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Background of Unilever Pakistan Ltd Co.

Unilever Pakistan Ltd., a subsidiary of the Unilever Group is operating in Pakistan


since 1948. The Companys main business lines are Soaps and Detergents,
Personal Products, Cooking Oils and Fats, Packed Teas, and Ice Creams.
Unilever has a long list of brands such as Surf, Vim, Rin, Lifebuoy, Sunlight, Lux,
Rexona, Sunsilk, Close-Up, Blue-Band, Dalda, Planta, Liptons Yellow Label,
Taaza and Richbru, Brook Bonds Supreme and Kenya Mixture etc. which are
common household names in Pakistan.

The Companys factory at Rahim Yar Khan was one of the first industrial units to
be constructed after the creation of Pakistan. As the consumer base expanded
over the years and the Company entered into new product lines like Personal
Products and Margarine, it invested further in the installation of modern
manufacturing facilities including a factory at Karachi. Today, the Company is
using latest state-of-the-art technology for producing high quality products.

In 1995, the Company established a new factory near Lahore to manufacture the
Walls range of ice creams, which have become popular within a short time. In
1996, the present group Unilever UK acquired the Polka Group that produced
ice creams. In 1999, Pakistan industrial promoters (Private) Limited, owners of
Polka brands of Ice Cream was merged with Lever.

In order to leverage the synergies of Unilevers international brand strength,


market edge and corporate image, Lever Brothers Pakistan Ltd. changed its name
to Unilever Pakistan Ltd., in August 2002.

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Vision Statement:
We meet everyday needs for nutrition, hygiene and personal care with brands that help
people feel good, look good and get more out of life

Mission Statement:
We are aimed to be leading products company in Pakistan, a
multinational with deep roots in the country.
We will attract and develop highly talented people, who are excited,
empowered and committed to deliver double-digit growth.
We are comitted to serve the everyday needs of all consumers
everywhere for foods, hygiene and beauty through branded products
and services that deliver the best quality and value.
We strive to remain an ever simple and enterprising business.
We will use our superior consumer understanding to produce
breakthrough innovations in brands and channels.
Through managing a responsive supply chain, we will maximise value
from Suppliers to Customers.
We want to be exemplary through our commitment to Business Ethics,
Safety, Health, Environment and involvement in the Community.

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Introduction - Unilever Pakistan

Incorporated in 1948, we, Unilever Pakistan Limited, are one of the most
prominent multinationals in the country today. We are proud of being a part of
Pakistans history, contributing towards the growth and prosperity of the nation,
providing 150 million people with a better future, a better tomorrow. Our passion
for understanding people's concerns and desires, our ability to create products
that fulfill those needs and our skills in getting those products to market drives our
growing success - and has made us one of the worlds leading consumer goods
companies.

The present company has come about through the original Lever Brothers
merging with Lipton (1988), Brooke Bond (1997), Polka Ice Cream (1998),
presently we are operationally merged with Best Foods since 2001. 1982 saw the
introduction of personal products and 1994 the setting up of the Walls ice-cream
business, which was a green field exercise.

WHAT THEY DO
At present they market a host of household products named
under the following brand names and product groups.

1. HOME & PERSONAL CARE:

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Personal Wash (PW)
Toilet Soaps Lifebuoy
Lifebuoy Gold (2 variants)
Lux (in 5 variants)
Rexona (in 3 variants)
Breeze
Sunlight Bar

Laundry Care: Surf Excel


Sunlight washing powder
Sunlight bar
Wheel washing powder

House Hold Caring: Vim dish wash bar


Vim scourers
Magic bar

Personal products:
Hair Care Sunsilk Shampoo (in 4 variants)
Lifebuoy Shampoo
Skin care Fair & Lovely skin cream
Ponds
Dental care Close up toothpaste (3 variants)
Pepsodent

2. SPREAD & COOKING PRODUCTS CATEGORY


Cooking products:
New Dalda
Dalda Cooking Oil

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Dalda Sunflower Oil
Planta Cooking Oil
Crisp N Dry
Dalda Lajawab
Spreads:
Blue Band

3. BEVERAGES
Lipton Brands Brooke Bond Brands

Leaf Teas
Yellow Label Supreme
Yellow Label-Danedar Red Label-Danedar
Richbru BB Tips
Top Star A-1
Taaza Leaf Tiger
Laojee

Dust Teas
Pearl Dust Red Rose
Kenya Mixture

4. ICE CREAM

WALLS POLKA
Cornetto (3 variants) Pop Cone
Feast (3 variants) Choc Bar
Top Ten Ice Cream Stick

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Star Cup (4 variants) Panda (2 variants)
Callipo Jetspot Orange
Big Split King Kulfa/Big Slice
Big Fruiti King Kulfa Cups
Max Rambo Half Litre(11 variants)
Max Kulfi Litre Pack(15variants)
Blue Berry 10 Litre Pack(14
variants)

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We are going to conduct our project in three stages:

INPUT STAGE:
SWOT analysis
PESTEL analysis
Mission statement
IFE Matrix
CPM matrix

MATCHING STAGE
TOWS matrix
BCG matrix
SPACE matrix
GRAND matrix

DECISION STAGE:
QSPM

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INPUT STAGE
SWOT ANALYSIS OF THE COMPANY

STRENTHS OPPERTUNITIES
Hygiene Consciousness
Number of Products Increasing Population
Advance technology Innovation (R&D)
Supply Chain Management Product Diversification
Financial Backing Explore New Markets
Experience Top Management

WEAKNESSES THREATS
Tall Organization Structure Product smuggling
High Operating Expenses Increase demand for
High Cost of Production Antibacterial Soaps
Long term strategies Counterfeit Products
Only few products International Trends
Local Competition

INTERPRETATION:

STRENGHTS

unilever Pakistan Limited is the largest producer of consumer products in Pakistan


and has strong brands in every field such as Close Up, Dalda, Surf, Lifebuoy, Lux,
etc.
unilever Pakistan Limited is the only company in Pakistan which has its own
corner research department.

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It has the largest and efficient distribution network then any its competition

The company is very strong financially


unilever Pakistan Limited enjoys the services of highly professional management
in the area of sales, marketing, technical and production

WEAKNESS
Due to tall structure it is difficult to handle the organisation easily.
No doubt its sales are large but in same time its operating expenses are huge.
As in the production unilever keeps its environment very neat and clean, and
produce high quality products so cost of production is very high. Increased import
duties are also adding to the prices of the products
unilever Pakistan Limited go for long term strategies for all their product
categories which prove to be a weakness with change in the circumstances and
taste, trends of people
Emphasizing only few products while ignoring others which could give them
potential market shares e.g. beverages section.

OPPERTUNITIES

People are becoming more conscious about their health and are becoming more
conscious about brands. As unilever has good positioning in consumers mind so it
can increase their market share to launch products in hygienic category.
As population is increasing it may lead to creat valuable opportunity to enhance
the growth of unilever.
Innovation in unilever may creat opportunity to more penetrate in the market.
They have capital to invest they can explore new product categories e.g. in food
and beverages they can develop new products like Rafhan has launched custard,
jelly, kheer mix, rasmalai mix, etcThese products can prove a cash cows as
customer in Pakistan always welcome food items especially they will welcome due
to brand image of Blue Band and Dalda ghee in food category and due to Lipton
and Supreme in beverages category.
Unilever Pakistan has opportunity to develop new markets by identifying the needs
of customers.

THREATS

unilever Pakistan Limited has not been able to place any check on its smuggling
shampoos into Pakistan e.g. Indonesian Sunsilk is made according to the
demographic of Indonesia, when it will be used in Pakistan it will damage the hair

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of people, which deteriorate the brand image. Which create problem on local sales
of Pakistan.
Demand for antibacterial soaps like safeguard is increasing while unilever has not
yet been produced any antibacterial soaps,it may switch the brand loyals of
unilever.
Their may be imitation of products in Pakistan which may damage the goodwill of
unilever Pakistan lmtd.
People of Pakistan prefer to purchase the products of foreign companies, it may be
prove to be a threat for unilever Pakistan lmtd.
number of local companies producing detergents and market them at very low
prices which is a threat to unilever Pakistan lmtd.

PEST ANALYSIS
PEST analysis is used to assess that what environmental factors affecting
different organization and which of them are more important and how they affect
the organization. It is indicator of political, economical, social and technological
influences on organization.

Political & Legal Factors

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As far as the Lever Brothers Pakistan Limited concerns according to them that
political instability have do affect but not particularly Lever Brothers Pakistan
Limited same as it affects any other organization around and specially they
are in consumer products business which never make them out of business.

In case of legal factors, any trade policy or import duties is not affecting
particularly Lever Brothers Pakistan Limited. In Pakistan right now following
liberalization policy under SAP by IMF made which they have to waive off all
restrictions and moreover due to huge investment by Lever Brothers Pakistan
Limited no government can afford to create hurdles in the way of an organization
like Lever Brothers Pakistan Limited.

And they dont have to go for only lobbying or what so ever as not action of
Pakistan government has affected them adversely as such.

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Economical Factors

Economical factors affect Lever Brothers Pakistan Limited in the same way as it
affect any other organization like current economic situation in Pakistan and
inflation has reduced consumers disposable income too, which in turn has
reduced the purchasing power of consumer but affect is same for every
organization and according to them Lever Brothers Pakistan Limited have edge
that they have targeted all possible segments through their vast product category
i.e. the width and length too. So one way or other they find way to cover it up.

Capital Markets

In other economic factors like interest rates and inflation has affected the
borrowing ability of organization but Lever Brothers Pakistan Limited stayed
unaffected as a company having business in billions and when in need of
financing no single bank can fulfill the need, they have to make a consortium to
finance Lever Brothers Pakistan Limited and with very good credit standing and
very low risk definitely they get the lowest or justified interest rate as well.

Socio-Cultural Factors

In socio-cultural factors, factors like lifestyle changes and level of education


affects an organization. In case of change in lifestyle, the world has converted into
global town now and people have readily access to every sort of information and
they are becoming more quality conscious. Now more concerned towards
environmental issues now and demand more social responsibility on the part of
organizations now. To cope up with all these factors now Lever Brothers Pakistan
Limited which always maintained the quality standards needs to work towards
other social factors like social responsibility and environmental concerns like P&G
did in its Arial campaign and image of a society responsible organization.

Technological Factors

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In technological factors comes R&D first and foremost that how much an
organization spending in terms of product improvement or development of new
products or improvement in production process or in the raw material etc. and
what is the trend in the industry as Pakistan is not that big and not very much
innovation seeking as the other developed countries. Yet they keep on finding
new ways of doing things and new things as well they continuously launched
variants in brands etc. and moreover in the market like Pakistan in product
categories of consumer products rates of obsolescence is not very high rather
very slow so no great pressure to launch new products,.

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EFE MATRIX

Key External Factors Weight Rating Weighted Score


Opportunities
Hygiene Consciousness 0.2 4 0.8
Increasing Population 0.15 3 0.45
Innovation (R&D) 0.10 2 0.2
Product Diversification 0.10 4 0.4
Explore New Markets 0.05 4 0.2

Threats
Product smuggling 0.15 1 0.15
Increase demand for Antibacterial Soaps 0.05 3 0.15
Immitation of Products 0.10 3 0.3
International Trends 0.05 3 0.15
Local Competition 0.05 4 0.2
Total 1.00 3.10

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IFE MATRIX

Key Internal Factors Weight Rating Weighted Score


Strengths
Number of Products 0.1 4 0.4
Advance Technology 0.05 4 0.2
Supply Chain Management 0.05 3 0.15
Financial Backing 0.2 4 0.8
Experience Top Management 0.2 3 0.6

Weakness
Tall Organization Structure 0.1 2 0.2
High Operating Expenses 0.05 2 0.1
High Cost of Production 0.05 2 0.1
Long term strategies 0.1 2 0.2
Only few products 0.1 1 0.1
Total 1.00 2.85

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TOWS ANALYSIS

Strength-S Weaknesses-W
Number of Products Tall Organization
Structure
THE Advance Technology
Supply Chain
High Operating Expenses
High Cost of Production
TOWS Management
Financial Backing Increasing Number of
MATRIX Experience Top
Small Competitors
Unbranded Products
Management

Opportunities-O SO Strategies WO Strategies


Hygiene Consciousness Create awareness Initiate catering new
among customers about markets and new
hygiene. segments
Increasing Population Accommodate rural Accommodate local
demand by your supply demand by joint ventures
network
Innovation (R&D) Launch new products
for lower class
Product Diversification
Explore New Markets
Threats-T ST Strategies WT Strategies
Tall Organization Control Cost Make creative and
Structure competitive strategies
High Operating Expenses Cost reduction
High Cost of Production
Long term strategies
Only few products

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BCG MATRIX

RELATIVE MARKET SHARE POSITION IN THE INDUSTRY

High Medium Low


1.0 0.50 0.0

?
High +20

Ice Cream Oil Products


INDUSTRY
SALES
GROETH
?
RATE (%)

Medium 0
Detergents

Home & Personal care

Low -20

INTERPRETATION

QUESTION MARK:
Oil products of unilever come in this region which has low market share but
yet competing in high growth industry.cash need is high and cash generation is

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low.its upto the organisation whether to strengthen this SBU by an intensive
strategy or to sell them.

STAR:
Icecream of unilever Pakistan comes in this region as it shows best long
run opportunities for growth and profitability.it has high market growth as well as
high market share.intensive and integration strategies are suitable for this SBU.

CASH COWS:
Detergents comes in this SBU.they create cash in excess of their needs,
they should be managed to maintain their long position. Product development and
diversification are suitable strategies.

DOGS:
No SBU of unilever comes in this region.
INTERNAL-EXTERNAL MATRRIX

THE IFE TOTAL WEIGHTED SCORE

4.00 3.0 2.0 1.0

THE 3.0
EFE
total
weigh
ted
score 2.0

1.0

INTERPRETATION
Unilevers strategy is to invest and hold.it can use intensive and integration strategies.

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SPACE MATRIX
Financial Strength
Net revenue 2.5
Net income 2.5
Total 5.0
Average 2.5

Industry Strength
Competition due to substitute products 4.0
Customer Loyalty 2.0
Total 6.0
Average 3

Competitive Advantage

Largely customer base -1.0


Strong Marketing and management -1.0
Total -2.0
Average -1.0

Environmental Stability:
Less developed countries facing high inflation -2.0
Total -2.0
Average -1.0

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SPACE MATRIX

Y a x is : 2 .5-0+.5() = 2 .5

X a x is : 3 -1
+ ) (= 2

C o n ser v ati v e FS A g g r essiv e

CA IS

D efen si v e ES C o m p etiti v e

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GRAND STRATEGY MATRIX

RAPID
MARKET
GROWTH

Quadrant II Quadrant I

UNILEVER

WEAK
COMPETITIVE STRONG
POSTION COMPETITIVE
POSITION

Quadrant III Quadrant IV

SLOW
MARKET
GROWTH

2. Market penetration
3. Product development
4. Forward integration
5. Backward integration
6. Horizontal integration
7. Concentric diversification

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QSPM

Integration Intensive
Key Factor Weight AS TAS AS TAS
Opportunities:

Hygiene Consciousness 0.2 - - 2 0.20


Increasing Population 0.15 2 0.30 2 0.40
Innovation (R&D) 0.10 3 0.30 2 0.20
Product Diversification 0.10 4 0.40 3 0.30
Explore New Markets 0.05 - - 1 0.05

Threats:

Product smuggling 0.15 1 0.15 1 0.15


Increase demand for 0.05 1 0.05 2 0.10
Antibacterial Soaps
Immitation of Products 0.10 3 0.30 - -
International Trends 0.05 4 0.20 2 0.4
Local Competition 0.05 4 0.20 - -
Total 1.00 3.85 5.15

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Integration Intensive
Key Factor Weight AS TAS AS TAS
Strengths:

Number of Products 0.1 2 0.20 3 0.30


Advance Technology 0.05 3 0.15 3 0.15
Supply Chain 0.05 2 0.10 3 0.15
Management
Financial Backing 0.2 3 0.60 4 0.80
Experience Top 0.2 - - 3 0.60
Management

Weaknesses:

Tall Organization 0.1 3 0.30 2 0.20


Structure
High Operating 0.05 2 0.10 3 0.15
Expenses
High Cost of Production 0.05 - - 2 0.10
Increasing Number of 0.1 3 0.30 - -
Small Competitors
Unbranded Products 0.1 2 0.20 2 0.15
Total 1.00 1.95 2.65

Total score of INTEGRATION STRATEGY = TAS OF EFE+TAS OF IFE


= 3.85 + 1.95
= 5.8
Total score of INTENSIVE STRATEGY = TAS OF EFE+TAS OF IFE
= 5.15 + 2.65
= 7.8
INTERPRETATION
As the total average score of intensive strategy(market penetration, market
development, product development) is high so it is more favourable for unilever
Pakistan lmtd to adopt this strategy.

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Conclusion & Recommendation

After the analysis of the IEFM and EFEM, we see that the company is
above average. With respect to SPACE and GRAND matrix analysis,
Unilever is placed in aggressive quadrant and it can follow any of the
strategies e.g. market penetration, forward integration, backward
integration etc.

According to the analysis in QSPM, we would like Unilever to pursue


Cost Reduction strategy which is a market development strategy.
Although the current business strategy of Unilever is Product
Development as they are bringing different product like Green Tea in
the market. They are also modifying their products for e.g. Lipton in
new round tea bags and Lux by adding a different ingredient.
Some recommendations are followings:
Reduce packaging expenses
Reduce international purchases of raw material cost as Unilever
purchases 90% raw material from international suppliers.
Reduce retailers commission cost
Reduce transportation cost
Reduce inventory-holding cost

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