According to Kotler (1999) PESTLE Analysis is a useful strategic tool for understanding market growth or decline, business position and direction for Operations. A nations GDP at purchasing power parity (PPP) exchange rates is the sum value of all goods and services produced in the country valued at prices prevailing in the United States. As Chairman of Unilever Sri Lanka, Carl successfully steered the business to a sustainable and competitive growth trajectory, Unilever said in the note published by NSE. lagos bourse gained 0.13 percent Friday. Threats: Unilever encounter decrease in revenues and strong competition, increasing store brands. In may 2003, Unilever announced that they would solve the child labour problem in India. Let's understand the advantages and disadvantages of a military rule. Homework research task on Unilever in Nigeria. This project is in place. From the launch of Close Up Red Gel toothpaste in 1975. Differentiated tasks for high and low ability. This also means that TNCs pay tax which can be used by the governments of countries to help their people. The basic aim of technological factor is that, it enhances quick awareness to the general public through the use of internet facilities, radio, television etc which promotes the marketing aspect of the business. This resulted in gross profit paring by 76 percent with Unilever earning N11 from every N100 sales in 2019 compared to N30 per hundred naira sales. It operates in 190 countries and has over 155,000 people delivering its success (Unilever, 2020). On a quarterly basis, sales fell by about 58 percent in Q4 while loss stood at N4.765bn, a result Unilever said reflects challenging trading conditions and its decision in Q3 to prioritize tightening of credit terms and minimize exposures on trade receivables. PZ Cussons meanwhile has a stake in a 26,000-hectare palm oil plantation in the state of Cross River. The potential prize is alluring. This year Unilever Nigeria announced the launch of a new partnership to make sorbitol a key ingredient in Closeup and Pepsodent toothpaste from sustainably sourced cassava starch rather than from corn. This is very scary, I dont know what will happen to us in 100 years. Watch the video below to see a glimpse of the event. Unilever told Hindustan Lever Limited to start rejecting the use of child labour. Some practices of the company have been criticized which means that Unilever has to ensure that it sustains and maintains its focus especially when the spotlight is on it. All Rights Reserved. Unilever, as a matter of policy, set a standard as to the way of tackling political issues. Porter E.M. (1996) Views strategy as being flexible, companies must be flexible to respond rapidly to competitive and market changes aggressively to gain efficiencies and achieve best practice. The basic aim of strategy is to move the business forward, it is not all about making profit alone, but how the business can succeed eventually. 3. Many of its products can be easily replaced with substitute products. The Company sells products such as Omo washing powder, Key soap, Royco bouillon, Lipton tea, Blue Band margarine, Pears baby care goods, Vaseline petroleum jelly, Lux soap, and Close Up toothpaste. From the definitions given by these scholars, it entails that, strategy is seen as a means of making business to strive and to achieve a defined goal through vision, hard work, through perseverance that will lead to transformation. Our brands are on a mission to create a better planet and society, Find out how were taking action on the issues affecting the world through the Unilever Compass, while helping our business grow. Globalization creates opportunities for the socio economic development among nations or state. It has over 400 brands in its mega portfolio. Unilever is an organisation known globally and it has made impact to so many peoples lives, their products have spread abroad, they have gainfully employed millions of people and their products have been sold massively across the globe. TNCs can help economic development by increasing the amount of manufacturing industry and they can bring great benefits to the counties they operate in. Talking about their brands, they produce domestic goods which they know from the onset that people would really need such goods because, it enhances the daily living of people. Strength: Unilever Nigeria is recognised as a global company which has its products all over the world. "They have been popular and the biggest contributor in sales to each brand," said Christos Giannopoulos, CEO of the company's Nigerian business. Many of its products can be easily replaced with substitute products. The table below summarises the SWOT analysis of Unilever Nigeria. 1. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management. "They have been popular and the biggest contributor in sales to each brand," said Christos Giannopoulos, CEO of the company's Nigerian business. But again, the firm is not alone in such tactics; the same shops stock Nestle. mdh.diva-portal.org. Copyright Get Revising 2023 all rights reserved. , Translate few sentences from ENGLISH TO FRENCH , Unilever Future Leaders Programme Online Games - WTF????? Copyright 2022 All rights are reserved. Another weakness to note is that Unilever has limited direct influence on consumers as it must rely on retailers. Unilever Tea Kenya owns and operates 22 pharmacies, 4 health centres and an 85 bed hospital Employment (economic benefit) There are 18,000 workers in the Unilever tea plantation in Kericho, Kenya who get paid twice the national minimum wage in an area where there are few other jobs available (prostitution being one). A look at how were growing our business and brands in one of the worlds most dynamic countries. This should be positive for the firms bottom-line as Unilever Nigeria paid N2.575 billion as interest expense in 2016, equivalent to 84 percent of its reported net income. Unilever recorded a loss before tax of N8.32bn compared to a pre-tax profit of N13.56bn in 2018. It has good infrastructure, expertise, market experience, distribution channels, and financial power to explore and implement diversification strategies. Information from the companys financials suggests a tax credit of N4bn which improved bottom-line to a loss of N4.22bn. It is the only Nigerian newspaper with a bureau in Accra, Ghana. Unilever has annual sales of over $4.5 billion. The external environment of any organisation is a large and complex place. Unilever Nigeria started with the soap manufacturing company, and is today one of the oldest surviving manufacturing organizations in Nigeria. They are as follows. Management has scheduled a meeting with shareholders for the 11th of May 2017, aimed at garnering approval for the rights issue before proceeding to obtain regulatory consent. The other weakness is that its products can easily be replaced with substitutes especially in the emerging markets in Africa and Asia where the rural consumers in the hinterland often use traditional and natural alternatives to the products that Unilever markets. It has both daily and Sunday titles. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. Environmental Factor: UnileverNigeria takes the responsibility of raising the quality of life of people in the operating environment through the quality of their brands and contributions to communities in which they operate. In This Content. Currently, local manufacturers face a number of challenges including: Customs administration and port related issues, Common External Tariff (CET) and issue of competitiveness. Unilever faces a number of big competitors globally. In Nigeria there was uncertainty about duties to be paid by companies due to inflation and fluctuation of currency. We're here to answer any questions you have about our services. I recently asked for write my paper, usedhttps://edubirdie.com/write-my-paperfor that. As mentioned earlier, Unilever operates in a market segment where local products and alternatives to its brands proliferate especially in the emerging markets and hence, it faces a threat from smaller and more nimble local upstarts who can provide more value for lesser money without the associated costs that global giants like Unilever incur. Robert and Caldart (2009) view strategy as a way a firm can only hypothesize about the implications of different possible initiatives and learn more about them through interaction with other actors such as competitors, regulators, customers, suppliers, and partners in its competitive landscape. There was a lot of disloyalty to the central government in Nigeria because of the high levels of tribalism and nepotism, which contributed to the rise of . At 31 December 2016, the unhedged financial assets and liabilities amounted to N11.1 billion (2015: N2.1 billion). Unilever has a platform and ground to improve vitality worldwide through its global scale and its interactions with consumers. Opportunities: Unilever has the opportunity of increasing need for healthy products and changing consumer preferences by adding value to their daily needs. Get Revising is one of the trading names of The Student Room Group Ltd. Register Number: 04666380 (England and Wales), VAT No. In contrast, entry barriers exist whenever it is difficult or not economically feasible for an outsider to replicate the incumbents position (Porter, 1980b; Sanderson, 1998). 1. Bye and large, the organisation is in a very good position to continue growing. Lever Brothers (West Africa) Ltd began trading soap in Nigeria in 1923. He writes regularly online on a variety of topics. But Nigeria, Africas top oil producer, last year emerged from its first recession in 25 years which was largely caused by low crude prices. The Advantages and Disadvantages of Colonialism. GDP (purchasing power parity):$353.2 billion (2009 est. A core competency is a way in which a business handles the affairs of the organisation. Weakness:Unileverweakness is the dual leadership not connecting with customers and secondly. Cash- strapped Nigerians have resorted to cheaper alternatives favouring unlisted brands over listed peers, and causing the latter much headache since the 2016 recession worsened income levels. In these situations, managers face the extremely difficult problem in making decisions that demand a long-term perspective, committing the firm in the long-run within a competitive landscape that is unlikely to stand still. Likewise, it is also accused of causing deforestation and seen by many as one of the top global plastic polluters. For Unilever, the availability of cheap alternatives to its Home & Personal Care segment (HPC) and intense competition in the Food Business space continues to dampen sales. In other to convince customers to buy products at different prices in the value created for each of those buyers usually indicates that the market is characterised by high supplier power and at the same time by low buyer power (Porter, 1998). Unilever Nigeria reported 35% growth in turnover in 2021, taking the business from 52 billion Nigerian naira in 2020 to 70.5 (108 million to 145 million). The change to cassava starch marks a significant step forward in Unilever Nigerias localisation agenda, where the company is taking action to source raw materials locally and transparently. Created employment opportunities - 6,000 direct jobs - contributed to the economy as 90% of employees are Nigerian. Advantages. Pepsi Lipton is a joint venture between Unilever and PepsiCo to manufacture and sell RTD ice tea across the world. Selling and distribution expenses plunged 26 percent in the period, marketing expenses eased by 10 percent while impairment loss on trade receivable surged 132 percent. The use of this material is free for learning and education purpose. Here are just a few updates from our initiatives. Business strategy to my own understanding is a way in which organisations view the future, the extent to which the business is heading to, the plan, set targets, etc. Nationalising UAC hampered Unilevers control over the market where UAC operates. Unilever, the develo ping market contribution rate into global revenue reached over 56% in 2005 and 53% in 20 10. In 2019, HCP segment revenue declined by 40 percent compared to 28 percent fall in the Food Product segment. Ellis & Williams (1993) expressed that, It indicates the perspectives for business to achieve better advantages, it elaborates tactics for business to face challenges, it points out the trends and competitions around the business. Business consists of two main aspects, namely external factor and internal factor. Knorrs purpose Eat for Good encourages consumers to change the world by changing what is on their plate. Another way Unilever ULVR.L is tailoring its operations to the local market is by offering smaller pack sizes of a range of products, from tea to stock cubes, to appeal to more customers in a country and region plagued by poverty and inequality. Unilever operates in nearly 190 countries around the world and has been a traditional paragon of excellence and quality in the Fast Moving Consumer Goods sector. Unilever helps 45 000 women in rural areas to become entrepreneurs by providing products to sell and loans. Although the global economic downturn has had an impact on Unilever, the speed of Unilever dealing with Covid-19 In fact, Dove was the leading deodorant brand in the USA in 2019 which generated 203.9 million U.S. dollars (Shahbandeh, 2019). TNCs can cause environmental problems, for example mercury-contaminated glass from a Unilever factory ended up in a waste dump instead of being safely disposed of. Brand Manager - Disrupt Innovation Lead. 1. Unilever is one of most influential companies in the world by providing products that help people in their daily life and also supporting global economic growth. Unilever are committed to providing consumers with products that are consistent in quality, safe in use and free from adverse effects at all times. The measure is difficult to compute, as a US dollar value has to be assigned to all goods and services in the country regardless of whether these goods and services have a direct equivalent in the United States (for example, the value of an ox-cart or non-US military equipment); as a result, PPP estimates for some countries are based on a small and sometimes different set of goods and services. Unilever wants to step up the use of the Internet in order to improve brand communication/marketing and on-line selling & to simplify business-to-business transactions throughout the supply chain. As shown on its revenue size, sales dropped by 32.5% from N92.025 billion in 2018 to N60.757 billion a year after. It has strong brand portfolio and sound relationship with retailers basically and economies of scale. Now I am so deep into this topic that I can write about anything about it myself. The intensity of rivalry, which is the most obvious of the five forces in anindustry, Unilever has been more dominant in market compare to Nestle. Shell has spent $12 billion in LICs for example. Work with us and we assure you that not only will you feel included, valued, trusted and celebrated but we will help you get on the path to achieving your career . The brand is promoting plant-based meals with Knorr seasoning as a key ingredient. Net earnings of 28 consumer companies in nine African countries have grown just 2 percent per year in local currency in the five years to 2016, and even less in dollar terms, according to Exotix, an emerging markets-focused financial services firm. Unilever was founded in 1929. Throughout 2021, Unilever Nigeria focused on reinvesting in brands and aligning with Unilevers global strategy of competitive, consistent, profitable, and responsible growth in addition to investing in employees to develop a pool of future-fit talent and adopting rigorous plans to fuel growth through cost savings. 852 Words4 Pages. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. There is hardly anyone who has not used at least one product from any of these brands. The total asset of Unilever declined 18 percent year-onyear to N107bn in 2019 while total liabilities fell 23 percent to N37.6bn resulting in a 16 percent reduction in total equity at about N70bn. Knorr believes that wholesome, nutritious food should be accessible and affordable for all and its encouraging Nigerian consumers to understand that they can change the world and their health for the better by changing whats on their plate. Joe David has years of teaching experience both in the UK and abroad. Likewise, many of its products can be easily imitated in countries where rules and regulations are not very closely observed. Concerning the area of health, Unilever has the credit to make people feel very healthy because they have good food that establishes their satisfaction. Identifies advantages and disadvantages of TNCs. Unilever plans to convert its outstanding Foreign Currency Loan (FCY) of N15.146 billion from its parent company Unilever Finance International AG into equity. Every day, 150 million consumers use Unilever brands. It has a broad portfolio of core brands (with Lipton, Pure Leaf, Brisk, each worth over $1 . According to the firm if the Naira had weakened/strengthened by 76 percent (the 5 year average change in the conversion rate of key currencies to Naira) against key currencies (Euro and USD) to which the Company is exposed to, with all other variables held constant, post-tax profit for the year would have been N6.4 billion higher/lower. A disadvantage of Unilever's organizational structure is its minimal support for regional strategic implementation. cereals ranging in size from 50 grams to 250 grams and 1 kilogram. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. Copyright Get Revising 2023 all rights reserved. Gross profit was also up 84%, from 11.1 billion in 2020 to 20.4 billion in 2021 (23 million to 42 million). Online shopping and digital commerce accounts for a small but growing fraction of sales. One-off income of 2.8 billion (6.3 million) was generated when Unilever Nigeria completed the separation of its tea business last year. Weaknesses of Unilever Unilever is vulnerable to product imitation and substitute products. In essence, most people in Nigeria always have their products at home. Nigeria. All rights reserved LCHW. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. Additional reporting by Martinne Geller; Editing by Pravin Char. Advantages of Military Rule. For this reason, they are committed to meet the everyday needs of people everywhere in Nigeria. With the shrinking of the disposable incomes of the global consumer, they are buying less and insisting on more value for their money or more bang for the buck. Barriers to Entry: The threat of new entrants is usually based on the market entry barriers. Profit fell following a 34 percent decline in the sales, the unaudited company result showed. If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. The differences between the OER- and PPP-denominated GDP values for most of the wealthy industrialized countries are generally much smaller (CIA World Fact book). In the 1960s, many countries began to nationalise foreign firms which also affected Unilever. (Capon, 2009. Brand is an asset of a company, it helps to distinguish companies product just as my lecturer Mr. John rightly said, it is the brand and logo of a company that promotes the market to competing products to help sales and capture the market. Ultimately, the decision to rent a house or buy a home depends on your personal financial situation, lifestyle, and long-term goals. Ready to make your mov. In fact, Knorrs new variant, enriched with natural ingredients and flavours, was one of Unilever Nigerias biggest success stories of 2021, contributing to business growth. Unilever produces a lot of products, namely; Food brands (e.g., Knorr, Lipton, Blue band, Beverages), Home care brands (e.g., Shampoo, Toothpaste, Soap, Moisturising cream), Personal care brands ( e.g., Lux, Vaseline, Sunsilk, Omo, Pears). It also examines the opportunities the company should explore and the threats it must deal with effectively. Some profits go overseas, for example Unilever is a Dutch-British company. A continent-wide downturn since 2014, tied to low commodity prices, has dampened hopes for companies. Unilever can make products that help give children a good start and be healthy for longer time. Unilever shares declined by 9.77 percent to N17.55 in Friday's trade, the most since November last year, as negative investors sentiment weighed on the consumer goods maker so that it emerged the worst performing on the Nigerian Stock Exchange (NSE) in the trading session. Unilever Nigeria Plc manufactures and markets consumer products primarily in the home, personal care and foods categories. Disadvantages of the Amalgamation. The main advantage is that TNCs can help countries develop by investing money ENCOURAGING DEVELOPMENT. These are examples of how the Anglo-Dutch group, like its global rivals, has been forced to adapt its business to cope with a central bank decision to restrict access to foreign currency for the import of certain products since 2015 to boost the economy. Unilever is famous for its CSR activities. , have long operated in Nigeria and are willing to go to some lengths to build brands and market share. The partnerships, programmes and purpose-led brands driving sustainable growth in one of Africas most vibrant countries. The company derives its competitive advantage from its global footprint and its track record of enhancing value for the consumers around the world. Shahbandeh, M., (2019) Leading deodorant brands in the United States in 2019, based on sales (in million U.S. dollars), available at: https://www.statista.com/statistics/194809/leading-us-deodorant-brands-in-2013-based-on-sales/, (accessed 17 August 2020), Unilever (2020) About Unilever, available at: https://www.unilever.com/about/who-we-are/about-Unilever/ (accessed 16 August 2020). We hope the article SWOT analysis of Unilever has been useful. T. Nguyen, L. Nguyen. Proctor & Gamble, Nestle, Johnson & Johnson, Colgate Palmolive, Kimberly-Clark. Unilever is a consumer goods company. Pros and cons of Unilever Nigeria proposed share sale, For Support : support@businessdaynigeria.zendesk.com. The United Africa Company employed around 70,000 people in the 1970s and was the largest modern business enterprise in West Africa. No plagiarism, guaranteed! More companies mean a greater income for India. In sustaining these successes, they ensured to maintain the highest and sound standards of mutual behavior towards their employees, consumers, customers, communities and operating environment as a whole. This gives Unilever an enormous opportunity to develop new products and grown further globally. All Rights Reserved. Its operating profit almost tripled to 9.2 billion naira ($30.1 million) in the first nine months of 2017, the latest figures available, after growing 25 percent in 2016. Unilevers turnover in 2019 was 52 billion. Unilevers Home & Personal Care includes the sale of skincare and oral care products, fabric care and household cleaning while Food segment includes the sale of tea, savoury and spreads. Socio Cultural Factor: This indicator is used to measure the rate and growth of population, changes in the taste and preferences of consumers, the changes in the lifestyle of consumers and the level of education of the populace which would have a great effect on the demand of the products or services provided by the organization. The PESTLE Analysis is an analytical tool used to evaluate and identify the Political, Economic, Social, Technological, Legal and Environmental factors in a given economy that would affect the operation of an organization. He has a keen interest in business, hospitality, and tourism management. There is a lot of unemployment in India due to lack of jobs. This should be positive for the firms bottom-line as Unilever Nigeria paid N2.575 billion as interest expense in 2016, equivalent to 84 percent of its reported net income. The company later started to sell food and laundry products, introducing Omo in 1960 and opening a production facility to manufacture the popular laundry brand locally in 1964. Registered office: International House, Queens Road, Brighton, BN1 3XE. Our Standards: The Thomson Reuters Trust Principles. Home care products generated 10.8 billion in the same (Unilever, 2020). The top- consumer brand said it raked N60.758 billion in revenue last year, a value which is the lowest level since it made N59.221 billion in 2015.
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