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UNILEVER'S Business-Level Strategy

Unilevers Business Level Strategy
Business-level strategy helps an organization achieve core competencies, keep its focus on satisfying the
customer needs and preferences to achieve economies of scale and profit above average. It also dictate the
actions need to be taken to provide value to customers and gain a competitive position in the industry by
outperforming its rivals and competitors and also by fully utilizing its core competencies in a particular,
individual product or in services. The position of a business or firm in an industry, its relative position or
standing to its rivals and five forces of competition, all are related to business level strategy.
The foundation of any business-level starategy is the customers of an organization. What they need, what
services they want and they can be ultimately satisfied, all these matters are concerned with the upperlevel management and thus the importance of business level strategy is also very crucial for these factors.
Business level strategy of Unilever is very important determinant of its overall performance and market
performance. It take care of its customers by focusing on demographic, geographic, lifestyle choices,
tastes and values, personality traits, consumption patterns and brand loyalty.
Its competitive advantage based on three Generic Strategies can be analyzed in the following way:
Cost Leadership
Unilever compete for a wide range of customers based on price. Its products Prices are based on internal
efficiency to obtain a margin that allows it to sustain its business above average profit or returns and cost
to the customers. Based on this cost and return analysis that determine the price, make customers to
purchase a particular product. This strategy works well when the product or service is standardize, have
generic qualities, fulfill customer needs and offer lowest price with best quality. In order to become a cost
leader a business should keep an eye on the price strategy followed by its competitors and its continuous
efforts to keep its prices low relative to its competitors.
This

can

Lower cost products with best quality

Building efficient production facilities

Maintain tight control over production and overhead costs

Minimize cost of sales, R&D, and service

Focusing on primary and support activities to reduce cost related to these activities

Configuring the value chain

Porter's 5 Forces Model

include:

For cost leader businesses like Unilever a cost leadership strategy may help to remain profitable even
with:
Rivalry, new entrants, suppliers' power, substitute products, and buyers' power. This analysis for Unilever
is as follows:

Rivalry

Customers

Unilever competes on the basis of its prices since the low cost products
of Unilever and its broad range of products allow it to enjoy a big family of
customers. It is because of its diversified product line that allows it to enjoy
above average profit and allow it to maintain low cost advantage over its
competitors in the market.

As its a part of Unilevers competitive advantage that it offer low prices that
help it to retain its customers and to earn profit.

Suppliers

Unilever as a Cost leader is able to absorb greater price increases before it must
raise price to customers.

Unilever creates barriers to market entry through its continuous focus on

efficiency and reducing costs and because of its economies of scale.

Entrants

Substitutes

As there are many substitutes available in the market to Unilevers products so

for Unilever its more likely to lower costs to attract customers to stay with their
product, invest to develop substitutes, purchase patents and invest in R&D.

As Unilever deal with a wide variety of products so it also focuses on its value chain. It identify and
evaluate the ways in which it can use its resources to identify and evaluate the ways in which its resources
and capabilities of workers can add value. It focuses on its primary as well as support activities to achieve
this objective.
According to Unilevers annual report, it defines its customers importance as:
We believe we are well placed to help people understand how their brand choices and small actions, when
added to those of others, can make a big difference across the world.

For example, Unilever's detergent brands are used in 125 billion washes a year. That is the equivalent of
14 million washes every hour. Every time a Unilever consumer does the laundry at a lower temperature or
with a full load, the reductions in energy, CO2 and water are cumulatively very large.
With consumer use accounting for nearly 70% of our greenhouse gas footprint, inspiring our consumers
to change their behavior will be key to achieving our mission of creating a better future every day.
Unilevers Five Levers for Change methodology is helping us create effective behavior change
campaigns. (Unilever annual report, Web)
Differentiation
Unilever is providing value to its customers through unique features and characteristics of its products.
This is done through high quality, features, high customer service, rapid product innovation, advanced
technological features, image management, etc Unilever Creates Value by:

Lowering Buyers' Costs with Higher quality and quicker response to problems.

Sustainability

Higher quality products

Creating barriers by perceptions of uniqueness and reputation

Creating high switching costs through differentiation and uniqueness

Wide product line

Efficient customer service and focus on customers needs

Operating all over the world

Porter's Five Forces Model

Effective differentiators can remain profitable even when the five forces appear unattractive. Analysis of
Unilevers differentiation strategy porters five forces is as follows:

Rivalry

Brand loyalty is the strongest point for Unilever to have its competitive
advantage. It means that customers will be less sensitive to price increases, as long
as the firm can satisfy the needs of its customers

As Unilever always strive to satisfy the needs of its customers so intense rivalry
for Unilever is not a threat

Suppliers

Because differentiators charge a premium price they can more afford to absorb
higher costs and customers are willing to pay extra too so bargaining power of
suppliers is low here that give a competitive edge to Unilever (Albany, Web)

Entrants

Brand Loyalty provides a difficult barrier to overcome

Substitutes
Once again brand loyalty helps combat substitute products.
Focus
Unilever focus more on the demographic features of population, it targets all age groups and offer a wide
variety of products to the people of all ages. It also focus on the emerging markets like a few years ago it
started to focus more on India because its an emerging market. Apart from that its wide variety of
products more and its attention to its value chain make it capture a big market share. It focuses on
customer needs and customer satisfaction. It focuses on innovation, quality and R&D. It also focus on its
low cost and has a wide base of customers so all these factors together give it a competitive advantage
over others in the same industry.

LONDON & ROTTERDAM, Netherlands--(BUSINESS WIRE)--

Wednesday July 20, 2016 Unilever today announced that it has signed an agreement to purchase
Dollar Shave Club. Founded in 2012 and headquartered in Venice, California, Dollar Shave Club
(DSC) has grown into a full male grooming business that has transformed the shaving category with its
lifestyle brand empowering 3.2 million members. In 2015, DSC had turnover of US$152 million and is
on track to exceed US$200 million in turnover in 2016. Terms of the transaction were not disclosed.
With a product and brand range that extends far beyond shaving to include Wanderer mens personal
wash products, Big Cloud mens skin care products, Boogies hair styling products, and One Wipe
Charlies daily wipes, Dollar Shave Club brings to Unilevers personal care category a unique male
grooming perspective.
Dollar Shave Club is an innovative and disruptive male grooming brand with incredibly deep
connections to its diverse and highly engaged consumers, said Kees Kruythoff, President of Unilever
North America. In addition to its unique consumer and data insights, Dollar Shave Club is the category
leader in its direct-to-consumer space. We plan to leverage the global strength of Unilever to support
Dollar Shave Club in achieving its full potential in terms of offering and reach.
Michael Dubin, founder and CEO of Dollar Shave Club, added: DSC couldnt be happier to have the
worlds most innovative and progressive consumer-product company in our corner. We have long
admired Unilevers purpose-driven business leadership and its category expertise is unmatched. We are
excited to be part of the family.
Michael Dubin will continue to serve as CEO of DSC.
Subject to regulatory approval, the transaction is expected to close during the third quarter.
About Unilever:
Unilever is one of the worlds leading suppliers of Food, Home and Personal Care products with sales
in over 190 countries and reaching 2 billion consumers a day. It has 169,000 employees and generated
sales of 53.3 billion in 2015. Over half (58%) of the companys footprint is in developing and
emerging markets. Unilever has more than 400 brands found in homes around the world, including
Persil, Dove, Knorr, Domestos, Hellmanns, Lipton, Walls, PG Tips, Ben & Jerrys, Marmite, Magnum
and Lynx.
Unilevers Sustainable Living Plan commits to:

Helping more than a billion people take action to improve their health and well-being by 2020.

Halving the environmental impact of our products by 2030.

Enhancing the livelihoods of millions of people by 2020.

Unilever was ranked number one in its sector in the 2015 Dow Jones Sustainability Index. In the
FTSE4Good Index, it achieved the highest environmental score of 5. It led the list of Global Corporate
Sustainability Leaders in the 2016 GlobeScan/SustainAbility annual survey for the sixth year running.
Unilever was ranked the most sustainable food and beverage company in Oxfams Behind the Brands
Scorecard in 2016 for the second year.

For more information about Unilever and its brands, please visit www.unilever.com. For more
information on the USLP: www.unilever.com/sustainable-living/
About Dollar Shave Club:
Dollar Shave Club is a men's grooming brand dedicated to helping men live smarter, more successful
lives through high-quality personal care products, content and technology. DSC began in March 2012
with a simple offering: deliver high-quality razors for a few bucks a month. DSC has since launched a
lineup of additional products on its march toward owning the men's bathroom. Those products include
Wanderer, a sulfate-free shower line including Calming Body Cleanser and Body Bar, Awakening Body
Cleanser and Body Bar, Face Cleanser and a Lathering Shower Cloth; Big Cloud, a compromise-free
skin protection line including Hand Cream, Lip Balm, and Daily Face Moisturizer with Sunscreen;
Boogies Gel, Clay, Cream, Fiber and Paste; Dr. Carver's Easy Shave Butter, Pillowy Shave Lather,
Magnanimous Post Shave Cream, and Miracle Repair Serum; and One Wipe Charlies. DSC will soon
be the easiest place for guys to get the things they use every day. For more information, visit
www.dollarshaveclub.com or you can also follow Dollar Shave Club on Twitter (@DollarShaveClub),
Facebook and Instagram.
Cautionary Statement/Safe Harbour:
This announcement may contain forward-looking statements, including forward-looking statements
within the meaning of the United States Private Securities Litigation Reform Act of 1995. Words such
as will, aim, expects, anticipates, intends, looks, believes, vision, or the negative of these
terms and other similar expressions of future performance or results, and their negatives, are intended
to identify such forward-looking statements. These forward-looking statements are based upon current
expectations and assumptions regarding anticipated developments and other factors affecting the
Unilever Group (the Group). They are not historical facts, nor are they guarantees of future
performance.
Because these forward-looking statements involve risks and uncertainties, there are important
factors that could cause actual results to differ materially from those expressed or implied by these
forward-looking statements. Among other risks and uncertainties, the material or principal factors
which could cause actual results to differ materially are: Unilevers global brands not meeting
consumer preferences; Unilevers ability to innovate and remain competitive; Unilevers investment
choices in its portfolio management; inability to find sustainable solutions to support long-term growth;
customer relationships; the recruitment and retention of talented employees; disruptions in our supply
chain; the cost of raw materials and commodities; the production of safe and high quality products;
secure and reliable IT infrastructure; successful execution of acquisitions, divestitures and business
transformation projects; economic and political risks and natural disasters; financial risks; failure to
meet high and ethical standards; and failure to comply with laws and regulations, including tax laws.
These forward-looking statements speak only as of the date of this document. Except as required by
any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking statements contained herein to reflect
any change in the Groups expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based. Further details of potential risks and uncertainties
affecting the Group are described in the Groups filings with the London Stock Exchange, Euronext
Amsterdam and the US Securities and Exchange Commission, including in the Groups Annual Report
on Form 20-F for the year ended 31 December 2015 and the Annual Report and Accounts 2015.
http://www.businesswire.com/news/home/20160719006720/en/

https://stratechery.com/2016/dollar-shave-club-and-the-disruption-of-everything/

http://www.thedailybeast.com/articles/2014/01/24/after-100-years-the-shaving-industry-is-finallybeing-disrupted.html

http://www.forbes.com/sites/davidvinjamuri/2012/04/12/could-your-brand-be-dollar-shaved/#f68065e54e8a
http://www.prweb.com/releases/shaving_products/razors_blades_creams/prweb4365034.htm

http://seekingalpha.com/article/3990079-real-reason-unilever-bought-dollar-shave-club

https://www.unilever.com/news/press-releases/2016/consistent-competitive-and-profitablegrowth-in-challenging-markets.html

http://www.cengage.com/resource_uploads/downloads/0170186288_243676.pdf

The global economic recession triggered a marked shift in consumers attitude from being quality
conscious to price-conscious. More consumers are opting for low-cost disposable razors rather than going
for high-cost permanent razors. Additionally, the market witnessed an increase in demand for private label
razors, compared to branded products. Overall, the global market for shaving products witnessed a
slowdown in sales during 2008 and 2009, which reflects the impact of economic downturn and changing
consumer preferences.
The shaving products market, nevertheless, is expected to pick up momentum in 2010, and witness steady
growth in ensuing years, driven by technological innovations, rise in the number of product launches,
increased focus on womens shaving products, and a regain in demand for high-end disposable products.
Continuous technological advancements in shaving systems - razors, cartridges, and disposable shavers
are set to drive the global market for shaving products. Recent noteworthy product innovations include
Fusion ProGlide from Gillette, Hydro shaving razor from Schick, Comfort 4 from BIC, among
others.

Europe leads the global market for shaving products, accounting for more than 30% share of the global
market, as stated by a new market research report on Shaving Products. The US is the third largest region,
trailing Asia-Pacific. Increased interest by male consumers in personal care products, popularity of mens
magazines, technological innovations such as multi-blade technology, growing interest in women's razors,
constitute key factors driving shaving products market in the US. Asia-Pacific constitutes the second
largest and the fastest growing market for shaving products globally, and is forecast to grow at a CAGR
of more than 8.0% during the next few years. Growth in the region is being driven by growing economies,
increase in disposable incomes, growing popularity of mens magazines, and increased awareness about
personal grooming. The market is also witnessing increasing sales of depilatories, shaving machines, and
other products. Promising growth is also expected to emanate from other emerging regions such as Latin
America, which is worth an estimated $2.6 billion.
Razor Blades refills dominate the global shaving products market. Of all the product categories, blades
and razors category is very competitive with the introduction of new technologies, pricing and
promotional strategies, and product performance. The market witnessed increase in blade count in razors
for providing better shaving experience. Some of the recent launches in this category include Schicks
Quattro Titanium, a four-blade razor, and Gillettes Fusion and Fusion Power razors that come with five
blades on the front and one on the rear. Meanwhile, Disposable Razors are projected to reach a sales level
of US$3.15 billion by 2013. A key recent market trend included the introduction of disposable razors with
increased number of blades.
Shaving creams constitute the other major category in the shaving products market. Though matured, the
market offers immense scope for new innovative products. Increasing demand for natural shaving oil and
gel-based shaving creams when compared to the traditional soap-based shaving creams is one of the key
factors driving market growth. Shaving Gels is the largest segment in the shaving creams market. Electric
Shavers, a key product segment in the shaving products market, witnessed a series of new product
introductions. Depilatories represent one of the fastest growing segments, with a CAGR of 5.97% during
the next few years.
Key players dominating the global shaving products market include Beiersdorf AG, Colgate-Palmolive
Company, Coty Inc., Energizer Holdings Inc., Schick Wilkinson-Sword, Gillette Company, Royal Philips
Electronics, SOCIETE BIC, SuperMax Corp., among others.

The report titled Shaving Products: A Global Strategic Business Report announced by Global Industry
Analysts Inc., provides a comprehensive analysis of the global shaving products market, impact of
recession on the market, future prospects, key market segments, current market trends, growth drivers,
new product introductions, recent industry activity, and profiles of market players worldwide. The report
analyzes market data and analytics in terms of value for regions including US, Canada, Japan. Europe,
Asia Pacific, Latin America, and Rest of World. Product segments analyzed include Electric Shavers,
Razor Handles, Razor Blades (Refills), Disposable Razors, Shaving Lotions/Creams, Depilatories,
Shaving Accessories & Others.