Chapter 12: Innovative

Innovation is at the heart of Unilever’s ambition to grow sustainability. All of new innovations at Unilever are based on key insight into what consumers want and need. They aim to develop new products that attractive to customers so they will keep choosing them again and again. The innovation process at Unilever goes through three main stages of R&D. The first stage is research. Unilever has six laboratories in the US, UK, Netherlands, India and China. These laboratories work on the science and technologies that can be applied to Unilever product development process. The research is aimed to bring together the best thinking and ideas from wherever they exist. The research is not only from the best scientific expertise from within Unilever, but they also work closely with universities and specialist companies. The second stage is development. In this stage, the product design teams take the breakthroughs in science and technology one step further, turning unique insights into the products that consumers need. Development and testing on the technology takes place until it fits the product description. The last stage of innovation is launching new product. The R&D Deploy teams draw on a deep understanding of local knowledge as they ready for a product to launch into a new market. They work closely with colleagues in marketing and supply chain to make sure the new product can be manufactured efficiently and meets the needs of consumers.

Unilever Total Reward Statement

Unilever has a total reward program where every employee in the company is encouraged to grow to his or her full potential. They develop a performance-based reward structure that recognizes people have delivered results and have the right values for the company. At Unilever, employees are not only encouraged to give feedback but the company also have developed leading-edge tools to help them hear clearly how reward feels from the point of view of their people. The company aim to give employee access to a Total Reward Statement. The statement describes and values every element of the reward package. It also provides useful information on how the elements of each individual’s package work. The content and coverage of the Total Reward Statement is not just money. It was created in order to help employees to be able to see the value of all their benefits at Unilever, including learning to help individuals keep track of their progress and potential. Another unique feature of the Total Reward Statements is the 'Rate-my-Reward' through which employees can tell what they think of every aspect of their package. At Unilever, they believe that rewards should be open, fair, consistent and explainable. The Total Reward Statements cover all Unilever’s management staff across 96 countries. And the company is trying to add more and more people to the coverage and they won’t stop until they include every single person in Unilever. Unilever also offer employees attractive incentives. If the company does well in meeting its goals, the pay for highly rated people making an exceptional contribution will be towards the top of the market range. At Unilever, employees believe that if they all work together to deliver excellent results for Unilever, they will be well rewarded.

Chapter 10: Organizational structure

Unilever was form in 1930 from two companies: the Margarine Unie (Netherland) and the Level Brother (UK). It was a full business merger, operating as a single business entity. Until now, the two separate legal parent companies were remained. They are now called: Unilever NV (Netherland) and Unilever PLC (UK). Unilever N.V., which has its registered and head office in Rotterdam, Netherlands and Unilever PLC, which has its registered office at Port Sunlight in Merseyside, United Kingdom and its head office at Unilever House in London, United Kingdom. [Unilever PLC and Unilever N.V. and their subsidiary companies operate as nearly as practicable as a single economic entity, whilst remaining separate legal entities with different shareholders and separate stock exchange listings.

The two parents companies operate with two separate organizational structures. Each company has its own Board of Director This can create problem for the organization. It is difficult to balance between the two companies interest. It can also lead to lack of co-ordination between the board of directors of the two holding companies and also having two separate masters can confuse followers.

Chapter 9: Organizational culture

At Unilever, integrity is the foundation on which they do their business. Unilever has a Code of Business Principle and Code Policies for its employee. These code are mandatory for everybody at Unilever including the Board of director, employees and contractors. This also applies to all Unilever companies, subsidiaries and organizations over which Unilever has management control. They define the behaviors that everyone who works for Unilever must follow to. These codes help to make sure that the company’s values are brought into the workplace and that the good reputation of the company is promoted and protected. For third parties who interact with Unilever, they have to follow Responsible Sourcing Policy defines the standards of integrity of Unilever that the third parties have to follow.

The important component of Unilever’s ‘winning with integrity’ strategy is the requirement for the highest standards of behavior from all of their employees and partners. Unilever operates with a broad definition of corruption. This includes fraud and financial misrepresentation, conflicts of interest, bribery, facilitation payments, anti-trust violations and misuse of information. They have dedicated policies in all of these areas, and others not specifically related to corruption (such as discrimination, workplace safety and information protection). These policies define in clear, simple terms what everyone who works with and for Unilever must and must not do.

Unilever Sustainable Living Young Entrepreneurs Awards

The Unilever Sustainable Living Young Entrepreneurs Awards developed in partnership with the Cambridge Program for Sustainability Leadership, are looking for innovative yet practical, tangible solutions created by young people that help make sustainable living commonplace. This is a great opportunity for young entrepreneurs who are interested in making a product, service, or application that could change a practice or behavior to enable sustainable living. All young entrepreneurs who are aged 30 or under are welcome to join the competition. Seven finalists will be selected and offered a total of more than €200,000 in financial support and individually tailored mentoring. The overall winner also receives the prestigious HRH The Prince of Wales Young Sustainability Entrepreneur Prize. Not only the award provides financial support, it also helps to take the winner’s sustainable living initiatives to the next level. The prize package includes funding, customized expert support, access to an online business development program, a three-day accelerator workshop at the University of Cambridge, and networking with senior executives and sustainability leaders at Unilever’s headquarters. For an entrepreneurial venture to create new value, three factors must be present – an entrepreneurial opportunity, the resources to pursue the opportunity, and an entrepreneur or entrepreneurial team willing and able to undertake the opportunity. The Unilever Sustainable Living Young Entrepreneurs Awards provides all three of these elements therefore it is a great opportunity for young entrepreneurs to make their dream come true.

Unilever's International Strategy

Unilever 's international strategies are global and transnational. These strategies allow Unilever to combine the benefits of global – scale efficiency with the benefit of local responsiveness. Many products of Unilever are standardized in the sense that they can be recognized in any countries that Unilever have their products at. The company's four biggest brands are Dove, Sunsilk, Rexona and Lux. These brands are being use by million of people from all around the world everyday. By considering the local preferences of different location, Unilever can better serve their customers. For example, the Doves shampoo is a well-known product of Unilever. The logo and the name stay the same in any countries but Unilever can change the ingredient to fit better to local preference. For example, in tropical countries where the weathers are hotter, the products should be more oil-free to keep customer’s hair from getting oily and dirty quickly. Another example taking local preferences in consideration of Unilever is Knorr. Knorr offer many different recipes mix and sauces in different countries. For example, in Vietnam, you can easily find the recipe mix for fish soup or stir fry sauces while in America, the most popular is pasta or gravies sauces. 

Unilever Business and Corporate level strategy

Unilever Business and Corporate level strategy

Unilever Business level strategy: Differentiation

Unilever achieves its competitive advantage through differentiation. Unilever focus not only on how to sell their product to customers also to meet absolute customers’ satisfaction. Nowadays, consumers are more concern with health and environment. They are more attracted to environmentally friendly products. Understand customer’s concern, Unilever develop a plan call Sustainable Living Plan. This plan has three main purposes. The first one is to “Improve Health and Well-being” by offering balanced nutrition, good hygiene and the confidence that comes from having clean clothes, clean hair and good skin. The second objective is to “Reduce Environmental Impact” by producing products which are sustainably sourced and used in a way that protects the Earth's natural resources. And the last purpose is to “Enhancing likelihood” by respecting for the rights of the people and communities they work with throughout the world. By promoting this plan, Unilever have built a strong, positive and different image to customers than any of their competitors

Unilever Corporate level strategy: Creating value through diversification

            Unilever’s diversification strategy is accomplished mostly through acquisition and divestment. Unilever has been merging and acquiring several companies throughout the years to extend its portfolio. For example, in April 2000 Unilever bought both Ben & Jerry's $326 million and Slim Fast for $2.3 billion. Unilever is also selling off or spinning off some segments of the firm’s business to enhance its competitive advantage. For example, in 2006, Unilever announced that it had decided to put the majority of its Frozen Foods businesses in Europe up for sale.

            Unilever also focuses on internal development to provide best product quality to customer. Unilever has several R&D centers that located around the world help the company to respond fast to changing needs, tastes and trends. With more than 6,000 scientists, engineers, chefs and technicians work in Unilever's R&D centers around the world - inventing new products and improving existing products, Unilever is able to bring to the best quality product and satisfaction to customers.

           

Human Capital - Chapter 4

             At Unilever, human capital is one of the most important factors that lead to the successful of the company. Being a global company with thousands of products and more than 400 different brands, Unilever understand that the important of hiring and training the right people to work for the company. They attract people through the company’s message. “It's encouraging to see how our sustainable living plan sits with our ambition to double the size of our business while reducing our environmental footprint. That's become an increasingly inspiring message to motivate people to join the company.” – said by Paul Maxin, Unilever's Global Resourcing Director. At Unilever, they look for people to not just have values but also to be able to add values and bring the sustainable living plan to life. When a person goes the Unilever’s website, they can easily the company’s culture, value and objectives. Unilever want to build a winning culture, in which every employee is encouraged to grow to his or her full potential. There are also many different training programs for fresh graduates or internship programs for junior and senior in college. These different programs help training new employees, get them familiar with the company’s culture and help the company to select talented people to stay and work with them after the program finish.

SWOT Analysis

                                                   SWOT analysis for Unilever

Internal Factors	Strength         -          Strong portfolio         -          Global brand         -          Product diversity         -          Sustainable living plan         -          Combine global and multidomestic strategy         -          Strong human resources	Weakness         -          Product can be easily replaced         -          Lack focus on non-famous brands
External Factors	Opportunity         -          Emerging market         -          Raising population         -          Globalization         -          Increase consumer concern for      health and environment	Threat         -          Global competitor         -          Local competitor         -          Changing lifestyle         -          Economic downturn

Strength

-          1. Strong portfolio: Unilever has more than 400 brands and their portfolio ranges from nutritionally balanced foods to indulgent ice creams, affordable soaps, luxurious shampoos and everyday household care products.

-         2.  Global brand: Unilever’s products are now sold in 190 countries in the world. Approximately, on any given day, two billion people use Unilever products. They have many famous brands that we all have heard about such as Doves, Omo, Knorr, Lipton, Magnum,…

-         3.  Product diversity: Unilever divide their products into four main segments: Personal care (36% of sales) with Dove, Rexona, Lux, Sunsilk,…; Foods (27% of sales) with Knorr, Hellmann’s, Flora, Rama…; Refreshment (19% of sales) with Lipton, Magnum, Wall’s,…; and Home Care (18% of sales) with Surf, Omo,… The diversity in products and product lines help Unilever reach their customer more easily.

-         4. Sustainable living plan: The Unilever Sustainable Living Plan sets out to decouple growth from environmental impact, while at the same time increasing their positive social impact.

-          5. Combine global and multidomestic strategy: Unilever have both global products that are the same in every country and the differentiate products based on different local preferences.

-          6. Strong human resources: Unilever have many program such as Future Leadership Program in many different countries to attract talented people

Weakness

-         1.  Product can be easily replaced: Many of Unilever products are easily replaced and substituted by local products with cheaper prices.

-         2.  Lack focus on non-famous brands: Having more than 400 brands make it difficult to manage and focus on all of them equally. The core brands are giving much more attention than the less famous brands.

Opportunity

-          1. Emerging market: Many new emerging markets allow the company to expand their business further in these markets.

-         2. Raising population: Raising population, especially in developing countries, leads to increase in demand for consumer’s good which is a good opportunity for Unilever to develop more new products and reach out to new customers.

-          3. Globalization: Globalization makes it easier to do business across countries borders. It can also help with cheaper production cost and supplier.

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-          4. Increase consumer concern for health and environment

Threat

-           1. Global competitor: Strong global competitor such as Procter & Gamble which offer many similar products and same quality.

-          2. Local competitor: Unilever also have to deal with local competitors who offer the same products but cheaper price because of the small economic scale and cheaper labors.

Competitive Advantage

    Unilever is an international company with more than 400 brands focused on people's health and well-being. Unilever's brands range from luxurious hair treatments and mouth-watering ice creams to low-cost nutritious foods, antibacterial soaps, germ-killing sprays and much more. Every day, there are nearly two billion people in the world are using Unilever products. Many of their products are familiar in our daily life such as: Doves, Sunsilk, Lipton, Vaseline, Ben&Jerry’s,… Unilever competitive advantage strategy is differentiation. Their goal is toward the sustainable growth. The Unilever Sustainable Living Plan sets out to decouple growth from environmental impact, while at the same time increasing their positive social impact. The plan has three big goals that are:

-        . Help more than a billion people to improve their health and well-being.

-          Halve the environmental footprint of products.

-          Source 100% of agricultural raw materials sustainably and enhance the livelihoods of people across value chain.

By taking social responsibility as a main goal, Unilever bring a different image to customer compare to many other companies in the same industry. Unilever believe that as a business they have a responsibility to their consumers and to the communities in which they have a presence.