Unilever

Presented to: Mr. Yousuf Sharjeel

Unilever
Presented By: M. Owais Khalid Saud Baloch

Topics Will Be Covered

UNILEVER OVERVIEW  SWOT ANALYSIS  KEY COMPETITOR  PRODUCTS AND SERVICES OF COMPETITORS  COMPETITIVE ANALYSIS  PRODUCTS AND SERVICES  STRATEGIES  CONCLUSION AND RECOMMENDATION


Unilever Overview
    

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. Lifebuoys rural hand washing campaign in India has reached 120 million people over 20022008 Our Signal/Pepsodent/Close Up toothpaste brands have reached more than 44 million children with school-based oral hygiene programmes over 19962008 Achieved a 19%* reduction in our accident frequency rate from 20072008 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 worlds 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 19952008, 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 Rebuildings 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.

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 Award

Health 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 CARE

FABRIC WASH  Surf Excel  Power Surf  Sunlight Washing Powder  Wheel HOME 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, family Packs Magnum

Foods
Our foods brands include:
      

Knorr Bertolli PG Tips Magnum Liptons Hellmans Colemans

Home and Personal Care

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

Competitor Comparison

Competitor Comparison

Top Segment Top Brand CEO --------Growth Revenues Revenue Growth International Business Segments Employees

CG/Foods Dove A. Burgmans -------------15.58% 42,942M -11.93% 100+ 3 234000

Consumer care Tide A.G. Lafley -----------9.25% 28.2 BL 19% 42 5 110000

Food Mac & Cheese R. Deromedi ----------8.2% $31,010 M 4.3%% 150+ 5 10600

Food Kit Kat Ian J. Donald -----------11.23% $69 B -1.93% 86 6 253000

PRODUCTS OF NESTLE

Top Competitors Key Measures: UL

UL

KFT

PG

Valuation
Price/Earnings 12.86 22.01 16.75

Per Share Data

UL Last Dividend Book Value Revenue 68.98 5.03 40.52 B KFT 91.80 15.02 PG 43.36 20.84 83.5 B

42.2 B

Profitability
UL EBIDTA Operating Margin Profit Margin Gross Profit Margin 8.46 B 14.55% 12.42% 49.06% KFT 4.83 B 11.94% 6.87% 33.25% ----- PG 20.71 B 22.13% 14.46% 51.27%

Revenues: Product Segmentation

43%

57%

Foods Division Home and Personal Care

Financial Strength
UL KFT --------PG

Quick Ratio Current Ratio LT Debt to Equity Ratio ROE ROA ROIC (Return on Invested Capital)

12.42 0.83 62.72 31.67 10.49 17.20

6.87 1.03 83.73 7.93 5.69 8.22

14.46 0.69 32.45 17.34 10.61 12.51

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

Factors Weight (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
Success Factors Quality Financial Position Market Share Technology/innov ation Global Market Price Competitiveness R&D Customer Loyalty Total Weight 0.13 0.15 0.16 0.12 0.10 0.10 0.14 0.10 1.00 Rating 4 4 3 3 3 2 4 3 Score 0.52 0.60 0.48 0.36 0.30 0.20 0.56 0.30 3.32

P&G
Rating 3 3 3 4 4 3 3 3 Score 0.39 0.45 0.48 0.48 0.40 0.30 0.42 0.30 3.22

Kraft
Rating 3 4 3 3 3 4 3 2 Score 0.39 0.60 0.48 0.36 0.30 0.40 0.42 0.20 3.15

Strengths
       

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

     

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

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


Weaknesses
 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 peoples lifestyle  Political and Economic factors


Threats

Threats
Increasing social awareness in society  Unfavorable conditions  Companys image destroyed  Acquisition decision


Threats

Strategies & Recommendations

Is it working?
No. Unilever was getting there, but getting there too late
    

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

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 whats next?

Yes
    

Is it working?


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

 

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

Competing with the Giants

Giants dominate all
categories

Giants are growing Giants operate globally Marketing is a luxury Misbelief that Marketing
needs big budgets

Strategies for competitors to the employee

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

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


Strategic Targets


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

Recommendation 1
1. Reorganize and Unilevers structure. organizational

2. Implement Unilever Believer product and brand extensions.

Recommendation 1

Strategy Justification
Unilever maintained two business entities, dual chairperson approach
 

Reduced effectiveness and slowed the decision making process.

Board and business responsibilities conflicted

One Unilever

An initiative to create an overall umbrella brand across all Unilevers 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