"They have been popular and the biggest contributor in sales to each brand," said Christos Giannopoulos, CEO of the company's Nigerian business. Pepsi Lipton is a joint venture between Unilever and PepsiCo to manufacture and sell RTD ice tea across the world. Differentiated tasks for high and low ability. Understanding 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). Last month, Unilever opened a $12 million Blue Band margarine factory in Nigerias southwestern state of Ogun so that it does not have to import margarine from Ghana, as it has in recent years. Unilever is vulnerable to product imitation and substitute products. Unilever produces a lot of products, namely; Food brands (e.g., Knorr, Lipton, Blue band, Beverages), Home care brands (e.g., Shampoo, Toothpaste, Soap, Moisturising cream), Personal care brands ( e.g., Lux, Vaseline, Sunsilk, Omo, Pears). Management has scheduled a meeting with shareholders for the 11th of May 2017, aimed at garnering approval for the rights issue before proceeding to obtain regulatory consent. Unilever has disadvantages that hinder its future growth, despite its strong market position. Unilever helps 45 000 women in rural areas to become entrepreneurs by providing products to sell and loans. The brand is partnering with NGOs to support women to access training in skills that will help them to start a new career or scale up their existing small business. Smooth flow of information and communication across and within the organisation is influenced by the nature of the working relationship within the organisation at all levels. 2023 - Businessday NG. Public relations: Unilever Nigeria uses this to establish a positive vision in the society and there market domain. These are examples of how the Anglo-Dutch group, like its global rivals, has been forced to adapt its business to cope with a central bank decision to restrict access to foreign currency for the import of certain products since 2015 to boost the economy. Case Study - Unilever - Advantages and disadvantages table in GCSE Cash- strapped Nigerians have resorted to cheaper alternatives favouring unlisted brands over listed peers, and causing the latter much headache since the 2016 recession worsened income levels. Unilever combines global thinking with local execution, which means that it pursues Glocal strategies that let it win the hearts and minds of consumers who would like to use its products that are globally famous yet retain a distinct local flavor. Watch the video below to see a glimpse of the event. The Essay Writing ExpertsUK Essay Experts. Inefficient management for R&D the inability to maximize. 1. Before that, profits were flat in 2015 and fell 40 percent in 2014. Threats: Unilever encounter decrease in revenues and strong competition, increasing store brands. 1. As the volume demanded slide, Unilever's cost of sales follow suite, went down by 10.5% year on year. Shops in Nigerias commercial capital Lagos sell packets containing just two Unilever-produced tea bags or two stock cubes, for example. Pros and cons of Unilever Nigeria proposed share sale 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. In fact, Dove was the leading deodorant brand in the USA in 2019 which generated 203.9 million U.S. dollars (Shahbandeh, 2019). 852 Words4 Pages. For this reason, they are committed to meet the everyday needs of people everywhere in Nigeria. Unilever is one of the worlds top three firms after Nestle and Kraft and the worlds second largest packaged consumer goods company behind Procter & Gamble. The Business Of Unilever Nigeria Plc Commerce Essay - UKEssays.com Working at Unilever in Lagos: Employee Reviews | Indeed.com The internal strategic elements that obstruct organizational and business growth are presented in this portion of the SWOT analysis. All quotes delayed a minimum of 15 minutes. The ongoing global economic crisis has severely dented the profitability of many FMCG companies and Unilever is no exception. The intensity of rivalry, which is the most obvious of the five forces in anindustry, Unilever has been more dominant in market compare to Nestle. This idea was carried out to capture integration amongst subsidiaries to facilitate control centralisation. 806 8067 22, Registered office: International House, Queens Road, Brighton, BN1 3XE, GCSE Geography- Unit 1A- The restless Earth, Living World - Thar Desert Case Study (LEDC), What careers can you have with a Food Marketing and Business Economics degree? The Board of Unilever Nigeria had earlier in January announced the appointment of Carl Cruz as its new Managing Director, according to a statement by Soromidayo George, Director, Corporate Affairs & Sustainable Business, Unilever, Ghana & Nigeria. Markets UK Stocks-Factors to watch on Jan 25. Whole Geography GCSE Lesson- Changing Economic World- NEE- Nigeria Case study. TNCs can cause environmental problems, for example mercury-contaminated glass from a Unilever factory ended up in a waste dump instead of being safely disposed of. Comparative analysis of multi-domestic strategy of P&G and Unilever Another factor Unilever adopted is in the area of brand, they did this to create awareness across border synergies in manufacturing and marketing. At 31 December 2016, the unhedged financial assets and liabilities amounted to N11.1 billion (2015: N2.1 billion). The differences between the OER- and PPP-denominated GDP values for most of the wealthy industrialized countries are generally much smaller (CIA World Fact book). 42 advantages and disadvantages of unilever supply - Course Hero Brand campaigns rooted in local insights are also connecting with consumers to boost the business. 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). Management retains a positive outlook for the business in the long term, Unilever said. In trying to analyze the strategies, it will be fair to know what Business Strategy is all about. The top- consumer brand said it raked N60.758 billion in revenue last year, a value which is the lowest level since it made N59.221 billion in 2015. Among rivals, Swiss group Nestle said that 41,600 local farmers suppled maize, soybean, sorghum and millet to its Nigerian factories. The use of smaller packaging is not new in emerging markets, but industry experts say that in Sub-Saharan Africa, it has not yet been widely adopted beyond the beer industry, and expect it to catch on further in coming years. A report by Coronation Merchant Bank last year explained the shift in preference of Nigerian consumers, many of whom live below $ 2 a day, towards cheaper brands. The twenty-first century is in the yard, and we are all so fixated on ourselves that we completely stopped thinking about others. We are a ISO 9001:2015 Certified Education Provider. Concerning the area of health, Unilever has the credit to make people feel very healthy because they have good food that establishes their satisfaction. Study for free with our range of university lectures! In addition, because they are have International experience and support, it enables them to consistently develop brands, which raise the worth of life. Copyright 2017 2025. Rivalry: Rivalry in any business outfit 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. Though we had mentioned that Unilever succeeds and scores over P&G in the CSR or the Corporate Social Responsibility aspect, the increased awareness among the global consumers has turned the harsh glare into each and every strategic move that the company makes. You may also like reading Marketing mix of Unilever and Competitors of Unilever (Unilever competitor analysis). Oral administration of drugs is the most common and acceptable route for drug administration, especially for out-patients.When possible, oral route usually abbreviated as p.o. It is worlds one of the oldest multinational companies. Unilever Nigeria said last week it will seek shareholder approval next month to raise N63 billion ($200 million) through a rights issue. Shell Oil in Nigeria. Competitors of Starbucks (Competitor analysis of Starbucks), Competitors of ASDA (ASDA Competitor analysis), https://www.statista.com/statistics/194809/leading-us-deodorant-brands-in-2013-based-on-sales/, https://www.unilever.com/about/who-we-are/about-Unilever/. The performance put peak revenue in the last five years at N92.026 billion in 2018, while peak revenue growth is 22 percent in 2017. Having said that, we conclude the article with a cautionary note of not taking the threat from the Asian FMCG majors lightly as they understand the continent better and at the same time are mastering the intricacies of the global marketplace. It has both daily and Sunday titles. The potential prize is alluring. Brand Manager - Disrupt Innovation Lead. Every day, 150 million consumers use Unilever brands. The effect of this price sensitivity has been a decline in sales of the big brands and has forced some players across sub-sectors of the consumer goods industry to repackage their products to smaller sizes that can be sold at cheaper rates. Unilever, the develo ping market contribution rate into global revenue reached over 56% in 2005 and 53% in 20 10. There were persistent calls for local equity participation in foreign firms; many companies were subject to local control on prices, imports, and employment of expatriate. Advantages And Disadvantages Of Globalization In Nigeria But again, the firm is not alone in such tactics; the same shops stock Nestle NESN.S cereals ranging in size from 50 grams to 250 grams and 1 kilogram. Why the UN summit in Egypt needs to unlock ambitious climate action. Gearing levels for the firm should however fall if a successful debt to equity conversion were to take place. The 2019 result means Carl Cruz, Unilevers new Managing Director has his work cut out for him when his appointment takes effect 1, February 2020. Unileveris a British-Dutch multinational company, founded in 1929. Instead, products are more commonly sold in smaller, local stores run by individuals rather than retail companies. One of Unilever's greatest competitors is Nestl, and in order to stay . Unilever brand is superior and sound brands to help add value to the lives of people in general.Unilever Nigeria is a leading manufacturer of Oral care products such as Close up Fresh Red Toothpaste, Close-Up Extended Protection Toothpaste, Close Up Expert and Popular Toothbrushes. Disadvantages of the Amalgamation. However potential dilution from Unilever Nigeria rights issue is still a key drag on valuation. Another weakness to note is that Unilever has limited direct influence on consumers as it must rely on retailers. Unilever controls subsidiaries in at least 90 countries and employs 295,000 (in 2000) people. Legal Factor: Though Nigeria has a weak legal structure 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. Unilevers corporate image has been affected by a number of controversies. For instance, it was fined 104 million eurosin 2011 for fixing washing powder prices in eight European countries. Unilever's weak performance in the United States market was an unsustainable position for a firm that aspired to be a global consumer goods player. It is cholesterol-free, and a good source of protein, vitamins and omega-3 and omega-6 fatty acids. Advantages and Disadvantages of Amalgamation in Nigeria - Nigerian Finder Some practices of the company have been criticized which means that Unilever has to ensure that it sustains and maintains its focus especially when the spotlight is on it. This means that Unilever faces the prospect of having to battle not only the recessionary blues but also emerging threats from this new age and new breed of competition from Asian conglomerates that are beginning to spread their wings internationally. Development programs such as Project Shakti. Many of its products can be easily replaced with substitute products. See here for a complete list of exchanges and delays. Technological Factor: This Framework is used to evaluate the level of Government spending on Research and Development institutes and the efforts of government and private sector efforts towards technological advancement. The loss in 2019 full-year was preceded by three years of decelerating bottom-line growth which had seen Unilever grow by an average of 112 percent a year. What is the role of transnational companies in Nigeria? Inside our markets: Unilever's fast-growing business in Nigeria Companies are positioning themselves in the expectation that low household spending will rise as the economy grows and people come out of poverty and become consumers of packaged goods. Microorganisms help in the maintenance of good farmland by keeping and sustaining a reasonable and regular presence of microbes in it. If you liked any of these articles, please feel free to share with others by clicking on the icons below. In Nigeria, doing business has been particularly tough since 2015, when the foreign exchange curbs and the devaluation of the naira currency meant the cost of importing certain goods, which the government wanted to be grown locally, increased markedly. Other relevant articles for you in are: Competitors of Amazon (Competitor analysis of Amazon), Stakeholders of Tesco (An analysis of Tescos stakeholders). The article is Written By Prachi Juneja and Reviewed By Management Study Guide Content Team. Geography Nigeria case study Flashcards | Quizlet From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. This should be positive for the firms bottom-line as Unilever Nigeria paid N2.575 billion as interest expense in 2016, equivalent to 84 percent of its reported net income. It is the only Nigerian newspaper with a bureau in Accra, Ghana. 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 external factor and internal factor. In 2019, HCP segment revenue declined by 40 percent compared to 28 percent fall in the Food Product segment. Globalisation has had a huge impact on the different companies, such as Unilever and has also had impact of the political, society, culture and economy of the country. Unilever has a distinct competitive advantage over its nearest competitor, Proctor and Gamble because of its flexible pricing and expertise in distribution channels that manage to reach the nook and the corner of the globe. Unilever Nigeria Plc manufactures and markets consumer products primarily in the home, personal care and foods categories. 4. Strong roots in local markets and first-hand knowledge of the local culture. I already thought about this once. Just short of 3 Billion Dollars of system revenue, Pepsi Lipton is the global leader in Iced Tea. Unilever has the worlds top makers of packaged which has products like shampoo, deodorants, soap, Vaseline, tea, and frozen foods over the world. In Nigeria there was uncertainty about duties to be paid by companies due to inflation and fluctuation of currency. 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, which indicates increase in turnover but decrease in profit. Advantages Of Unilever. 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. The table below summarises the SWOT analysis of Unilever Nigeria. The PESTLE Analysis is an analytical tool used to evaluate and identify the Political, Economic, Social, Technological, Legal and Environmental factors in a given economy that would affect the operation of an organization. The maker of foods, homecare and personal care products also said it would seek approval to increase its authorised share capital to N5 billion naira by creating an additional 3.95 billion new ordinary shares of 0.50 naira each. From the launch of Close Up Red Gel toothpaste in 1975. Campaigns show consumers healthier ways to prepare this meal by incorporating diverse vegetables and cooking with Knorr to make the dishes extra-tasty. Capital: Unilever is one of the oldest surviving manufacturing organisations in Nigeria today. 2. All work is written to order. PZ Cussons meanwhile has a stake in a 26,000-hectare palm oil plantation in the state of Cross River. Unilever told Hindustan Lever Limited to start rejecting the use of child labour. A continent-wide downturn since 2014, tied to low commodity prices, has dampened hopes for companies. We call these decisions strategic decisions. 3 Unilever's total employment was over 350,000 in the mid-1970s, or around seven times larger than that of Procter & Gamble (hereafter P&G), its main rival in the U.S. detergent and toothpaste markets. Analysis on the Opportunities and Challenges of Unilever's Knorr believes that wholesome, nutritious food should be accessible and affordable for all and its encouraging Nigerian consumers to understand that they can change the world and their health for the better by changing whats on their plate. The company sells its goods in over 150 countries and has returns of approximately $46 billion (31,5bn). Mondelez International, Edgewell Personal Care, and some others put a huge pressure on Unilever and impact on its pricing strategies and ultimately the profits. TNCs in NEE- Nigeria and Shell case study lesson In other words, the organisation makes advancements to the growth of its business. Let's understand the advantages and disadvantages of a military rule. Sunlight detergent is extremely popular, as is Closeup toothpaste and Knorrs range of seasoning and stock cubes. Net finance income also shrunk on the heels of a 20 percent drop in finance income to N2.86bn while finance cost rose by 82 percent to N824m. Were working hard to tackle plastic packaging waste, particularly through partnerships and collaborations that drive change beyond our own operations. Selling and distribution expenses plunged 26 percent in the period, marketing expenses eased by 10 percent while impairment loss on trade receivable surged 132 percent. The Company sells products such as Omo washing powder, Key soap, Royco bouillon, Lipton tea, Blue Band margarine, Pears baby care goods, Vaseline petroleum jelly, Lux soap, and Close Up toothpaste. It works with the local communities and markets to develop new products and aims to achieve high standards of employment and environmental stewardship. There is no doubt that that even in economic difficulties, people will continue to buy foods & refreshment and beauty & personal care products making Unilevers brands highly sought after around the world. Our performance, strategy, and governance. In these situations, managers face the extremely difficult problem in making decisions that demand a long-term perspective, committing the firm in the long-run within a competitive landscape that is unlikely to stand still. The multinational's management viewed an untroubled relationship with its workforce as an essential complement to its economic position. It is the only Nigerian newspaper with a bureau in Accra, Ghana. It invests a huge amount of money on research to develop new products in line with current market trends. *You can also browse our support articles here >. Advantages and Disadvantages of Microorganisms - Pharmapproach.com Advantages. I recently asked for write my paper, usedhttps://edubirdie.com/write-my-paperfor that. 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. Valuation Unilever Nigeria currently trades at a trailing twelve months Price Earnings (PE) ratio of 42.2 and Price to Sales (P/S) ratio of 1.80. Drugs administered orally (e.g., tablets, capsules, syrup, solutions . Nationalising UAC hampered Unilevers control over the market where UAC operates. The measure is difficult to compute, as a US dollar value has to be assigned 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. Likewise, as Unilever operates around the world, it can anytime be affected by local macro-environmental challenges. Unilever was founded in 1929. 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 demand of the products or services provided by the organization. Mrs Oluyemiusi Iranloye is CEO and Founder of the Psaltry International factory, where the new approach will produce 24 tonnes of cassava-derived sorbitol a day. Unilevers Home & Personal Care includes the sale of skincare and oral care products, fabric care and household cleaning while Food segment includes the sale of tea, savoury and spreads. These are all packs that we use to gain penetration and to develop the market, said Yaw Nsarkoh, managing director of Unilever Nigeria. Weakness:Unileverweakness is the dual leadership not connecting with customers and secondly. It has received a number of awards and accolades on sustainability, social, and economic performance from external bodies and agencies over the years. Unilever's Generic Strategy & Intensive Growth Strategies There is a lot of unemployment in India due to lack of jobs. The factors are systems used to control financial, reporting and accounting systems in an organisation. The use of this material is free for learning and education purpose. Currently, local manufacturers face a number of challenges including: Customs administration and port related issues, Common External Tariff (CET) and issue of competitiveness. It has a broad portfolio of core brands (with Lipton, Pure Leaf, Brisk, each worth over $1 . While Unilever has over 400 brands, it can pursue new opportunities, particularly beyond the consumer goods industry. Here are just a few updates from our initiatives. meanwhile has rolled out a range of small pack sizes over the last three years for products from soap and detergent to milk and vegetable oil. The move means we will use locally grown cassava rather than imported corn to produce Closeups and Pepsodent formula, creating thousands of employment opportunities for factory workers, agronomists, back-office support staff and farmers. Information from the companys financials suggests a tax credit of N4bn which improved bottom-line to a loss of N4.22bn. The organisation is well 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. How best to navigate the African consumer market is on the agenda to be discussed by corporate leaders at the World Economic Forum in the Swiss resort of Davos this week. According to Kotler (1999) PESTLE Analysis is a useful strategic tool for understanding market growth or decline, business position and direction for Operations. Video embedded with a worksheet to collect information on Shell in Nigeria. However Unilever Nigeria's financial results suggest that some of the tactics adopted to counter this may be paying off. It helps explains why these companies, plus the likes of Procter & Gamble. Unilever 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 supply chain. Recipe sharing and in-person experiential activities from the brand also aim to inspire consumers to choose Knorr and change the way they cook. Unilever works with charities to help hygiene education programs - sanitation to 115 million people in India. They are as follows. It said 82 percent of its inputs were sourced locally and that it aimed to extend to 100 percent where possible. The brand is promoting plant-based meals with Knorr seasoning as a key ingredient. Our Standards: The Thomson Reuters Trust Principles. The World Bank sees the countrys economy growing from 1 percent in 2017 to 2.5 percent this year. Meanwhile, Cruz has expressed optimism about his new challenge steering Unilever in Nigeria. 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. Unilever are committed to providing consumers with products that are consistent in quality, safe in use and free from adverse effects at all times. Shakti offers women training in book-keeping, retailing and other business skills so they can become local vendors of Unilever products, earning a reliable and fair income by selling products within their community. Be yourself. In 1982 Lever Brothers opened a factory in Agbara, which still operates today, and the business changed its name to Unilever Nigeria plc in 2001. The Debt-Equity conversion however may enable the parent company (Unilever UK) increase its stake currently at around 60.06 percent as the parent company may also take up rights of shareholders who fail to exercise their rights. We are a ISO 2001:2015 Certified Education Provider. Political Environment: The government is currently focusing on encouraging the local manufacture of finished and semi-finished goods in the country. "They have been popular and the biggest contributor in sales to each brand," said Christos Giannopoulos, CEO of the company's Nigerian business. This compares somewhat favourably to Hindustan Unilever of India which trades at a PE of 48.96 and P/S of 6.15. Unilever Nigeria plans to raise N63 billion from existing shareholders but should they exercise their rights?