International Business of Unilever Company - Case Study Example

International Business International Business Introduction Unilever is one of the largest companies that operate in the gulf region which is the leading FMCG production company. It should be noted that the company has got a very big and new factory in Dubai. Unilever Company is widely recognized by the fact that it is one of the leading consumer goods producers in the entire Middle East (Unilever 2013). Inclusively, most of the consumable products of Unilever include Lipton, Vaseline, tea, home and personal care products among many other products (Unilever 2013). This paper will explore and analyze the company following their marketing process, strategies for global expansion and challenges they face including competitors they face. Discussion The resources and capabilities of Unilever Company are beyond imagination. Unilever Company developed and objective in the year 2007 of driving alignment of its entire operations in addition to leverage synergy of scale and achieve the benefits of cost arbitrage (Unilever 2013). To begin with, almost all products that Unilever markets in the Middle East and its environs are manufactured locally. Unilever Company has got several dotted factories all over the gulf region even extending to some parts of the northern Africa (Unilever 2013). The merging of the three clusters of Arab business; “Mashreq and Maghreb” saw the formation of Unilever North Africa Middle East (Algethami 2014). This was a powerful opportunity which capacitated the company to market its goods widely. The other resources capability is the fact that Unilever Company delegated production duties to various stronghold regions. For example, factory producing homecare product’s is located in Algeria, Tunisia, Saudi Arabia Yemen, UAE Kuwait, Gulf and Qatar specializes in production of food products and tea (Algethami 2014). This shows how widely resourceful the company is. In terms of man power, Unilever has a total of 4600 people employed within the gulf region (Algethami 2014). It is estimated that Unilever allocated €60 to €100 million just for expansion (Algethami 2014). Moreover, the company is full of ambitious management with a10-15% growth plan for the next 15vyears (Algethami 2014). Counterfeit products are the main challenge the company face. There are vast products manufactured by other factories and which copies Unilever branding such that customer cannot differentiate original and fake products. This has made many people divert from using Unilever product thinking it is made up of poor quality. It should be noted that 90% of general Unilever products are counterfeited (Algethami 2014). In 2013 alone over €70 million worth of counterfeit Unilever products were collected and confiscated (Algethami 2014). Henkel AG & Company, KGaA is another main competitor for Unilever in the gulf region (Algethami 2014). The company is also known for its quality laundry and home care products, beauty products, soaps, detergents and other products (Algethami 2014). In the year 2012, Henkel reinforced its position since it emerged with 42% of overall sales increase and also had 54% employed people in the company (Algethami 2014). Henkel most famous product is Persil; a laundry detergent that was introduced in 1907 and which many people prefer as compared to Unilever products (Algethami 2014). The strong establishment of Henkel has made it hard for Unilever to compete with it on its well established products. However, Unilever came up with advanced laundry products that were cost effective were able to survive in the competitive business (Algethami 2014). In addition to Henkel, companies like Hormel foods and Pinnacle food are some of the emerging competitors that were keeping Unilever on toes (Unileverme 2010). The main challenge was competition on laundry detergents, the food production and fighting counterfeit products that are on the market. With most challenge coming from counterfeit product, Unilever has been able to develop advanced branding for their original product in the name of distinguishing between their original and counterfeit products (Unileverme 2010). In addition to this, prosperity in their food product enabled them develop a brand that is global and hard for their competitors to imitate (Unileverme 2010). The resource on Unilever food business was categorized to have over €20 billion. Unilever company global market advancement attracted unique strategies that would enable them in entering new countries. To begin with, Unilever strategy to enter Iraq and Spain posed some little disparities in order to conquer the new areas (Unilever 2013). In Spain, Unilever came up with the five level of change strategy that could keep it in a better position to win more customers in the foreign land. The first strategy involved background understanding of the business in relation with the foreign people behavior and belief on their culture (Unilever 2013). This was important because being an Arabian and Islam based company they had to know whether the new markets will appreciate their products. This in other words created awareness and encouraged them on acceptance as they explored new markets (Unilever 2013). Make it easy was their next strategy which focused on establishing confidence and convenience among people in Spain (Fikri 2010). The strategies aimed at ensuring people were confident in using Unilever products (Fikri 2010). For example when marketing for a detergent product, there was need for practical demonstration to convince people on its effectiveness in washing and rinsing cloths using very little amount of water (Fikri 2010). In addition to this, there was need for Unilever to develop their product entering new market to be more desirable in terms of appearance and quality. This is because native competition already present in new market. Marketing should be intensive over the media and planned campaigns. For their hygienic products, Unilever in Spain should use venues where they sponsor hand washing awareness and in the process market their products (Fikri 2010). In addition to this, Unilever should also engage in supporting youth activities in Spain including football sponsorship. This provides best venue for marketing their products as they enter new markets. Media is another vital marketing center. Marketing can be done through TV and social media (Fikri 2010). Finally, there is the rewarding marketing strategy. This involved offers, bonuses and manufacturing of products that were affordable by low and middle income communities (Fikri 2010). People of Spain are ranked in several social statuses and Unilever should market affordable products by everyone. Iraq being part of Middle East, Unilever will have less workload in exploring and establishing within the new market (Fikri 2010). Extensive campaign of their products through media is one strategy that worked well when marketing their products in Iraq. Customer marketing by developing and implementation of the activation plan which supports the objectives of the brand is another effective strategy Unilever can employ when advancing Iraq markets (Fikri 2010). Once customers were aware of the brand, the next step will be to categorize their solutions and provide the best customer channel based on fully integrated shoppers (Fikri 2010). Think global and act global is another marketing strategy employed in Iraq by Unilever Company. This strategy focused on establishing the brand in new market as they adapted to the new environment (Fikri 2010). The 4P’s marketing strategy simply stands for Product, Promotion, place and price (Unileverme 2010). It is prudent to note that Unilever Company elaborately employed the strategy when advancing new markets (Unileverme 2010). When Unilever was entering Spain and Iraq, there was need to develop brand promotion strategies for people to be aware of the company. In their promotion it is important to involve a marketing slogan that will attract people attention. For example, Unilever have their international slogan and communication for their detergent “dirt is good” (Unileverme 2010). When it comes to products, there was need for creating market competitive products (Unileverme 2010). This is because when products are of quality and of standard to be able to compete with rival companies. For Unilever, their products are usually classified as; home and personal care product with also various classes of products and food products (Unileverme 2010). This helps them in maintaining the standards and quality in each classification. Place is another very important entity that determines how the company can conduct its marketing. In this case, marketing in Spain varied slightly with Iraq in terms of culture and religion of target customers. Iraq being an Arab and Muslim-based country, Unilever can use similar branding done in Dubai and other gulf countries since they can read Arabic. For Spain, this has to vary slightly. This is because Spanish people do not read Arabic and have a different religion. To attract customers, local language can be incorporated in the branding and marketing of product (Unileverme 2010). Price is the last 4Ps entity. Products prices can vary depending on social economic status of the country. Many people in Spain fall under low and middle income generating status. It is therefore necessary for Unilever to factor that and market their products with prices people can afford. One of the variations in marketing strategies between Iraq and Spain was employment of more demonstration activities in Spain than how it was conducted in Iraq (Fikri 2010). Spain being new market with different culture and religion, there was need to practically demonstrate to people their products. This aimed at convincing people to start using the new products against the native products manufactured by companies in Spain. Community awareness and sensitivity to culture and religion in Spain was very necessary for Unilever Company. Religion and culture is very sensitive and they had to respect that when entering the market in order to attract many people from different religious background. The gulf company is originally designed in Arabic brandings. This was to be adjusted to allow Spanish people read the information on product without difficulties (Fikri 2010). Above all there were similarities in the marketing strategies employed by the company in both Spain and Iraq. Think global and act global marketing strategy was very successfully employed in both countries (Unilever 2013). This strategy focused on popularizing the company brand, adapting to new market environment, learn the competitive nature of other products before advancing in sales (Unilever 2013). In addition to this, Unilever worked harder in increasing its efforts to expand its roots on traditional and modern retail outlets which were well adaptable with international brand that suits local markets (Unilever 2013). This was a good strategy that could help Unilever capitalize on growth forecast in these foreign regions (Unilever 2013). References Algethami, S. (2014). Unilever to Expand Production in the Region. Viewed 6 May, 2014 . Fikri, M. (2010). Unilever Group: Cosmetics and Toiletries Business. Viewed 6 May, 2014 . Unilever. (2013). Behavior Change and Sustainability. Viewed 6 May, 2014 . Unileverme. (2010). About Unilever Name. Viewed 6 May, 2014 . Read More