Unilever

Presented to:

Mr.Shahid Mehmood

Lecturer Deptt. Of Commerce

The islamia university of Bahawalpur

Unilever

Presented By:

(M.Com-4th Morning)2008-10Group-1

UNILEVER OVERVIEW SWOT ANALYSIS KEY COMPETITOR PRODUCTS AND SERVICES OF

COMPETITORS COMPETITIVE ANALYSIS PRODUCTS AND SERVICES STRATEGIES CONCLUSION AND RECOMMENDATION

Topics Will Be Covered

Created in 1930 as result of a merger Key player in the food and household

products industry Maintains dual headquarter/dual chairperson

approach Launched Path to Growth strategy (2000) to

revive the company Historically grew through acquisitions Every

day around 160 million people in150 countries will buy a Unilever brand.

Unilever Overview

13 of our brands achieve annual sales of E1 billion or more. Our top 25 brands account for over 70%of sales.

Dressings E14,232 7. growth 6% Turnover (millions) Underlying sales growth Ice cream

and beverages E7,694 5. growth 9% Operating profit (millions)E7,167 Turnover (millions)E40,523 We have operations in around 100 countries and our

products are on sale in about 50 more. Employees (year end) 174,000 Purchase of goods and services (millions) E29,346

Unilever Overview

All 22,000 products in our food and beverage portfolio.

Lifebuoy’s rural hand washing campaign in India has reached 120 million people over 2002–2008

Our Signal/Pepsodent/Close Up toothpaste brands have reached more than 44 million children with school-based oral hygiene programmes over 1996–2008

Achieved a 19%* reduction in our accident frequency rate from 2007–2008

Deliver 15 million school meals to 80,000 children in 2008 via our partnership with the United Nations World Food Programme.

Unilever Overview

160 million times a day someone buys a Unilever brand

13 brands with sales of E1 billion or more per year

15 billion invested in advertising and promotion E927 million invested in R&D Hand washing Day on 15 October 2008. We

worked closely with NGOs, governments and other companies to launch the day in 75 countries around the world.

Unilever is one of the world’s largest buyers of palm oil. We purchase 1.5 million tonnes a year for use in products.

We own over 2 million point-of sale ice cream freezer cabinets worldwide.

Unilever Overview

Delivered 16 million meals to 76 000 children in 2008.

Lifebuoy aims to take its hand washing message to 1 billion people by 2012.

Unilever will purchase all palm oil from certified sustainable sources by 2015.

Over 1995–2008, achieved a 68%*reduction in total waste per tonne of production.

Ranked 9th out of 21 in 2008. Sales from developing markets reached

47% in 2008

Unilever Overview

By end 2008, around 10 500 people involved and 40 000 tree seedlings raised.

Unilever has contributed around Rs. 78 (Mn) to earthquake relief including:

Rs. 35.5(Mn) to president relief fund Rs.3.5(Mn) to TCF for long term reconstruction and

Re-buildings for the affected areas ·4(Mn) of employee contributions to president relief

fund ·3(Mn) worth of contributions from our overseas

Unilever colleagues from Sri lanka, Turkey, Indonesia & etc

In addition the company has donated 5(Mn) worth of goods for immediate relief including tents, blankets, Tea & Soap.

Unilever Overview

Mission

Mission Statement

Unilever's 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.

Look good, feel good and get more out of life

Achievements

Achievements

ISO Certification

KSE Top

Achievements

Asian CSR AwardHealth and

Safety Award

Achievements

TPM Award

BRANDS

Brands

22,000 products in our food and beverage portfolio 13 brands with sales of E1 billion or more per year PERSONAL WASH TOILET SOAPS Lifebuoy (3 varieties) Lifebuoy Gold (2 varieties) Lux (8 varieties) Breeze

FABRIC AND HOME CAREFABRIC WASH Surf Excel Power Surf Sunlight Washing Powder WheelHOME CARE Vim Dish Washer/Scourers Vim Bar Vim Powder

PERSONAL Care

HAIR CARE Sunsilk Shampoo (4 varieties) Lifebuoy Shampoo Harmony Soap

SKIN CARE Fair & Lovely skin cream and lotion Ponds skin cream Ponds talc

DENTAL CARE

Close-up Tooth paste Pepsodent Tooth Paste TEA Yellow Label Yellow label Danedar Richbru Top Star Taaza Leaf Supreme

ICE CREAM

Cornetto(3varieties), Feast(2 varieties)

Feast Stickless, Top Ten,Star Cup(4 varieties),Callipo Split Fruiti, Peddle Pop (3 varieties),3-D, Solo(3 varieties),Polka Cup

Panda, amily Packs

Magnum

Our foods brands include: Knorr Bertolli PG Tips Magnum Lipton’s Hellman’s Coleman’s

Foods

Our home and personal care brands include: Dove Cif Persil Domestos Sunsilk Comfort Lux

Home and Personal Care

Our home and personal care brands include:

Signal Vaseline Comfort Radiant

Home and Personal Care

Competitor Comparison

Competitor Comparison

Top Segment

Top Brand

CEO

Growth

Revenues

Revenue Growth

International

Business Segments

Employees

CG/Foods Consumer care Food Food

Dove Tide Mac & Cheese Kit Kat

A. Burgmans

15.58%

42,942M

-11.93%

100+

A.G. Lafley

234000

9.25%

28.2 BL

19%

42

5

110000

R. Deromedi Ian J. Donald

8.2% 11.23%

$69 B$31,010 M

4.3%% -1.93%

150+ 86

5

10600

6

253000

3

--------- -------------- ------------ ----------- ------------

PRODUCTS OF NESTLE

Top Competitors Key Measures: UL

UL KFT PG

Valuation

Price/Earnings 12.86 22.01 — 16.75

Per Share Data

UL KFT PG

Last Dividend 68.98 91.80 — 43.36

Book Value 5.03 15.02 — 20.84

Revenue 40.52 B 42.2 B — 83.5 B

Profitability

EBIDTA 8.46 B 4.83 B — 20.71 B

Operating Margin 14.55% 11.94% — 22.13%

Profit Margin 12.42% 6.87% — 14.46%

Gross Profit Margin 49.06% 33.25% — 51.27%

UL KFT ------ PG

57%

43%

Foods Division

Home and Personal Care

Revenues: Product Segmentation

Quick Ratio 12.42 6.87 — 14.46

Current Ratio 0.83 1.03 — 0.69

LT Debt to Equity Ratio 62.72 83.73 — 32.45

ROE 31.67 7.93 — 17.34

ROA 10.49 5.69 — 10.61

ROIC (Return on Invested Capital) 17.20 8.22 — 12.51

UL KFT --------- PG

Financial Strength

Muhammad Faisal RashidM.COM 4th (Finance) MRoll # 12

Competitive Profile Matrix (CPM)

Competitive Profile Matrix (CPM)

The competitive profile matrix identifies a firms major competitors and its particular strength and weaknesses.

Steps in CPM;Success FactorsWeight (0.00 to 1.00)

Steps in CPM

Rates (1 to 4);

4= Major strength

3= Minor strength

2= Minor weakness

1= Major weakness

Competitive Profile Matrix (unilever)

Unilever P&G KraftSuccess Factors Weight Rating Score Rating Score Rating Score

Quality 0.13 4 0.52 3 0.39 3 0.39

Financial Position 0.15 4 0.60 3 0.45 4 0.60

Market Share 0.16 3 0.48 3 0.48 3 0.48

Technology/innovation

0.12 3 0.36 4 0.48 3 0.36

Global Market 0.10 3 0.30 4 0.40 3 0.30

Price Competitiveness

0.10 2 0.20 3 0.30 4 0.40

R&D 0.14 4 0.56 3 0.42 3 0.42

Customer Loyalty 0.10 3 0.30 3 0.30 2 0.20

Total 1.00 3.32 3.22 3.15

Largest organizations Advanced technology well skilled professionals Good distribution network all over world Unilever provided creative strategies Strong marketing and good image creation Wide distribution channels in both national and

internal markets Decentralized decision-making

Strengths

Strengths

High market share Strong management teams Efficient HRM department Strong reputation Global innovation centers Understanding local culture

Weaknesses Weaknesses

Competitors offered better alternative product Dual co-chair approach and dual company

structure create problems Lack of high volume brands Slow sales growth compared with the

competitors. Low cash flow

WeaknessesWeaknesses

Focus on short term strategy High cost of restructuring Hard to manage and control company

structure High cost limit promotions in company

Opportunities

Rural areas are a large prospective market Employing external job applicants Gain high market share Introducing new distribution channel Advertising through e-commerce Promote its products in new geographic areas Customer base is increasing with effective marketing

Opportunities Take advantage of the changes of technology Increase cash flow Gain scale of economies Decrease its labor cost Maintaining good relationship Population expanding at a rapid rate Current capacity utilization is 80%

THREATS

Threats

Product innovation is ineffective The high competition for market share

increases rapidly Changes of people’s lifestyle Political and Economic factors

Threats

Threats

Increasing social awareness in society Unfavorable conditions Company’s image destroyed Acquisition decision

ThreatsThreats

Strategies & Recommendations

Reported a net loss of $318M In 2004, underlying sales grew by

only .4%, leading brands by .9% Issued 1st ever profit warning

ahead 3% decline Lagging behind competitors in

terms of marketing and innovation

No…. “Unilever was getting there, but getting there too late”

Is it working?

Failure to increase advertising and marketing efforts

Still lack focus and effective strategy execution

The company remained too local

Unilever plans to discontinue the “Path to Growth” Strategy

So what’s next?

Successfully modify unsuccessful brands

Leading brands increased sales from 75% to 93%

12 brands with sales of 1B+

Consistent growth in Home & Personal Care

Improved overall quality and growth profile of Food portfolio

Yes…

Global procurement programs have delivered 2.4B, excess of 1.6B target

Improved capital efficiency Successful integration of

Best foods acquisition Operating assets have

improved by 9%, exceeding 6% target

Is it working?

Competing with the Giants

Giants dominate all categories

Giants are growing

Giants operate globally

Marketing is a luxury

Misbelief that Marketing needs big budgets

It is going to get tough, so we will need to be equally tough in response

Strategies for competitors to the employee

Path to Growth Strategies 2001

Why Path to Growth Strategy Years of slow performance Lack of sound corporate strategy Low-volume brands Small global presence compared to competition Mediocre performance in emerging markets

Objectives of Path to Growth

Expectations

Achieve double-digit EPS growth

Secure a better competitive position in global food and household

Build brand value to gain pricing power

Top-line sales growth of 5-6% annually

Increase operating profit margins 11% to over 16%

Strategic Targets

Strategic Issue

What adjustments, both internally and externally, should Unilever make to rebuild a strong and focused competitive strategy?

1. Reorganize and Unilever’s organizational structure.

2. Implement “Unilever Believer” product and brand extensions.

Recommendation 1

Recommendation 1

Strategy Justification

Reduced effectiveness and slowed the decision making process.

Unilever maintained two business entities, dual chairperson approach

Board and business responsibilities conflicted

One Unilever

An initiative to create an overall umbrella brand across all Unilever’s brands that will eventually consolidate various businesses under one name

Recommendation 2

Strategy Justification

Consumers demand high quality products that both are convenient and delicious

Consumers look for new ways to use products More females are working full time jobs Large population of single-parent households Increase consumer focus on health and nutrition

Recommendation 3

Environmental issues are becoming increasingly important

Failure to address these issues can damage brand reputation

LCA is a useful tool to measure, understand and communicate environmental performance innovation process, product design communication with external stakeholders