P&G & Unilever
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Transcript of P&G & Unilever
Procter & Gamble was created on October 31, 1837 by William Procter and James Gamble
It has its headquarters in Downtown Cincinnati, Ohio
The company initially sold only candles and soaps
HISTORY OF P&G AND MAJOR MILESTONES FACED BY THE COMPANY
The company first time diversified its product line by introducing Crisco, a shortening made of vegetable oil
First acquisition made by the company was that of Thomas Hedley Co. in 1930
The company introduced Tide Laundry detergent in 1946 and Prell shampoo in 1947
Some of the acquisitions made by P&G included Folgers Coffee, Norwich Eaton Pharmaceuticals (the makers of Pepto-Bismol), Richardson-Vicks, Noxell (Noxzema), Shulton's Old Spice, Max Factor, and the Iams Company, among others.
In 1955, Procter & Gamble began selling the first toothpaste to contain fluoride, known as Crest.
Branching out once again in 1957, the company purchased Charmin Paper Mills and began manufacturing toilet paper and other paper products.
Once again focusing on laundry, Procter & Gamble began making Downy fabric softener in 1960 and Bounce fabric softener sheets in 1972.
One of the most revolutionary products to come out on the market was the company's Pampers, first test-marketed in 1961
In January 2005 P&G announced an acquisition of Gillette This added brands such as Gillette razors, Duracell, Braun, and Oral-B to their stable.
It also divested Gillette's oral-care toothpaste line, Rembrandt. The deodorant brands Right Guard, Soft & Dri, and Dry Idea were sold to Dial Corporation. The companies officially merged on October 1, 2005.
Liquid Paper, and Gillette's stationery division, Paper Mate were sold to Newell Rubbermaid. In 2008, P&G branched into the record business with its sponsorship of Tag Records, as an endorsement for TAG Body Spray.
On August 25, 2009, the Ireland-based pharmaceutical company Warner Chilcott announced they had bought P&G's prescription-drug business for $3.1 billion.
P&G exited the food business in 2012 when it sold its Pringles snack food business to Kellogg's for $2.75bn after the $2.35bn deal with former suitor Diamond Foods fell short
Unilever was founded on 1 January 1930Products: Personal Care, Home Care, Foods
and Refreshment.Regions: Asia, Africa and Central and Eastern
Europe (Asia Africa CEE), the Americas and Western Europe
1943 – Becomes the majority shareholder in Frosted Foods & Batchelor's (freezing food)
1958 -61 – Acquires Vita NV (Netherland) & Good Humor (USA) to enter frozen foods & ice cream
HISTORY OF UNILEVER AND MAJOR MILESTONES BY THE COMPANY
1965 – Forms its own specialist packaging business, the 4P Group
1970 - 72 – Acquires Zwanenberg's (meat) & Lipton International (Tea), becomes one of the largest in the Tea business
1973 – 80 – Frigo ice cream, acquired in Spain & National Starch (adhesives, starch & speciality organic chemicals)
1984 - Brooke Bond is acquired in Unilever's first hostile take-over
1986 – The acquisition of Naarden doubles Unilever's business in fragrances and food flavours. Chesebrough-pond's, which owns Ponds and Vaseline, is acquired in the US
1989 – Calvin Klein and Elizabeth Arden/Fabergé are acquired
1993 – Breyers ice cream is acquired in the US
1994 – Disposes United Africa Company, its West African trading, brewing & textiles company.
1997 - Acquires Kibon ice cream (Brazil), and sells National Starch & Quest International (chemicals)
2000 – Best-foods is acquired in the second-largest cash acquisition in history.
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Integration - Unilever
HorizontalIce cream Tea and other foods
businesses Cosmetics – Chesebrough-
Pond'sSpecialty chemicals,Restaurant chainsFerries Floor coveringsHygiene
Verticalplantations, paper and
packaging, Transport and
distributionadvertising, and market research
companies
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Integration – P&G
HorizontalTissue and Towel marketFragranceSoapCoffeePharmaceuticalsPersonal care (male and
female)Pet care
VerticalNetwork of
external innovatorsOutsourcingDistribution
Strategy: InternationalModel: Co-ordinated FederationView of the world: Extension MarketsOrientation: EthnocentricP&G follows a global model of strategy, using essentially the same competitive strategy approach in all country markets where the company has a presence, sells much the same products everywhere, strives to build global brands, and coordinates its actions worldwide
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Pattern of internationalization – P&G
Strategy: Multi-domesticModel: De-centralizedView of the world: National MarketsOrientation: PolycentricUnilever uses the best practices across the organization how-ever the company does rely heavily on local talent and their managerial expertise to adapt, sell the product and ensure that it reaches a mass audience
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Pattern of internationalization - Unilever
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Unilever
With Pepsi Co., to revive Lipton Tea HUL and yet another Tata company,
Lakme Limited, formed a 50:50 joint venture, Lakme Unilever Limited
Lever Egypt was formed as a Joint-Venture with the Fine Foods Company, a member of the Rachid Group
Joint venture with Perdigão to reap better benefits in Brazil
Teva Pharmaceutical Industries Ltd.
1988 - The Company announces a joint venture to manufacture products in China. This is the Company’s first operation in the largest consumer market in the world.
Joint ventures
P&G
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Unilever IBM – Global ERP Philips – new range of
irons Kwality Ice-cream
Group - HUL
Jones Lang LaSalle – Commercial Facilities Services Partner in real estate
Alexion Pharmaceuticals – development of cardiovascular related medicines
Alliance – Publicize the environmental and energy benefits
Strategic Alliance
P&G
For Unilever, emerging economies are already a big market. In CY12, Unilever's turnover increased by 10.5% crossing the $ 50 bn mark
Unilever wants to further raise the share of sales from emerging markets to 70-75% of turnover by 2020
The company is building 27-28 factories worldwide out of which barring two, all are in the developing economies
P&G wants to expand its sales share from emerging markets to 50% by 2025
P&G is relatively small in many categories across the world largely because it began globalizing much later than Unilever.
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Comparison of corporate strategies
Dynamic View
Resource Endowments
Resource Commitments
Activities performed
Developing capabilities based on market feedback
Two of the world's largest and most successful suppliers of consumer goods
Both companies own hundreds of popular brand names across dozens of product markets
Each stock has rewarded shareholders over the long term
Both of them market home care and personal care products
Similarities
Size: P&G is a much bigger FMCG company having turnover of $ 83.7 bn as compared to turnover of $ 66.7 bn raked in by Unilever
Unilever had commenced operations almost a decade later than P&G in 1885.
Product portfolio: In case of P&G, home care and personal care product segments contribute a lion's share of 75% with the balance coming from over-the-counter healthcare products. For Unilever, home care and personal care account for 53% of sales and the rest 47% comes from foods and refreshments.
Differences
Geographical focus: In case of Unilever a huge share of 55% of its sales comes from emerging economies. On the other hand, P&G derives a majority 62% of its overall sales from developed markets.
While P&G's size gives it comparable sales volume in absolute terms, Unilever is more exposed to emerging markets as a percentage of its total sales mix
Distinctive Competencies1. R&D2. Technology3. Human resources and Organisational
Culture4. Brand5. Distribution Network
Unilever
For greater innovation. Key R&D facilities in Port Sunlight, UK, Netherlands,
Colworth, UK; Shanghai, China; Trumbull, USA; Bangalore, India
40% of R&D comes from emerging markets Unilever prioritises higher quality science, accelerated
delivery of breakthroughs ( to be able to create barriers in highly competitive landscape), more focus on big wins, balance between short term and long term
R&D
‘Big wins’ refer to those products in the portfolio that are popular among customers, and have a strong brand presence.
Some of Unilever’s R&D strengths include Spray technology deodorants, Skin mildness and moisturising products, product processing E.g. ice cream, hair technology, structured oils and emulsions, tea.
E.g. through their systems biology-new understanding of microorganism metabolism-new routes to control microbes- new product technologies such as Lifebuoy soap, Axe deodorant, All clear anti-dandruff shampoo, Domestos disinfectant floor cleaner etc…
Creating freedom to operate and building
barriers to entry
Focus on customer needs
Integrating the frontiers of science
and technology
Safety
Patents
Regulatory affairs
Clinical Trials
Open innovation
Information management
and IT
Business Needs
Critical capabilities developed
Exploiting technology to fuel growthPrimarily used to To connect with customers To collaborate with customers To leverage scale in operations To reduce environmental impactUnilever follows the policy of “Design once-deploy
everywhere”. Seamless integration across geographies is possible only through superior technologies.
Technology
A simplified IT landscape provides agility. E.g. integration in mergers and acquisition can be carried out in lesser time, which saves cost
Unilever leverages its digital platform for brand-consumer intimacy. The mobile revolution has helped in connecting with millions, especially in emerging markets, at lower costs
Since Human resource is the biggest resource of Unilever, it pays special emphasis on acquiring and retaining global talent and in enhancing their productivity.
Human Resources and organisational culture
3+1 GoalsMore Variable PayIndividual assessment
based on ratingsTop 100 required to
hold 1.5x salary in shares
ULE required to hold >3x salary in shares
Internal and external appointments
2/3rds of the senior management in new roles
Performance Culture
The logistics network of Unilever transports the finished goods over 1.5 billion kilometres each year. This scale enables the company to have global and regional distribution hubs, improving operational efficiency significantly and reducing vehicle kilometres- cutting costs and emissions while improving service.
In 2008, Unilever launched its own internal transport management organisation, UltraLogistik. From this original initiative came the idea to establish global and regional control hubs. Helps in better co-ordination and utilisation of vehicles to fullest capacity. In total, the hub system, promises to reduce total distance travelled by 175 million km in Europe alone from 2013 to 2015 (compared to 2010 levels).
Implementation of the UltraLogistik control tower network to give the management control over multiple transport movements.
Also committed to reduction of global carbon footprint – reduction of around 16,000 tonnes of CO2 over 2010-2014.
Distribution Network
Distinctive Competencies:1. R&D2. Brand3. Distribution Network4. Human Resources and Organisational
Culture
Procter and Gamble
P&G’s R&D is enhanced by a global relationship with more than 2 million researchers in technology areas connected with P&G’s businesses.
P&G spends almost twice as much on R&D as its closest competitor.
The two most important factors in P&G’s innovation process are its practice of consumer demand research and its ‘connect and develop’ R&D structure. P&G incorporates the consumers’ input into the R&D process through this initiative wherein people can submit what P&G calls ‘game-changing product’ ideas, and provide input on topics such as packaging, product improvement and services offered on a website.
R&D
To be a supply chain leader and optimise trading partner relationships, P&G uses Axway’s business-to-business solution for their external managed file transfers. The solution delivers secure file transfer with real time visibility and control, improving communication within and outside P&G.
Offers the agility required to respond to changes in the supply chain
To continue its global leadership position, P&G has partnered with Cisco Systems to help develop its next phase in supply-chain management called “smart packaging”. It is a highly innovative system that allows a company to look at its supply chain from the consumer’s perspective. Smart packaging will embed a chip into every item in the store, providing more information than today’s standard barcodes. By creating an easy way to track products through the factory, on delivery trucks and in the stores, this innovation will dramatically increase the supply chain efficiency. I will result in fewer out of stocks, greater on-time delivery, better products, and an enhanced user experience for customers.
Distribution Network
P&G is currently working with i2 Technologies to support the physical distribution of its North American operations. Utilising the i2 freight matrix transportation solution, P&G is trying to achieve efficiency in its logistics through improved carrier selection, event management and dashboard reporting.
Human resource viewed as the most valuable asset of the company
Encouraged to have the same values and principles as the company
All employee are considered leaders and are encouraged to take responsibility to do the best they can while meeting business needs, bettering the business and helping those around them
Human Resource and Organisational Culture
The HR strategy is built around 5 core values:
1. Hire the best: Almost 5,00,000 people apply every year but P&G recruits less than 1% of them
2. Challenge the employees from Day 1: Hands on experience to develop future leaders. P&G develops consequential responsibilities for each employee that demand collaboration inside and outside the organisation, disciplined project management and the need to be in touch with the customers and other stakeholders.
3. Business and functional leaders actively recruit, teach and coach:
4. Plan careers: P&G believes in creating career opportunities and not just jobs. Enables growth across businesses and geographies- developing managers. Talent is identified early on and groomed through a series of enriching assignments that prepare them for future leadership roles.
5. Never stop learning: Plethora of opportunities to develop technical, functional and leadership skills
STRATEGYLower the price while making a profit: single-use packets for
everything from shampoo to laundry detergent, costing pennies a pack
Unilever's commitment to put sustainable and equitable growth at the heart of its business model is helping to increase sales while reducing costs and risks.
By 2020 Unilever aims to halve the environmental footprint of its products, improve the welfare of 1 billion people and source all its agricultural products sustainably, while doubling its revenue
Host of Unilever brands have made sustainability central to their brand proposition or product innovation
TRESemmé and Dove dry shampoos are helping to reduce greenhouse gas emissions because they do not require users to wash their hair in heated water. (sales of these brands increased by nearly 20%)
Unilever's Dove brand, the company's largest personal care brand, has redesigned its self-esteem program for young people
Unilever's factories have been reducing their use of energy, water and materials and cut down on the waste they produce. As a result, the company says it has removed more than 300 million euros from its product costs since 2008
Structure Currently organised into two global divisions-Foods and Home and
Personal Care (HPC) – headed by Divisional Directors. The two divisions’ operations are currently organised into
business groups on a regional basis, with certain exceptions: the global businesses of prestige, our fragrance business within HPC, and Unilever Food solutions within Foods
The regional and global businesses are currently headed by Business Presidents. These businesses remain the driving force behind Unilever, comprising the operating companies which provide the key interface with customers and consumers, allowing quick response to the needs of local markets
Unilever represents common organizational structure; the hybrid form
This company operates with three divisional regions, two product segments, and five functional segments.
Unilever developed and implemented this organizational structure for their company to improve communication and to take advantage of resources that are available to them
Typically this kind of structure is organized in a top-down manner. Once the executive level is satisfied with the structure, it flows down to management.
Systems
One Unilever-The initiative was designed in 2004 to eradicate duplication, leverage its scale and make improvements in its focus on consumers and the market place. All of Unilever’s production participated in this productivity initiative Unilever integrated this systems to standardize inventory forecasting, and planning functions with its software system for supply chain, customer relationship system and enterprise resource planning software provider to unify its infrastructure and processes to provide enhanced product traceability and process control.
Unilever’s e-business strategy continues to evolve, implementation of GSDN and RFID technologies and the creation of an online buying system for making certain types of purchases from suppliers. The firms e-business strategy focuses primarily on the use of the internet and information technologies to achieve operational efficiencies in dealing with suppliers and in utilizing its distribution network
Staffing Unilever is basically equal employment opportunity organization.
Almost 70%of its employees are male and 30% are female. The job description of each and every employee is predefined. Performance appraisal is done on annual basis. Average age of Unilever employee is 32 years. This shows that they prefer young and energetic people for their middle and lower level management. High profile well experienced persons are considered for top-level management. Average Salary is 12000 for an employee
Personnel : All of the employees serving at Unilever are very devoted as they are given a wonderful learning environment to work, pay offered to them is also very attractive and ample chance of progress motivates them to work more
Recruitment & Selection : Unilever has this policy of not mentioning the name of the company in a job advertisement. Usually hiring takes place through outsourcing with a help of a third party. Final selection takes place after the candidate has been interviewed by the
Compensation & Benefits' very effective way to retain an employee is to give him compensation and benefits. At Unilever following benefits are given:
Medical Facility to employee and his/her parents Paid Vacations Accommodation Facility to energetic employees
Skills Unilever‘s Path to Growth integrated strategy combined marketing,
supply chain, customer development, and other key organizational assets. One of its primary targets was effective enterprise culture aimed at encouraging employees to demonstrate winning behaviours in the marketplace through their mindset, passion, and motivation. In the long run, the company was willing to knit major activities for (a) growth in the international markets with behaviours that deliver this growth, and (b) the use of leadership competency as an important tool in winning from the competition1
Style Unilever‘s Leadership Growth Profile is the most important
component of strategic redirection in the field of human resources. It combined the following elements:1. To create a growth vision (growth served as the key criteria for
employees‘ behaviours at Unilever);2. To drive growth through implementation and to energize others for
growth; and3. To secure employees‘ commitment to growth.
It has been Unilever company-policy to actively foster the common-sense spirit and fruitful benefits that accrued with leadership, and specifically the distinctive leadership concept of ―servant leadership,‖ as a way of doing business.
Shared Value Impact investing; an approach intended to generate social and
environmental impact, which is gaining momentum in Africa. Unilever, recently entered the water business in Kenya with a home purifier that works without electricity or gas. Not only will this improve the quality of water Kenyans have access to in their homes, it will also allow Unilever to capitalise on the growing number of consumers entering the bottled water market.
Unilever's values are expressed in their Corporate Purpose. The Code of Business Principles guides how to live them out on a day-to-day basis. Their Sustainable Agriculture Code sets out what they expect from their suppliers of agricultural raw materials. Unilever's Corporate Purpose - It describes what Unilever aspires to
be as well as expressing their values and beliefs. Corporate Purpose describes the factors that they believe will contribute to long-term success. They also underpin commitment to meet these needs in a sustainable way.
Code of Business Principles sets the framework of standards within which they work. The Code is supported by additional operational standards on issues such as employee and product safety.
Strategy P&G focuses its energy on bettering its relationships with
retailers, suppliers, and innovation partners while continuing to provide innovative products to customers worldwide.
P&G focuses on building its market share with its core brands, expand its product portfolios, and increase market share in emerging markets.
P&G continues its strong support and funding of its world class research and development in order to provide innovative products to touch the lives of customers worldwide. Proctor and Gamble’s (P&G) tag line, “Touching lives, improving life,” well describes what this company has been doing through serial innovation for over 170 years and the reason it is repeatedly at the top of comparative rankings worldwide. P&G has produced loyal customers globally and sizeable financial rewards from this strategy.
P&G’s technological and product innovation strategy continues to drive its success into the 21st century. Serial innovation has provided sustained competitive advantage and market leadership that few other firms have attained
Structure •P&G recently grouped its Global Business Units into four industry-based sectors as part of the Company’s ongoing plan to improve business performance. The businesses in each sector are focused on common consumer benefits, share common technologies, and face common competitors.•P&G’s Market Development Organizations (MDOs) are focused on understanding consumers and retailers in each market. MDOs integrate the innovations flowing from the Global Business Units into business plans to grow our business in each country, using their expertise in sales, logistics and retail execution.•Global Business Services (GBS) utilizes P&G talent and expert
partners to provide best-in-class business support services at the lowest possible costs to leverage P&G’s scale for a winning advantage.•Lean Corporate Functions ensure ongoing functional innovation and capability improvement.
Systems “consumer pulse” : to scan the universe of comments,
categorize them by individual brand, and then put them on the screen of the relevant individual. . This allows for real-time reaction to what’s going on in the marketplace, because if something happens in a blog and one don’t react immediately—or, worse, or don’t know about it—it could spin out of control by the time you get involved.
In manufacturing plants, for example, there are systems that allow people to use iPads to download data off the production line in real time and communicate that to a place where they roll the data up. With this one could see any product at any moment as it goes through the manufacturing line of any one of the plants.
In transport and logistics, a digitally enhanced operational program called Control Tower lets user see all the transportation we’re doing: inbound, outbound, raw materials, finished product. We’re probably the second- or third-largest user of trucks in the United States, and through this technology they have been able to reduce “deadhead” movement by about 15 percent. This reduces costs and carbon monoxide.
StaffingRecruitment Policy
develop a patented, score able online application form create the multi-function school team campus concept recognize the importance of a paperless, web-based recruiting
structure recruitment philosophy is based on three principles:
Its human resource strategy is built of five core values:
1. Hire the Best P&G claim that almost 500,000 people apply for P&G jobs every year and that they normally only hire less than 1% of those applicants
2. Challenge P&G People from Day One P&G has learned that “there’s no substitute for hands-on experience when it comes to leadership development.” To help develop this leadership P&G has created consequential responsibilities for every employee.
3. Business and Functional Leaders Actively Recruit, Teach and Coach At P&G, leadership by example starts from the top.
4. Plan Careers P&G believes in creating career opportunities and not just jobs. P&G has been very successful in managing its talent globally and enable career development and growth across businesses and geographies.
5. Never Stop Learning P&G provides a plethora opportunities to develop technical, functional and leadership skills training. These programs are offered at different level of development or new assignments. This process not only helps P&G people develop business skills but also deepens their commitment to touching and improving P&G’s consumers’ lives
Skills “Stick to your knitting” – Core Competencies-In Procter and
business terms, it means to understand your core competencies and stick to them.
P&G is clearly known as a marketing/branding/advertising company, it has other core talents as well.
The primary core is the people. Great care and effort is expended in identifying and recruiting top candidates in all functions. They state that people are their most valuable asset and they mean it.
The second core competency is in research and development. The company has “overspent” in this area for decades. In fact, at one time, there were more PhDs per square foot in the R&D labs than at any other place in the world
The combination of these three elements results in a core competency of bringing superior products to market. Superior is defined as not only breakthrough, but also better meeting customer needs.
Strong brand leadership enables brand building innovations with retail and media partners giving a distinct competitive advantage
Style P&G is also very focused on most important creativity component
– motivating employees. They state, “We challenge P&G people from day one” through hands-on experience
They match meaningful responsibilities for each employee, which is critical for intrinsic motivation. They stimulate employees’ minds by providing technical, functional, and leadership skills training
P&G also stimulates minds by assigning projects that require collaboration within and outside the company. This collaboration requires work-group design , which P&G does by valuing differences, believing that “the interests of the company and the individual are inseparable,” and building “confidence and trust across business units, functions, categories and geographies.” Furthermore, P&G seeks to minimize hassles by striving to “simplify, standardize and streamline” work.
P&G provides employees with supervisory encouragement . Senior executives are mentors and coaches for younger managers, helping them develop necessary leadership skills and planning their careers at P&G
It is evident that the two theories of leadership is innovation and leadership is culture come into play at P&G
P&G’s innovative culture help them achieve their purpose of providing “branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come”
Shared ValuesP&G defines commitment to sustainable development
as "ensuring a better quality of life for everyone, now and for generations to come." They have a long heritage as a sustainability leader and remain committed improving consumers' lives through P&G brands and by contributing to the sustainability of our planet and the communities in which all live and work.
The values, purpose and principles of P&G give the analysis of how the company has planned out its strategy in accordance with the socially responsible attitude. Sustainability in ‘embedded’ in all the efforts and all their actions. The five strategies of P&G are about the products, operations, social responsibility, employees and stakeholders
Share loss.: P&G made progress last year, climbing toward the top third of its competitive set in organic sales growth and growing or holding market share in most of its categories and countries, powered by a ramp-up in marketing spending. But momentum slowed as P&G raised prices to recoup higher commodity costs, which resulted in lost market share across more than half of its business globally last quarter.
Decreasing ad effectiveness: While P&G's Old Spice ads drew creative raves in years past, the company's broader array of advertising, according to consumer surveys by Advertising Benchmark Index in January and February, ranked in the middle of the pack or below household and personal-care peers. This was particularly true in TV and print, where P&G still spends the vast majority of its media dollars.
Sliding retailer ratings :Retailer ratings of P&G have slipped for four straight years in WPP's Kantar (formerly Cannondale Associates) surveys. At least P&G still leads others in that rating, whose methodology gives it an edge based on its sheer breadth of categories.
Go-to-market issues : Hurting P&G in the eyes of retailers -- not to mention of investors and analysts -- has been its inability to fully deliver on product launches in recent years.
Challenges-P&G
Share loss : Cashing in on its existing R&D and Innovation capabilities P&G should bring more products that either consumer pocket friendly or focusing green marketing (a similar approach like that of Unilever)
Decreasing ad effectiveness: Focusing more on the new marketing channels especially social media would help the company not only to improve its reach and visibility but would also help to work around the reducing market share.
Sliding retailer ratings: Company should revise their retailer incentive plans encouraging them to stock the products which in turn would ensure a increasing market share.
Go-to-market issues : Focus on marketing and PR activities
P&G Solutions
Customer relationships - Unilever operates in one of the world's toughest marketplaces, selling premium branded products to supermarkets such as Tesco, Sainsbury's, and Morrison's. And not only are these supermarkets tough negotiators, capable of delisting brands and shrinking available shelf space, but they are also competitors, too. Competing against almost every Unilever brand is a cheaper supermarket "own label" offering.
Sustainability - Unilever has set itself a tough challenge. Sustainability, it recognizes, is important to consumers -- and so it is important to Unilever. As the company puts it: "Unilever's vision to double the size of our business while reducing our environmental impact will require more sustainable ways of doing business. This means increasing the positive social benefits of Unilever's activities while reducing our environmental impact."
Supply chain risk - Unilever is a global business with global supply chains. The business depends on securing high quality materials, efficient manufacturing, and the timely distribution of products to our customers. thesupply chain network is exposed to potentially adverse events such as physical disruptions, environmental and industrial accidents or bankruptcy of a key supplier which could impact our ability to deliver orders to our customers.
Challenges-Unilever
Customer relationships - Here, Unilever's strength in emerging markets -- where it makes 54% of sales -- helps significantly. As the company points out, it aims to build and maintain trading relationships across a broad spectrum of channels ranging from centrally managed multinational customers through to small traders accessed via distributors in many developing countries. Also, both brands and customer relationships are focused around areas where Unilever thinks it can add value and build sustainable competitive advantage -- positioning it firmly away from price-led markets and customers and more into ones where its strengths in innovation, sustainability, and other non-price characteristics are valued.
Sustainability - In terms of ensuring sustainability, the company can point to the Unilever Sustainable Living Plan, which sets clear long‑term commitments for environmental impact, underpinned by specific targets in areas such as sustainable sourcing, water availability and usage, waste, and greenhouse gases. These, in turn, are monitored by the Unilever Sustainable Development Group, comprising five external specialists in corporate responsibility and sustainability.
Supply chain risk - By policies designed to ameliorate risk in the first place and contingency plans to deal with the aftermath of whatever disruption does materialize.Such plans, for instance, are designed to enable the company to secure alternative material supplies on short notice, to transfer or share production between manufacturing sites, and to use substitute materials in our product formulations and recipes. Additionally, these contingency plans also extend to an ability to intervene directly to support a key supplier should it, for any reason, find itself in difficulty or at risk of negatively affecting a Unilever product.
Unilever - Solutions
Procter & Gamble (PG) and Unilever (UL) are two of the world's largest and most successful suppliers of consumer goods. Both companies own hundreds of popular brand names across dozens of product markets. Most importantly, each stock has rewarded shareholders over the long term. Yet careful research reveals that these two businesses vary not only in their size - (P&G is twice as big) and location - (Unilever is headquartered in the UK and Netherlands) - but also in their business model and strategy going forward
Conclusion