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CASE STUDY
Group 1
Subsidiary companies in each major national market were responsible for the
production, marketing, sales, and distribution of products in that market.
The structure also allowed local managers to alter sales and distribution
strategies to fit the prevailing retail systems.
Example: Unilever recruited local managers to run local organizations; the U.S.
subsidiary (Lever Brothers) was run by Americans, the Indian subsidiary by
Indians, and so on.
b. This structure started to create problems for the company in the
1980s because:
Structure had lots of duplication, particularly in manufacturing; a lack of scale
economies; and a high-cost structure.
Example: Unilevers global competitors, which include the Swiss firm Nestl
and Procter & Gamble from the United States, had been more successful than
Unilever on several frontsbuilding global brands, reducing cost structure by
consolidating manufacturing operations at a few choice locations, and executing
simultaneous product launches in several national markets.
Unilever was falling behind rivals in the race to bring new products to market.
Its structure also prevented the creation of global brands, consolidation of
manufacturing and quick product development and launches.
Example: In Europe, for example, while Nestl and Procter & Gamble moved
toward pan-European product launches, it could take Unilever four to five years
to persuade its 17 European operations to adopt a new product.
Group 1
Group 1
Previously Unilever has many different products on the same type of product to
customers more choice, but with this new strategy Unilever will focus on a few
products but do not have many choices for customers but it will make customers
remember longer product with Unilever brand.