Today we live in a global economy in which the time taken for people to move between continents has been significantly reduced and in which Internet and other connections make instant connections possible. Businesses and organisations now have to recognise that they now operate in a global market place and to develop appropriate strategies. A global strategy is an organisational plan that takes into account these new global realities.
Both Nestle and Unilever have developed global distribution and marketing networks, based on their powerbrands i.e. market leading brands that are recognisable in nearly every country in the world. Both Nestle and Unilever have many powerbrands.
Key aspects of global strategy include:
1. Treating the global market as the domestic market, in terms of attention to detail, without being complacent or ingnorant.
2. Creating a global marketing mix, recognizing regional and national differences, such as differences in language and tastes.
3. Creating global production and distribution systems, e.g. superfactories covering major areas of the world.
4. Concentrating on powerbrands - the most successful brands and products. Because the global market is so large there are substantial benefits to be gained from economies of large scale production, marketing and distribution. Rather than producing thousands of different products it makes sense to narrow down the range to a much smaller number in order to support these brands across the globe.
Unilever is one of the world’s leading suppliers of consumer goods, including household favorites such as Persil, Knorr, Hellmann’s, Lipton, and Dove. To keep up with consumer needs and increase operating margins, Unilever wanted to consolidate its 1600 brands to 400. By consolidating its brands, Unilever plans to focus on stronger product innovations, strengthening marketing efforts, building a world-class supply chain, and simplifying business processes. Dubbed Unilever’s Path to Growth strategy, the company has already saved €1.6 billion from global procurement efficiencies.
Maintaining 1,600 brands across the world was very difficult for Unilever to control. Unilever had a decentralized IT infrastructure which lacked the integration needed for a truly efficient global company. To reach its Path to Growth goals, employees at Unilever needed fast, easy access to information on both a regional and global basis. To get to this point, the IT department launched the Unilever Information Program (UIP) to develop an infrastructure to support the Path to Growth strategy. One of the greatest priorities for the UIP was to find a quick data integration solution to allow user access to any number of data sources for in-depth analysis. The UIP provided Unilever with the following ;
•Better understand consumer needs and plan with its key global customers •Monitor the health of its top 400 power brands and competitors •Identify how to improve and streamline supply chain management worldwide •Provide business intelligence (BI) and financial reporting on a global basis
By using the UIP Unilever are strengthening their relationships with retail customers. They will also be outsourcing transactional operations in IT, finance and human resources so that they can focus on growing global brands. Unilever has deep roots in local cultures and markets around the world that gives them a strong relationship with customers and is the foundation for their future growth strategy. They plan to bring their wealth of knowledge and international expertise to the service of local consumers. They view themselves as a truly multi-local multinational.
Unilever’s future strategy is as follows; “We aim to build a winning portfolio by extending our leadership positions and our presence in high growth spaces. We are improving our core capabilities. Bringing all this together as ‘One Unilever’ will ensure that we capitalise on...