Case study: Unilever

Résumé du document

The merger of Lever Brothers and Margarine Unie, two European companies, created the company Unilever which has become one of the major players in food, personal and home care market. Unilever competes with Procter & Gamble, owing to its 400 brands, in over 100 countries all around the world. In this document we will analyze how Unilever adapted itself and changed, over the last 25 years. Then we will try to understand how such a big firm, with a complex structure (a group separated into two entities, with PLC and NV), manages multiple brands in various countries.

Extraits

[...] This is the case in almost all the old British colonies in Africa and Asia. Nevertheless, Unilever had to face certain hostility in some countries, notably during the 1960's and 1970's, when feelings of reject were developing in emerging countries However, Africa and Asia represent today important markets for Unilever, with a total 10.9 Bn of turnover, representing of the total turnover. We saw with the description of the structure and of human resources, that the division of the businesses by regions was an important feature for Unilever, showing the importance given by the organisation to local responsiveness and adaptation to every international markets in which it operates. [...]

[...] Thus, the restructuring had to give to Unilever the advantages of both centralization and decentralization. The aim was also to associate more efficiently the regional responsibilities with the operating ones. Since 2002, the “Path to growth” approach has been launched, introducing the latest important change in history of Unilever. The portfolio has been again rationalized, to focus on high strategic businesses, thanks to new acquisitions. This movement has given birth to the two main strategic sectors in which Unilever is operating, with two world divisions: and “Home and personal care”. [...]

[...] The expansion and growth of Unilever occurred via two ways, with organic growth and acquisitions. Acquisitions were a critical feature and were managed strategically. At fist used to achieve diversification, Unilever then used it as a way to threaten the core businesses and the strategic activities. As we said before, Unilever usually, buy small or medium size firms and developed them to make them grow organically Seen as a strategic activity, the acquisitions or divestments of businesses are regulated by an internal policy and guidelines for acquisitions. [...]

[...] With complex restructuring periods and none explicit knowledge, an important threat was that information would move out of the firm. Workshops were put into place to identify the threat and weakness of Unilever's knowledge management system, and to determine what was known and what was not. The good practices were also identified and spread to the all organisation. One other interesting point of the analysis was the detection of different groups of experts, within the company, sharing information on a specific domain. In other words, they discovered sorts of “communities” within the firm. [...]

[...] These two agreements ensure that both entities will work closely and co- operate on common operating policy (it take into account the exchange of information, knowledge, patents, and trade mark). The second accord obliges the two entities to exchange and borrow their subsidiary if necessary. The “Unity of shareholder's right” is also capital in the Unilever governance. The “equalisation agreement”, avoid any economical differences between the shareholders of PLC and NV. By adopting the same financial and accounting structure and governance, the two entities permit to shareholders and stakeholders to better understand the financial structure of the group. [...]