Unilever's New Global Strategy: Competing through Sustainability SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

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 - – talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, technology disruption, increasing government debt because of Covid-19 spendings, increasing energy prices, 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.

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.

Digital Transformation in Global Business segment

- digital transformation varies from industry to industry. For Polman Uslp digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Polman Uslp has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

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.

Superior customer experience

– The customer experience strategy of Polman Uslp in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

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.

Cross disciplinary teams

– Horizontal connected teams at the Polman Uslp are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

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.

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.

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.

Highly skilled collaborators

– Polman Uslp has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Unilever's New Global Strategy: Competing through Sustainability HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

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.

---

---

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 -

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.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Unilever's New Global Strategy: Competing through Sustainability, is just above the industry average. Polman Uslp needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

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.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Unilever's New Global Strategy: Competing through Sustainability, in the dynamic environment Polman Uslp has struggled to respond to the nimble upstart competition. Polman Uslp has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Need for greater diversity

– Polman Uslp has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Polman Uslp is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Unilever's New Global Strategy: Competing through Sustainability can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

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.

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.

Skills based hiring

– The stress on hiring functional specialists at Polman Uslp has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

Increasing silos among functional specialists

– The organizational structure of Polman Uslp is dominated by functional specialists. It is not different from other players in the Global Business segment. Polman Uslp needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Polman Uslp to focus more on services rather than just following the product oriented approach.

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.

---

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 -

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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Polman Uslp in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.

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.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Polman Uslp can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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.

Loyalty marketing

– Polman Uslp has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Polman Uslp can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Polman Uslp can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.

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.

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.

Learning at scale

– Online learning technologies has now opened space for Polman Uslp to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

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.

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.

---

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 -

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.

Consumer confidence and its impact on Polman Uslp demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.

Technology acceleration in Forth Industrial Revolution

– Polman Uslp has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Polman Uslp needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

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.

Aging population

– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.

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.

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Polman Uslp.

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.

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.

Backlash against dominant players

– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Polman Uslp business can come under increasing regulations regarding data privacy, data security, etc.

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.

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.

---

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.

--- ---