Background
Unilever is a Dutch-British company, one of the world leaders in the market of food products and household chemicals. The company was founded in 1930 due to the Dutch margarine producer’s merger and the soap industry pioneer, the British company Lever Brothers, to economize on the scale of supply. The idea of merging these incompatible companies arose at first glance because the products of one company are made from the same raw materials – fats and oils.
At the end of the XX century, up to the moment of the Procter & Gamble and Gillette merger in 2005, it was the largest manufacturer of consumer goods worldwide, as of 2020 – the second largest in the world in terms of sales. The number of employees in the Division is 40 thousands, capitalization reaches around $ 65.45 billion, and profits near € 4.9 billion (Boohene & Williams, 2012). The company continues to develop actively, and its dynamics indicate an increase in revenue and demand for products yearly, despite the competition. More than 44% of the sales are in developing countries (as of 2017). The cleaning and personal care division accounts for 45% of group sales and about ⅔ of business in developing countries (Nahar & Zayed, 2019). Nowadays, due to this combination, Unilever occupies one of the first places in the food and non-food markets.
The product range consists of some of the best-known cosmetics and household brands worldwide and 14 brands worth over €1 billion each. The company’s products are sold in 88 countries around the world. A plan for sustainable development and quality of life is at the core of Unilever’s business. According to the Plan, the company’s main objective by 2030 is to double the volume of business, reduce its negative impact on the environment and increase the positive impact on society (Nahar & Zayed, 2019). In order to achieve these goals, the company’s management is implementing the most modern strategies to ensure business development and stakeholder delight.
Stakeholder Engagement Plan
Performing with business partners and stakeholders is built on respect for Unilever’s values. General requirements for acceptable behavior affect human rights, such as working and employment conditions, fair treatment, respectful treatment, health, and safety. In order to educate, the company will conduct educational programs and pieces of training addressing critical aspects of human rights for its employees and other stakeholders. Employees will undergo special training modules on an annual basis to confirm their awareness of the key provisions of the Code of Business Principles and their willingness to comply with these provisions in practice.
It should be accomplished in order to identify critical skills and competencies for development and consciously manage their careers. A particular emphasis in the development plan will be placed on maintaining the health and well-being of employees. The company will aim to build a habit of continuous learning and create a culture and ecosystem where self-learning and sharing knowledge become integral to employees’ lives. Learning resources are available and applicable in practice. Unilever Beauty and Personal Care will focus on developing the qualities of each employee in order to align them with the company’s goals and organizational climate.
The second main stakeholder is the customers themselves, who are an integral part of Unilever Beauty and Personal Care. In the plan, it is crucial to focus on building customer relationships and strengthening the overall recognition and reputation. A typical customer interaction point could be a social media post or an advertising campaign (Agustia et al., 2020). What is more, it is vital to provide post-purchase feedback support. Post-purchase support relates to those instances where the customer interacts with the brand after they have already bought the product and are using it. Moreover, it is essential to develop a relationship with customers, build their image, find expectations for products and services. This information will help understand their preferences and align service, support, and products with their needs (Stakeholders Template). This way, customers will become more interested in the company and involved in the buying and development of Unilever Beauty and Personal Care.
No less critical stakeholders of the organization can be considered the suppliers as those individuals who bear a great responsibility for the quality of products. The plan is primarily aimed at ensuring that the salaries of these partners are at a decent level and there is an opportunity to increase profitability. Correspondingly, one of the plan’s goals is to allow them to participate in the community’s life and develop. It requires frequent face-to-face meetings with suppliers and a focus on opportunities for them to make suggestions to improve product quality. Furthermore, it is necessary to introduce modern technologies to monitor the operation of purchased and installed equipment. Informing critical users through the Internet of Things, data lakes, predictive analytics, mobile apps, and chatbots will help better manage crises and promptly involve suppliers in resolving them.
Business-Level Strategies Adopted by Unilever – Division Beauty and Personal Care
The beauty industry is rapidly moving toward inclusion and tolerance, embracing magnificence in all its manifestations. It is the position that Unilever Beauty and Personal Care follows in implementing its strategies. It is especially remarkable in its approach to selling facial care products. The management is convinced that it is impossible to sell and promote only by changing this area’s habitual perception, which will benefit people and the planet. The strategy’s basic idea is to reduce harm and do valuable business for people and the earth (Ali & Anwar, 2021). To accomplish this, the company is trying to create a new era of beauty in which there is no place for unattainable ideals, stereotypes, and objectification. These long-term benchmarks will bring change to the industry on a global level (Hutsaliuk et al., 2020). In order to realize such an ambitious task, the company’s cosmetics brands are making several commitments. For example, they are all abandoning digital processing of photographs, where body shapes and proportions or facial skin color are distorted. Moreover, there will be more images of different ethnic groups in advertising materials shortly.
Another of the many steps the company has taken is to abandon the word normal. It is a challenge to restrictive ideals of beauty and discrimination. The prerequisite for this decision was a study by Unilever, which included 10 thousand people from nine countries. It found that using the word “normal” to describe skin texture makes most people (56% of those surveyed) feel insufficiently attractive (Pogodayev, 2022). They also indicated they would like to see cosmetic brands and companies do more to make people feel good about themselves, not just look good. The desire for naturalness and naturalness among female customers is conquering the industry. There is a constant demand for more effective formulations in all categories of cosmetic products. The active stance of cosmetic brands and participation in social initiatives cause customers to respond more significantly and increase loyalty.
Beauty does not depend on age, body proportions, or skin color – its manifestations are multifaceted and should not be limited by standards. That is why the strategy chosen by the company is entirely rational and makes it possible to sell to a much larger number of customers, thus increasing the volume of funds and earnings. An essential part of the strategy is to take care of the planet. By 2025, all plastic used in Unilever’s skin care products will be recycled, and the eco raw materials in the packaging will be increased by at least 25% (Peters & Simaens, 2020). The company’s cosmetics brands will also contribute to a special fund, which will benefit the company and the environment. Thus, we can conclude that the strategy is effective, but at the same time, it has a disadvantage, which concerns not enough precise formation of goals and sales of a particular product. Approaches to implementing business strategies are often unstable, which may lead to a lack of understanding by consumers of the organizational climate and mission of the organization and, as a consequence, loss of demand. Therefore, it poses the necessity of forming brief long and short-term goals for an accurate understanding of the desired and the possibility of achieving it.
Corporate-Level Strategic Initiatives Unilever
As the corporation developed, from time to time, Unilever opened new divisions, the purpose of which was to support the units of consumer goods. However, a different situation occurred in the group specializing in producing special chemicals. As the businesses of this group had no direct relation to consumer goods production, there were only indirect links between the operations of these enterprises. For example, the chemical companies produced required chemicals in some markets and then sold them to Unilever enterprises, which specialized in consumer goods (Ali & Anwar, 2021). Those companies, in turn, used the substances received in the production of consumer goods, which were traded in all corners of the world.
The board of directors of Unilever expressed increasing concern that the corporation seems unable to increase its market share at the expense of its main competitor, Procter & Gamble. Based on all these conclusions, the heads of Unilever Corporation decided to sell their businesses. This transaction would provide cash that could be used to pay off the company’s debts and acquire new companies in crucial areas of Unilever. Thus, Unilever concluded a deal on the sale of enterprises to produce special chemicals to British company Imperial Chemical Industries PLC for about $ 8 billion (Kostetska et al., 2020). The decision of Unilever’s management to sell its specialty chemicals production facilities turned out to be an important strategic decision. The main reason for such a decision was an ineffective organizational scheme of the company.
The company has more than 250 production sites and is rapidly expanding its activities, mainly in new and emerging markets. It expects that it is the new markets that will provide 70-75% of its growth in the long term (Rusu & Avasilcai, 2019). Thus, it is constantly creating alliances, the last of which was in 2019. The partnership provided engineering services to Unilever production sites worldwide. Moreover, as part of Unilever’s intensive capital increase program, the alliance improved project operations related to costs, speed of implementation in markets, processes, and the company’s sustainability (Rusu & Avasilcai, 2019). The agreement concerned the strengthening of technical controls together with one of the best engineering companies in the world. This project is another example of how Unilever created a new business model focused on long-term capitalization, not just short-term savings.
The alliance will help Unilever reduce operating costs, carry out joint innovations, and – in the harmonization of standardization processes in the categories. Correspondingly, the company constantly carries out mergers or acquisitions that allow it to remain competitive and conquer an increasing part of the market. The latest example is that Unilever has absorbed a brand of skin care creams Paul’s Choice (Tien, 2019). The financial aspects of the transaction remained undisclosed, but the merger itself confirms that the brand strategy is effective and allows the company to increase assortment and profitability.
Recommendations
Analyzing the company’s activities allows to conclude that it is business and corporate strategies are effective. At the same time, for more than half of consumers, the company’s position on social issues can become decisive in choosing and purchasing goods. That is why before considering the company’s project, it is desirable to conduct preliminary research on the topics consumers are concerned about. It will help to correctly formulate the problems and facilitate the process of building a communication strategy. Moreover, advertising is one of the critical tools not only for attracting attention to the products and the brand in general but also for broadcasting the values.
For consumers, the goals and missions of the company must be comparable to their own. It is also vital for other stakeholders, and the company should pay attention to the internal values of its promotion. Moreover, to involve the stakeholders, it is crucial to constantly transmit values that should be supported on all levels of communication. It is possible to attract attention to the brand by utilizing actions and campaigns that the brand carries out within the limits of its mission. To be successful, the drive should have simple and understandable mechanics for consumers and transparent and open reporting. Social marketing will help highlight the brand and draw attention to specific products and issues being addressed as part of sustainability. Competent targeting, collaborations with bloggers and opinion leaders, exciting games, and interactives are all practical tools.
References
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