SWOT Analysis of Unilever Company

Date:  2021-03-10 12:33:57
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Unilever company was first founded in 1930 out of the merger between the Lever Brothers from the United Kingdom and Uni-margarine from Netherlands (De Jong, Higgins, and Van, 2015). It became a multinational consumer goods company with its headquarters situated in Rotterdam, Netherlands as well as in London. Its principal products were foods, home, and personal care products with the most recognized products worldwide being; Omo, Vaseline, Blueband, and Close-up toothpaste.

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Strengths

The company being the oldest multinational corporations has got its products available in over 100 countries globally with 400 brands whose sales hit over a billion Euros with just 14 of the companies' brands. The brands focus on hygiene, nutrition, and personal care. Personal care products include hair and skin products, and deodorants. Nutrition products include sauces, snacks, soups, mayonnaise, margarine, and spreads. Hygiene products include the famous Omo, bar soaps, and many other cleaning products (McDonalds, 2015).

Unilever has been spending over two percent of its yield on research and development and one and a half percent on Corporate Social Responsibility to manage and bring the market innovation as well as cutting edge products to fit the consumer preferences. Over 150 million people choose their products to feed families and maintain a hygienic environment. This has made the company grow tremendously due to perfect choice of essential products that people need most in their daily life.

The company has been able to outrun its nearest competitors, Proctor, and Gambie due to its flexibility in pricing of their products to enable even the low-income earner to be able to purchase their products. There is enough expertise in distribution channels that manage to reach the furthest corner of the earth. This is possible because the company has erected branches in over 100 countries that manufacture and distribute these products to a wider range of area with minimal costs and maximum profit generation.

Unilever has combined both global thinking and local execution by pursuing global strategies to win the consumers hearts and minds that will stop at nothing to use their product. However, the company being a globally recognized has maintained a special local skill to stretch and reach that person in the rural areas, unlike other global companies that focus on the elite few.

Weaknesses

Stahl and Wright (2012) found out that Unilever is facing stiff competition from Proctor and Gambie, Nestle and Rackitt Benckiser; companies that operate worldwide. Just like Unilever, they have millions of customers with significant market stakes, and a variety of products and brands also widely accepted by consumers all over the globe (Stahl and Wright, 2012). They challenge the dominance raising the stake in the Fast Moving Consumer Goods (FMCG) space. Just like Unilever, they have been opening offices and manufacturing industries all over the world in hundreds of countries. This makes the competition stiffer so that each company has to come up with strategies and innovative skills to keep the company running as well as maintain its consumers.

There are substitute products especially in the emerging markets in continents like Asia and Africa where developing countries have come up with ideas to create their products by using common and available natural resources. This move has threatened the company's products due to reduced consumption. These local products have hit the market with their lower prices shifting the demand for Unilevers expensive products.

Opportunities

Unilever is much aware that their consumer likes to eat healthy foods with fewer or no calories as well as use products that are environmental friendly. It is an opportunity for the company to add products to the market geared towards health consciousness.

There is also a growing market which is creating more opportunities to suction the huge company whose customers are aspiring to western lifestyles. The company can utilize this golden opportunity by providing these customers with the products they need to join the Westerners way of life (Patton and Holstius, 2015).

Threats

The continuing global economic crisis has critically affected many of the FMCG companies of which Unilever is part of. The company is facing fewer returns and increasing costs due to reduced expenditure by consumers, that is, they are buying less and banking more.

Global competition is growing faster than before. New companies are coming with newer innovations. If the company does not come up with unique innovations, it stands a threat of becoming extinct. Additionally, competing companies have in the recent past surpassed each strategic move the company has made. Some of the companys practices have been criticized meaning that the company has to ensure that it sustains and focus on newer strategies to keep it on the charts.

Conclusion

Being in the business for decades now, with the right kind of consumer goods and ongoing innovations the company can still stand tall by understanding and mastering the global marketplace.

References

De Jong, A., Higgins, D. M., & van Driel, H. (2015). Towards a new business history?. Business History, 57(1), 5-29.

Macdonald, R. (2012). Unilever. A Strategic Analysis.

Patton, C. R., & Holstius, K. (2015). Unilever: A Marketing Giant. InProceedings of the 1993 World Marketing Congress (pp. 603-606). Springer International Publishing

Stahl, G., Bjorkman, I., Farndale, E., Morris, S. S., Paauwe, J., Stiles, P., ... & Wright, P. (2012). Six principles of effective global talent management.Sloan Management Review, 53(2), 25-42.

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