Unilever: Diversification Strategy
Unilever was founded on soap and margarine - both products essentially sharing the same raw materials with diversification into other business areas starting in the midfifties.
The second phase started in the mid-fifties when rapid growth in the Western world resulted in increased competition and lower margins in the company's traditional categories. Unilever's strategy was an active diversification programme through acquisition. The vigour with which this was pursued, while successfully introducing the company into valuable new categories, also brought in a lot of peripheral activities.
Unilever's thirteen core business sectors are: ice cream, tea-based beverages, culinary products, hair care, skin care and deodorants (all with superior growth potential);spreads, oral care, laundry care and household care (steady growth); and frozen foods, fragrances and professional cleaning (selective growth).
Unilever also exemplifies balance between specialization and diversification. With five hundred companies operating in more than sixty countries, Unilever is so complicated that few outsiders understand its structure. Its activities range from growing oil-bearing seeds and catching fish to