The Corporate Portfolio Strategy of Unilever
Unilever’s portfolio
Before the analyzed period the brand portfolio of Unilever was characterized by major vertical and horizontal integration processes. The production of low-cost consumer goods required significant control over raw materials. Moreover, the production of some goods (e.g. soap) served as a basis for a new business development (chemicals) and related diversification was the managerial decisions. At that time Unilever was also a huge packaging and shipping company.
End of 1980s
A “core strategy” was adopted. The restructuring was designed to concentrate the company in "those businesses that we properly understand, in which we have critical mass, and where we believe we have a strong, competitive future," (Unilever PLC Chairman M. R. Angus in 1988)
The company sold ancillary businesses: transport, packaging, and advertising.
Core businesses were thus the following: home care (detergents), foods, personal care (toiletries), specialty chemicals, agribusiness and pet feeds. Acquisition of Brooke Bond, Chesebrough-Pond (personal care) was part of the strategy.
By the end of 1980s due to its significantly diverse business units Unilever had a multi-business corporate strategy with a conglomerate portfolio strategy. According to the above-mentioned quotation Unilever’s target audience was huge and because of the lack of focus on certain product lines the enterprise wanted to sell them practically everything possible. Although there could be many synergies between the product lines (raw materials, supply channels, the target consumer segment – households; and basically the major part of marketing mix – product, place and promotion) by this time Unilever was not aware of these synergy opportunities. Problems: the company became inflexible as it did not suit the business processes according to the size. “Sleeping giant”
Mid 1990s
By 1992 Unilever was composed of some 500 companies conducting business in 75 different countries. The international
Before the analyzed period the brand portfolio of Unilever was characterized by major vertical and horizontal integration processes. The production of low-cost consumer goods required significant control over raw materials. Moreover, the production of some goods (e.g. soap) served as a basis for a new business development (chemicals) and related diversification was the managerial decisions. At that time Unilever was also a huge packaging and shipping company.
End of 1980s
A “core strategy” was adopted. The restructuring was designed to concentrate the company in "those businesses that we properly understand, in which we have critical mass, and where we believe we have a strong, competitive future," (Unilever PLC Chairman M. R. Angus in 1988)
The company sold ancillary businesses: transport, packaging, and advertising.
Core businesses were thus the following: home care (detergents), foods, personal care (toiletries), specialty chemicals, agribusiness and pet feeds. Acquisition of Brooke Bond, Chesebrough-Pond (personal care) was part of the strategy.
By the end of 1980s due to its significantly diverse business units Unilever had a multi-business corporate strategy with a conglomerate portfolio strategy. According to the above-mentioned quotation Unilever’s target audience was huge and because of the lack of focus on certain product lines the enterprise wanted to sell them practically everything possible. Although there could be many synergies between the product lines (raw materials, supply channels, the target consumer segment – households; and basically the major part of marketing mix – product, place and promotion) by this time Unilever was not aware of these synergy opportunities. Problems: the company became inflexible as it did not suit the business processes according to the size. “Sleeping giant”
Mid 1990s
By 1992 Unilever was composed of some 500 companies conducting business in 75 different countries. The international