4410075243839900333375231584500 00Strategic Management ProjectStrategic Management Project Submitted by
4410075243839900333375231584500 00Strategic Management ProjectStrategic Management Project
Submitted by:
Ibrahim AlSemari (201731360)
Khaled Alrabiah (201731365)
Abdulaziz Ahmad Al Mugarain (201731361)
Faisal Khalid Alhogai (201731365)
Submitted To:
Dr. Norizan Bin Mat Saad
Table of contents
Chapter 1 Situational Analysis
Company’s analysis – the industry, Corporate Vision, Mission and Values
Competitive advantage and overall strategy
SWOT analysis
1.4 Porter’s Five Forces Model
Chapter 2 Competitive strategy
2.1 Product /market focus (generic strategy/ Ansoff Matrix)
2.2 Positioning – Marketing program (marketing Mix strategy)
Chapter 3 Implementation
3.1 Financial Data Projection
3.2 Implementation
3.3 Evaluation and control
Chapter 1 – Situational Analysis
Unilever is one of the leader consumer goods manufacturing company globally. The company was founded in 1930 through a merger, and has an annual revenue exceeding 62 Billion Dollars as per 2017. The company produces goods in Foods, Beverages, and personal care products.
Company Analysis
Unilever functions in the consumer goods industry which is one of the most competitive industries globally. The consumer goods industry requires constant innovation in products, and the number of competitors in the industry is the highest in all industries. Organizations in the industry are constantly studying the market for consumer goods and identifying new products, and product trends to be able to remain competitive and reach out to gain maximum market share. The consumer goods industry also requires a huge investment in research and development in order for organizations to be able to track the changing markets and consumer preferences for products. Furthermore, product development in the industry is not as easy, since the products need to go through an extensive development and testing phase, followed by approval of the products. Furthermore, for companies like Unilever, it is important to maintain its international presence based on its operating size and market, but not all products are easily launched in different regions across the world.
Competitive Advantage and Overall Strategy
The competitive advantage for Unilever is as follows:
Brand recognition – Unilever is a highly established brand and recognized across the world for its quality products. This allows Unilever to be able to launch newer products much more easily than new companies which have to go through different product and market development strategies.
International Presence – The Unilever brand has its offices and retail centers well-established in the global market. This allows Unilever to be able to quickly provide products to consumers, and consumer preference for easily available products also helps provide a huge competitive advantage to Unilever.
Cash Flows – The high revenue of Unilever allows it to be able to maintain its profitability and invest in developing newer products. Unilever is able to sustain funds through its established products, and utilizes profits to be able to develop and launch new products.
The Overall Strategy for Unilever is to provide its consumers with high quality products which also ensuring shareholder returns. The company consistently aims to ensure that all quality and control processes are regularly updated to meet changing market requirements while also enforcing the controls to help maintain the organizational goals.
SWOT Analysis
A SWOT Analysis of Unilever reveals the following:
Strengths Brand Strength – Unilever is a well-established and recognized brand with many products under its flag ship giving it a strong edge over competitors.
Broad Product Range – Unilever has many different consumer products in the market which also set it in front of its competitors.
Strong Global Presence – Unilever has a global presence in all markets across the globe, with retail and partnerships, allowing for Unilever to sell many different products and capture a large market share.
Weaknesses Imitable Products – Unilever products can easily be imitated by competitors and sold for a lower price which makes it difficult for products to maintain market share once imitations are available.
Retailer Dependence – Unilever depends on retailers to help in providing consumers with its products, and this limits its options since direct sales are not used as a channel to reach to consumers in many cases.
Opportunities Diversification – Unilever can explore other industries other than consumer goods and attempt to enter the industries since it has the sources in terms of available funds.
Environmental Conservation – Unilever can enhance its products towards developing environment, and also this will help towards corporate governance.
Market Development – Unilever can further develop its market in different product lines by increasing partnerships with smaller companies.
Threats Competition – Unilever faces excessive competition, the consumer goods market is highly developing and there are new competitors entering regularly.
Changing Market Environments – People are becoming more cautious towards a product, which is causing Unilever to change a lot of its products to be healthier.
Porters Five Forces Model
The analysis of Unilever on Porters 5 forces reveals the following:
Competitive Rivalry High
The consumer products industry is a highly competitive industry, and although Unilever has a huge market presence and market recognition, competitive rivalry still remains high.
Bargaining Power of Customers Low
Consumer products for Unilever are well established in the market, and consumers do not have a choice in pricing since products have defined retail prices.
Bargaining Power of Suppliers Moderate
Similar to consumer buying power, retailers also have limited bargaining power, but compared to consumers, the bargaining power of suppliers is still slightly higher.
Threat of Substitutes High
Many new entrants in the market are able to imitate the products and supply them in the market at cheaper costs. This makes the threat of substitute products a high concern for Unilever.
Threat of New Entrants Medium
Entering the consumer products market is not easy and has many variables and entry requirements; however, new entrants and new products regularly participate in the market which requires Unilever to update its products regularly increasing costs of research and development.
Chapter 2 Competitive strategy
2.1 Product /market focus (generic strategy/ Ansoff Matrix)
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Market Penetration Increase Market share – Unilever offer low prices to its premium customer by increasing market share.
Advertising techniques – Adapt more advertising techniques to attract customers.
Quality & Productivity – Continuous increase in quality and productivity results in increase in turnover.
Unique Product – Unilever offers such a unique product that no other business offers.
Brand awareness – Unilever has to re-launch its some of the products for increasing brand awareness
Product development Research & Development – Invest in research and development., modifications and extensions
Buy in products
Additional benefit – Creation of products with new or different characteristics that offer new or additional benefits to the customer.
Market Development Partnership – Unilever can further develop its market in different product lines by increasing partnerships with smaller companies
Discover new Market segment – Unilever can extend existing products to new market new sales areas, segments, uses.
Acquire competition – Unilever can also buy competitor.
Diversification New product – Develop new product for the new market
Switch Internal focus.
Strategic business unit (SBU) – Create new business units.
Subsidiary – Buy subsidiaries and share technology.
2.2 Positioning – Marketing program (marketing Mix strategy)
Product Offer more variety- Unilever has the capability to offer unique variety for its target market.
Warranty distribution – warranty, service, and support are very important
Design and quality – When it comes to developing a product, the design, quality, packaging, features, after-sales service, and customer service should be considered.
Create value by giving complementary services
Price Price competition- Unilever shall make their prices competitive in the market
Discount & credit – Offer discounts on regular basis, introduce credit terms in payments and cash and credit purchases.
Place Location & distributions – Location, distribution, and ways of delivering the product to the customer to cover over all area of KSA.
Increase distribution channels.
Shop front – location of your business, distributors, shop front, possible use of the Internet, and logistics.
Positioning – positioning is all about painting a beautiful picture of how you want your customers to view your product.
Promotion Value & benefits – Communicating the values and benefits of your products to your customers
Persuade customers – Direct marketing, sales promotion,
advertising, and personal selling to encourage customers to
Your business.
Chapter 3: Implementation
In order to run a high scales successful business…usually two strategies are planned. One is short term… which is applied immediately for immediate performance success and other one that is planned year by year.
3.1Financial Data projection
It is important to have realistic financial projections incorporated into your business plan in order to get the attention of serious investors.
Key Elements of Your Financial Projection.
All financial projections are governed by three types of financial statements:
Income Statement: An Income Statement states revenues, expenses and profit of a company in a particular period
. The key sections of an income statement are:
Revenue – Money earned by providing goods or services
Expenses – It includes all direct and indirect costs.
Total Income –revenue minus expenses, before income taxes.
Income Taxes
Net Income – Your total income without income taxes.
Cash Flow Projection: A Cash Flow Projection includes
Cash Revenues
Cash Disbursements
Reconciliation of Cash Revenues to Cash Disbursements
Balance Sheet: Represents a picture of business net worth at a particular time. In short, summary of all business financial data in three categories: assets, liabilities and equity.
Assets –Tangible objects of financial value owned by your company.
Liabilities – These are any debts your business owes to a creditor.
Equity – Difference between assets and liabilities.
Financial projection of the implemented strategy is as under.
Income statement (in millions $)
Year Revenue Expenses Profit
2018 435 335 100
2019 565 433 132
2020 763 399 364
2021 802 419 383
2022 889 498 391
Expected return on investment:
Initial investment is 1000M $
year ROI
2018 10%
2019 13%
2020 36%
2021 38%
2022 39%
3.2 Implementation
Implementation is the operational stage during which an organisation attempts to put its marketing plan into practice.
Comprises three activities:
1. To organise the market efforts
2. Hire new staff in the organisation.
3. Directing the execution of marketing plans.
Organising the marketing department
In order to implement the strategy, Unilever should organize the market and take care several factors affect decisions about structure
Ability to talk to and listen to customers.
Strong teamwork between departments.
Vertical structures shall be replaced with hhorizontal structures
Organisation levels should be fewer.
Cross-functional teams.
Empowerment of Employee.
Company-wide organisation
For Production oriented firms or sales-oriented firms like Unilever, following characteristics are necessary to make strategy effective
Marketing activities shall be distributed in all regions.
Physical distribution handled by production.
Marketing-oriented firms like Unilever shall coordinate all marketing activities under one manager. Activities can be line activities or staff activities.
Marketing/Sales department organisation
Specialisation on the basis of geography
Unilever will focus on organising the sales team based on geographic territories.
Specialisation on the basis of product
Unilever can divide its products into more than one line. Separate sales teams are responsible for selling each line.
Specialisation on the basis of customer
Unilever will divide its sales departments according to the type of customer (industry or distribution channel or major accounts).
.
3.3 Evaluation and control
The evaluation step of a strategic marketing plan helps in finding quantitative and qualitative metrics associated with the implementation and strategy. And what factors are contributing to success or failure
The marketing audit
To review and evaluate the marketing function in an organisation,a marketing audit is an important tool
This includes
Environment of the market.
Marketing strategy.
Productivity of the Market.
Functions of the Market.
The evaluation process
Evaluation process includes three metrics
To find out what happened.
To finding out why it happened.
Deciding what to do about it.
Various options and approaches Sales-volume analysis.
Sales results versus sales goals.
Market-share analysis.
Taking corrective action
Territory decisions.
Product decisions.
Customer decisions.
Order-size decisions.
Conclusion:
Unilever is one of those widely flourished companies that have adopted the technique of
Financial projection. It will not be wrong to say that it is one of the secrets of the success of this
Well-known company.
Unilever is a highly established brand and recognized across the world for its quality products.
The Overall Strategy for Unilever is to provide its consumers with high quality products which also ensuring shareholder returns. The company consistently aims to ensure that all quality and control processes are regularly updated to meet changing market requirements while also enforcing the controls to help maintain the organizational goals.
