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Company Profile Overview

Unilever is a multinational corporation selling consumer goods including foods, beverages, cleaning agents and personal care products. Unilever is a dual-listed company consisting of Unilever NV in Rotterdam and Unilever PLC in London. Unilever owns more than 400 brands including 11 "billion-dollar brands", which each achieve annual sales in excess of €1 billion. Revenue (£m and currency as quoted) 39,823 (2009) Number of employees 163, Origin of ownership UK/Netherlands Geographical presence Operates in 100 countries Key contact Santiago Gowland

generate electricity.

• The Cu Chi factory in Vietnam uses solar panels to preheat water for steam generation.
• 2m point-of-sale ice cream freezer cabinets are being replaced with energy-efficient HC alternatives.
• The company plans to reduce indirect impacts by working with customers and suppliers to address wider impacts. For example, Ben & Jerry's has a Lick Global Warming campaign and an ice cream flavour called Fossil Fuel.
• Around 4m tonnes of CO2 are produced each year because of Unilever's transport and product distribution requirements. Water
• Unilever relies on water for:
• Sourcing: the cultivation of agricultural raw materials
• Manufacturing operations: cleaning, cooling, as an ingredient
• Consumers: use of home care and personal products
• Unilever aims to:
• Reduce water in manufacturing
• Work with suppliers on issues such as crop irrigation
• Innovation on product design
• Since 1995, Unilever has reduced the amount of water used per tonne of production by 63% by minimising water use and maximising water recycling.
• During 2008, there was a 3% reduction in water intensity compared to 2007 – from 3 m

to 2 m3 per tonne of production.

• The water intensity of food production has dropped from 5 m3 in 2003 to 4 m3 in 2007 per tonne of production.

• Products aimed at reduced consumer water consumption include the One Rinse Comfort fabric conditioner. In Vietnam, One Rinse Comfort reduces the water needed by two-thirds and sales rose by nearly 30% in 2008. Waste

• Waste intensity has reduced by 68% per tonnes of production between 1995 and 2008, despite a 4% increase in the last year (7 kg/tonnes in 2007 to 7 kg/tonne).

• The company says this increase was due to:

• Legislative changes

• Under-capacity in effluent treatment

• Planned disposal of accumulated and inherited hazardous waste

• Changing packaging design is one of the ways in which the company wants to use to reduce waste impacts.

• The PVC policy commits to replacing PVC in all packaging by the end of 2010, where there are viable alternatives. Resources

• Agricultural and forestry crops make up around half by volume of raw materials used by Unilever.

• Unilever worked alongside Tesco to persuade the Consumer Goods Forum, a global alliance of 300 leading manufacturers and retailers, to work together to end deforestation.

• Working with Greenpeace on climate-friendly refrigerants in an alliance called Refrigerants Naturally!

• Founding members of the Carbon Disclosure Project's Supply Chain Leadership Collaboration.

• CEO Paul Polman co-chairs a sustainability steering group of The Consumer Goods Forum with Sir Terry Leahy. They have set out the vision for the sustainability programme to drive and communicate sustainability improvements throughout the value chain of the consumer goods industry.

• Participated in a 2008 event hosted by Wal-Mart on water stewardship, sharing expertise on reducing water use at all steps of a product lifecycle.

• Participated in an initiative with Kenya Tea Development Agency (KTDA), the UK Department for International Development and Wageningen University to train smallholder farmers in sustainable tea cultivation. Company Background

The company was formed by a merger of Dutch Margarine Union and British soap-makers Lever Brothers in 1929. Unilever was one of the world’s first genuine multinationals with operating companies in more than 40 countries. The company produces and distributes a vast number of well known brands in the areas of nutrition, hygiene and personal care that are used by consumers all over the world. The history of Unilever dates back to 1885, William Lever established a soap manufacturing company in the UK with his brothers and named the company Lever Brothers in 1885. William Hesketh Lever was born at Bolton, Lancashire in 1852 was the son of grocer. Together with James Lever, William Lever opened soap factory at Warrington, England, in 1885. Their products, Sunlight, the world’s first packaged soap, was very successful. The soup they made in ready moulded tablet. Previously laundry soap was marketed in bars and grocers cut off pieces and sold them by weight. Until 1919 Lever was wholly own an controlled by the founder. By 1919, as a result of ingle

Recognised annually amongst the Top 20 Tax Payers in the country, Unilever Philippines employs over 1,000 people directly, as well as provides jobs for 10,000 indirectly (i. distributors and suppliers), as a result of its business presence in the country. Employees and business partners recognise that energy, creativity, the resilience to face changes and make things better are all needed for business and people to grow together. Unilever is known to be one of the few companies in the industry that has succeeded in keeping majority of its manufacturing base in the Philippines. Its Personal Care unit made news by securing the right to manufacture deodorant mini-sticks for local and export markets. It has succeeded in entering the US market and achieved the milestone on producing its 100 millionth stick in 2004. The company has been a leader in introducing new technologies into the country since the early days of its existence - margarine production in the 1930s, non-soap detergents, shampoos and toothpaste in the 1960s and 1970s and state of the art sulphonation technology and cogeneration power plant in the 1980s. The nineties has seen the company focusing on several improvements in the Environment front one of which was the introduction of the first 100% biodegradable detergent bar in the Philippines. Unilever works closely with the community and other NGOs to protect and improve the environment. Unilever Philippines is also a leading company in the area of Human Resources Management and Development. Unilever has for decades also been known in the industry as a sound training ground for young Filipino graduates. Some of its managers have progressed to senior levels in government and public life. Unilever seeks to manage and grow its business sustainably,

focusing on three pillars as set out by the Unilever Sustainable Living Plan – Health & Well- Being, Environmental Impact and Enhancing Livelihoods. We will develop new ways of doing business if we are to meet the needs of the billions of people in the developing world who are yet to become consumers and deserve a better quality of life. Supply Chain Strategy In 2010, Unilever launched an organizational transformation plan that completely switched their gears. They decided to utilize supply chain sustainability to drive their growth. This was not an easy conversion and had to start from the core. Not only processes and policies

suppliers that were not aligned with their vision of being sustainable and could hurt their reputation. The appointment of a CSO was crucial as this became a business unit that has grown into the organization’s core beliefs. In sum, there were two main “keys to success” that Unilever adopted to become a Sustainability-Driven grown company: 1 1. Identifying, accepting, and committing to the need for change. 2 2. Aligning every party involved in the chain to their strategy to make sure they all moved towards the same goals. Those who were not on board were left behind. It sounds so simple, yet it completely changed their business, and they continue to grow stronger today. How difficult might this approach be to replicate? Unilever's impressive supply chain We are ranked in the Top 10 supply chains in world by Gartner (number one in Europe) We are one of the largest contract logistics companies in the world, second only to DHL We are on track to reduce our carbon footprint by 40% by 2020 We have 150,000 customers globally who we serve with a range of almost 60,000 products

We source more than 200,000 different materials from 160,000 suppliers who work with up to a million smallholder farmers We run more than 250 factories which produce 130,000 tea bags every minute, 1 billion deodorants annually and 2 billion Magnums every year We collaborate with the Lotus F1 grand prix team to build a performance culture in our Supply Chain. Operations Management Strategy As one of the strong and healthy companies in the world with many successful brands, Unilever has an opportunity to expand into foreign markets that it is not yet operating in, in order to gain access to customers around the world. Supported by strengths of its four key global brands

Unilever is increasing its efforts to build on its long-established local roots in developing regions. Through its well-established distribution network in both the traditional and modern retail outlets and with a good ability to adapt successful global brand concepts to suit local markets, Unilever is in a good position to be able to capitalize on the growth forecast in these regions. Once Unilever became one of the most successful global companies in the world, it has many profit sanctuaries. By having multiple profit sanctuaries, Unilever has strong competitive advantage over its competitor with a single or few sanctuaries. In the cosmetics and toiletries globally competitive industry, there are no doubt that Unilever’s major rivals over the next few years will be Procter & Gamble and L’Oréal, both of which give significant resources to new product development activity, and respond to changes in the market faster than Unilever. L’Oréal also has the benefit of being exclusively involved in cosmetics and toiletries, unlike both Unilever and Procter & Gamble which both have cross- industry involvement, such as in packaged food. Much the same group of rival companies competes in many different countries. Therefore, the competition pursues the company to be more innovative in developing its products and maintaining its brands. The following diagram shows the market performance of Unilever’s skin care and hair care market share:

To win customers and sales away from select rivals in country markets, Unilever employ cross- market subsidization. This offensive strategy is appropriate for Unilever which is compete in multiple county markets with multiple brands and wide variety of products. Finally in entering the emerging-country market Unilever prepare to compete on the basis of low prices. Unilever pursued this strategy because consumers in emerging markets are often highly focused on price, which can give low-cost local competitors the edge unless a company can find ways to attract buyers with bargain prices as well as better products. All strategies executed by Unilever for competing in foreign market resulting in moderate 5% sales growth in 2006 – just above market performance – ensured that Unilever kept its position as third largest player in cosmetics and toiletries with a 7% market share. Second-placed L’Oréal

ANALYSIS

Before analyzing the Unilever strategies for competing in foreign market, it’s important to identify company’s resource strengths and weaknesses and its external opportunities and threats, commonly known as SWOT analysis. This analysis provides a good overview of whether the company’s overall situation is fundamentally healthy or unhealthy. Therefore, for a company’s strategy to be well-conceived, it must be:

• Matched to its resource strengths and weaknesses
• Aimed at capturing its best market opportunities and erecting defenses against external threats to its well-being SWOT Analysis of Unilever Cosmetics and Toiletries Based on the SWOT analysis we can infer that the company has very healthy and strong condition in overall. Therefore, this condition provides high capabilities to the company and

offers wide opportunities for the company to compete in foreign market. Based on this analysis, Unilever firstly entered foreign market in the year of 1950 by offering its product to European community. From the Unilever mission statement, we can conclude that the company expands into foreign markets in order to gain access to customers around the world. Unilever recognized that its product is commonly used for all people worldwide. The company’s objective to bring their wealth of knowledge and international expertise to the service of local consumer pursues the company to produce many nutrition, hygiene and personal care product with successful brands. Therefore, Unilever are moving rapidly and aggressively to extend their market reach into all corners of the world. For its cosmetics and toiletries product, Unilever start to compete internationally by entering just one or select few foreign markets. Unilever launched Axe/Lynx/Ego deodorant body spray in the US and Canada in autumn 2002 and introduced Dove initially in Italy, France and Belgium in 2002. Once successfully introduced its product in several market, Unilever expands its successful brand to many other markets and starting to compete globally. Through its successful growth strategy, Unilever has continued to build on the strengths of its four key global brands–Dove, Sunsilk, Rexona and Lux–and by doing so, created strong platforms for further growth in a number of cosmetics and toiletries sectors. This has been particularly evident in deodorants, men’s grooming products and bath and shower products, with strong growth for the Axe, Dove and Rexona brands. However, competition in the cosmetics and toiletries industry remains tough, and while the current strategy is providing