Unilever's New Global Strategy: Competing through Sustainability SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Unilever's New Global Strategy: Competing through Sustainability
In January 2009, when Paul Polman was appointed CEO of Unilever, he inherited a company in long-term decline at the beginning of a major global financial crisis. As the first outsider ever recruited to lead the company, Polman lost little time in challenging the existing strategy and organization. But the biggest change he made was to introduce the Unilever Sustainable Living Plan (USLP), a commitment that placed three "sustainability" goals at the core of the company's strategy: to help 1 billion people improve their health, to halve the environmental footprint of making and using Unilever products, and to enhance the livlihood of those in its value chain. The case describes how the new CEO then had to convince skeptical internal and external stakeholders why a struggling company in a tough competitive environment should embrace such bold nonfinancial goals. It then follows how he translated his radically different vision into strategies and priorities that could be implemented by a global company with 170,000 employees. In the process, the case explores how Unilever's top team had to adapt and adjust is structures, systems, processes, people and culture in order to implement USLP. The case concludes as Polman and and his top team face some key decisions in 2015. Should they double down on their original 2020 US LP objectives? Should they scale back in the face of some strong economic headwinds? Or should they pivot to a new transformational strategic agenda?
Authors :: Christopher A. Bartlett
Topics :: Global Business
Tags :: Corporate governance, Ethics, International business, Marketing, Social responsibility, Strategy execution, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Unilever's New Global Strategy: Competing through Sustainability" written by Christopher A. Bartlett includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Polman Uslp facing as an external strategic factors. Some of the topics covered in Unilever's New Global Strategy: Competing through Sustainability case study are - Strategic Management Strategies, Corporate governance, Ethics, International business, Marketing, Social responsibility, Strategy execution and Global Business.
Some of the macro environment factors that can be used to understand the Unilever's New Global Strategy: Competing through Sustainability casestudy better are - – increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, increasing commodity prices, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels,
central banks are concerned over increasing inflation, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Unilever's New Global Strategy: Competing through Sustainability
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Unilever's New Global Strategy: Competing through Sustainability case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Polman Uslp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Polman Uslp operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Unilever's New Global Strategy: Competing through Sustainability can be done for the following purposes –
1. Strategic planning using facts provided in Unilever's New Global Strategy: Competing through Sustainability case study
2. Improving business portfolio management of Polman Uslp
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Polman Uslp
Strengths Unilever's New Global Strategy: Competing through Sustainability | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Polman Uslp in Unilever's New Global Strategy: Competing through Sustainability Harvard Business Review case study are -
Successful track record of launching new products
– Polman Uslp has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Polman Uslp has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Diverse revenue streams
– Polman Uslp is present in almost all the verticals within the industry. This has provided firm in Unilever's New Global Strategy: Competing through Sustainability case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Polman Uslp has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Polman Uslp to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Polman Uslp is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Christopher A. Bartlett can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management
– Polman Uslp is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Global Business field
– Polman Uslp is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Polman Uslp in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Polman Uslp has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Sustainable margins compare to other players in Global Business industry
– Unilever's New Global Strategy: Competing through Sustainability firm has clearly differentiated products in the market place. This has enabled Polman Uslp to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Polman Uslp to invest into research and development (R&D) and innovation.
Organizational Resilience of Polman Uslp
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Polman Uslp does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Polman Uslp is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Polman Uslp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Unilever's New Global Strategy: Competing through Sustainability Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Unilever's New Global Strategy: Competing through Sustainability Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to recruit top talent
– Polman Uslp is one of the leading recruiters in the industry. Managers in the Unilever's New Global Strategy: Competing through Sustainability are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Unilever's New Global Strategy: Competing through Sustainability | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Unilever's New Global Strategy: Competing through Sustainability are -
Products dominated business model
– Even though Polman Uslp has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Unilever's New Global Strategy: Competing through Sustainability should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Unilever's New Global Strategy: Competing through Sustainability HBR case study mentions - Polman Uslp takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Interest costs
– Compare to the competition, Polman Uslp has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Workers concerns about automation
– As automation is fast increasing in the segment, Polman Uslp needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High bargaining power of channel partners
– Because of the regulatory requirements, Christopher A. Bartlett suggests that, Polman Uslp is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Unilever's New Global Strategy: Competing through Sustainability HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Polman Uslp has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Unilever's New Global Strategy: Competing through Sustainability that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Unilever's New Global Strategy: Competing through Sustainability can leverage the sales team experience to cultivate customer relationships as Polman Uslp is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Polman Uslp has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Polman Uslp even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Capital Spending Reduction
– Even during the low interest decade, Polman Uslp has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High cash cycle compare to competitors
Polman Uslp has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High operating costs
– Compare to the competitors, firm in the HBR case study Unilever's New Global Strategy: Competing through Sustainability has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Polman Uslp 's lucrative customers.
Opportunities Unilever's New Global Strategy: Competing through Sustainability | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Unilever's New Global Strategy: Competing through Sustainability are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Polman Uslp is facing challenges because of the dominance of functional experts in the organization. Unilever's New Global Strategy: Competing through Sustainability case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Polman Uslp in the consumer business. Now Polman Uslp can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Polman Uslp can use these opportunities to build new business models that can help the communities that Polman Uslp operates in. Secondly it can use opportunities from government spending in Global Business sector.
Using analytics as competitive advantage
– Polman Uslp has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Unilever's New Global Strategy: Competing through Sustainability - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Polman Uslp to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Polman Uslp can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Polman Uslp can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Polman Uslp can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
Creating value in data economy
– The success of analytics program of Polman Uslp has opened avenues for new revenue streams for the organization in the industry. This can help Polman Uslp to build a more holistic ecosystem as suggested in the Unilever's New Global Strategy: Competing through Sustainability case study. Polman Uslp can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Polman Uslp to increase its market reach. Polman Uslp will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Buying journey improvements
– Polman Uslp can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Unilever's New Global Strategy: Competing through Sustainability suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Polman Uslp to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Polman Uslp can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Polman Uslp can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Threats Unilever's New Global Strategy: Competing through Sustainability External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Unilever's New Global Strategy: Competing through Sustainability are -
Stagnating economy with rate increase
– Polman Uslp can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Unilever's New Global Strategy: Competing through Sustainability, Polman Uslp may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Shortening product life cycle
– it is one of the major threat that Polman Uslp is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Polman Uslp with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Polman Uslp needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Polman Uslp in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Polman Uslp in the Global Business sector and impact the bottomline of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Polman Uslp will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High dependence on third party suppliers
– Polman Uslp high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Polman Uslp can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Polman Uslp needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
Increasing wage structure of Polman Uslp
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Polman Uslp.
Weighted SWOT Analysis of Unilever's New Global Strategy: Competing through Sustainability Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Unilever's New Global Strategy: Competing through Sustainability needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Unilever's New Global Strategy: Competing through Sustainability is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Unilever's New Global Strategy: Competing through Sustainability is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Unilever's New Global Strategy: Competing through Sustainability is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Polman Uslp needs to make to build a sustainable competitive advantage.
