Environment and involvement in the Community.
WHAT THEY DO
At present they market a host of household products named under the following brand names
and product groups.
1. HOME CARE:
Personal Wash(PW):
Toilet Soaps Lifebuoy, Lifebuoy Gold (2 variants), Lux(in 5 variants), Rexona(in 3 variants), Breeze,
Sunlight Bar.
Laundry Care:
Surf Excel, Sunlightwashingpowder, Sunlightbar, Wheelwashingpowder
House hold Care:
Vim dish wash bar, Vimscourers Magicbar
2. PERSONAL CARE:
Hair Care:
Sunsilk Shampoo (4 variants), Lifebuoy Shampoo
Skin Care:
Fair & Lovely skin cream, Ponds
Dental Care:
Close up tooth paste (3 variants), Pepsodent
3. FOOD & REFRESHMENT CATEGORY
Cookingproducts:
New Dalda, Dalda Cooking Oil,Dalda Sunflower Oil, Planta Cooking Oil, Crisp ‘N’ Dry, Dalda Lajawab
Spreads:
Blue Band
Leaf Teas:
Lipton Yellow Label, Yellow Label-Danedar, Richbru, Top Star, Taaza Leaf, Laojee, Brook Bond
Supreme, Red Label-Danedar, BB Tips, A-1, Tiger
Dust Teas:
Pearl Dust, Kenya Mixture, Red Rose
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.
UNILEVER Pakistan Limited is the largest producer of consumer products in Pakistan and
has strong brands in every field such as Close Up, Dalda, Surf, Lifebuoy, Lux, etc.
UNILEVER Pakistan Limited is the only company in Pakistan which has its own corner
research department.9
Weaknesses:
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.
People are becoming more conscious about their health and are becoming more
conscious about brands. As UNILEVER has good positioning in consumer’s mind so it can
increase their market share to launch products in hygienic category.
As population is increasing it may lead to create valuable opportunity to enhance the
growth of UNILEVER.
Innovation in UNILEVER may create opportunity to more penetrate in the market.
They have capital to invest they can explore new product categories e.g. in food and
beverages they can develop new products like Rafhan has launched custard, jelly, kheer
mix, rasmalai mix, etc. These products can prove a “cash cows” as customer in Pakistan
always welcome food items especially they will welcome due to brand image of Blue
Band and Dalda ghee in food category and due to Lipton and Supreme in beverages
category.
Unilever Pakistan has opportunity to develop new markets by identifying the needs of
customers
Threats:
On strength side:
Customer’s loyalty is not a hidden fact in UNILEVER case. People have developed and
adopted the taste of UNILEVER’s high quality products and there is no comprise on
quality. 150 million times a day, in 150 countries, people use UNILEVER’s products at key
moments of their day.
Micro marketing in developing countries. UNILEVER services 500,000 outlets with 50%
through direct distribution and remaining via wholesalers.
UNILEVER’s continuous expansion and its large market share indicate their strength in
latest facilities and quality management. UNILEVER has ISO certification.
Its brands are enjoying international recognition. UNILEVER is serving almost 150
countries.
UNILEVER is concerned about its customers as well as employee. There are strict safety
standards for employees and visitors of plants too.
On weakness side:
Although UNILEVER claims that strategic alliance with small firms for manufacturing
purpose is the part of its reducing cost objective but if we look at the other side of the
picture, strategic alliance is a weakness as well as threat for UNILEVER. For example,
Asad Soap Factory is manufacturing soap for UNILEVER Rahim Yar Khan, and now Asad
Soap Factory is searching for buyers of soap plant.
UNILEVER’s products are costly as compare to local producers. Although costly goods
are not posing any big threat to UNILEVER but in long run it can be proved harmful for
company. So, company is responding greatly towards covering its weakness. For this
purpose, company has adopted policy of contractual hiring, strategic alliance etc.
UNILEVER has a large number of products in its portfolio. It means that UNILEVER has a
large number of SBU’s to control. It adds operational complexity to UNILEVER’s
operations.
EFE Matrix
Justification of ratings:
On opportunity side:
P&G with 50% market share is a big threat for UNILEVER. Nestle with roundly 30%
market share is also posing a threat in near future. Engro is planning to enter in ice
cream market and a future rival in ice cream as well.
Rapid increase in inflation rate can increase the prices of products and hence can reduce
demand.
Smuggled products swallow a big part of profits of UNILEVER every year. Almost 40% tea
and 29% shampoo used in Pakistan is smuggled from Afghanistan and China.
Economic system of host country and rapid increase in raw material cost are last two
major threats for UNILEVER.
Critical Success Factors Weight Rating Score Rating Score Rating Score
Advertising 0.10 4 0.40 3 0.30 2 0.20
Market Penetration 0.06 3 0.18 2 0.12 2 0.12
Customer Service 0.08 4 0.32 3 0.24 3 0.24
Store Locations 0.06 3 0.18 3 0.18 3 0.18
R&D 0.10 4 0.40 3 0.30 3 0.30
Employee Dedication 0.06 4 0.24 2 0.12 2 0.12
Financial Profit 0.09 4 0.36 3 0.27 3 0.27
Customer Loyalty 0.07 3 0.21 3 0.21 3 0.21
Market Share 0.06 3 0.18 3 0.18 3 0.18
Product Quality 0.15 4 0.60 4 0.60 4 0.60
Top Management 0.08 4 0.32 3 0.24 3 0.24
Price Competitiveness 0.09 3 0.27 3 0.27 3 0.27
Totals 1.00 3.66 3.03 2.93
MATCHING STAGE
SWOT Matrix
Proposed Strategies:
SO Strategies
1 Discover new markets (O1, O2, O4, S4, S3)
2 New quality products (O3, O5, S3, S6)
3 Unrelated diversification (O3, S1)
4 Create awareness among customers about hygiene.
ST Strategies
1 Vertical Integration (T1, T3, S2, S4)
2 Control Cost
3
4
WO Strategies
1 Market Expansion in rural areas (O4, O1, W2)
2 Initiate catering new markets and new segments
3 Accommodate local demand by joint ventures
4
WT Strategies
1 Increase in manufacturing capacity. (W1, T1).
2 Cost leadership (W2, T5)
3 Make creative and competitive strategies
4
Space matrix
SPACE matrix indicates whether conservative, aggressive, defensive and competitive strategies
are more appropriate for given organization. The matrix shows that UNILEVER has Aggressive
Strategy which means that it has a strong competitive position in the market with rapid growth.
It needs to use its internal strengths to develop a market penetration and market development
strategy. Other possible strategies include product development, integration with other
companies and diversification.
Market development is another strategy suggested for UNILEVER, we’ve seen that
UNILEVER is producing high quality products and captured the maximum market share.
But still lots of lower and middle-income people are out of its use for most of the
products as they are highly priced. Rural area is also an untapped market for UNILEVER.
UNILEVER
must consider about producing low-price products as well, so company can earn
maximum share.
Internal External Matrix
The IFE matrix score for home care, personal care and food segment of UNILEVER is 3.1, 2.83 and
2.61 and for EFE matrix scores 3.0, 2.74 and 2.52 respectively, therefore our IE matrix falls
more around ‘v’ cell. The company should adopt HOLD & MAINTAIN STRATEGIES and I
recommend Market Development and Product Development for UNILEVER.
UNILEVER can introduce existi ng products to new geographical area that are rural
markets and markets of developing nations. On the other hand, UNILEVER can also be
modifying its existing products and introduce variants in order raise its market share
Grand Strategy Matrix
The grand matrix helps us to determine the strategy that firm must pursue, based on
its competitive position and market growth. UNILEVER’s segments home care and personal care
lie in Q1 which represents excellent strategic position of these segments. For these segments,
continued concentration on current market and products is an appropriate strategy. UNILEVER
has abundant resources so, backward, forward, and horizontal integration also prove effective.
BCG Matrix
Interpretation
Star;
Home Care divisional products of Unilever Pakistan comes in this region as its shows best long
run opportunities for the growth and profitability. Its has high market share as well as high
market growth. Backward Forward Horizontal Market penetration Market development and
Product development strategies are suitable in this region.
Question Mark;
Personal Care and Food & Refreshment division of Unilever Pakistan come in this region which
has low market share but yet high market growth. Cash needed is high and cash generation is
low. It up to the organization which strategy they adopt. Market development Market
Penetration Product development and Divestiture strategies are suitable for these divisions.
Cash Cow
No any division of unilever Pakistan comes in this sector. In this region market growth is low
but market share is high. Suitable strategies are Diversification Retrenchment and Divestiture.
Dogs;
Unilever Pakistan is a well known brand so no any single product comes in this region. In this
region both market share and market growth is low so our result show no single product comes
in this region which is a great advantage for the company. Diversification strategy is suitable in
this region.
DECISION STAGE
QSPM Matrix
Strategic Recommendations:
Appropriate strategy for UNILEVER is Market Development. UNILEVER should remain in the
present business and should introduce present products in new geographical area.
Following are necessary factors that are present, so we chose the market development strategy:
www.igisecurities.com.pk
And various newspaper articles, research findings and blogs, which helped me indirectly to
build up my mind about Pakistan UNILEVER and figure out their External and Internal Factors
which were involved in the project.