Unilever’s buyers are scattered all around the world and they are in billions. In true sense they are not so powerful to pull prices down. But on the other hand it is easier for the customers to switch to a competitor. So Unilever has to be very precautious in deciding about prices and keep the customers satisfied. Competitive Rivalry :
In consumer products business Unilever has a large number of competitors and these competitors are in reality very strong. They range from small local corner shop retailer to big giants like P&G, Kraft and Nestle. These competitors almost provide equally attractive products and services and sometimes better. These competitors have the power to attract and influence the customers by more attractive substitute, prices and marketing techniques. Threat of Substitution :
Continuous research and development in the consumer and household products has brought about a revolution in the consumer market and today customers like to try something new and better. This trend has reduced the customer loyalty and product lifecycle. Unilever is under continuous threat of substitute products and its competitors are already spending huge sums on R&D and new product development. Unilever has to be very adoptive and closer to its customers so as to get what exactly its customers want.
Threat of New Entry :
As Unilever operates in different geographical markets so threat of new entrants varies in different markets. In well developed countries where big players like Unilever have a very strong hold and brand image, it is very hard for a new entrant to enter the market because of higher cost to set up a business. On the other hand in less developed markets, it is easier to enter as legal requirements and capital needed is not as much as in a developed market. Unilever has its presence almost in every market either through its subsidiaries, branches or franchises. But its brand image is a strong barrier in the way of new entrants. Supplier’s Power :
Unilever has a policy of local buying and local manufacturing. Which provides itself an edge to brake power of its suppliers and make them weaker to negotiate at its own terms. Most of time Unilever has blanket agreements with its suppliers to provide for a certain period of time at a certain rate. This strategy help to prevent supplier’s from switching to other competitors and charge higher rates. Also Unilever treat its supplier’s fairly so as to create more loyalty among them like customers .
* Global food producer, located in over 100 countries. Consistently one of the world's largest producers of food products, with sales in the USA in 2008 of $10 billion; sales and earnings in 2008 were better than expected, even in a downturned economy. Global sales in 2008 topped $101 billion. * Repeatedly ranked as the world's largest bottled water company and have set up facilities to operate water resources in a responsible manner. * In 2008, Nestlé was named one of "America's Most Admired Food Companies" in Fortune magazine for the twelfth consecutive year. * Nestlé provides quality brands and products and line extensions that are well-known, top-selling brands including: * Lean Cuisine, Yoplait, Maggi, Dryer's/Edy's, Haagen-Dazs, Stouffer's, Boost, Dibs, Hot Pockets. * Chocolate and Candy: Kit Kat, Toll House, Butterfinger, Baby Ruth, Crunch Bar, the Willy Wonka Candy line. Weaknesses
* Their LC-1 division was not as successful as they thought it would be in France. In the late 1980s, Dannon entered the market with a health-based yogurt, and become the top selling brand of yogurt; Nestlé's 1994 launch was behind the product life cycle curve in an already mature market and could not compete against a strong, established brand. * Growth in their organic food sales division was flat in 2008, even though the industry grew 8.9%. * Since 2004 the breakfast cereal industry has been under fire from the FDA and...