International strategic frameworks: A case study of Unilever 2008

Résumé du document

According to Stonehouse and al (2004: 142) ‘the macro environment is the part of the environment over which the business can rarely exert any direct influence but to which it must respond'. The essential framework to critically analyzed Unilever's external business environment is the PESTEL one; it is concerned with changes and trends in political, economic, social, technological, environmental and legal factors. The two main relevant factors to analyze correctly the macro-environment of Unilever are the economic and the social ones.

In terms of the economy, the emerging market/economies are growing so rapidly, for example the Indian market represents $300b a year. According to the Economist in 2007, ‘the world is experiencing one of the biggest revolutions in history, as economic power shifts from the developed world to China and other emerging giants. Thanks to market reforms, emerging economies are growing much faster than developed ones. There is a widening gap between their growth rate and that of the sluggish developed world.' By being a part of these particular markets, a political aspect is also involved, above all by contributing to the GDP and in the employment rate (e.g.: South Africa); negotiation or special treatment with the government can be an advantage.

Extraits

[...] (2005) Billions: Selling to the New Chinese Consumer. Gordonsville: Palgrave Macmillan. Hofstede, G. (1984) Culture's consequences: international differences in work-related values. London: Sage. Johnson, G. (2008) Exploring corporate strategy. 8th edn. Harlow : Financial Times Prentice Hall. L. [...]

[...] Strengths: Competitors are internationals; imports and exports favour this global competition. Question BCG and Ansoff's analyses In order to evaluate the logic of Unilever's strategic development, a BCG and the Ansoff matrices with be used linked with the acquisitions or divestments of the company. According to Johnson and Scholes in 2006, ‘strategic development is different if a business is seeking rapid growth by acquisition or development of new products compared with if it is seeking to consolidate its past performance'. [...]

[...] Cultural differences are a nuisance at best and often a disaster.' Finally, the continual expansion can also be considering as a strategic issue, as the customers needs evolve every day, the major competitors increase their portfolio regularly, and be respectful of the environment become much more important for the reputation. According to Unilever in 2007, they want to ‘develop new and improved products that address relevant consumer needs and aspirations; by rolling out innovations and brand concepts across our businesses around the world; and by striving to lower the cost of our sourcing, manufacturing and distribution processes while ensuring the quality of our products'. However, according to Ansoff matrix, more they used differentiation strategy, more they take a risk on market or product. [...]

[...] This one can also be underlines by Porter's 5 Forces. Markets drivers Customers are global but their needs are local: according to Levitt in 1983 ‘cultural and economic convergences are causing customer needs to converge in many markets'. In western countries, needs are very defined and precise whereas in Eastern countries, customers are still less demanding for the quality or final properties; but they are more exigent in term of components, this was expressed in India with oil in the shampoo (this is the same for food). [...]

[...] The competitive advantage is present as this allow to the parent structure to control every ‘subsidiaries' all across the globe; the headquarter takes decisions; this avoids duplication; decision making is really fast and there are global economies of scale. This also permits to the transnational to establish control procedures for assessing subsidiary performance and ensuring the conformity with the corporate objectives. At a lower level, Unilever also used regional structures (China, South Africa . ) responsibilities for operations are allocated to area executives; by implanted this, the turnover of Unilever growing rapidly especially in China. [...]