Maintain its Sophistication for Research and Development

So here are our alternative courses of action. For P&G, it would be better to maintain its
sophistication for research and development so that it can maintain and even improve the
quality of their products albeit rather costly and time consuming

Lowering the Cost of Producing Products

They should also try looking for resources or inputs with lower prices. However, this may
inversely influence their relationships with their current suppliers and may compromise the
quality of their products.

Patent and Trademark Protection

Since these two companies, especially P&G are pouring a lot of funds towards their
research and development, they must ensure that they will reap all the benefits brought
by such. Therefore, they must secure their intellectual properties against imitation
although this will definitely be costly for them to maintain.

Diversification
This will help them spread the costs, particularly their fixed costs to various products as well as
gain more recognition and increase customers from existing products.

Unilever

Centralized Manufacturing
Since Unilever operates in different countries, it may take advantage of lower costs such as
supplies, labor, utilities and other production needs by exporting only the final goods. However
they must still assess whether the additional costs brought by exporting will outweigh the cost
savings in production.

Strategic Alliances may also help in cost reduction by partnering with another company sharing
costs of facilities, labor and other costs, however this can also mean reduction in profits.

Last is Business Acquisition. Since Unilever is a big company, it can turn the threats of new
entrants, as well as small existing competitors into an opportunity by purchasing them. This will
also help them move beyond large competitors by eating up share in the market. However,
Unilever must still ensure that their acquisitions will actually add value to the company.
After considering the aforementioned courses of action, we recommend P&G to
maintain its research and development since one of P&G’s core strengths is innovation.
Such strength may be maintained by protecting their intellectual properties like patents
and trademark. To do that, they must actively cooperate with the government in their
host countries to regulate acts of imitation. This may be costly at first, but will be
beneficial in the long run as it may discourage other competitors from exhibiting similar
violations.

For Unilever, since their main problem maintaining position amidst cheaper alternatives,
one of the viable options is to eat up market share which they can easily do since they
are a large corporation. However, if through evaluation it is found that no additional
value will be obtained, they may also consider cost reduction strategies such as
exportation or strategic alliances.