Strategic Management and Unilever Essay Example for Free

Strategic Management and Unilever Essay Introduction: Unilever is a multinational corporation with â€Å"extensive product offerings in the food, detergent, and personal care business.† Because Unilever is organizing its companies on a decentralized structure, they are falling behind their competitors. In order for Unilever to succeed as a company they must look over their whole business strategy starting from their foundation and working their way through each and every subsidiary. In making minor adjustments for improvement, Unilever might pull through and have a chance of becoming a successful company once again. Case Problems: Unilever is facing many problems not only within the company but with competition as well. â€Å"Competitors are more successful by building global brands, reducing cost structure, and executing simultaneous product launches in several national markets.† In Unilever’s case, the decentralized structure is working against any efforts of building both global and regional brands. Because of many duplicates in â€Å"manufacturing, a lack of scale economies, and a high-cost structure,† they are trailing behind competitors in bringing new products to the market. Alternatives: One alternative Unilever could take would be to focus more on the products that bring in the most profit. In this case it would be the food products, which account for â€Å"60 percent of sales and include strong offerings in margarine, tea, ice cream, frozen foods, and bakery products.† Mainly because not everyone is willing or able to buy name brands or certain detergents, but there will always be a need for food. If they put more of their focus on this they would be able to exceed the already 70 percent of market share in other countries. The only downfall I see in this would be the extra profit that would normally come in from the other two options would decrease. Another alternative Unilever might consider might be to focus its detergents and personal care products in accordance to the needs and wants of communities in certain areas. For example, while one country might see it more fit to have Omo, another region might prefer the personal care products of Calvin Klein. In researching the area and what customers seem more comfortable with would help enhance sales. However, if the company would be willing to invest both time and money in doing this would be upon them. A third alternative would be for the company’s financial and marketing team to use the SWOT analysis. By using this, the company would get a better understanding of their strengths, weaknesses, opportunities, and threats. This would give them the chance to take advantage of what they are doing well while also showing them what exactly they should focus on to improve. Again, it would just be whether the company is willing to take the time and money to put int o the analysis. Solutions: Unilever â€Å"introduced a new structure based on regional business groups.† By creating groups and divisions in the company, each team was able to focus on a specific category of products. In doing so â€Å"groups and divisions coordinated the activities of national subsidiaries within their region to drive down operation costs and speed up the process of developing and introducing new products.† However, even with this change in structure, Unilever was still lagging behind the competition. Therefore, the company cut the number of brands sold â€Å"from 1,600 to 400 that could be marketed on a regional or global scale.† They also â€Å"reduced manufacturing plants from 380 to about 280.† Even after proceeding with this new foundation, they were still behind the competition. Unilever then decided to establish just two global product divisions. This included a â€Å"food division and a home and personal care division.† Contingency: If the solutions and changes made to the company fail, one back-up plan would be to cut out either the food or home and personal care division. That way the company would be able to focus on just one certain area. In doing so they would cut back even more products and brands, as well as  reducing manufacturing plants even more. This would help cut not only labor costs, but operating costs as well. As far as competition goes, Unilever would fall behind competing companies even more, therefore, instead of going for a global business, they should start back locally and overtime work their way back up. If they keep going at the rate they are, the company would take a bigger fall and might be harder for it to bounce back. Overtime, as they work on building the business then they can look into adding the other division, and then eventually work into competition globally once again. Conclusion: Unilever took a big step in trying to change and improve the company. Most businesses find it hard to accept change and that’s always the downfall to any great company. As far as the competition goes, Unilever has a lot to catch up on. They fell to far behind other competitors and suffered greatly from this. As long as Unilever stays patient with building their company up to what it once was, I feel that they will have no problem accomplishing a very successful company overtime.