Presentation On Strategic Management

REPORT ON STRATEGIC MANAGEMENT

Unilever Pakistan Ltd

Background of Unilever Pakistan Ltd Co.  Unilever

Pakistan Ltd., a subsidiary of the Unilever Group is operating in Pakistan since 1948.  The Company’s main business lines are Soaps and Detergents, Personal Products, Cooking Oils and Fats, Packed Teas, and Ice Creams.  Unilever has a long list of brands such as Surf, Vim, Rin, Lifebuoy, Sunlight, Lux, Rexona, Sunsilk, Close-Up, Blue-Band, Dalda, Planta, Lipton’s Yellow Label, Taaza and Richbru, Brook Bond’s Supreme and Kenya Mixture etc

Mission Statement: 

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We are exemplary through our commitment to Business Ethics, Safety, Health, Environment and involvement in the Community. We use our superior consumer understanding to produce breakthrough innovations in brands and channels. We strive to remain an ever simple and enterprising business. We serve the everyday needs of all consumers everywhere for foods, hygiene and beauty through branded products and services that deliver the best quality and value. We attract and develop highly talented people, who are excited, empowered and committed to deliver double-digit growth.

Vision Statement:  Touching

hearts, changing lives.

Unilever Pakistan Limited

Objectives  Top

Priority – Fulfilment of customer’s needs:

 “Unilever

aims to continuously improve the environmental performance of their process and their brands to achieve sustainable profitable growth as their consumer expects them to fulfil their needs with brands that have low environmental impact.”

Objectives    

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Cont…..

To be honest, transparent and ethical in our dealings at all times. To win the hearts and minds of consumers. To deliver what they promise. To become empowered leaders who are inspired by new challenges and have a bias for action. To believe in trust, truth and outstanding teamwork. They value a creative and fun environment. They care about and actively contribute to the community in which they live.

STRATEGIES  Product  Unilever

Development

continuously work on improving product qualities and features to capture the market.  It analyzes the demand to check whether the product is profitable or not so that if the product is not it should be discontinued.  It keeps an eye on the competitor’s products in order to become the market leader of certain product.

STRATEGIES  Corporate

Cont…...

Strategies

 Leader

in the consumer goods market.

 Managing

govt relations to influence duty on imports of raw materials and countering smuggling of competitors goods

STRATEGIES  Human

Cont…...

Resource Strategies.

 Managing

employee recruitment and placement to put the right person for the right job.  Replacement Planning.  Employee rotation in the department.  Employee training.  Remuneration survey for salary adjustments of employees.

STRATEGIES  FINANCE        

Cont…...

STRATEGIES

Maintain company finance operations with in the resources Maintain working capital keeping stock debtors low. Adhere strictly to the ICAP accounting practices and laws Tax management to gain legitimate advantages lessening the burden Ensure internal control through internal audit Introduction of IT and implementation Ensure sales revenue generation meet targets Maintenance of purchasing function

STRATEGIES  ACQUISITIONS  Lever

Cont…...

& MERGERS

has successfully completed an acquisition of Pakistan Industrial promotional (pvt) limited, manufacturers of polka in 1999.  The company completed an merger with Brooke Bond (BB) Pakistan last year, where each BB shareholder received one lever share for every 4.3 BB shares .The merger has resulted in consolidation of distribution channels, thus, reducing operating costs for the company.

SWOT ANALYSIS OF THE COMPANY  OPPORTUNITY  

ANALYSIS

The rapid expanding urban population is the key opportunity. Awareness growing in rural areas due to education children with family members abroad sending foreign income.

 THREATS 

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P& G is the significant multinational threats with presences in soap, detergents and personal products. Purchasing power can affect demand due to depressed economy resulting in inflation.

SWOT ANALYSIS OF THE COMPANY Cont…..   

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STRENGTHS Research and development and financial support from parent Unilever. Strong brand names. most of the brands for e.g. (detergent are now used generically to present product. Sound and experienced management. Excellent marketing department assisted by a highly regarded marketing research unit. Merger with Brooke bond was expected to result in cost saving and spur earnings growth and its working as per expectations.

SWOT ANALYSIS OF THE COMPANY Cont……  WEAKNESSES  About

80% of raw material is imported for the manufacturing of the consumer goods. Raw material constitutes about 85% of manufacturing cost, leaving Levers margin exposed to rupee devaluation.  Rampant smuggling of tea and detergents has seriously affected levers sale and earning. Unless the govt. takes serious steps to curb smuggling growth in sales and earning will continued to be significantly restrained.  Low liquidity of stock due to higher prices.

SPACE MATRIX

BCG MATIX

EVALUATING THE BUSINESS STRAGEY  Performance 

Test:

Unilever main competitor is P& G its financial position is good, the market position is average and technological performance is also average.

EVALUATING THE BUSINESS STRAGEY Cont……  Consistency 

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Test

a. Buyer power and trends in demand for product is expected to change in five years, although Unilever strategy is consistent, but it may need some changes. b. Substitutes or alternatives would increase as buying power changes and new taste are developed with changing lifestyle. Unilever strategy is consistent in this case. c. Likely Entrants would also increase but Unilever believes it cannot affect their market share as they have a strong position in mind of consumers. d. Competitors are going to increase but Unilever does a continuous effort to stratify their customer needs and demands. e. Supplier Power would increase in five years but Unilever strategy is consistent with local supplier and international supplier.

Competitive Advantage 

Economic Advantage: P&G make sure that its products are available at all outlets. It is also occupies a major market share.

 Disadvantage: P&G has a weak cost

structure and not occupies a strong image like Unilever.

Human ResourceAdvantage: P&G also believes in teamwork, and continuously boost the morale of their employees.  Disadvantage: P&G has a formal culture atmosphere. 

Conclusion & Recommendation  After

the analysis of the IEFM and EFEM, we see that the company is above average. With respect to SPACE and GRAND matrix analysis, Unilever is placed in aggressive quadrant and it can follow any of the strategies e.g. market penetration, forward integration, backward integration etc.

Conclusion & Recommendation Cont…..  According

to the analysis in QSPM, we would like Unilever to pursue Cost Reduction strategy which is a market development strategy. Although the current business strategy of Unilever is Product Development as they are bringing different product like Green Tea in the market. They are also modifying their products for e.g. Lipton in new round tea bags and Lux by adding a different ingredient.