Professional Documents
Culture Documents
Business Studies
Specification A
3132/PM
F&H
G/T50823/Jun10/3132/PM
6/6/6/3/
3132/PM
2
There is no source material printed on this page
G/T50823/Jun10/3132/PM
Unilever
Web pages
www.unilever.co.uk
www.benjerry.co.uk
www.potnoodle.com
Source: Images, with the kind permission of Unilever
Turn over
G/T50823/Jun10/3132/PM
Background
Unilever is an Anglo-Dutch multinational company with headquarters in both Holland and the UK. In
Holland the company is known as Unilever NV and in Britain it is called Unilever plc.
Unilever was created in 1930 by the merger of British soap
maker, Lever Brothers, and Dutch margarine producer,
Margarine Unie. Both businesses used palm oil as a key
ingredient in their products. The two companies decided to
merge because they recognised that they could import palm
oil much more cheaply if it were bought in large quantities.
Knorr
Hellmanns
Lipton
Flora
Blue Band
Walls
Omo
Surf
Dove
Lux
Rexona
Sunsilk
G/T50823/Jun10/3132/PM
History
In the 19th Century, general standards of hygiene in Britain were poor. People found it difficult to
keep themselves and their houses clean because, for many, soap was very expensive.
Lever & Co was started by William Hesketh Lever and
his brother, James, in 1884. Their father ran a grocery
business which sold soap, as well as many other items.
Soap in those days was sold in long bars that had to be
cut into smaller pieces when the customer got home.
William recognised that he could add value by offering
bars of cut, wrapped and branded soap in his fathers
grocery shop.
The two brothers took over a small soap works in
Warrington, Cheshire. The business manufactured
Sunlight Soap, which was made with vegetable oils
rather than animal fats.
The business outgrew the Warrington factory and Lever & Co moved to larger premises. A factory
together with a workers village was built on reclaimed marshland by the River Mersey. The area
became known as Port Sunlight. The location was thought to be suitable as it was next to the river,
which allowed ships to get close to the factory.
In 1890, the business became known as Lever Brothers Ltd.
Lever Brothers quickly established a good reputation for being an ethical business. The company set
up projects to improve the lives of its workers and created products that benefited society. Soap and
other cleaning materials made by Lever Brothers also improved hygiene.
By 1911, the company had established its own palm plantations in West Africa and the Solomon
Islands. Lever Brothers also acquired other soap companies, including A&F Pears.
Turn over
G/T50823/Jun10/3132/PM
Marketing
Unilever currently owns about 400 brands, which can be split up into four categories:
Unilevers major
competitors include
Heartbrands
G/T50823/Jun10/3132/PM
Turn over
G/T50823/Jun10/3132/PM
Stakeholders
Unilever says that it has been involved in a growing number of projects to obtain its raw materials
from sustainable sources. Unilever also believes that it has a responsibility to support the local
communities in which it operates.
Local communities
In 2007, Unilever contributed 89 million to local communities in the form of cash contributions and
other support. This helped fund more than 14 000 community projects around the world. About
two-thirds of this funding went on long-term community investments. The rest was given as charitable
donations in response to urgent local social needs.
Employees
When Lever Brothers moved its soap making business to Port Sunlight, it built good quality housing
for its employees. Unilever states that it continues to take an interest in its employees. The company
is concerned that its workforce represents the communities in which it is based. Having a diverse set
of employees, Unilever says, helps the company to understand its customers. Unilever has a policy
of giving fair consideration to all job applicants regardless of such things as gender, nationality, race,
creed and disability.
Unilever ensures that its employees are trained to do their jobs safely
and efficiently. The company also tries to ensure that its employees
enjoy a healthy work/life balance.
Unilever has recently decided to outsource some of the work of its
human resource department to another organisation.
G/T50823/Jun10/3132/PM
Outsourcing
Using another company
to take responsibility
for certain aspects of a
business.
Palm oil is still an important ingredient in some of Unilevers products. Palms are grown in Asia,
Africa and Central America, in some of the poorest rural areas of the world. Many people rely on
growing palms and extracting its oil for their incomes. Money made from selling palm oil is also used
to regenerate some of the poor areas in which it grows. For example, funds made from palm oil were
used to pay for a hospital in Sierra Leone, in West Africa.
The demand for palm oil has expanded in recent years. Some of this increase is due to the growth
in the economies of India and China. Palm oil is also being increasingly used as an ingredient in
livestock feed and for biofuels.
Palm oil production has an environmental
impact. Environmental pressure groups, such
as Greenpeace, point out that tropical rainforests
are being destroyed to make way for palm
plantations. Animal habitats are being destroyed
as a result of deforestation.
Unilever says that not all of its products use
palm oil. It points out that the company has
a long history of promoting sustainability of
resources, particularly with tea and fish. It also
states that it is leading the search to find ways of
making palm oil production sustainable.
Economic Factors
Unilever operates in many countries. The company accounts are given in euros, so costs, revenues
and profits need to be converted into this currency. Unilevers profits are affected by changes in
exchange rates.
The global recession and credit crunch, that started in 2008, meant that many businesses had to find
ways of maintaining demand for their goods. Many jobs have been lost as businesses attempt to
reduce their costs.
Turn over
G/T50823/Jun10/3132/PM
10
Finance
Unilever publishes its accounts in euros.
Table 1
Details of Unilevers finances extracted from the Company Accounts.
All figures are million.
2008
2007
2006
Turnover
Cost of Sales
Net Profit
40 523
21 342
5 285
40 187
20 558
4 136
39 642
20 093
5 015
24 967
11 175
13 800
22 342
27 374
9 928
13 559
23 743
27 571
9 501
13 884
23 188
Breakdown of turnover and profits by region: Western Europe, Americas and Asia/Africa
Chart 1
Unilever: Turnover by Region
15 000
14 000
13 000
12 000
Turnover:
million 11 000
10 000
9 000
8 000
7 000
6 000
2008
Key:
G/T50823/Jun10/3132/PM
2006
2007
Western Europe
Americas
Asia/Africa
11
Chart 2
Unilever: Operating Profit by Region
3000
2800
2600
2400
Operating 2200
Profit:
million 2000
1800
1600
1400
1200
2008
Key:
2006
2007
Western Europe
Americas
Asia/Africa
G/T50823/Jun10/3132/PM
12
There is no source material printed on this page
G/T50823/Jun10/3132/PM