The following report pertains to Unilever Company. This report is an analysis of the internal and external factors of Unilever. This analysis will give an overview of the industry intensity and the profitability by using The Porter’s Five Forces approach. Overview
Unilever was created in 1930 through the merger of Margarine Unie, a Dutch margarine company and British based Lever Brothers, a soap and detergent company. Over the next decades, Unilever continued acquiring companies and brands, gradually moving into more food and household products categories in more and more countries.
Unilever possesses a competitive advantage as one of the largest consumer products company. It has some of the most well known and traditional brands such as Ben & Jerry, Lipton, I Can’t Believe it’s Not Butter and Knorr. Because of its size and dominance in the market, Unilever has developed strong distribution links with retailers over the years Therefore they have very strong supplier and buyer power. Unilever’s co-chairmen, Niall FitzGerald and Antony Burgmans had formed a five year strategy plan in early 2000, the Path to Growth strategy. Retrenchment was one of the first key elements of Unilever’s Path to Growth strategy. The strategy involved cutting the size of the company’s portfolio from 1,600 brands down to 400 core brands. Also require closing or selling 100 factories and laying off 25,000 employees so as to combine production at fewer plants to operate more efficiently by reducing their production cost. Down sizing the company, Unilever was able to generate annual savings of €3.9 billion with this advantage, they are capable to market the demand of consumers’ needs and have enough capitals to focus in R & D and advertising on the company’s leading brands. The second strength is divesting underperforming brands and businesses. Narrowing down some of the products would not only allow them to allocate their resources efficiently but would...
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