The Business Of Unilever Nigeria Plc Commerce Essay

The Business Of Unilever Nigeria Plc Commerce EssayUnilever has built its rail stylus line on understanding and sufficeing to the needs of its consumers glob separatelyy. Its corporate goal is to hang on cling to and quality to the basic positions of its consumers satis accompanimention which adds valuate and srength to the consumers life.Unilever Nigeria Plc, came into life as prize Brothers (West Africa) Ltd on 11th April, 1923 by Lord Lever Hulme, but the partys antecedents meet to be traced nates to his existing trading interests in Nigeria and West Africa gener every(prenominal)y, and to the fact that he had since the 19th century been greatly involve with the soap pargonntage in Britain. Unilever Nigeria started with the soap manufacturing attach to, and is directly virtuoso of the oldest surviving manufacturing organizations in Nigeria.Their ProductsUnilever produces a lot of products, get a linelyFood nones (e.g., Knorr, Lipton, Blue band, Beverages)Home c atomic number 18 brands (e.g., Shampoo, Toothpaste, Soap, Moisturising cream) individualized bang brands ( e.g., Lux, Vaseline, Sunsilk, Omo, Pears)NutritionHealth, hygiene and beautyUnilever victuals solutionsYour suggestionsLatest brand newsThe success of this moving in is as a result of the reasoning(a) family relationship which they generate naturalised with the consumers in the topical anaesthetic anaesthetic anesthetic cultures and merchandises creating products that help them change in life. In sustaining these successes, they ensured to chief(prenominal)tain the highest and right standards of mutual behavior towards their employees, consumers, customers, communities and subr kayoedineal surround as a whole.Talking about their brands, they produce stateal costlys which they know from the on frame that undecomposed deal would really need much(prenominal) goods beca usance, it enhances the unremarkable living of bulk. For this reason, they argon committed to meet the everyday needs of people everywhere in Nigeria. In addition, beca apply they ar withdraw International fol hap little up and support, it enables them to consistently develop brands, which raise the worth of life. In essence, most people in Nigeria constantly perk up their products at home.1.2 THEORETICAL FRAMEWORKThe mold Analysis is an analytical rooster utilise to evaluate and identify the Political, scotch, Social, Technological, wakeless and Environmental factors in a given thriftiness that would affect the consummation of an organization.According to Kotler (1999) PESTLE Analysis is a useable strategic tool for understanding market sprainth or decline, bank line position and room for Operations. This Analysis also allows an Organization to have a competitive usefulness everywhere other firms in the industry.Political broker This factor is always necessary to be evaluated, in order to know the favorability of the political mode to market harvest -festival and development in a particular country, such as the Government Stability, Taxation Policy, and Attitude of the Government towards foreign investment.Economic calculate This Economic framework is used to monetary standard the state of an economy by considering the gross domestic product, the wage take aim, interest rate, the disposable income, unemployment rate, railway line cycle and the economic growth in the country.Socio Cultural Factor This indicator is used to measure the rate and growth of population, changes in the taste and preferences of consumers, the changes in the lifestyle of consumers and the level of education of the populace which would have a great effect on the essential of the products or operate provided by the organization.Technological Factor This textile is used to evaluate the level of Government spending on inquiry and Development institutes and the efforts of government and private sector efforts towards technological advancement.Legal Fa ctor This is used to know the laws and regulations that exist in the environment an organization is operating(a) such as the employment, health and safety laws.Environmental Factor This is used to understand the various environmental laws, natural resources available and the prevailing digest condition in the economy.1.3 ANALYSISUsing porters beers models (Kippenberger, 1998 Haberberg and Rieple, 2001), but to examine it in addition to other strategic frameworks of liftandPEST abstract.In stressful to analyze the strategies, it bequeath be fair to know what Business scheme is all about.Business strategy to my own understanding is a way in which administrations view the future, the extent to which the business is heading to, the plan, set targets, etcetera The basic aim of strategy is to move the business forward, it is not all about making wampum alone, but how the business stick out pursue eventually. In other words, it will establish strategic direction, and implement th ose strategies, all in an effort to satisfy key stakeholders.Robert and Caldart (2009) view strategy as a way a firm can only imagine about the implications of different possible initiatives and learn to a greater extent about them by means of interaction with other actors such as competitors, regulators, customers, suppliers, and partners in its competitive landscape. In these situations, managers brass section the extremely punishing problem in making decisions that demand a long-term perspective, committing the firm in the long-run in spite of appearance a competitive landscape that is un homogeneously to stand still. We call these decisions strategic decisions.Porter E.M. (1996) Views strategy as being flexible, companies must be flexible to respond rapidly to competitive and market changes aggressively to gain efficiencies and achieve beat out practice. Strategy to him is total quality management, benchmarking, time- found competition, re-engineering, change management. F rom this definition, it is believed that, for whatever business to grow there should be freedom, ability to initiate plans on how to move the business forward.Ellis Williams (1993) expressed that, It indicates the perspectives for business to achieve better advantages, it elaborates tactics for business to face challenges, it points out the trends and competitions around the business. Business consists of two main aspects, namely outdoor(a) factor and internal factor.From the definitions given by these scholars, it entails that, strategy is seen as a means of making business to strive and to achieve a delimitate goal by means of vision, hard work, done perseverance that will die to transformation.1.4 ApplicationIINTERNAL FACTORSInternal factors include information and communication as one of the internal control components. The factors are systems used to control financial, reporting and story systems in an organization. Smooth flow of information and communication crosswi se and within the constitution is influenced by the nature of the working relationship within the organisation at all levels. The working relationship coordinates organisations activities to achieve specific goal. When rough-and-ready working relationship exists in an organisation, delegation of responsibilities is achieved. The main internal factors which are considered to uphold the organisation are the managers, employees, capitals, and materials.Managers Since the inception of Unilever, there were constantly sound and visional managers succeeding the affairs of Unilever and respectively improving the management of Unilever.Employees Unilever has massive employees who effect specific duties to move the organisation forward. Unilever has the worlds prime bring up waterrs of packaged which has products like shampoo, deodorants, soap, Vaseline, tea, and stock-still pabulums over the world. The company sells its goods in over 150 countries and has returns of approximately $46 billion (31,5bn). Unilever controls subsidiaries in at least 90 countries and employs 295,000 (in 2000) people. Unilever is one of the worlds top three firms aft(prenominal) Nestle and Kraft and the worlds second largest packaged consumer goods company behind Procter Gamble.Capital Unilever is one of the oldest surviving manufacturing organisations in Nigeria today. The organisation is well up known with its products all over the world, its food brand, home care products, Unilever food solution, personal care brands, nutrition, etc, Unilever is recognised as the worlds most valuable brand.THE out-of-door ENVIRONMENTThe word external simply means outside that is the activities which takes take outside the business environment. The external environment of any organisation is a large and complex place. (Capon, 2009. P.5) for the sake of this work, we shall take a look at PESTEL analysis of the organisation, which includes Political, Economic, Socio-cultural, Technological, Enviro nmental, Legal elements.Political Environment The government is currently management on encouraging the local manufacture of finished and semi-finished goods in the country.Thiswill be amajor advantage for interested local investors as it provides them with a playacting ground for building their business.Currently, local manufacturers face a number of challenges includingHigh Input Cost,Lack of petrochemical plant,High cost of action/distribution,Customs administration and port related issues,Common External obligation (CET) and issue of competitivenessSecurity of life propertyWeak lawful frameworkAlthough, there are various incentives in place to salary cast up local manufacture the high transaction costs resulting from above make local manufacturing uncompetitive with the outside world.Unilever, as a matter of policy, set a standard as to the way of tackling political issues. In the 1960s, galore(postnominal) countries began to nationalise foreign firms which also affecte d Unilever. There were persistent calls for local equity participation in foreign firms many a(prenominal) companies were subject to local control on prices, imports, and employment of expatriate. An example is UAC, a subsidiary of Unilever, whose operation was in many African countries like Cameroun, Ghana, Ivory Coast, including Nigeria, was focused on as its profit margin and the rate of easy remittance of profit to its Anglo-Dutch parent was enormous. Nationalising UAC hampered Unilevers control over the market where UAC operates.Economic Factorgross domestic product real growth rate3.8% (2009 est.)5.3% (2008 est.)6.4% (2007 est.)YearGDP real growth rateRankPercent ChangeDate of Information20033.00 %cv2002 est.20047.10 %25136.67 %2003 est.20056.20 %44-12.68 %2004 est.20066.90 %4311.29 %2005 est.20075.30 %90-23.19 %2006 est.20086.40 %6620.75 %2007 est.20095.30 %78-17.19 %2008 est.20103.80 %44-28.30 %2009 est.SourceCIA military man FactbookThis entry gives GDP growth on an ye arbook basis ad sounded for inflation and expressed as a percent.GDP ( acquire power parity)$353.2 billion (2009 est.)$340.3 billion (2008 est.)$323.1 billion (2007 est.)notedata are in 2009 US dollarsThis entry gives the gross domestic product (GDP) or value of all final goods and services produced within a nation in a given year. A nations GDP at purchasing power parity (PPP) exchange rates is the sum value of all goods and services produced in the country valued at prices prevailing in the United States. This is the measure most economists prefer when looking at per-capita eudaimonia and when comparing living conditions or use of resources across countries. The measure is difficult to compute, as a US dollar value has to be depute to all goods and services in the country regardless of whether these goods and services have a direct equivalent in the United States (for example, the value of an ox-cart or non-US military equipment) as a result, PPP estimates for some countries are based on a small and sometimes different set of goods and services. In addition, many countries do not formally participate in the World Banks PPP project that calculates these measures, so the resulting GDP estimates for these countries may lack precision. For many developing countries, PPP-based GDP measures are multiples of the official exchange rate (OER) measure. The differences between the OER- and PPP-denominated GDP values for most of the wealthy industrialized countries are more often than not much smaller (CIA World Fact book)In Nigeria there was incertitude about duties to be paid by companies due to inflation and mutant of currency. The effect on Unilever was a decrease in profit in 2005 equivalenced to 2004, though there was increase in turnover. In 2004 and 2005 the profit after tax were =N= 2.167 billion (naira) and =N= 1.616 billion (naira) respectively, while in the turnover in 2004 and 2005 were =N= 28.6 billion (naira) =N= 33.4 billion (naira) respectively, w hich indicates increase in turnover but decrease in profit. Also the low per capital of people affects Unilevers market. Over 30% of Africa population lives on less than $ 1 per day.Socio-cultural FactorLooking at the social factor of Unilever, their main focus is to add beauty to life, they ensure that they meet the needs of consumer on daily basis Such needs are nutrition, hygiene, and personal care with brands that help someone feel good, look good and get more out of life. Unilever can make products that help give children a good start and be healthy for longer time. Their brands are also involved in a number of social initiatives to promote the importance of playing sports. Unilever has a platform and ground to improve vitality worldwide through its planetary scale and its interactions with consumers. Every day, 150 million consumers use Unilever brands. They use them to feel really good.Health and WelfareConcerning the area of health, Unilever has the credit to make people fe el very healthy because they have good food that establishes their satisfaction. Soya is another plant-derived ingredient with an excellent nutritional profile. It is cholesterol-free, and a good source of protein, vitamins and omega-3 and omega-6 fatty acids. It has modest cholesterol heavy(p) potentialUnilever BrandUnilever brand is superior and sound brands to help add value to the lives of people in public.Unilever Nigeria is a leading manufacturer of literal care products such as Close up Fresh reddened Toothpaste, Close-Up Extended Protection Toothpaste, Close Up Expert and Popular Toothbrushes. From the lay down of Close Up Red Gel toothpaste in 1975.Technological FactorThe basic aim of technological factor is that, it enhances quick awareness to the general public through the use of internet facilities, radio, television etc which promotes the marketing aspect of the business. Unilever attract people with their advertisements, another strategy they use is e-commerce. Un ilever wants to step up the use of the Internet in order to improve brand communication/marketing and on-line selling to simplify business-to-business transactions throughout the leave chain.Legal Factor Though Nigeria has a weak heavy grammatical construction generally, it has a Parastatal called Nigeria Agency for Food Drugs Control (NAFDAC) that regulates activities of multinational companies that are into manufacturing of consumables like foods, Beverages and Detergents. Unilever are committed to providing consumers with products that are consistent in quality, safe in use and free from adverse effects at all times.These are achieved by1. Fostering a consumer safety structure throughout the company by establishing systems and processes that will guarantee the well being of their consumers.2. Complying with all legal requirements in the management of consumer safety.3. Implementing an effective consumer complaints mechanism, to monitor, investigate and deal with complaints f rom the trade.4. With all these precautions, they are continuously ascertaining that their products and processes meet the highest standards of quality and safety.Environmental Factor UnileverNigeria takes the responsibility of rhytidectomy the quality of life of people in the operating environment through the quality of their brands and contributions to communities in which they operate. Talking about the environment, it explains the weather, temperature and the climatic condition of the environment which the business operates, in most cases, when the weather condition is good, it favors the business itself. Unilever is a market that is known globally and its market has been successful all over the world, due to this awareness, its brand is well appreciated.Porters Five ForcesUnderstanding the nature of each of these forces gives organizations the necessary insights to enable them to formulate the appropriatestrategiesto be successful in their market (Thurlby, 1998).Rivalry Rivalr y in any business tackle is inevitable, when a business should have its rivals, it motivates them to improve more in their products in other to attract more attention to consumers. The intensity of rivalry, which is the most patent of the five forces in anindustry, Unilever has been more dominant in market compare to Nestle.Barriers to Entry The threat of new entrants is usually based on the market entry barriers. In contrast, entry barriers exist whenever it is difficult or not economically feasible for an outsider to replicate the incumbents position (Porter, 1980b Sanderson, 1998)Suppliers The threat that alternative products pose to an industrys profitability depends on the relative price-to-performanceratiosof the different types of products or services to which customers can turn to satisfy the same basic need.Customers Kippenberger (1998) states that it is often useful to distinguish potential buyer power from the buyers willingness or incentive to use that power, willingn ess that derives mainly from the risk of failure associated with a products use. In any business organisation, Buyer Power is a force that influence the value established by anindustry. The most important aspect of buyer power is the sizing and the concentration of customers. Other factors are the extent to which the buyers are informed.Substitutes as the name implies, substitute products are usually many in the market and wide numbers of substitutes are available, supplier power is seen as a reverberate image of the buyer power. In other to convince customers to buy products at different prices in the value created for each of those buyers usually indicates that the market is characterised by high supplier power and at the same time by low buyer power (Porter, 1998). Bargaining power of suppliers exists in the quest situationsWhere the switching costs are high (switching from one Internet supplier to another)High power ofbrands(McDonalds,British Airways,Tesco)Possibility of for ward integration of suppliers (Brewers buy bars)Fragmentation of customers (not in clusters) with a limited bargaining power (Gas/ gaseous statestations in remote places).4. SWOT ANALYSISSWOT analysis to my own understanding is a way to analyze the Strengths, Weaknesses, Opportunities, and Threats involved in a business environment. It explains the purpose of the business and if there are any lapses or pot holes, the management is liable to provide solutions.The table at a lower place summarises the SWOT analysis of Unilever NigeriaStrength Unilever Nigeria is recognised as a global company which has its products all over the world.It has self-coloured brand portfolio and sound relationship with retailers basically and economies of scale.Strong roots in local markets and first-hand knowledge of the local culture.WeaknessUnileverweakness is the dual leadership not connecting with customers and secondly,Inefficient management for RD the softness to maximize.Opportunities Unilever has the opportunity of increasing need for healthy products and changing consumer preferences by adding value to their daily needs.Threats Unilever encounter decrease in revenues and strong competition, increasing storage brands.They also encounter Tougher Business Climate and exchange rates.1. Core CompetencesA nitty-gritty competency is a way in which a business handles the affairs of the organisation. In other words, the organisation makes advancements to the growth of its business. In core competence, it is not usually easy for competitors to imitate, take for example, in the area of branding, the logotype of a company, and their style of doing things etc it is usually difficult to imitate. The core competence of Unilever is that, it can provide competitive advantage in its strong brand portfolio, strong relationship retailers. Brand is an asset of a company, it helps to distinguish companies product just as my lecturer Mr. John rightly said, it is the brand and logo of a comp any that promotes the market to competing products to help sales and capture the market.2. Global perspectivesUnilever is an organisation known globally and it has made impact to so many peoples lives, their products have spread abroad, they have gainfully employed millions of people and their products have been sell massively across the globe. Its global factor is achieving its growth and objectives, looking at how Unilever has pushed the business toward global approach is focused towards new opportunities, this could be traced back to how Unilever started, viewing this from the historical perspective of the company. In 2002, Unilever initiated a procurement optic in Shangai and China, this was to increase opportunities for Chinese raw materials providers. Unilever also carried out research and development to be able to ascertain new product and have basic knowledge to introduce to new market, these activities were meant to boost Unilever global business.another(prenominal) facto r Unilever adopted is in the area of brand, they did this to create awareness across border synergies in manufacturing and marketing. In other to accomplish this task, it started in 1999 when it launched the heart Brand logo of ice cream product, this was meant to enhance its products. This idea was carried out to capture integration amongst subsidiaries to facilitate control centralisation.ConclusionBye and large, the organisation is in a very good position to continue growing. The memorial of Unilever is really amazing because, it started with the soap production and gradually, it grew up to producing diverse products today which is really enhancing the lives of people. In this work, I established the following which include henceThe History of Unilever NigeriaThe theoretical FrameworkThe Analysis, internal and external factorsThe five forces (Porter)SWOT Analysis and Core competences and finally,Global perspectives