The Unilever Group’s Strategies for the Next Five Years

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This paper provides a detailed analysis of the Unilever Group to determine the best strategies for the next five years. All strategic options are assessed based on the results of a comprehensive analysis that includes external and internal factors affecting the organization, as well as its strengths and weaknesses. The Unilever Group, a privately held company founded in the Netherlands in 1930, is now one of the leaders in the food and household chemicals market (Unilever: Our Company, 2021). Beginning with massive palm oil sales, the company has grown by 2019 to become the world’s second-largest consumer goods company (Top 100 Consumer Goods Companies of 2019, 2019).

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At the moment, the Unilever Group employs more than 149 thousand people worldwide (Unilever: at a glance, 2021). The company’s primary goal is to make sustainable lifestyles commonplace (Unilever: Our Strategy, 2021). Unilever is committed to integrity, future-proofing, and culture.

The company’s mission mainly implements social responsibility and is focused on the potential and strengths of employees. The company has implemented a matrix management structure, which implies double subordination of employees to the heads of the entire department and the temporary project (Young, 2018). The company’s business model includes analysis of consumer demand, focus on innovation, collaboration with other companies, organization of logistics, and the constant search for new sources of supply. The general tenets of the company’s vision are reflected in the Unilever Sustainable Living Plan, which is the organization’s roadmap (Unilever: Our Approach, 2021). Each product category is carefully monitored all the way from production to final sale.

Environmental Analysis

Macrotrend Environmental Analysis

The company is among the leaders in the market for various categories of consumer goods, capturing more and more promising territories. The organization operates in the markets of the United States, India, and China, where sales growth is gaining relatively high speed and has excellent potential (Khodori & Farahin, 2018). Constant work on the reputation of Unilever forces them to maintain constant control over many of their brands. Innovation, which is also the company’s main focus, includes new searches in the production of consumer goods and the optimization of many business processes, which is reflected in their strategy (Unilever: Compass Strategy, 2021). In addition, the company’s strategy on an equal footing with plans in production includes social responsibility: the promotion of inclusion and diversity, highlighting the value of each person’s health. Unilever is dependent on many external factors, which are listed in a detailed PESTLE analysis in Appendix A.

Microtrend Analysis

Analyzing Porter’s Five Forces at Unilever, it can be seen that competitive rivalry is a critical external force affecting the company. Despite the fact that it is pretty easy for the consumer to switch to other products of a similar group, Unilever is generally the leader in terms of price-quality ratio. It means that low switching costs are offset by the low availability of substitutes of the same quality for the same price (Yin, Bi & Chen, 2021). Unilever has a territory to distribute its goods all the way to grocery stores closest to residential buildings, which significantly simplifies the availability of its products to the end consumer (Widnyana & Widyawati, 2020).

Developing the same brand power is beyond the power of new and fresh players. The experience and reputation that Unilever has earned over almost a century of history play an essential role (Pant & Ramachandran, 2017). Savings from large-scale deliveries allow keeping prices sufficiently low for the end consumer, which almost completely excludes the possibility of the emergence of the same international giant, capable of imposing the struggle for Unilever at higher than local levels. Porter’s five forces for Unilever are reflected in Appendix B.

Segmentation Analysis

Even though the company’s goal is aimed at everyone globally, it is not easy to please everyone. In this regard, the company uses segmentation aimed at the middle and higher class in the social structure of most developed countries since their products are of high quality and require related costs (Závadský & Hiadlovský, 2020). However, the company is deploying cheaper brands in developing regions, which speaks of geographic market segmentation (Ali & Mike, 2021). The company uses various marketing patterns for behavioral groups that customers often respond to (Mukiira, Musau & Munyao, 2017). Demographically and psychographically, at the global level, there is no division, as the company produces consumer goods of daily use that everyone needs. The market segmentation table is presented in Appendix C.

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SWOT Analysis

is detailed in Appendix G. Below is a recommendation based on it for Unilever. The recommendation for Unilever is in the areas of innovation and diversification. The company’s financial capabilities allow it to take over organizations in markets other than the sale and manufacture of consumer goods. By leveraging strengths and the power of brands, promoting new products will be easier than competing with them. Economies of scale and international experience will help avoid significant risks and unexpected mistakes (Camillus, 2008). Keeping track of innovation is key to being unique from the competition. If Unilever is at the forefront of new technologies, its products will be better positioned than its competitors.

Internal Environment Capability Analysis

According to McKinsey’s 7s analysis, the company’s strategy is fully defined. It is an excellent sign that the company’s actions are always focused on this clearly defined strategy. Employees are the primary resource of the company. Paying such attention to working conditions, and social responsibility, vacancies in this company become attractive to specialists, where everyone gets as much as they deserve. The Value Chain generally repeats all of the above and is provided by the company itself in the form of infographics presented in Appendix E. McKinsey 7s and VRIO analysis are presented in Appendix F.

Strategic Direction

Potential Developments

Recent changes in the macroenvironment of the organization are related to environmental factors. There is an advanced development of cosmetics that are not tested on animals, and most of the company’s press releases recently have been associated with this (27 PETA-Approved Unilever brands join the fight to save cruelty-free cosmetics in Europe, 2021). This fact once again confirms the need for the company to focus on environmental responsibility and better cover it in its marketing campaigns. In addition, Unilever develops recyclable toothpaste tubes and donates money to protect tropical forests (Unilever to introduce recyclable toothpaste tubes, 2021; New public-private coalition launched to mobilize more than $ 1 billion to protect tropical forests and enhance global climate action, 2021 ).

The question is emerging why activities that are pretty important in the framework of environmental conservation are not reflected in the company’s mission, strategy, and vision, as is done by many other international giants, such as Coca-Cola (Coca-Cola Purpose & Vision, 2021). The company’s strategic direction has not shifted, judging by the fact that such activities are ongoing. However, Unilever’s strategic compass does not reflect this information in the company’s plans.

Along with quality products, a company should also improve its environmental strategy and marketing. There are more and more supporters of environmental behavior, but in addition to claims of natural products, Unilever must do its best to cover its activities in the rainforest and cosmetics that are not tested on animals. Supporters of these active positions will be able to advertise specific brands of the company once again, contributing to the positive growth of the company’s reputation.

The strengths involved in this case are international experience and adaptation to the culture of each country, which will create a unique marketing campaign for each country. Although environmental protection is not directly named in the company’s mission and vision, indirectly, creating a sustainable lifestyle for everyone depends on the environment. In this regard, it is possible to establish the necessary connection with the values ​​of the organization.

In addition to ecology, business diversification and innovative approaches were also mentioned as possible development strategies. An R&D investment strategy can help develop specific brands, improve manufacturing or logistics processes, or create a unique new product. However, such discoveries usually entail the appearance of similar products from competitors, which can become a threat. However, simultaneously, with the timely receipt of a patent, bypassing all the complexities of this process, Unilever can obtain a unique, high-quality product that distinguishes it from all similar imitations primarily engaged in by retailers.

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The diversification strategy is aimed at acquiring companies other than the sale of essential consumer goods. Unilever’s financial strength, coupled with international experience, could allow the company to break into the electronics, packaging, and many other markets inaccessible to similar companies due to significant risks (Johnson et al., 2017). Given the muscular leadership flexibility and adaptability of the organization, such an experience, even if unsuccessful, would only benefit the company. Unilever has the opportunity to increase its net profit against the background of competitors by moving to a new market, but the amount of competition from this step will only increase.

Strategy Options

The strategic plan builds on the proposed strategies and should be consistent with the company’s vision and purpose. First, the ecology orientation can manifest itself in health education through appropriate products. Secondly, the company’s goal is to satisfy all consumers globally, which can be achieved by gradually releasing products for specific groups. The short-term goals of the project are to create an ecological product, place it in the required markets, and conduct ecological marketing campaigns for its implementation. Long-term goals highlight strengthening the company’s reputation through compliance with environmental responsibility, the constant expansion of brand products for specific customer groups, and the continuous education of customers about healthy lifestyles.

The target market is, accordingly, allocated for the product. A healthy lifestyle product will need to target audiences with high levels of environmental behavior (Geiger, Dombois & Funke, 2018). As a rule, these are young people; therefore, it is possible to promote lifestyle habits through a particular drink (van den Berg et al., 2019). It is necessary to connect the appropriate channels for the scientific development of formulations and changes in the technological process to create a new product. The strategy itself involves creating such a product as, for example, Lipton slimming tea – the Linea line (Han et al., 2019). Hence, Calve sauces can be suggested for specific diets; Mineral stones in Ax deodorants, which do not close the pores on the skin, or the same line for weight loss in the more affordable Brooke Bond teas.

More complex production technology will require financial investments. However, a complex composition can guarantee that a quality product will be more difficult to imitate. Nevertheless, the product’s price will be overpriced, which is why, in the context of a pandemic and an economic downturn, not all interested consumers will be able to try it. Only large retailers usually have minimal risks when purchasing new products from one manufacturer or another (Zeybek & Ülengin, 2021).

As a result, it will take time for the product to reach the end consumer. In fact, many resources will be spent with a specific risk of getting an unsuccessful result; however, this attempt will, in any case, count toward the company’s reputation.

This strategy addresses environmental responsibility issues and meets the company’s primary goal. In addition, as a rule, at this point, retailers rarely provide quality products for a healthy lifestyle, especially among their home brands. In this regard, the problem of imitation of goods with complex production technology and competition in a specific price segment will be partially eliminated. At first, losses are inevitable, but the marketing of these products will work for its reputation, better covering its activities within the framework of environmental responsibility. This strategy uses the company’s capabilities in an innovative aspect; therefore, in an ideal situation, it requires advanced developments. The company’s strengths, such as brand awareness and cross-cultural approach, will allow for strong marketing campaigns that are geographically sharpened.

This approach does not use the methods of business diversification, does not require the company to acquire or merge enormous financial costs. The organization will have to act only within the framework of the sale and production of consumer goods, in which it already has many years of experience and reputation. The company has the relevant competencies for implementation since similar food products have already entered the market – for example, Lipton Linea tea and Calve light mayonnaises. However, if new technology is used in these products, it will also be necessary to involve lawyers and food technologists, who will resolve the issue of patents and compliance with sanitary standards.

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Action Plan

As stated above, Unilever needs to develop products that meet nutritional lifestyle standards. Examples have been low-calorie Calve sauces, Brooke Bond slimming teas, and Axe deodorant mineral stone technology. Economically, Lipton Linea slimming tea was too expensive (Han et al., 2019). By using the technology for its cheaper Brooke Bond counterpart, more people will afford it, especially during this pandemic period. By promoting a healthy lifestyle, the company will improve the impact of social factors by meeting environmental responsibility requirements. Even though the company is currently working to save the rainforest and fight for cosmetics without testing animals, the introduction of such food products and its strong marketing campaign will adequately highlight the organization’s environmental activities.

The price, however, for quality goods, especially at first, will be overpriced. In this regard, it is necessary to collaborate with end retailers to conduct promotions that will be available to the end consumer (Buttkus & Eberenz, 2019). Such incentives will drive sales while the market responds to new product launches (Newberry & Collins, 2017). Competition at this stage is excluded since other companies’ imitation, and the launch of similar products will also take time. During this period, Unilever needs to make every effort to gain a permanent audience of consumers who have access to this product.

These trends are widespread in the United States. The United States stands out as one of the most promising markets for Unilever’s growth, which means geographic expansion. The sales area does not differ from the area for the sale of ordinary goods of the company’s brands and the preservation of contracts with suppliers and distributors. Perhaps it is worth looking for distributors among retailers, restaurants, and cafes, which will also contribute to the marketing campaign.

Marketing is key to this strategy. First, Unilever must focus on healthy living by providing related advice and recipes for new products. Secondly, through this campaign, Unilever can cover its broader environmental activities. Thirdly, during innovative development, it is worth focusing on new technology, emphasizing the uniqueness of the product. The collaboration will require holding promotions with retailers that can directly impact the end consumer. At first, advertising needs to be launched through all possible channels of influence on the public, since the first period is the most important since there are no imitation goods on the market, and the consumer needs to be given a simplified opportunity to try this product through promotions.


According to the Ansoff matrix, Unilever does not go beyond diversification, simply developing its product. Indirectly, we can say that the market also develops by connecting a new market segment more explicitly. In general, the company remains in the field of production and sale of consumer goods, in which it has many years of experience. At the same time, according to the SAF matrix, the strategy is confirmed by the company’s goal, which is aimed at a sustainable lifestyle for each client. Segmentation in a given organization should always be a priority strategy, according to the goal. Although the strategy meets modern trends in environmental behavior, not all clients adhere to it, so it is necessary to draw additional attention to a healthy lifestyle. However, the groups targeted by these campaigns should accept the product positively. The company’s capabilities make it possible to implement this project in practice, but only time will tell its success.

Funding can be taken from investments. A company to invest in by the indicators in Appendix D is attractive for several reasons. Investors typically evaluate the PE ratio and return on equity to assess the relevance of an investment. Unilever’s PE ratio has been growing every year and has been stable for many years. It shows earnings per share versus share price, which is relatively small compared to other consumer goods companies (Fatma & Hidayat, 2019).

Return on equity has started to drop significantly in recent years, as have net income and annual turnover. It is primarily due to the pandemic since many consumers have lost their purchasing power or become severely limited. Sales of many companies fell, but overall, Unilever maintained acceptable results and, by other indicators, is a lovely company for investment.


However, the strategy described here is just one of many such strategies that can be devised and just as quickly discarded in a rapidly changing world. To maintain the advantage, the company must conduct activities in the direction of innovation for each of its brands, periodically expand the market geographically and segment it, and constantly consider the opportunity and moment for diversification, which will bring the business to a new level. According to the Current Ratio in Appendix D, the company cannot cover all of its debt obligations right now. The rate is relatively low, but this is typical for companies with a significant turnover of goods worldwide, like, as example, McDonald’s and Amazon (Al-Marzooqi & Nobanee, 2020).

EBITDA shows the company’s profitability, which is generally high among competitors (Al-Marzooqi & Nobanee, 2020). The net profit margin confirms this fact, also indicated in Appendix D.

Although Unilever sells goods at nearby convenience grocery stores, not all of them are bought by consumers every day. Asset turnover in companies selling goods should generally be high (Agustina & Pratiwi, 2021). Even food at Unilever is not represented by necessities such as bread or dairy products. The same is true for household chemicals and cosmetics. In this regard, the company’s assets are higher than the proceeds received; however, this fact is offset by the relatively low costs of supplies, the frequency of which can be stretched over time.


The company responds quite professionally to external stimuli and threats, constantly looking for opportunities in various fields. Years of experience with this response make the organization adaptable and flexible. Such a comprehensive presentation of a company’s brands suggests that it is taking multiple risks. Consequently, diversification can be painless for Unilever, but the company will need careful analysis and subsequent ongoing evaluation of new approaches.

The constant activity aimed at development will allow the company to maintain its leading position in the market and not yield to competitors in each of its industries. Environmental responsibility will improve its reputation and eliminate competition for quality products, making them unique through innovation. Collaboration with retailers will enable better communication with end consumers in each region to better conduct market segmentation. Segmentation is necessary for a company, as it reflects the essence of its purpose and mission.


Appendix A

Unilever PESTEL Analysis

Unilever PESTEL Analysis

Like any large international company, Unilever is entirely dependent on a variety of laws that differ from country to country. However, the company’s success and stability speak to the organization’s highly professional ability to respond to external factors. According to PESTLE’s analysis, political factors include a company’s compliance with hygiene standards in each product category (Cheng, 2021). Given the supply scale, these conditions require constant monitoring by the management since any mistake can lead to legal and civil problems, up to criminal liability. Threats related to political factors include the development of import substitution due to the pandemic and closed borders and restrictions in trade laws within countries (Kheyfets & Chernova, 2018). Economic factors, coupled with legal ones, are usually closely related to the political situation in the country or the world.

The impact of the pandemic extends primarily to the end consumers of the company, who, due to the difficult economic situation, will less often afford expensive goods. The company can close this gap by increasing employee salaries and expanding its product line, relying on more affordable brands (Pandey et al., 2021). The increase in wages will help stabilize the economy in the country and set a positive trend in the population’s ability to pay. By stabilizing the economy, the company itself protects itself from possible risks from this side. However, the increase in salaries creates risks of significant losses since many of the organization’s production facilities are located in developing regions and therefore require additional investments.

With a vast number of brands under its wing, Unilever relies on its reputation. The organization maintains close control over the quality of products, which must also comply with environmental responsibility and current trends (Varkkey, Tyson & Choiruzzad, 2018). Growing environmental behavior creates opportunities for the company along with an intercultural approach to staffing. With sustainable products, Unilever can develop health education through marketing technologies that align with the company’s vision and strategy (Murphy & Murphy, 2018). Coupled with a focus on innovation, Unilever has a solid foundation for a multitude of social opportunities.

From a technological point of view, the company has long been using the benefits of automation and digitalization. Digital marketing, e-commerce, and business platform development are part of the company’s strategy (Unilever: Compass Strategy, 2021). Given the rapid pace of technology development, according to the analysis, each of the company’s distinctive features is both an opportunity and a threat. R&D investments create first-hand opportunities for scientific discoveries and developments, which in turn can lead to the creation of new competitive companies or technologies (Daramola, 2019). Improving logistics and business automation should be carried out with an eye to preserving jobs so as not to severely hit the country’s economy where the new technology will be applied (Razmochaeva, Semenov, & Bezrukov, 2019). However, it is not in the company’s interest to miss out on technological opportunities that have many application channels, given the company’s diversification.

Finally, legal factors are closely related to environmental, as there is now a trend of increasing requirements for environmental protection. While patent laws are becoming more complex and consumer rights laws are tightening, this is both a threat and an opportunity for Unilever (Turner et al., 2019). Social responsibility is openly and fully presented on the company’s website, but environmental responsibility is only mentioned in passing (Unilever: Our Strategy, 2021).

The multitude of health and safety regulations that Unilever must adhere to with specificity in each country only underline the importance and similarity of legal and environmental factors for a given organization. By developing its environmental responsibility, the company will be able to understand the global problems of humanity and contribute to the fight against them, protecting itself from external threats from environmental factors.

Appendix B

Unilever Five Porter Forces

Unilever Five Porter Forces

In each of the industries where the company’s brands are represented, many quite aggressive competitors contribute to the company’s continuous development, which can be considered a high-priority force in this analysis (Fornari, Grandi & Fornari, 2018). The low cost of switching between competitors and the high availability of information makes customer strength a high priority as well. It costs every person nothing to change the brand of one product category for another, which almost eliminates the power of individual and committed shoppers (Bag, Tiwari & Chan, 2019). However, thanks to its reputation, Unilever maintains its advantage and primarily due to its wide range of products that meet the needs of many consumer groups. The company has oil and paper suppliers supplying raw materials in large quantities (Başar, 2018). However, on average, the number of suppliers is quite large, which indicates that their influence on the Porter scale is moderate.

Appendix C

Unilever Segmentation Table

Unilever Segmentation Table

Appendix D

Unilever Financial Indicators

Annual Data | Year 2020 2019 2018 2017 2016
Revenue 57942m $ 58212m $ 60209m $ 60714m $ 58332m $
Net Income 6375m $ 6300m $ 11088m $ 6801m $ 5736m $
Current Ratio 0.785 0.783 0.783 0.732 0.675
EBITDA Margin 20.34 20.56 28.01 19.35 17.75
Net Profit Margin 11.00 10.82 18.41 11.21 9.83
Asset Turnover 0.75 0.8 0.85 0.89 0.93
Return on Equity 34.39 43.39 79.79 45.08 32.66
PE Ratio 22.5 18.1 16.0 21.8 23.4
Stock Price 54.8 57.8 52.7 46.4 34.4

Appendix E

Unilever Value Chain

Unilever Value Chain

Appendix F

Unilever McKinsey 7s Analysis

Unilever McKinsey 7s Analysis

Strategy increases the company’s reputation in the eyes of employees, allowing them to increase their engagement and satisfaction (Magagan & Ngugi, 2021). The management ultimately echoes the primary strategy, however, when necessary, showing flexibility. Constant competitive pressure and changing consumer preferences require high engagement from each employee, and therefore the success of a company is worth much effort. The internal composition of the organization is characterized by a high level of cross-industry communication and a focus on teamwork (Onifade, Opele & Okafor, 2018). Team experience also promotes employee engagement and the development of practical communication skills (Oteshova et al., 2021). The systems within the company are also constantly monitored and tracked, as are the products.

The company’s values ​​are built around strategy. Social values ​​are honored in work processes by encouraging inclusiveness and diversity. Creativity and friendliness are manifested both within the team of employees and when working with clients (Rao-Nicholson, Khan & Marinova, 2019). Leadership style is participatory, involving many people in the company to leverage their strengths (Akpoviroro, Kadiri & Owotutu, 2018). This alignment ensures that the company is a success that must be sustained at all times.

The VRIO analysis is relevant due to the high competition from Unilever. In addition, the company itself often uses this type of analysis to create its projects (Lanzolla & Markides, 2021). The value of the Unilever brand resource is undeniable – an outstanding contribution to social responsibility, along with many years of development and advertising, has created one of the most recognizable brands of our time. As a result, Unilever, due to its stability, is attractive to investors. It is confirmed by the financial performance in Appendix D. The company’s rarity lies in its international presence, adaptability, and ability to take risks.

Uniqueness is reflected in global location, marketing presence, product quality, and value for money. As an organization, Unilever is responsible for educating employees, supporting organizational culture and corporate ethics, aligning leadership with the company’s vision, focusing on innovation, and investing in R&D and discovery.

Appendix G

Unilever SWOT Analysis

Unilever SWOT Analysis

A long history is a reason for Unilever’s success. The company’s strengths result from strong and already recognizable brands, a wide range of products, and an international presence that significantly saves the end consumer’s money (Craven-Matthews, Nordlund & Fouzbi, 2021). Unilever’s ongoing mergers and acquisitions (Lanza & Giangiulio, 2018) contribute to this development. The positive and stable growth dynamics demonstrated by the company’s indicators presented in Appendix D only reflect the consequence of the clever use of the company’s strengths. The international scale allows the organization to enter new promising markets with a significant cultural and strategic experience that reduces the ultimate risks. However, the company is not without its weaknesses.

Due to the presentation of a vast product line of all brands, the company competes with many similar products. It is easy to imitate such products, depriving its brands of uniqueness (Geng, Yang, & Xu, 2019). Other competitors can imitate quality Unilever products by selling them for a lower price. In addition, by entering many categories of consumer products, each time, Unilever reduces the possibility of diversifying its own business, which is focused on continuous growth. Finally, the company’s considerable distance from its end consumer makes it impossible to overtake retailers in terms of influence (Hecht et al., 2020). Weaknesses emphasize that innovation is essential not only in each specific industry of the company but also in its horizontal development to expand the products sold and enter promising markets.

Consequently, the company’s capabilities are embedded in markets with a particular potential: both geographically and in specific consumer goods industries. If the company can organize its development plan focusing on innovation in new non-consumer goods areas, Unilever can develop its business diversification experience. In addition, the company needs to focus on its mission to preserve the environment. Environmental responsibility is still poorly covered by a company whose products are bought on store shelves every day (Yue et al., 2020). The quality of their products also undergoes many environmental checks, which is why Unilever needs to focus on caring for the environment and educating consumers in this regard.

Threats are related to the development of trends in environmental behavior in humans and at higher administrative levels. If the company does not take action in this area, the initiative of the most eco-friendly company will be taken over by someone else. From this comes another threat, which is constant rivalry and many competitors. The company’s competition in every consumer product industry imposes an aggressive fight for every brand in every country and city.

The company’s market share is constantly under threat, as are its financial performance. Retailers tend to create their own, cheaper brands that imitate well-known brands (Vogel & Watchravesringkan, 2017). Threats can be combined to fight competition and maintain a company’s reputation to succeed in the marketplace (Hambrick & Fredrickson, 2005). In addition, there is now growing popularity for natural, home, and private products that also compete with Unilever food products.

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