Strategic Analysis of UNILEVER Pak. LTD

Strategic Management Of UNILEVER
STRATEGIC ANALYSIS
OF
THE ISLAMIA UNIVERSITY OF BAHAWALPUR

2
Submitted by:
Nadia Shoukat (23)

MBA, 4th semester,
Section A, (M)
Submitted to:
Sir Shahid Yaqoob

MBA Marketing
Submittion Date: 22 May, 2010

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DEDICATION
WE DEDICATE THIS HUMBLE EFFORT TO
The Holy Prophet

“HAZRAT MUHAMMAD”
(P.B.U.H)
The greatest Social Worker,
Whose every tear was for
The Cause of humanity
And also dedicated to

THE UNFATHOMABLE LOVE, UNFLINCHING SUPPORT
UNTIRING MIDNIGHT PRAYERS AND STEADFASTNESS
OF
“OUR REVERED PARENTS”
WHO HAS BEEN A BEACONHOUSE

FOR USFOR THE WHOLE OF OUR LIFE, WHO HAS
ALWAYS SHOWED US THE RIGHT PATH, THE PATH OF
TRUTHFULNESS AND HONESTY AND WHO HAS BEEN
ALONG WITH US THROUGHOUT OUR
STUDYING CARRIER

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Acknowledgements
God never spoils any effort; every piece of work is rewarded

according to the nature of devotion for it. We are extremely thankful
to ALLAH ALMIGHTY Who, in spite of numerous difficulties,
vicissitudes and acute frustrations enabled us to probe the present
study and dissertation. We bow our head to ALLAH ALMIGHTY for
the buntings and the blessings that He has bestowed upon us. Who
has given us the courage and stamina to come up to the
expectations of our revered teachers and ever loving parents and to
sum up my maneuverings for the completion of this manuscript.
All the respects are for the last Prophet of God, HOLY
PROPHET MUHAMMED (Peace Be Upon Him) Who is the greatest
scientist of all the ages, whose moral and spiritual teachings
enlighten our heart, mind and soul and flourished our thoughts
towards achieving higher ideas of life.
We deem it utmost pleasure to avail this opportunity to

express the heartiest gratitude and deep sense of obligation to our
revered Teacher Sir Shahid Yaqoob, Lecturer, Department of
Business Management Sciences, Islamia University, Rahim Yar Khan
for his skilled guidance, keen interest, constructive criticism,
constant encouragement, valuable suggestions and pains taking
supervision throughout the course of our study and research work.
The work presented in this manuscript is accomplished under his
dynamic, skillful, affectionate guidance and generous transfer of
knowledge. Whenever we sought help from him, he was the person
who was always there bearing a welcoming smile on his face and
having the doors of his good offices always opened for us. We have
learnt a great deal from him.
We have the honor to express our deep sense of gratitude

and profound indebtedness to ever affectionate Sir Shahid
Yaqoob for his keen interest, encouragement, generous guidance
and untiring help at all times. In fact it was not possible to bring this
work to fruitful conclusions without his day and night persuasive and
sincere efforts. He has guided us at every step that we took
throughout our career at postgraduate level. He has always thought
right for our betterment and for our success in the professional field.
We cannot thank him, as we have no words that can have an idea of
the respect we have in my heart for him.

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Table of Contents
1- Introduction of UNILEVAER………………………………….6
2- Company Summary...………………………………………..…8
2.1- Vision………………………………………………..….8
2.2- Mission……………………………………………..…...8
2.3- Objectives……………………………………………….9
3- Internal and External Audit…………………………..................10
4- The Input Stage………………….……………………… ...12
4.1- EFE matrix…………………………………… ………..12
4.2- IFE Matrix………………………………………………14
5- The Matching Stage ……………………………………………16
5.1- SWOT Matrix………………………………………….16
5.2- SPACE Matrix ……………………………………..….18
5.3- BCG Matrix…………………………………………….21
5.4- IE Matrix……………………………………………….24
5.5- Grand Strategy Matrix………………………………….25
6- The Decision Stage …………………………………………..…26
6.1- QSPM Matrix………………………………………….26
7- Strategic Recommendation…………... ……………………….…27
8- References ………………………………………………….…..…28

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INTRODUCTION OF UNILEVER PAKISTAN Ltd.
Unilever is one of the world's leading suppliers of fast moving

consumer goods across Foods and Home and Personal Care
categories. Unilever's portfolio includes some of the world's best
known and most loved brands.
Unilever Pakistan Ltd:
Unilever Pakistan (70.4% Unilever equity) is the largest FMCG

company in Pakistan, as well as one of the largest multinationals
operating in the country. 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. which are common household names in Pakistan.
The Company’s factory at Rahim Yar Khan was one of the first
industrial units to be constructed after the creation of Pakistan. As
the consumer base expanded over the years and the Company
entered into new product lines like Personal Products and
Margarine, it invested further in the installation of modern
manufacturing facilities including a factory at Karachi. Today, the
Company is using latest state-of-the-art technology for producing
high quality products.
In 1995, the Company established a new factory near Lahore to

manufacture the Wall’s range of ice creams, which have become
popular within a short time. In 1996, the present group – Unilever
UK acquired the Polka Group that produced ice creams. In 1999,
Pakistan industrial promoters (Private) Limited, owners of ‘Polka’
brands of Ice Cream were merged with Lever.
In order to leverage the synergies of Unilever’s international brand

strength, market edge and corporate image, Lever Brothers
Pakistan Ltd. changed its name to Unilever Pakistan Ltd., in August
2002.

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Overview of Unilever Pakistan Ltd.
The company had a turnover of Rs. 23.3 bn (Euro 309 mn) in 2007,
and enjoys a leading position in most of its core Home and Personal
Care and Foods categories, e.g. Personal Wash, Personal Care,
Laundry, Beverages (Tea) and Ice Cream.
The company operates through 5 regional offices, 4 wholly owned

and 6 third party manufacturing sites across Pakistan.
Accountable to our stakeholders
Since the time Unilever Pakistan began its operations in 1948, the
Company has been closely connected to the Pakistani people and its
brands have been an integral feature in their daily lives. In fact, the
nature of our business enables our brands to be the pulse and
heartbeat of the 164 million people in Pakistan.
This is a huge commitment, which makes us responsible and

accountable to all our stakeholders and society as a whole and
strengthens our resolve to:
• Make a positive difference to the lives of low income

consumers
• Create new opportunities for growth
• Improve the overall quality of life in Pakistan, by promoting
education, nutrition, health and hygiene.

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Our Vision
“Touching Hearts, Changing Lives.”
Our Mission
“Mission Is To Add Vitality To Life. We Meet Everyday Needs For

Nutrition, Hygiene and Personal Care With Brands That Help People
Feel Good, Look Good and Get More Out Of Life.”
Adding Vitality to life:
150 million times a day, in 150 countries, people use our products at
key moments of their day. In the future, our brands will do even
more to add vitality to life. Our vitality mission will focus our brands
on meeting consumer needs arising from the biggest issues around
the world today – ageing populations, urbanisation, changing diets
and lifestyles.

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Scale and geographic reach:
“Our deep roots in local cultures and markets around the world give
us our strong relationship with consumers and are the foundation
for future growth. We will bring our wealth of knowledge and
international expertise to the service of local consumers - a truly
multi-local multinational” - extract from Unilever’s Corporate
purpose.
Strategy and long-term financial target

At the heart of Unilever's strategy is a concentration of resources on
areas where we have leading category and brand positions and
which offer excellent opportunities for profitable growth, especially
in personal care, developing and emerging markets and Vitality. The
focus is primarily on developing the business organically, but
acquisitions and disposals can also play a role in accelerating the
portfolio development.
To execute this strategy we have reorganised the business to
simplify the organisation and management structure and to improve
capabilities in marketing, customer management, and research and
development. The result is better allocation of resources, faster
decision-making and a lower cost level. This transformation, known
as the One Unilever programme, allows us to leverage our scale
both globally and locally.
Unilever's long-term ambition is to be in the top third of our peer
group in terms of total shareholder return. We expect underlying
sales growth of 3-5% per annum and an operating margin in excess
of 15% by 2010 after a normal level of restructuring charges of 0.5
to 1 percent of turnover. Return on invested capital is targeted to
increase over the 2004 base of 11%. Over the period 2005 – 2010,
we aim to deliver ungeared free cash flow of €25-30 billion. It should
be noted that previous and planned disposals and the additional
restructuring plans will have reduced ungeared free cash flow by
about €2.5 billion over this period, while enhancing the ongoing
cash generating capacity of the business.

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Internal and External Audit of Unilever
Strengths:
 Customer’s Loyalty.
 Latest state of the art facilities and technology for producing

high quality products.
 International brand strength.
 Committed to business ethics, safety, health, environment

and community.
 UNILEVER’s key competitive advantage over other market

participants is the retail reach of the company. UNILEVER
services 500,000 outlets with 50 % through direct distribution
and remaining via wholesalers.
 UNILEVER is enjoying market edge of 41% in FMCG industry.

UNILEVER is at number one in ice cream segment and having
14% market share all over the globe.
Weaknesses:
 The biggest challenge in safeguarding market position is to

become cost leader.
 Operational complexity due to a large number of products in

portfolio and due to diverse work force.
 Strategic alliance with other small mills for manufacturing

purpose is the weakness as well as a threat for UNILEVER.
Although UNILEVER claims that it is a part of its cost reduction
strategy but it can not hide the reality that it shows weakness
of UNILEVER.
Opportunities:

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 Markets of developing countries can be proved a profitable

segment because people are consumption oriented rather
than saving or investment oriented.
 UNILEVER can gear up its market share in the untapped rural
market.
 Diversification in unrelated business.
 Rapid increase in world population. World population is set to

grow by 800m in 2010 and almost all increase will be in
developing countries.
Threats:
 FMCG market is highly responsive to economic conditions,

inflation and social disruptions resulting in variations in sales
revenues and demand for the company.
 P & G is the major competitor and threat for UNILEVER. Other

organized players are Nestle and R & B.
 UNILEVER is facing intense competition from unorganized

players i.e. cheaper smuggled products and Chinese products.
According to industry source, 40% of tea consumed locally
and a large portion of HPC products are smuggled into the
country.
 Legal, political and regulatory factors of host country. For

example, supportive Government policies for attracting FDI,
1% tax rate on corporate profit and inability of Pakistan
Government to control smuggled products etc.
 Although UNILEVER has a first mover advantage in ice cream

segment but Engro has announced to enter in ice cream
segment and is considering a big rival post CY2010.
 Rapid increase in raw material cost and supply disruptions

from suppliers of raw material. The unprecedented surge in
palm oil, tallow prices and other materials has resulted in
declining margins. Going forward, high raw material costs are
a key risk to UNILEVER’s profitability.

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EFE Matrix
Weigh Rating Weighte

Key External Factors
t s d Score
OPPORTUNITIES
Market of developing countries due to
1. 0.15 4 0.60
more tendency towards consumption
2. Rapid increase in world’s population. 0.15 3 0.45
3. Unrelated diversification. 0.10 1 0.10
4. Rural area. 0.05 4 0.20
5. Hygiene Consciousness 0.10 2 0.20
THREATS
Competition from organized players, P
1. 0.15 4 0.60
&G
2. Inflation Rate 0.08 2 0.16
Smuggled products and local
3. 0.07 2 0.14
competition.
Legal, political and regulatory factors
4. 0.05 2 0.10
of host country.
5. Rapid increase in raw material cost. 0.10 4 0.40
Total Weighted Score 1.0 2.95
Ratings:
1 – Poor 3 – Above Average
2 – Below Average 4 – Superior
Total weighted score of EFE matrix of UNILEVER (2.95) shows strong

response of company towards external factors.
Justification of ratings:
On opportunity side:
1. It is a general observation that people of developing countries
like Pakistan are more inclined towards consumption rather
than saving and the major portion of spending is on FMCG.
2. World population is increasing at an alarming rate. World

population is set to grow by 800m in 2010 and almost all
increase will be in developing countries. And increase in
population leads to increase demand of FMCG sector.

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3. Like Engro, UNILEVER can enter in unrelated areas of
production.
4. The under penetrated rural market offers tremendous growth

potential as rural population constitutes around 60% of the
total population. In the past few years, favorable structural
changes, such as double digit growth in agricultural credit,
increased penetration of television cable media have boosted
demand for FMCG products. Following table shows that rural
population will be almost 50% of total population in near
future.
% of total
1990 1995 2005 2010 2015E
population
Rural 31.9 34.3 37.0 43.3 47
Urban 68.1 65.7 63.0 56.7 53
Total (mn) 109.4 123.6 159.2 179.6 202.2
On threats side:
1. P & G with 50% market share is a big threat for UNILEVER.

Nestle with roundly 30% market share is also posing a threat
in near future. Engro is planning to enter in ice cream market
and a future rival in ice cream as well.
2. Rapid increase in inflation rate can increase the prices of

products and hence can reduce demand.
3. Smuggled products swallow a big part of profits of UNILEVER

every year. Almost 40% tea and 29% shampoo used in
Pakistan is smuggled from Afghanistan and China.
4. Economic system of host country and rapid increase in raw

material cost are last two major threats for UNILEVER.

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IFE Matrix
Weigh Rating Weighte

Key Internal Factors
t s d Score
STRENGTHS
1. Customer’s Loyalty. 0.15 4 0.60
2. Micro level retail outlets 0.10 4 0.40
Latest state of the art facilities and
3. 0.10 4 0.40
technology.
4. International brand strength. 0.08 3 0.24
5. Market share of 41% 0.12 3 0.36
Committed to business ethics, safety,
6. health, environment and community. 0.10 3 0.30
WEAKNESSES
1. Strategic Alliance 0.15 1 0.15
2. Costly Products. 0.15 2 0.30
3. Operational Complexity. 0.05 1 0.05
Total Weighted Score 1.0 2.80
The score 2.80 shows that company has solid internal position, its
strengths are overcoming the weaknesses.
Ratings:
1 – Major Weakness 3 – Minor Strength
2 – Minor Weakness 4 – Major Strength
Justification of ratings:
On strength side:
1. Customer’s loyalty is not a hidden fact in UNILEVER case.

People have developed and adopted the taste of UNILEVER’s
high quality products and there is no comprise on quality. 150
million times a day, in 150 countries, people use UNILEVER’s
products at key moments of their day.
2. Micro marketing in developing countries. UNILEVER services

500,000 outlets with 50 % through direct distribution and
remaining via wholesalers.

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3. UNILEVER’s continuous expansion and its large market share
indicate their strength in latest facilities and quality
management. UNILEVER has ISO certification.
4. Its brands are enjoying international recognition. UNILEVER is

serving almost 150 countries.
5. UNILVER is concerned about its customers as well as

employee. There are strict safety standards for employees
and visitors of plants too.
On weakness side:
1. Although UNILEVER claims that strategic alliance with small

firms for manufacturing purpose is the part of its reducing
cost objective but if we look at the other side of the picture,
strategic alliance is a weakness as well as threat for
UNILEVER. For example, Asad Soap Factory is manufacturing
soap for UNILEVER Rahim Yar Khan, and now Asad soap
factory is searching for buyers of soap plant.
2. UNILEVER’s products are costly as compare to local producers.

Although costly goods are not posing any big threat to
UNILEVER but in long run it can be proved harmful for
company. So company is responding greatly towards covering
its weakness. For this purpose, company has adopted policy of
contractual hiring, strategic alliance etc.
3. UNILEVER has a large number of products in its portfolio. It

means that UNILEVER has a large number of SBU’s to control.
It adds operational complexity to UNILEVER’s operations.

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SWOT or TOWS Matrix
STRENGHTS WEAKNESSES
1. Customer’s Loyalty. 1. Strategic Alliance
2. Micro level retail
2. Costly Products.
outlets
3. Latest state of the art 3. Operational
facilities and technology. Complexity.
SWOT / TOWS 4. International brand
Matrix strength.
5. Market share of 41%
6. Committed to business
ethics, safety, health,
environment and
community.
OPPORTUNITIES S-O Strategies W-O Strategies

1. Developing countries. 1. Discover new markets 4. Market Expansion in
(O1,O2,O4,S4,S3) rural areas (O4, O1, W2)
2. Rapid increase in 2. New quality products
world’s population. (O3,O5,S3,S6)
3. Unrelated 3. Unrelated
diversification. diversification (O3, S1)
4. Rural area.
5. Hygiene
Consciousness
THREATS S-T Strategies W-T Strategies
1. Competition from
organized players, P & G 5. Vertical Integration 6. Increase in
(T1,T3,S2,S4) manufacturing capacity.
2. Inflation Rate (W1, T1).
3. Smuggled products
and local competition. 7. Cost
4. Legal, political and leadership(W2,T5)
regulatory factors of host
country.
5. Rapid increase in raw
material cost.

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Proposed Strategies:
1. UNILEVER can capture untapped rural markets and markets of

developing nations by using its state of the art facilities &
technology. International brand strength is plus point which
will be proved helpful while positioning.
2. UNILEVER’s Commitment to business ethics, safety, health,

environment and community can be proved helpful in order to
satisfy hygiene conscious customers. UNILEVER should focus more
on quality of goods.
3. Unrelated diversification is a risky decision to be taken. Loyal

customer is the major power to cope up with after effects of
this decision.
4. Customers in rural areas and in developing countries usually

have low income level. UNILEVER should reduce its costs in
order to capture that uncovered markets effectively.
5. UNILEVER can use its international brand strength and wide

network of retail outlets in order to compete with organized
and unorganized players of market.
6. Strategic alliance is showing the weakness of UNILEVER in

particularly manufacturing area which the competitors do not
hold. UNILEVER should its production capacity in order to
compete in market and to reduce competitor’s threat.
7. If UNILEVER can obtain cheaper raw material, it can reduce

cost of goods manufactured.

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SPACE Matrix
Financial Strength (FS) Ratings
10% increase in net income in 2009 as compare to 2008. +4

Net sales were 15.7% 2009 as compare to 14% in 2008. +3
Total asset turnover is 3.2times in 2009 as compare to
+2
3.1 times in 2008.
ROI has declined from 87% to 86% in 2009. +1
ROA is averaged 27% which is declined to 24% in 2009. +1
Total: +11
Industry Strength (IS)
Consumption Oriented Culture. +4

Rapid increase in raw material cost. +2
Growth potential in rural and developing countries
+4
market.
Profit potential is reducing due to intense competition
+1
especially from un-organized players.
Total: +11
Competitive Advantages (CA)
Committed to business ethics, safety, health, environment

-1
and community.
Customer loyalty. -1
Market share of 41%. -2
Control over supplies and distribution. -4
Latest state of the art facilities and technology. -1
Total -9
Environmental Stability (ES)
Demand in the retail industry is price elastic. -3

Smuggled products and local competition. -5
Legal, political and regulatory factors of host country -3
High rate of inflation effects demand. -4
Law and Order Situation -2
Total: -17

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Average scores:
FS = 11/5 = 2.2
IS = 11/4 = 2.75
CA = -9/5 = -1.8
ES = -17/5 = -3.4
X-axis = IS+CA = 2.75-1.8 = 0.95
Y-axis = FS+ES = 2.2-3.4 = -1.2
FS
+6
CA -6 + 0.95 +6
IS
-1.2
Competitiv
e
Strategy
-6
ES
SPACE matrix indicates whether conservative, aggressive, defensive

and competitive strategies are more appropriate for given
organization. UNUILEVER should pursue Competitive Strategies that
are intensive and integration strategies.
I will suggest following two strategies:
1. Product development
2. Market Development

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Company will use Product Development to increase sales by

slightly modifying its products. It would eliminate its threat from
unorganized market competitors which are selling smuggled items
and hurting the market of UNILEVER quite badly.
Following are some factors that prove why I choose this strategy for
UNILEVER:
 UNILEVER’s existing products are very much successful across

the globe. Its 41% market share shows the number of satisfied
customers.
 There are rapid technological developments in FMCD industry.
 FMCG is a high growth industry. High growth is characterized

by rapid increase in demand due to some factors like increase
in population etc.
 UNILEVER has both organized and un-organized rivals.

Organized rivals are competing by introducing comparable
prices and un-organized rivals are hurting UNILEVER by selling
even at lower of the cost.
Market development is another strategy suggested for UNILEVER,

we’ve seen that UNILEVER is producing high quality products and
captured the maximum market share. But still lots of lower and
middle income people are out of its user for most of the products as
they are highly priced. Rural area is also an untapped market for
UNILEVER. UNILEVER must consider about producing low-priced
products as well so company can earn maximum share.

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BCG Matrix
Market Share
High Medium Low

1.0 0.50 0.0
?
High +20
Ice cream
Knorr
INDUSTRY
SALES ?
GROETH
RATE (%) Detergents Dove
Medium 0
Beverages (Tea)
Soap
Home & Personal care
Low -20
Industry Classification:
Industry Industry Indicators

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Classification
Tea Mature Industry growth lagging GDP growth.
Low profit margins
Reduced sales volumes
Ice cream Growth 0.5kg per capita yearly consumption
Double digit revenue growth
Large Capex and advertising spend
Soap Mature ULEVER Growth company within
mature industry
Lux sales doubled in 3 years
High profit margins
Introduction of liquid hand wash
Detergen Growth 11% rise in Surfs market share
t Low penetration, 50% population
uses laundry soap
Double digit turnover growth
Shampoo Growth Lowest penetration in Asia.
Clear Shampoo highest growth in
comparable regions
STARS - Ice cream:
Unilever has the first mover advantage in the capital intensive ice
cream segment. With around 65% market share, ULEVER is the
only major operator in the industry. The company is in the process
of increasing production capacity and strengthening its distribution
channel. In CY07, sales were restricted by lost trade confidence,
delay in factory expansion resulting in plant shutdowns, and
adverse weather conditions. However, going forward with per
capita consumption at a low 0.5 liters per annum tremendous
growth potential exists in the ice cream segment.
We expect segment revenue growth of CAGR 19% in CY08-CY12E.
QUESTION MARK – Frozen foods:
According to matrix, UNILEVER’s frozen foods like Knorr and some

products of household care business units like Dove are question
marks as they are operating in a growing market without high
market share, thus holding the sales growth of the company’s 400
leading brands by 0.6%.

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Therefore it can be noticed that not the whole divisions are under
performing, as a result UNILEVER needs to invest more in these
business units to keep up with the fast growing market because
they are already successful but need better performance. Brands
such as Knorr and Lipton in food and Dove in the household product
sector are among the core brands that raise concern for UNILEVER.
As they operate in a growing market more investment is needed to
boost sales and margin and as it is unlikely that these units achieve
sufficient cost reduction benefits, UNILEVER may turn to its cash
cow businesses to offset such investment.
As part of its path to growth strategy UNILEVER must build on these
businesses to improve performance as the market share must grow
if they are to become stars otherwise they may face alternative
solutions that could include the sale of the business, which should
be the last alternative because of the growing divisions inside the
business.
UNILEVER might be better off investing more cash in frozen foods
and household care; since the market is growing it may gain more
share and dominance
CASH COWS – HPC:

The HPC segment continues to drive the top-line and profitability
growth, and is the key focus of the company’s growth strategy. In
CY09 the company posted impressive turnover growth of over 25%
attributable to higher volumes and price increases. Among the key
brands in the HPC business Lux, Surf and Sunsilk continue to be the
star performers with market leadership positions.
DOG – Beverages (Tea):

The mature tea segment continues to follow a declining trend as
ULEVER faces stiff competition in the tea market. ULEVER continues
to lose sales volume to Tapal in organized sector and to small local
brands in rural areas that are using cheap smuggled tea. Supply
disruptions as a result of political turmoil and drought in Kenya
ensue in squeezed margins.
The companys strategy is to defend losing market share as no
growth is expected in beverages segment. ULEVER had two
production facilities for tea located in Karachi and Khanewal.
Recently, ULEVER has closed down the Karachi tea factory in view of
low demand and sales volumes.
This is expected to result in restructuring charges in the short run,
however, in the long run the company is expected to benefit in
terms of cost efficiencies and reduced overheads.

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In the backdrop of losing market share, the contribution of tea

business to total turnover has declined over the years (34% in
CY09). Going forward, the tea segment is expected to remain under
pressure. It is forecasted a flat outlook for the segment with decline
in turnover of 5-6% each year.
Internal-External Matrix
IFE Weighted Scores
Strong Average Weak

3.0
2.0 1.0
4
Hi .0
gh i ii iii
EFE
3
Weight .0
ed Mediu
Scores iv v vi
m
2
.0
Lo 1 vii viii ix
w .0
The IFE matrix score for UNILEVER is 2.80 and for EFE matrix score
is 2.95 therefore our IE matrix falls more around ‘v’ cell.
The company should adopt HOLD & MAINTAIN STRATEGIES and I

recommend Market Development and Product Development
for UNILEVER. UNILEVER can introduce existing products to new
geographical area that are rural markets and markets of developing
nations. On the other hand UNILEVER can also modifying its existing
products and introduce variants in order raise its market share.

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Grand Strategy Matrix
Rapid Market
Rapid market Growth
Growth
Q2 Q1
Weak Strong
Competitiv Competitiv
e Position e Position
Q3 Q4
Slow Market Growth
The grand matrix helps us to determine the strategy that firm must
pursue, based on its competitive position and market growth.
UNILEVER lies in Q1 which represents excellent strategic position of

company. For these firms, continued concentration on current
market and products is an appropriate strategy. UNILEVER has
abundant resources so backward, forward and horizontal integration
may also prove effective.

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QSPM Matrix
Market Product
Development Development
Attracti Attracti
Weig
External Factors ve Total ve Total
ht
Score Score
Untapped Rural area. 0.05 4 0.20 --- ---
Market of developing 0.15 3 0.15 --- ---
countries.
Rapid increase in world’s 0.15 4 0.60 1 0.15
population.
Hygiene Consciousness 0.10 --- --- 2 0.20
Unrelated diversification. 0.10 --- --- --- ---
Legal, political and 0.05 4 0.20 1 0.05
regulatory factors of host
country.
Inflation Rate. 0.08 2 0.16 3 0.24
Competition from P & G 0.15 4 0.60 3 0.45
Raw material cost 0.10 3 0.30 4 0.40
increased.
Smuggled products and 0.07 3 0.21 4 0.28
local competition.
Total 1.0 2.42 1.77

Internal Factors
Costly Products. 0.15 --- ---- --- ---
Customer’s Loyalty. 0.15 3 0.30 4 0.60
Micro level retail outlets 0.10 4 0.40 1 0.10
Latest state of the art 0.10 3 0.30 3 0.30
facilities and technology.
Market share of 41% 0.12 4 0.48 3 0.36
Committed to business
ethics, safety, health, 0.10 --- --- --- ---
environment and
community.
Strategic Alliance 0.15 --- --- --- ---
International brand 0.08 4 0.32 3 0.24
strength.
Operational Complexity. 0.05 --- --- --- ---
Total 1.0 1.8 1.6

Grand Total 4.22 3.37

27
Strategic Recommendation
Appropriate strategy for UNILEVER is Market Development.

UNILEVER should remain in the present business and should
introduce present products in new geographical area.
Following are necessary factors that must be present while choosing

market development strategy:
 UNILEVER has its own strong distribution channel.
 UNILEVER is very successful at what it does.
 Untapped rural market and market of developing countries

exist for UNILEVER to cover.
 UNILEVER is a strong MNE in Pakistan. It has abundant

resources both financial and human, so it can easily expand
geographically. Here we are not concerned about expansion of
operating activities to new geographical area. We are
particularly concerned about capturing untapped market. It is
up to UNILEVER whether it is decided to start operating in new
areas too or just introduce products by using its strong
channel of distribution.
 UNILEVER is operating globally. It means that FMCG is such an

industry which can be grown globally.

28
References
 www.pakistanunilever.com
 www.igisecurities.com.pk
And various news paper articles, research findings and blogs, which
helped me indirectly to build up my mind about Pakistan UNILEVER
and figure out their External and Internal Factors which were
involved in the project.

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Strategic Management Of UNILEVER

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

Nadia Shoukat (23)

Sir Shahid Yaqoob

Submittion Date: 22 May, 2010

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

The Holy Prophet

And also dedicated to

“OUR REVERED PARENTS”

WHO HAS BEEN A BEACONHOUSE

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

God never spoils any effort; every piece of work is rewarded

We deem it utmost pleasure to avail this opportunity to

We have the honor to express our deep sense of gratitude

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

INTRODUCTION OF UNILEVER PAKISTAN Ltd.

Unilever is one of the world's leading suppliers of fast moving

Unilever Pakistan Ltd:

Unilever Pakistan (70.4% Unilever equity) is the largest FMCG

In 1995, the Company established a new factory near Lahore to

In order to leverage the synergies of Unilever’s international brand

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

Overview of Unilever Pakistan Ltd.

The company operates through 5 regional offices, 4 wholly owned

Accountable to our stakeholders

This is a huge commitment, which makes us responsible and

• Make a positive difference to the lives of low income

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

“Touching Hearts, Changing Lives.”

“Mission Is To Add Vitality To Life. We Meet Everyday Needs For

Adding Vitality to life:

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

Scale and geographic reach:

Strategy and long-term financial target

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

Internal and External Audit of Unilever

 Latest state of the art facilities and technology for producing

 International brand strength.

 Committed to business ethics, safety, health, environment

 UNILEVER’s key competitive advantage over other market

 UNILEVER is enjoying market edge of 41% in FMCG industry.

 The biggest challenge in safeguarding market position is to

 Operational complexity due to a large number of products in

 Strategic alliance with other small mills for manufacturing

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

 Markets of developing countries can be proved a profitable

 Diversification in unrelated business.

 Rapid increase in world population. World population is set to

 FMCG market is highly responsive to economic conditions,

 P & G is the major competitor and threat for UNILEVER. Other

 UNILEVER is facing intense competition from unorganized

 Legal, political and regulatory factors of host country. For

 Although UNILEVER has a first mover advantage in ice cream

 Rapid increase in raw material cost and supply disruptions

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

Weigh Rating Weighte

Total weighted score of EFE matrix of UNILEVER (2.95) shows strong

2. World population is increasing at an alarming rate. World

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

4. The under penetrated rural market offers tremendous growth

1. P & G with 50% market share is a big threat for UNILEVER.

2. Rapid increase in inflation rate can increase the prices of