REPORT ON STRATEGIC REPORT ON STRATEGIC MANAGEMENT MANAGEMENT

Unilever Pakistan Unilever Pakistan LtdLtd

Sultan Ali EP1303066Sultan Ali EP1303066

Syed Sagheer Abbas EP1303063Syed Sagheer Abbas EP1303063

Azhar Akhter EP1303009Azhar Akhter EP1303009

Background of Unilever Background of Unilever Pakistan Ltd Co.Pakistan Ltd Co.

Unilever Pakistan Ltd., a subsidiary of the Unilever Pakistan Ltd., a subsidiary of the Unilever Group is operating in Pakistan since Unilever Group is operating in Pakistan since 1948. 1948.

The Company’s main business lines are Soaps The Company’s main business lines are Soaps and Detergents, Personal Products, Cooking and Detergents, Personal Products, Cooking Oils and Fats, Packed Teas, and Ice Creams.Oils and Fats, Packed Teas, and Ice Creams.

Unilever has a long list of brands such as Surf, Unilever has a long list of brands such as Surf, Vim, Rin, Lifebuoy, Sunlight, Lux, Rexona, Vim, Rin, Lifebuoy, Sunlight, Lux, Rexona, Sunsilk, Close-Up, Blue-Band, Dalda, Planta, Sunsilk, Close-Up, Blue-Band, Dalda, Planta, Lipton’s Yellow Label, Taaza and Richbru, Lipton’s Yellow Label, Taaza and Richbru, Brook Bond’s Supreme and Kenya Mixture etcBrook Bond’s Supreme and Kenya Mixture etc

Mission Statement:Mission Statement:

Adding vitality to Adding vitality to lifelife

Vitality is at the heart of every Vitality is at the heart of every thing we do its in our brand , thing we do its in our brand ,

our people and our approach to our people and our approach to businessbusiness

Vision Statement:Vision Statement:

Touching hearts, changing Touching hearts, changing lives.lives.

Unilever Pakistan LimitedUnilever Pakistan Limited

ObjectivesObjectives

Top Priority – Fulfilment of Top Priority – Fulfilment of customer’s needs:customer’s needs:

““Unilever aims to continuously Unilever aims to continuously improve the environmental improve the environmental performance of their process and performance of their process and their brands to achieve sustainable their brands to achieve sustainable profitable growth as their consumer profitable growth as their consumer expects them to fulfil their needs with expects them to fulfil their needs with brands that have low environmental brands that have low environmental impact.”impact.”

Objectives Cont…..Objectives Cont…..

To be honest, transparent and ethical in our To be honest, transparent and ethical in our dealings at all times.dealings at all times.

To win the hearts and minds of consumers.To win the hearts and minds of consumers. To deliver what they promise.To deliver what they promise. To become empowered leaders who are To become empowered leaders who are

inspired by new challenges and have a bias inspired by new challenges and have a bias for action.for action.

To believe in trust, truth and outstanding To believe in trust, truth and outstanding teamwork. They value a creative and fun teamwork. They value a creative and fun environment.environment.

They care about and actively contribute to They care about and actively contribute to the community in which they live.the community in which they live.

STRATEGIESSTRATEGIES

Product DevelopmentProduct Development

Unilever continuously work on improving Unilever continuously work on improving product qualities and features to capture the product qualities and features to capture the market. market.

It analyzes the demand to check whether the It analyzes the demand to check whether the product is profitable or not so that if the product is profitable or not so that if the product is not it should be discontinued.product is not it should be discontinued.

It keeps an eye on the competitor’s products It keeps an eye on the competitor’s products in order to become the market leader of in order to become the market leader of certain product.certain product.

STRATEGIES Cont…...STRATEGIES Cont…...

Corporate StrategiesCorporate Strategies

Leader in the consumer goods market.Leader in the consumer goods market.

Managing govt relations to influence Managing govt relations to influence duty on imports of raw materials and duty on imports of raw materials and countering smuggling of competitors countering smuggling of competitors goodsgoods

STRATEGIES Cont…...STRATEGIES Cont…...

Human Resource Strategies.Human Resource Strategies.

Managing employee recruitment and Managing employee recruitment and placement to put the right person for the placement to put the right person for the right job.right job.

Replacement Planning.Replacement Planning. Employee rotation in the department.Employee rotation in the department. Employee training.Employee training. Remuneration survey for salary adjustments Remuneration survey for salary adjustments

of employees.of employees.

STRATEGIES Cont…...STRATEGIES Cont…... FINANCE STRATEGIESFINANCE STRATEGIES

Maintain company finance operations with in the Maintain company finance operations with in the resourcesresources

Maintain working capital keeping stock debtors low.Maintain working capital keeping stock debtors low. Adhere strictly to the ICAP accounting practices and Adhere strictly to the ICAP accounting practices and

lawslaws Tax management to gain legitimate advantages Tax management to gain legitimate advantages

lessening the burden lessening the burden Ensure internal control through internal auditEnsure internal control through internal audit Introduction of IT and implementationIntroduction of IT and implementation Ensure sales revenue generation meet targetsEnsure sales revenue generation meet targets Maintenance of purchasing functionMaintenance of purchasing function

STRATEGIES Cont…...STRATEGIES Cont…...

ACQUISITIONS & MERGERSACQUISITIONS & MERGERS

Lever has successfully completed an Lever has successfully completed an acquisition of Pakistan Industrial acquisition of Pakistan Industrial promotional (pvt) limited, manufacturers of promotional (pvt) limited, manufacturers of polka in 1999.polka in 1999.

The company completed an merger with The company completed an merger with Brooke Bond (BB) Pakistan. where each BB Brooke Bond (BB) Pakistan. where each BB shareholder received one lever share for shareholder received one lever share for every 4.3 BB shares .The merger has every 4.3 BB shares .The merger has resulted in consolidation of distribution resulted in consolidation of distribution channels, thus, reducing operating costs for channels, thus, reducing operating costs for the company.the company.

SWOT ANALYSIS OF THE SWOT ANALYSIS OF THE COMPANYCOMPANY

OPPORTUNITY ANALYSISOPPORTUNITY ANALYSIS The rapid expanding urban population is the key The rapid expanding urban population is the key

opportunity.opportunity. Awareness growing in rural areas due to Awareness growing in rural areas due to

education children with family members abroad education children with family members abroad sending foreign income.sending foreign income.

THREATSTHREATS P& G is the significant multinational threats with P& G is the significant multinational threats with

presences in soap, detergents and personal presences in soap, detergents and personal products.products.

Purchasing power can affect demand due to Purchasing power can affect demand due to depressed economy resulting in inflation.depressed economy resulting in inflation.

SWOT ANALYSIS OF THE SWOT ANALYSIS OF THE COMPANY Cont…..COMPANY Cont…..

STRENGTHSSTRENGTHS Research and development and financial support Research and development and financial support

from parent Unilever.from parent Unilever. Strong brand names. most of the brands for e.g. Strong brand names. most of the brands for e.g.

(detergent are now used generically to present (detergent are now used generically to present product.product.

Sound and experienced management.Sound and experienced management. Excellent marketing department assisted by a Excellent marketing department assisted by a

highly regarded marketing research unit.highly regarded marketing research unit. Merger with Brooke bond was expected to result Merger with Brooke bond was expected to result

in cost saving and spur earnings growth and its in cost saving and spur earnings growth and its working as per expectations.working as per expectations.

SWOT ANALYSIS OF THE SWOT ANALYSIS OF THE COMPANY Cont……COMPANY Cont……

WEAKNESSESWEAKNESSES About 80% of raw material is imported for About 80% of raw material is imported for

the manufacturing of the consumer goods. the manufacturing of the consumer goods. Raw material constitutes about 85% of Raw material constitutes about 85% of manufacturing cost, leaving Levers margin manufacturing cost, leaving Levers margin exposed to rupee devaluation.exposed to rupee devaluation.

Rampant smuggling of tea and detergents Rampant smuggling of tea and detergents has seriously affected levers sale and has seriously affected levers sale and earning. Unless the govt. takes serious earning. Unless the govt. takes serious steps to curb smuggling growth in sales and steps to curb smuggling growth in sales and earning will continued to be significantly earning will continued to be significantly restrained.restrained.

Low liquidity of stock due to higher prices.Low liquidity of stock due to higher prices.

BCG MATIXBCG MATIX

SPACE MATRIXSPACE MATRIX

EVALUATING THE BUSINESS EVALUATING THE BUSINESS STRATEGEYSTRATEGEY

Performance Test:Performance Test: Unilever main competitor is P& G its financial Unilever main competitor is P& G its financial

position is good, the market position is average position is good, the market position is average and technological performance is also average.and technological performance is also average.

EVALUATING THE BUSINESS EVALUATING THE BUSINESS STRATEGEY Cont……STRATEGEY Cont……

Consistency TestConsistency Test a. Buyer power and trends in demand for product is expected a. Buyer power and trends in demand for product is expected

to change in five years, although Unilever strategy is to change in five years, although Unilever strategy is consistent, but it may need some changes.consistent, but it may need some changes.

b. Substitutes or alternatives would increase as buying power b. Substitutes or alternatives would increase as buying power changes and new taste are developed with changing lifestyle. changes and new taste are developed with changing lifestyle. Unilever strategy is consistent in this case.Unilever strategy is consistent in this case.

c. Likely Entrants would also increase but Unilever believes it c. Likely Entrants would also increase but Unilever believes it cannot affect their market share as they have a strong position cannot affect their market share as they have a strong position in mind of consumers.in mind of consumers.

d. Competitors are going to increase but Unilever does a d. Competitors are going to increase but Unilever does a continuous effort to stratify their customer needs and continuous effort to stratify their customer needs and demands.demands.

e. Supplier Power would increase in five years but Unilever e. Supplier Power would increase in five years but Unilever strategy is consistent with local supplier and international strategy is consistent with local supplier and international supplier.supplier.

Competitive AdvantageCompetitive Advantage

Economic AdvantageEconomic Advantage: P&G make sure that its : P&G make sure that its products are available at all outlets. It is also products are available at all outlets. It is also occupies a major market share.occupies a major market share.

Disadvantage:Disadvantage: P&G has a weak cost P&G has a weak cost structure and not occupies a strong image like structure and not occupies a strong image like Unilever.Unilever.

Human ResourceAdvantage: Human ResourceAdvantage: P&G also P&G also believes in teamwork, and continuously boost the believes in teamwork, and continuously boost the morale of their employees.morale of their employees.

DisadvantageDisadvantage:: P&G has a formal culture P&G has a formal culture atmosphere.atmosphere.

Conclusion & Conclusion & RecommendationRecommendation

With respect to SPACE analysis, With respect to SPACE analysis, Unilever is placed in aggressive Unilever is placed in aggressive quadrant and it can follow any of the quadrant and it can follow any of the strategies e.g. market penetration, strategies e.g. market penetration, forward integration, backward forward integration, backward integration etc.integration etc.

Conclusion & RecommendationConclusion & Recommendation Cont…..Cont…..

According to the analysis in QSPM, we According to the analysis in QSPM, we would like Unilever to pursue Cost would like Unilever to pursue Cost Reduction strategy which is a market Reduction strategy which is a market development strategy. Although the current development strategy. Although the current business strategy of Unilever is Product business strategy of Unilever is Product Development as they are bringing different Development as they are bringing different product like Green Tea in the market. They product like Green Tea in the market. They are also modifying their products for e.g. are also modifying their products for e.g. Lipton in new round tea bags and Lux by Lipton in new round tea bags and Lux by adding a different ingredient.adding a different ingredient.