Unilever’s Business Strategy: A Success Story
Unilever is a global FMCG (Fast Moving Consumer Goods) company that has been in the market for over 90 years. It is the parent company of several popular brands such as Dove, Lipton, Knorr, and Axe, among others. Unilever’s business strategy has been nothing short of phenomenal, given the multiple challenges and competition that exist in the FMCG industry. In this blog, we will take a deep dive into Unilever’s business strategy and analyze it from various angles.
The Importance of Unilever’s Purpose-Driven Approach
One of the core components of Unilever’s business strategy is its purpose-driven approach to doing business. It has been one of the pioneers in the industry to adopt this approach and integrate it into all aspects of its operations. Unilever’s purpose-driven approach stems from its belief that businesses need to play a vital role in society and contribute positively to the environment and communities they operate in. Unilever’s purpose is “to make sustainable living commonplace.” This purpose is embedded in all their brands, products, and operations.
Unilever’s purpose-driven approach has been critical in driving its success. It has helped them to build a strong brand reputation and earn the trust of their consumers. Unilever’s purpose is not just a PR tactic, but it’s integrated into their business model. Its sustainable living plan sets out three goals: improving health and well-being, reducing environmental impact, and enhancing livelihoods.
Unilever’s Diversified Portfolio of Brands
Another critical factor contributing to Unilever’s success is its diversified portfolio of brands. Unilever has a wide range of brands covering various categories, and this diversification helps them hedge against risks and challenges in specific markets. Unilever’s brands are segmented into four categories – Personal Care, Home Care, Foods, and Refreshments.
Each of these categories is further divided into sub-brands, offering Unilever significant flexibility in terms of product development, innovation, and market reach. Unilever’s strategy is to maintain a balance between its core brands and invest in emerging brands to drive growth. For example, the company acquired Dollar Shave Club, a subscription-based service that delivers razors and personal grooming products directly to consumers, to tap into the growing male grooming market.
Unilever’s Focus on Innovation and Research & Development
Innovation and Research & Development are ingrained in Unilever’s business strategy and culture. The company has a Global Research & Development Center that is dedicated to developing new products and improving existing ones. Unilever spends a significant amount on Research & Development each year to ensure they are ahead of the competition and delivering to the needs of their consumers.
Unilever’s focus on innovation has been instrumental in driving growth and staying ahead of the competition. For instance, the company introduced a new range of deodorants called Rexona Clinical Protection, which offers 3x for the money-back guarantee for its consumers. In doing so, Unilever has cemented its position as a leader in the personal care category.
The Bottom Line
In conclusion, Unilever’s success story is an excellent case study for businesses operating in the FMCG industry. Unilever’s purpose-driven approach, diversified portfolio of brands, focus on innovation and Research & Development, and other business strategies such as the sustainable living plan have all played a vital role in their growth and success. Businesses can take cues from Unilever’s strategy and tailor them to their specific industries, leading to sustained growth, profitability, and success.
