Tuesday, May 8, 2012

Unilever Paksitan Ltd. SWOT,QSPM Matrix,Strategy,CPM Matrix,







STRATEGIC ANALYSIS

OF

Unilever Pakistan Ltd.




Unilever Paksitan Ltd. SWOT,QSPM Matrix,Strategy,CPM Matrix















Table of Contents
  1. Executive Summary.. 3
  2. Letter of Acknowledgement. 4
  3. Introduction.. 5
      1. Introduction of Unilever Pakistan
      2. Overview of Unilever Pakistan
      3. Accountability towards Stakeholders


  1. Facts & Figures


  1. .Introduction to our Brands
      1. Food Brands
      2. Personal Care
      3. Home Care

  1. Offices and Sites.
      1. Offices
      2. Sites.. 6


  1. Sales and Revenue
  2. No. of Employees
  3. Strategy Formulation.. 10 - Stage I
      1. Vision Statement. 10
      2. Mission Statement. 11
      3. Critical Views. 12
      4. Proposed Mission Statement. 12
      5. Proposed Vision. 12

  1. Input Stage - The External Audit / Assessment
.. 13
. 13
  1. Opportunities. 13
  2. Threats. 14

  1. EFE MATRIX




  1. Competitor Performance Matrix (CPM) Matrix
  2. Input Stage - The Internal Audit / Assessment

  1. Strengths
  2. Weaknesses

. 17
  1. Organization’s Audit

  1. Management Audit. 17
  2. Marketing Audit. 17
  3. Financial Audit. 17
  4. HR Audit. 17

  1. IFE MATRIX


  1. Strategies In Action

  1. Intensive Strategy.. 21
  2. Integrative Strategy.. 21
  3. Diversified Strategy.. 21
  4. Defensive Strategy.. 21

  1. Matching Stage

  1. BCG Matrix.. 22
  2. IE Matrix.. 23
  3. Grand Matrix.. 24

  1. Decision Stage
.. 25
  1. QSPM... 25 MATRIX

  1. Strategy Implementation.. 29
  1. Annual Objective.. 29
  2. Policies. 29
  1. Strategy Evaluation.. 30
  1. Set Standards. 30
  2. Conclusion





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.


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.         






FACTS & FIGURES


  • Unilever Pakistan has 5 wholly owned and 7 third party manufacturing sites across Pakistan
  • Unilever Pakistan has employees around 1,500 on their payroll and many thousands indirectly.
  • Listed in Karachi Stock Exchange.
  • Unilever Pakistan has 32 products as per its website.
  • Head office is in Karachi.
  • During the year ended December 31, 2011, the Company produced 48,313 metric tons of home and personal care products out of its annual capacity of 60,446 metric tons.
  • 28,909 metric tons of beverages out of 62,377 metric tons.
  • 43 million liters of ice cream out of its annual capacity of 77 million liters.
  • Unilever Pakistan Ltd. had revenues for the full year 2011 of 51.9B. This was 16.1% above the prior year's results.
  • In 2010 it was $44.7 B
  • Share Value 6,261 PKR.
  • Annual earnings equaled 323.88 per share.
  • The Company had three subsidiaries, namely Lever Chemicals (Private) Limited and Levers Associated Pakistan Trust (Private) Limited, which act as trustees of Union Pakistan Provident Fund (Unilever Provident Fund), and Sadiq (Private) Limited, which is not carrying on any business operations.














The directors are pleased to present the financial statements for the nine months ended September 30, 2010.
Nine months ended September 30

2010
2009
Net Sales (Rs’000)
33,009,192
28,508,781
Profit before taxation (Rs’000)
3,232,527
3,370,165
Profit after taxation (Rs’000)
2,135,755
2,292,248





September 30, 2010
(Rupees in thousands)

Home and Personal Care
Beverages
Ice Cream
Other
Total






Revenue
6,625,359
2,853,108
1,738,235
288,682
11,505,384



















OUR BRANDS


Food brands

Unilever is one of the world's leading food companies. Our passion for understanding what people want and need from their food - and what they love about it - makes our brands a popular choice.

Badami

"Badami" is Wall’s response to the traditional kulfi.

Blue Band

Blue Band is essential for a family’s healthy growth and development and to enjoy a lifestyle full of vitality.

Brooke Bond A1

Brook Bond A1 is the strong cup of tea that gives the strength to face challenges and stand up for what you believe in.
Currently, Brooke Bond Supreme is running the “Chaske Zindagi Ke” campaign

Brooke Bond Supreme

Brooke Bond Supreme is part of life for the Pakistani consumer, bringing families closer together with its rich taste and traditions 

Cornetto

The Cornetto experience consists of a delicious, crispy-baked wafer, coated inside fro m top to bottom with a chocolate layer, rich ice cream inside, topped off with sauce and chocolate chips.

Energile

Bringing Vitality to your life.

Fruttare

Fruttare’s mission is to inspire in people the freedom to indulge by providing both pleasure and health through the natural goodness of fruit without the guilt of too many calories.

Knorr

Knorr believes in adding magic to every day meal moments.





Chatt Patta Noodles


Chicken Jalapeno Noodles


Lemon Chilli Noodles


Soupy Noodles Mast Masala


Soupy Noodles Chicken Delite


Achar Gosht































Lipton

Lipton is Tea – Tea is Lipton.

Magnum

Celebrate pleasure with the tempting Magnum range – an irresistible combination of thick, cracking chocolate with creamy vanilla ice cream.

Pearl Dust

Lipton Pearl Dust is the Sindhi soul that imbues intimacy and warmth in a couple’s relationship


Unilever

Unilever Food Solutions helps chefs serve tasty, wholesome meals that keep guests coming back for more. We create ingredients that save precious prep time in the kitchen, without compromising on flavor or flair.

Rafhan

From the highly nutritious and healthy Corn Oil to the lip smacking Desserts – Rafhan today offers a complete meal package with the cherry on top!





Wall's Desserts

At Wall’s, we like to think we have one of the best jobs in the whole world; making delicious frozen dessert treats for the whole family.

Wall's Kid's Range

Wall’s Kid's Range brings to you the surprise of delicious frozen desserts wrapped around fun and adventure.


Personal care brands

Our personal care brands, including Dove, Lifebuoy, Lux, Pond's, Rexona and Sunsilk, are recognised and respected around the world. They help consumers to look good and feel good – and in turn get more out of life.
    

Clear (Shampoo)

Clear spells confidence for the young Pakistanis of today.

Close Up

Our mouths are our gateway to life. We use them to eat, drink, talk, laugh, smile and what not!

Dove

To help you enjoy your own brand of beauty, Dove provides an extensive range of cleansing and personal care products.

Fair & Lovely

Asia’s leading fairness brand.

Lifebuoy shampoo

Providing healthy hair to all Pakistani consumers.

Lifebuoy soap

Lifebuoy's goal is to provide affordable and accessible hygiene and health solutions.

Lux

Lux brings out the star in you! 

Pond's

Making a real difference to women's skin and the way they live their lives.

Rexona

With Rexona you know your deodorant won’t let you down.

Sunsilk

Sunsilk provides real solutions to women's everyday hair needs everywhere.

Vaseline

To help you enjoy great, healthy skin everyday.




Home care brands

In many parts of the world we lead the home care market, with brands such as Omo, Surf, Comfort and Cif. It's more than just hygiene – with homes and clothes that are clean and cared for, we help you get more out of life.
    

Comfort

Comfort fabric conditioner helps your loved ones feel cared for everyday through clothes with amazing shine and fragrance that no detergent alone can deliver.

Rin

Consumer insight shows that one of the leading drivers that indicate a good wash is the level of whiteness and brightness that clothes have after the use of a detergent powder. Rin is formulated to offer whiteness and bring back life in your everyday clothes.

Sunlight

Sunlight aims to transform the chore of washing clothes into a moment of delight for Pakistani housewives by giving them a magical wash experience of lemons and thousands of flowers.

Surf Excel

Remember when you were a child? How you were free to explore, returning home covered in dirt and other stains that you wore like the badges of an intrepid discoverer?

Vim

The globally renowned brand with its revolutionary one-wipe degreasing formula, now in Pakistan!


Offices and Sites


The company operates through 5 regional offices, 4 wholly owned and 6 third party manufacturing sites across Pakistan.




Our Vision





We help people around the world meet everyday needs for nutrition, hygiene and wellbeing, with brands that help people look good, feel good and get more out of life.
Our Mission






Vitality is at the heart of everything we do. It's in our brands, our people and our approach to business.


CRITICAL ANALYSIS OF VISION

The vision that is mentioned on their website predominantly seems to be fulfilling the requirement of mission rather than vision if taken in literal sense, but if taken subjectively it does address the vision statement. After a careful and thorough study of Unilever and especially whatever is mentioned on their website we would like to propose the following vision and Mission Statements.



PROPOSED VISION STATEMENT

Lead the FMCG MARKET by achieving significant growth objectives by developing new ways of doing business while decoupling growth from environmental impact for the well being of humans in general and thus by directing them towards a healthy, hygienic lifestyle.



PROPOSED MISSION STATEMENT

Our Philosophy sets out our aspirations in running our business. It's underpinned by our code of business Principles which describes the operational standards that everyone at Unilever follows, wherever they are in the world. The code also supports our approach to governance , corporate responsibility and defines our state of existence which to help people around the world meet everyday needs for nutrition, hygiene and wellbeing, with brands that help people look good, feel good and get more out of life and this requires requires "the highest standards of corporate behavior towards everyone we work with, the communities we touch, and the environment on which we have an impact."





Internal and External Audit of Unilever


Strengths:

  1. End-user sales control and direction.

  1. Right products, quality and reliability.

  1. Superior product performance vs competitors.

  1. Better product life and durability.

  1. Spare manufacturing capacity.

  1. Staff has experience of end-user sector.

  1. Maintain customer/consumer lists.

  1. Direct delivery capability.

  1. Promoting special events of every culture.

  1. Oldest MNC of Asia

  1. Continously working on Product Quality and Inovations.

  1. Existing sites are big enough to serve easily serve.

  1. Products have required accreditations.

  1. Management is committed and confident.

  1. Good diversity of nationalities on the Unilever executive board which indicate no discrimination.

  1. Encouraging managerial personnel from developing world as well as women

  1. Spending Lacs of Rupees on ERP Implementation.

  1. Ability to tailor products to customer demands.

  1. In-depth understanding of different markets and innovate the products suitable for each market, i.e Geo-Centric and Poly Centric.

  1. Adhering to a policy of listening to customers.

  1. 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.


  1. 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.


  1. Practice Human Needs theory.

  1. Employees are promoted quick and timely.

  1. Close Monitoring of Human Resources.

  1. Provide Work, Life Balance to their employees.

  1. PKR 2.43m Employee contribution towards flood relief and rehabilitation work.

  1. Facilitate purchase of houses, vehicles and computers repayable in monthly installments to employees.

  1. Established Raabta Consumer Careline for their consumers.

  1. Global leader in products for skin cleansing, deodorants, tea, shampoo, soap and antiperspirants.

  1. 385 Unilever employees volunteered in sustainability initiatives in 2010.

  1. Successful Brand extension in dove from skin care to hair care .

  1. Introduces new way of woring and teambuilding.

  1. Responsibility for others

  1. Supports Innovation, pioneering innovation

  1. Robust career development

  1. Traveling and Tourism

  1. Diversity in opinions

  1. Good social responsibility to shareholders and employees


  1. Follow Participative style of Management.

  1. Large range of brands to match the diversity of its consumers.

  1. Path to growth-concentrating and refocusing on core brands

  1. Open way of Communication

  1. Employee is given extensive briefing and training soon after appointed.

  1. Strong brand equity.

  1. Innovative, Strong and effective brand communication

  1. High dividend pay out.

  1. Strong financial position.

  1. Excellent supply chain management .

  1. Corporate philanthropy .

  1. Well-established brand name.

  2. Aware of the Consumer Buying Behavior.

  3. Unilever has Global reach, with local Roots.

  4. Vast Distribution Networks.

  5. Strong and Timley Strategic Decisions like, acquiring of polka, Knorr, Rafhan Foods and selling of Dalda.
  6. Reached 5.2 Million People through Lifebuoy Handwash Programmes in 2010.

  7. Reached 6.2 Million People through Sustainability Programmes in 2010.

  8. 82608 Meals were provided to World Food Programme.

  9. 16 % Reduction in it's Carbon Footprint through Unilever Head Office Initiatives.


Awards and Recognition:

  1. Included in Carbon Disclosure Leadership Index for sixth consecutive year with a score of 82% for disclosure in 2010 Carbon Disclosure Project.

  1. Food industry leader in the Dow Jones Sustainability World Indexes for the 12th year running.

  1. Unilever named 'Company of the Year 2010' by the UK’s Business in the Community (BITC)

  1. Received the International Charter's 'Committed to the Environment 2010' award for environmental management and performance

  1. Food industry leader in the Dow Jones Sustainability World Indexes for the 11th year running – the only company to have achieved this
  2. Retained SAM Sector Leader and SAM Gold Class Sustainability distinctions from Sustainable Asset Management.

  1. Included in the FTSE4Good Index Series since its inception in 2001 and attained a top environmental score of 5, leading to inclusion in the FTSE4Good Environmental Leaders Europe 40 Index

  1. Member of the Carbon Disclosure Project's Leadership Index, scoring 76% in its 2009 survey

  1. Ranked 7th in the Global 100 Most Sustainable Corporations in the World, a list compiled by 'Corporate Knights' magazine

  1. Unilever has achieved Platinum Plus status in the latest evaluation carried out by the UK's Business in the Community (BITC). Scoring 80%, Platinum Plus is the highest ranking in BITC's CR Index 2009. Toby Shillito, BITC Director, CR Index and Advisory Services, commented: "Unilever has demonstrated how the thinking around sustainability issues can be used to create business value and competitive advantage ".

  1. Scored 78% and recognised as 'best practice' at Level 4 by the Natural Value Initiative's Ecosystem Services Benchmark, a tool to help investors assess biodiversity and ecosystem impacts

  1. Placed in the top five of 59 European companies in the 2009 Palm Oil Buyers' Scorecard, and rated top of six Australian companies in the 2010 Palm Oil Buyers' Scorecard, both assessments conducted by WWF
  2. One of 35 companies to respond to the first disclosure request from the Forest Footprint Disclosure Project

  1. Top of the foods sector in a benchmarking study carried out by Ceres, UBS and Bloomberg on companies' disclosure of water use

  1. Presented with the highest international level of recognition – the Level II International Corporate Health and Productivity Management Award by the Institute for Health and Productivity Management (IHPM) for our

  1. Led the food and beverage sector with a 64% score in the Tomorrow's Value Rating of how well companies manage their most pressing social and environmental issues.











Weaknesses:

  1. Rising raw material cost is being absorbed by the company.

  1. Discrimination among Employees.

  1. Brands have swallowed up the Parent Company Name.

  2. Weak Web Presence.

  3. Contradictions on website.

  1. In-sufficient data available to quote for Uni-lever Pkaistan.

  1. Operational complexity due to a large number of products in portfolio and due to diverse work force.

  1. Unilever Pakistan has got no identity of its own like hindutan Unilever.

  1. Unilever.pk heavily rely on Unilever Gobal.

  1. Only 1500 Employees are on their Payroll as per website.

  1. Many protests have been conducted by labour Unions against Unilever Pakistan.

  1. Accused of involvement in exploitive tactics against indirect employees.

  1. Hire and Bless only Managers from First lIne to Top, labour is indirectly hired and not on their payroll.

  1. Not able to manage factories on their own closing and outsourcing.

  1. Monopoly Practices and Political Bullying.

  1. As per IGI Security Report, The main focus has been investing in HPC business constituting over 60% of the total advertising expenditure. However, the growth in sales has lagged the growth in advertising spend which has been twice the revenue grwth indicating that investment in brands have been unsuccessful in leveraging sales growth.

  1. Heavy reliance on casual, temporary and agency workers, workers whose contracts bring them no job security and inferior pay and benefits to those formally employed by Unilever, is the rule throughout the company's operations.

  1. At the Walls Ice Cream Factory in Lahore, for example, there are (still) 89 permanent workers - and 750 workers employed on a casual basis.

  1. At Unilever's Khanewal Tea Factory, for example, there are 22 permanent workers and 1,000 casual employees.

  1. The Lipton tea factory in Karachi formerly employed 132 permanent workers and 450 casuals.

  1. Recently, ULEVER has closed down the Karachi tea factory in view of low demand and sales volumes.

  1. Not Following National laws and international Conventions and guidelines,

  1. Using Nameless Factories for Prduction as in the case of Tea, in Karachi.

  1. Unilever systematically violates worker and trade union rights through direct attacks on trade unionists (involving armed police as well as hired thugs) as well as aggressive outsourcing and casualization.

  1. More focused towards outsourcing then in-house development and manufacturing.

  1. Indirect Distribution Network.

  1. Had to sale of Dalda.

  1. Blueband being produced from Dalda factory.

  1. Charged of signigng contract with Dalda that it won’t enter into competition.




























Opportunities:

  1. Could develop new products.

  1. Local competitors have poor products.

  1. Profit margins will be good.

  1. End-users respond to new ideas.

  1. Can surprise competitors.

  1. Support core business economies.

  1. Could seek better supplier deals.

  1. Market Development in developing countries.

  1. Strategic acquisitions can help Unilever to expand its business.

  1. Population continously increasing in Pakistan.

  1. Rural area markets to expand.

  1. Big opportunity in food business.

  1. Export opportunity of hlal foods to Foreign Countries.

  1. Younger generation is becoming look and beauty conscious.

  1. More awareness about hair protection and hair cleanliness.

  1. Integration providing innovation opportunities.

  1. New soups can be introduced in winters.

  1. huge potential in the rural areas of Pakistan

  1. E-commerce- Online Selling can be initiated.

  1. Forward Integration can be done by launching unilever stores

  1. Enough space available for launching of nutritious food items.

  1. Like Pepsi's Lays and P&G's Prigle can Come up with Chips.

  1. Pakistan is the third largest importer of tea in the world so huge potential in tea farming.

  1. Huge oppurtunity is awaiting in detergent as about 50% of the population uses laundry soap for fabric washes.
  2. Aaround 40% tea is smuggled so that can be catered too by unliever thus a big market remain un-addressed.

  1. Only urban area are familiar with shampoo there still awaits a long way to go.

  1. Since pak has one of the least cocentrated retail market in the world with state owned utility stores corporation holding








Threats:

  1. Legislation could impact.

  1. Existing core business distribution risk.

  1. Market demand very seasonal.

  1. Retention of key staff critical.

  1. Could distract from core business.

  1. Possible negative publicity.

  1. Vulnerable to reactive attack by major competitors.

  1. Health consciousness people may find an alternative low calorie diets and exercise.

  1. Low GDP growth rate.

  1. Double digit inflation.

  1. Deteriorating security conditions.

  1. Energy shortage.

  1. Smuggling of tea and its own international products.

  1. Deteriorating value of Pakistani currency.

  1. High taxation.

  1. The local companies.

  1. Price wars.

  1. Competitors' aggressive marketing.

  1. Religious Semitism can be provoked being a Non Muslim MNC.

  1. Distribution and Retailer ship can be compromised for various reasons like they may go bankrupt or other factors could influence which will have direct impact on it.

  1. Due to Political situation their top notch could migrate.

  1. Strategic allies might seek for better opportunities.









EFE Matrix



Key External Factors
Weight
Ratings
Weighted Score
OPPORTUNITIES
1.
Could develop new products.
0.02
4
0.60
2.
Local competitors have poor products.
0.03
3
0.45
3.
Unrelated diversification.
0.03
1
0.10
4.
Since pak has one of the least cocentrated retail market in the world with state owned utility stores corporation holding
0.02
1
0.20
5.
Around 0.3 % of the market. USC has given license to many Super Stores which is a seems to be a good oppurtunity as they can make alliances with them.
0.02
2
0.04
6.
Aaround 40% tea is smuggled so that can be catered too by unliever thus a big market remain un-addressed.
0.03
2
0.06
8.
Only urban area are familiar with shampoo there still awaits a long way to go.
0.04
3
0.12
9.
End-users respond to new ideas.
0.03
2
0.06
10.
Support core business economies.
0.02
1
0.02
11.
Could seek better supplier deals.
0.02
3
0.06
12.
Strategic acquisitions can help Unilever to expand its business.
0.02
4
0.08
13.
Population continously increasing in Pakistan.
0.03
4
0.12
14.
Huge potential in the rural areas of Pakistan
0.03
4
0.12
15.
Big opportunity in food business.
0.02
4
0.08
16.
Export opportunity of hlal foods to Foreign Countries.
0.04
3
0.12
17.
Younger generation is becoming look and beauty conscious.
0.04
2
0.08
18.
More awareness about hair protection and hair cleanliness.
0.04
2
0.08
19.
New soups can be introduced in winters.
0.03
1
0.03
20.
E-commerce- Online Selling can be initiated.
0.03
3
0.09
21.
Forward Integration can be done by launching unilever stores
0.04
2
0.08
22.
Enough space available for launching of nutritious food items.
0.03
4
0.12
23.
Like Pepsi's Lays and P&G's Prigle can Come up with Chips.
0.03
4
0.12
24.
Pakistan is the third largest importer of tea in the world so huge potential in tea farming.
0.04
3
0.12
25.
Huge oppurtunity is awaiting in detergent as about 50% of the population uses laundry soap for fabric washes.
0.04
3
0.12

THREATS
1.
Legislation could impact.
0.02
2
0.04
2.
Existing core business distribution risk.
0.02
2
0.04
4.
Retention of key staff critical.
0.02
4
0.08
5.
Could distract from core business.
0.01
1
0.01
6.
Possible negative publicity.
0.01
2
0.02
8.
Vulnerable to reactive attack by major competitors.
0.02
1
0.02
9.
Health consciousness people may find an alternative low calorie diets and exercise.
0.01
3
0.03
10.
Low GDP growth rate.
0.02
2
0.02
11.
Deteriorating security conditions.
0.01
4
0.04
12.
Energy shortage.
0.01
2
0.02
13.
Smuggling of tea and its own international products.
0.02
3
0.06
14.
Deteriorating value of Pakistani currency.
0.01
2
0.02
15.
High taxation.
0.02
3
0.06
16.
The local companies.
0.02
4
0.08
17.
Price wars.
0.01
4
0.04
18.
Competitors' aggressive marketing.
0.02
4
0.08
19.
Religious Semitism can be provoked being a Non Muslim MNC.
0.02
3
0.06
20.
Distribution and Retailer ship can be compromised for various reasons like they may go bankrupt or other factors could influence which will have direct impact on it.
0.02
2
0.04
21.
Due to Political situation their top notch could migrate.
0.01
2
0.02
22.
Strategic allies might seek for better opportunities.
0.01
2
0.02
Total Weighted Score
1.0

3.87



Total weighted score of EFE matrix of UNILEVER (3.87) shows strong response of company towards external factors.








CPM Matrix




Critical Success Factor
Weight
P&G
Lakson
Reckit
Rating
Score
Rating
Score
Rating
Score
1.
Advertising.
0.1
4
0.4
2
0.2
3
0.03
2.
Product Quality.
0.09
4
0.36
2
0.18
3
0.27
3.
Price.
0.1
3
0.3
4
0.04
3
0.03
4.
Management.
0.04
4
0.16
3
0.12
4
0.16
5.
Financial Position.
0.04
4
0.16
3
0.12
3
0.12
6.
Customer Loyalty.
0.06
4
0.24
3
0.18
3
0.18
8.
Marketing/Branding.
0.04
4
0.16
2
0.08
3
0.12
9.
Market Share.
0.06
4
0.24
2
0.12
3
0.18
10.
Infrastructure.
0.05
3
0.15
4
0.20
2
0.10
11.
Technology.
0.06
4
0.24
2
0.12
4
0.24
12.
Assets.
0.06
3
0.18
4
0.24
2
0.12
13.
Distribution & Network.
0.03
4
0.12
2
0.06
4
0.12
14.
Logistics and Supply Chain.
0.06
4
0.24
3
0.18
4
0.24
15.
Potential Human Resource.
0.05
4
0.20
3
0.15
4
0.20
16.
Consumer Feedback System.
0.04
3
0.12
2
0.08
2
0.08
17.
Product Line
0.04
4
0.16
3
0.12
3
0.12
18.
Strategic Alliances
0.04
3
0.12
3
0.12
3
0.12
19.
Research & Development
0.04
4
0.16
2
0.08
4
0.16
Total Weighted Score
1.0

3.71

2.39

2.59

















IFE Matrix


Key Internal Factors
Weight
Ratings
Weighted Score
STRENGTHS
1.
Customer’s Loyalty.
0.04
4
0.16
2.
High dividend pay out.
0.03
4
0.12
3.
International brand strength.
0.03
4
0.12
4.
Market share of 41%
0.04
4
0.16
5.
Strong financial position.
0.04
4
0.16
6.
Have won more than 10 awards.
0.03
3
0.09
7.
Oldest MNC of Asia
0.04
3
0.12
8.
Highly Motivated Human Resource
0.06
4
0.24
9.
Vast Distribution Networks.
0.05
4
0.20
10.
Large range of brands to match the diversity of its consumers.
0.03
3
0.09
11.
Committed to business ethics, safety, health, environment and community.
0.05
3
0.15
12.
An Active participant in Social Service.
0.03
3
0.09
13.
Latest state of the art facilities and technology.
0.03
4
0.12
14.
Possess multiple international standard certifications like ISO 9001, ISO 14001, OHSAS 18001.
0.02
3
0.06
15.
Well-established brand name.
0.04
4
0.16
16.
Good social responsibility to shareholders and employees.
0.04
3
0.12
17.
Established Raabta Consumer Careline for their consumers.
0.04
3
0.12
18.
Spare manufacturing capacity.
0.03
3
0.09
19.
Enjoying market edge of 41% in FMCG industry. UNILEVER is at number one in ice cream segment
0.03
4
0.12






WEAKNESSES
1.
Strategic Alliance
0.02
1
0.02
2.
Costly Products.
0.04
2
0.08
3.
Discrimination among Employees.
0.03
1
0.03
4.

Weak Web Presence.

0.01
1
0.01
5.
Contradictions on website.
0.02
1
0.02
6.
Only 1500 Employees are on their Payroll as per website.
0.02
1
0.02
7.
Many protests have been conducted by labour Unions against Unilever Pakistan.
0.02
1
0.02
8.
Accused of involvement in exploitive tactics against indirect employees.
0.01
1
0.01
9.
Not able to manage factories on their own closing and outsourcing.
0.01
2
0.02
10.
As per IGI Security Report, The main focus has been investing in HPC business constituting over 60% of the total advertising expenditure. However, the growth in sales has lagged the growth in advertising spend.
0.02
2
0.04
11.
Heavy reliance on casual, temporary and agency workers, workers whose contracts bring them no job security and inferior pay and benefits to those formally employed by Unilever, is the rule throughout the company's operations.
0.02
1
0.02
12.
Recently, ULEVER has closed down the Karachi tea factory in view of low demand and sales volumes.
0.01
2
0.02
13.
Using Nameless Factories for Prduction as in the case of Tea, in Karachi.
0.01
2
0.02
14.
Unilever systematically violates worker and trade union rights through direct attacks on trade unionists
0.02
1
0.02
15.
Indirect Distribution Network.
0.01
1
0.01
16.
Had to sale dalda.
0.02
2
0.02
17.
Operational Complexity.
0.01
1
0.01

Total Weighted Score
1.0

2.88

The score 2.88 shows that company has solid internal position, its strengths are overcoming the weaknesses.


















Strategies in Action:



Market Penetration:
For the following brands unilever’s strategy would be Market Penetration.

  • Clear All Shampoo
  • Badami
  • Vim
  • Walls
Billboards all over the Shahrah e Faisal in Karachi.
Launching new advertisements to focus youth.
  • Surf excel
New Ad Campaign .
Dirt is good (Daag to achay hotay hain).
  • Lifebouy
    • Hand Washing Campaign








Market Development:
For the following brands unilever’s strategy would be Market Development.
  • Vaseline
This is an old product but now they are working on its market development.
  • Sunsilk
In order to further develop sunsilk’s market they have come up with an innovative idea that is by exploiting the religious Semitism of muslim women. They have launched a new product to address the HIjabi Women.





Product Development:
  • Domex
It is a new product in the market and its is launched against HARPIC of Reckitt Benckiser.

  • Fair Menz
A new product to address specifically men in terms of fairness .





Forward Integration:
Unilever has never indulged itself into forward integration.






Backward Integration:
Unilever has never indulged itself into backward integration.






Horizontal Integration:
  • Polka
    • In 1994 Lever Brothers Pakistan tried to acquire Polka Ice Cream for Rs 600 million. Polka refused the bid, and demanded Rs 1 billion. One year after the launch of Wall's Ice Cream by Lever Brothers in 1995, Polka approached Wall's with an offer to merge the two companies.
  • Knorr
    • It was a german brand which Unilever acquired in year 2000.

  • Glaxose-D
    • Glaxose-D is a fifty year old brand which was acquired by Unilever Foods Pakistan Ltd. from Glaxo Wellcome Pakistan Ltd in January 1999.







Defensive Strategy:

  • Retranchment:
    • On Oct 20,2007 ; 292 Contract employees were fired.



Organization’s Audit

Management Audit

The success of UNILEVER’s Management is evident from their Strong Financial and HR.
The management seems committed and well equipped in terms of technical, analytical, perceptual and managerial aspect.



Financial Audit

As part of our audit of financial statements we are required to obtain an understanding of
the accounting and internal control systems sufficient to plan the audit and develop an effective
audit approach.

We believe that our audit provides a reasonable basis for our opinion and,
after due verification, we report that:

(a) in our opinion, proper books of accounts have been kept by the Company as required
by the Companies Ordinance, 1984;

(b) in our opinion:

(i) the balance sheet and profit and loss account together with the notes thereon
have been drawn up in conformity with the Companies Ordinance, 1984, and are
in agreement with the books of accounts and are further in accordance with
accounting policies consistently applied;

(ii) the expenditure incurred during the year was for the purpose of the Company's
business; and

(iii) the business conducted, investments made and the expenditure incurred during
the year were in accordance with the objects of the Company;

(c) in our opinion and to the best of our information and according to the explanations
given to us, the balance sheet, profit and loss account, cash flow statement and
statement of changes in equity together with the notes forming part thereof conform
with approved accounting standards as applicable in Pakistan, and, give the information
required by the Companies Ordinance, 1984, in the manner so required and respectively
give a true and fair view of the state of the Company's affairs as at December 31, 2010
and of the profit, its cash flows and changes in equity for the year then ended; and

(d) in our opinion, Zakat deductible at source under the Zakat and Ushr Ordinance, 1980
(XVIII of 1980), was deducted by the Company and deposited in the Central Zakat Fund
established under section 7 of that Ordinance.

Based on our review, nothing has come to our attention which causes us to believe that the
Statement of Compliance does not appropriately reflect the Company's compliance, in all
material respects, with the best practices contained in the Code of Corporate Governance as
applicable to the Company for the year ended December 31, 2010.

A.F.Ferguson & Co.
Chartered Accountants
Karachi
Dated: February 21, 2011






HR Audit;
HR supports and develops Unilever's most important asset – the people – by enabling them to deliver outstanding business performance. In HR, they're not just a part of the Unilever culture; they help create it. Their environment is all about empowering individuals, both in terms of contributing to business objectives as well as achieving their own personal and career goals. HR's job is to make sure that UNILEVER has highly skilled people across the organization.
Human Resource Management at Unilever Pakistan is one of the best examples of HR practices of the real world. They are implementing HR practices in the best possible manner according to the needs and requirements of the culture of Pakistan.
Few highlights of their HR practices in Pakistan include:
  • H.R forms the backbone of Unilever as it helps in providing with the best people.
  • Annual demand planning
  • Benchmark the HR practices with International HR standards
  • HR audit is done that is high on information security
  • Database of all applications that come to Unilever is kept with the recruitment manager
  • Strategic recruiting process
  • Performance culture is strong in Unilever
  • Pay for performance programs
  • Motivational practices
  • Flexible benefits to the employees
  • Use of HRIS software i.e. PeopleSoft to maintain online data of all employees
  • Retention management and strong performance management system
  • Career development
  • Training & Development
  • Career counseling offered to employees
  • Induction plans for new employees
  • Career planning for the employees
  • Learning management system
  • Performance appraisal- strictly related to performance
  • Strong Health, safety & security measures in Unilever



MARKETING AUDIT.


ULEVER has a strategy of investing in brands in an effort to maintain awareness and develop brand equity. There has been double digit growth in advertising and sales promotions expenditure which totaled PKR 2.6bn in CY07. The main focus has been investing he HPC business constituting over 60% of the total advertising expenditure. However the growth in sales has lagged the growth in advertising spend which has been twice the revenue growth, indicating that investments in brands have been unsuccessful in leveraging sales growth. In our opinion this is mainly attributed ti the facts that major investments have been directed toward re-launching and re-energizing established brands like LUX, SURF EXCEL and brooke bond rather than new products. Going forward we expect double digit growth in the advertising expecditure which is likely to remain 11-12% of net sales.









BCG Matrix

























Grand Strategy Matrix






Rapid Market Growth

Rapid 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.





QSPM Matrix





Market Development
Product Development

External Factors
Weight
Attractive
Score
Total
Attractive
Score
Total

Opportunities





1.
Could develop new products.
0.04
---
---
4
0.16
2.
Local competitors have poor products.
0.03
3
0.09
2
---
3.
Related diversification.
0.03
---
---
2
0.06
4.
Around 40% tea is smuggled so that can be catered too by unilever thus a big market remains un-addressed.
0.03
4
0.12
1
0.03
5.
Only urban areas are familiar with shampoo there still awaits a long way to go.
0.04
4
0.16
---
---
6.
End-users respond to new ideas.
0.03
3
0.09
2
0.06
8.
Could seek better supplier deals.
0.04
4
0.16
4
0.16
9.
Strategic acquisitions can help Unilever to expand its business.
0.03
4
0.12
3
0.09
10.
Population continuously increasing in Pakistan.
0.04
4
0.16
3
0.12
11.
Huge potential in the rural areas of Pakistan
0.04
4
0.16
3
0.12
12.
Big opportunity in food business.
0.03
2
0.06
4
0.12
13.
Export opportunity of halal foods to Foreign Countries.
0.04
3
0.12
4
0.16
14.
Younger generation is becoming look and beauty conscious.
0.04
4
0.16
4
0.16
15.
More awareness about hair protection and hair cleanliness.
0.04
4
0.16
3
0.12
16.
New soups can be introduced in winters.
0.02
---
---
4
0.08
17.
E-commerce- Online Selling can be initiated.
0.02
4
0.08
---
---
18.
Forward Integration can be done by launching unilever stores
0.02
4
0.08
----

19.
Enough space available for launching of nutritious food items.
0.03
3
0.09
3
0.09
20.
Like Pepsi's Lays and P&G's Prigle can Come up with Chips.
0.04
---
---
4
0.16
21.
Pakistan is the third largest importer of tea in the world so huge potential in tea farming.
0.03
4
0.12
---
---
22.
Huge oppurtunity is awaiting in detergent as about 50% of the population uses laundry soap for fabric washes.
0.02
4
0.08
1
0.02















Threats





1.
Legislation could impact.
0.02
1
0.02
---
---
2.
Existing core business distribution risk.
0.03
4
0.12
---
---
4.
Retention of key staff critical.
0.02
3
0.06
---
---
6.
Possible negative publicity.
0.02
4
0.08
---
---
8.
Vulnerable to reactive attack by major competitors.
0.01
1
0.01
---
---
9.
Health consciousness people may find an alternative low calorie diets and exercise.
0.03
4
0.12
3
0.09
10.
Low GDP growth rate.
0.03
3
0.09
3
0.09
11.
Deteriorating security conditions.
0.03
3
0.09
3
0.09
12.
Energy shortage.
0.01
1
0.01
---
---
13.
Smuggling of tea and its own international products.
0.02
2
0.04
---
---
15.
High taxation.
0.02
2
0.04
2
0.04
16.
The local companies.
0.04
4
0.16
3
0.12
17.
Price wars.
0.03
4
0.12
4
0.12
18.
Competitors' aggressive marketing.
0.02
4
0.08
2
0.08
19.
Religious Semitism can be provoked being a Non Muslim MNC.
0.02
2
0.04
2
0.04
20.
Distribution and Retailer ship can be compromised for various reasons like they may go bankrupt or other factors could influence which will have direct impact on it.
0.02
3
0.06
---
---
21.
Due to Political situation their top notch could migrate.
0.02
2
0.04
---
---








Total
1.0

4.55

2.38

Internal Factors

Strengths





1.
Customer’s Loyalty.
0.06
4
0.24
4
0.24
2.
High dividend pay out.
0.03
2
0.06
---
0.06
3.
International brand strength.
0.05
4
0.20
3
0.15
5.
Strong financial position.
0.06
4
0.24
4
0.24

6.
Highly Motivated Human Resource

0.05

4

0.20
4

0.20
7.
Vast Distribution Networks.
0.06
4
0.24
4
0.24
8.
Large range of brands to match the diversity of its consumers.
0.06
4
0.24
3
0.24
9.
Committed to business ethics, safety, health, environment and community.
0.03
2
0.06
2
0.06
10.
Latest state of the art facilities and technology.
0.04
4
0.16
3
0.12
11.
Possess multiple international standard certifications like ISO 9001, ISO 14001, OHSAS 18001.
0.04
4
0.16
3
0.12
12.
Well-established brand name.
0.05
4
0.20
3
0.15
13.
Established Raabta Consumer Careline for their consumers.
0.05
4
0.20
3
0.15
14.
Spare manufacturing capacity.
0.04
3
0.12
3
0.12








Weakness





1.
Strategic Alliance
0.04
3
0.12
---
---
2.
Costly Products.
0.04
3
0.12
---
---
3.
Discrimination among Employees.
0.03
2
0.06
---
---
4.

Only 1500 Employees are on their Payroll as per website.

0.03
2
0.06
---
---
5.
Many protests have been conducted by labour Unions against Unilever Pakistan.
0.02
1
0.02
---
---
6.
Accused of involvement in exploitive tactics against indirect employees.
0.02
1
0.02
---
---
8.
Not able to manage factories on their own closing and outsourcing.
0.04
3
0.12
2
0.08
9.
As per IGI Security Report, The main focus has been investing in HPC business constituting over 60% of the total advertising expenditure. However, the growth in sales has lagged the growth in advertising spend.
0.04
3
0.12
---
---
10.
Heavy reliance on casual, temporary and agency workers, workers whose contracts bring them no job security and inferior pay and benefits to those formally employed by Unilever, is the rule throughout the company's operations.
0.03
2
0.06
---
---
11.
Recently, ULEVER has closed down the Karachi tea factory in view of low demand and sales volumes.
0.03
2
0.06
---
---
12.
Indirect Distribution Network.
0.03
2
0.06
---
---
13.
Operational Complexity.
0.04
3
0.12
1
0.04








Total
1.0

3.26

2.21

Grand Total


7.81

4.59




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.



References






Various Articles and Reports on Unilever.

Reports By IBA GRADS.

Reports BY A.F.Ferguson & Co.








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.






Proposed Suggestion:

As per QSPM result Market Development is suggested. In order to achieve the respective goal, the following annual objectives have been proposed and the policies formulated pertaining to those are mentioned below.




Annual Objectives:
The following annual objectives are only specific to those products which we feel require Market Development, Market Penetration and Revival.

  1. Lipton:
By the end of this year we expect to reestablish the brand by achieving at least
% of the market share.



  1. Clear Shampoo:
By keeping in mind the biggest competitor of clear shampoo that is head & shoulder which already enjoys 20% of the market share; We expect to capture atleast 17% of the market share.



  1. Walls:
Walls is already doing well so we need to focus on the following areas.
      1. Sustain the brand image.
      2. Launch affective and aggressive market campaign.
      3. Ensure tough competition to Omore strategies.


  1. Close-up:
To chase Colgate and Medicam toothpastes market share to nearest possible.




Policies:

For Lipton:

  1. Hire a brand ambassador.
  2. Offer lucrative packages to potential human resources of Lipton competitors.
  3. Give a health consciousness touch.
  4. Organize stalls and tea making setups at Corporate, Social and Media events.
  5. Make alliances with 4Star and 5Star hotel and International fast food franchises.





For Clear Shampoo:

  1. Change brand ambassador from Shahid Kapoor to Shan and Mahnoor baloch.
  2. Currently Clear has been projected as a mainly brand where as our strategy would be to project it for both genders.
  3. Give a higenic touch alliance with big and reputitive saloons.
  4. Organise hair washing point.


For Walls:

  1. Promote family culture in advertisements.
  2. Introduce a new design for walls cycle.
  3. Get a new music composed.
  4. Make alliances with international fast food franchises.
  5. Closely monitor Omore strategies and respond to them accordingly.


For Close-up:

  1. Reestablish the brand name.
  2. Launch aggressive advertising and marketing campaign.
  3. Launch school campaign.
  4. Add a free toothbrush.


EVALUATION:


Reviewing Bases of Strategy
  • How have competitors reacted to our strategies?
  • How have competitors' strategies changed?
  • Have major competitor's strengths and weaknesses changed?
  • Why are competitors making certain strategic changes?
  • Why are some competitor's strategies more successful than others?
  • How satisfied are our competitors with their present market positions and profitability?
  • How far can our major competitors be pushed before retaliating?
  • How could we more effectively cooperate with our competitors?

    Reviewing SWOT

  • Are our internal strengths still strengths?
  • Have we added other internal strengths? If so, what are they?
  • Are our internal weaknesses still weaknesses.
  • Do we now have other internal weaknesses? If so, what are they?
  • Are our external opportunities still opportunities?
  • Are there now other external opportunities? If so, what are they?
  • Are our external threats still threats?
  • Are there now other external threats? If so, what are they?
  • Are we vulnerable to a hostile takeover?







Measuring Organizational Performance

Some key financial ratios that are particularly useful as criteria for strategy evaluation are as follows.

  • Return on investment (RIO)
  • Return on equity (ROE)
  • Profit margin
  • Market share
  • Sales growth
  • Asset growth

In terms of Strategy :

  • Is the strategy internally consistent?
  • Is the strategy consistent with the environment?
  • Is the strategy appropriate in view of available resources?
  • Does the strategy involve an acceptable degree of risk?
  • Does the strategy have an appropriate time framework?
  • Is the strategy workable?






CONCLUSION
Unilever is committed to diversity in a working environment where there is mutual trust and respect and where everyone feels responsible for the performance and reputation of our company. They are committed to safe and healthy working conditions for all employees. We will not use any form of forced, compulsory or child labor. and committed to working with employees to develop and enhance each individual's skills and capabilities.

0 comments:

Twitter Delicious Facebook Digg Stumbleupon Favorites More