This study intends to describe the nuances of the business environment and how it influences the operations of a company entity. Business environment refers to the external conditions and influences that affect commerce. It can be divided into two categories: internal and external. The internal environment includes a company's employees, management, and stakeholders, as well as its premises and equipment. The external environment of a firm consists of its suppliers, rivals, customers, and most crucially, the government, bilateral trade agreements, and quotas.
This study will investigate the effects of international commerce and the European dimension on British enterprises. In the United Kingdom, we shall focus on the importance of international trade, economic integration, and global markets. Similar consideration is given to the influence of two microeconomic policies and the global economy on organizations and stakeholders situated in the United Kingdom.
For any organization, whether for profit or not, to run effectively and in accordance with its goals, it must have a well-considered and executable design and structure. Organizational structure and design are interdependent. A corporation or institution's organizational structure is the framework within which it plans and performs its everyday activities or processes. Human resource management is the process of organizing and controlling human resources, communication, technology, and other inputs. In order for an organization to establish a structure, it must employ a flexible layout. A good design must assist an organization in achieving its objectives. Typically, the staff discusses the organization's needs and then develops a rubric to suit those needs. To realize a successful organizational structure, quality designs and a concerted effort by the labor force are necessary (Burton et al, 2006).
In the second section of this paper, we will describe and explore certain organizational management difficulties. We will conduct a detailed analysis of Unilever's business environment. Unilever is a well-known company whose headquarters are located in the United Kingdom. It has numerous investments and economic activities that span the globe. Unilever is involved in Fast Moving Consumer Goods (FMCG). Standard-of-living essentials are fast-moving consumer goods (FMCGs). Examples include soaps, body lotions, beauty items, tea leaves, tissue papers, and cooking fats.
Unilever is the most reputable and well-known player in the FMCG industry. Since it deals with the manufacture, distribution, and final sale of life's most necessary commodities and operates in numerous nations, it is the best firm to use for a case study on the business environment. The company's history reveals that it is the result of a merger of two companies established in the United Kingdom and the Netherlands. This foundation has two headquarters, one in the United Kingdom and the other in the Netherlands. This has led to the simplification of the organizational structure.
Task 1: Determine the Importance of International Trade and the European Aspect for British Businesses
Importance of overseas commerce, economic integration, and worldwide markets for UK businesses.
International trade is the cross-border exchange of commodities and services. This type of business has a solid base in the contemporary business world because manufacturers and distributors seek to profit from a larger market than their own. Each and every business that want to cast a wide net must globalize its marketing and distribution activities. As a result of economic integrations and bloc formations, standardizations and trade barriers have become ingrained obstacles to entering international trade.
Numerous economies have realized that they cannot effectively compete using a "go-it-alone" strategy. Consequently, regional economies are increasingly merging to build larger economies. This grouping and regrouping of states has a significant effect on the social, political, and most importantly economic aspects of organizations. There are several benefits and drawbacks associated with this integration. Any corporation desiring these benefits and prepared to assume the associated risks will accept these difficulties and profit from the global market's bounty. As with any other multinational corporation, Unilever's presence on the global market has contributed to the formation of new market segments.
In order to take advantage of economies of scale, the company shakes off the European home market's saturation by catering to the needs of foreign customers. Considering the resources and products in the corporation's portfolio, international trading is also crucial. Unilever employs a variety of internationalization strategies to capitalize on these undeniable advantages of worldwide trading. Mergers and acquisitions have provided the firm with a significant stepping stone in its foray into international trade. Pepsico collaborates with the corporation to market and distribute Lipton, a ready-to-drink tea; Inmarko, the leading ice cream company in Russia; and the impending acquisition of the Sara Lee division of body and laundry production are among the many companies that have entered into international partnerships with the corporation. In a summary, the organization has successfully completed twenty acquisitions.
The essence of economic integration is the merging of monetary and financial norms and laws between two or more formerly independent parties with similar objectives. It is a concerted effort to push for improved trade terms and increase efficiency among members and non-members. It entails drafting engagement agreements and establishing conditions that enterprises must follow. It is also intended to regulate competition. The European Union is a prime example of economic integration (EU). Although the E.U. is perceived as a political organization, its establishment was motivated by an economic aim. The majority of its members are Europeans who have ratified the organization's statutes.
Unilever is a multinational corporation built on the aforementioned characteristics. This is justified by the company's presence in numerous countries and its employment of coordinated brands on the worldwide market. A centralized office in the United Kingdom controls the company's whole strategy. Unilever's income and operations will ultimately be impacted by the European Union's policy regarding tariffs and free trade agreements. The reduction of trade restrictions and impediments on the European market will result in a gain in revenue due to easier penetration into domestic markets. The elimination of all trade tariffs is one of the corporation's greatest advantages.
The influence of two microeconomic policies and the global economy on organizations and stakeholders in the United Kingdom.
Thus far, microeconomic interventions have been effective in bringing about structural changes in the organizations of the United Kingdom. These policies are the kind of long-term alterations to the patterns of output production. Immediate improvements include a decrease in inflationary expectations and an increase in production and employment possibilities. The primary objective of microeconomic policies is to develop the operations of businesses, industries, and markets in order to increase aggregate supply levels. Because these factors indirectly affect the supply side of the economy, the United Kingdom's government has taken the lead in ensuring that efficiency, flexibility, and less expensive production are the norm of the day. By using modern technology for the production of goods and services, businesses are required to maximize efficiency and minimize production costs. Technically efficient organizations, such as Unilever, tend to minimize the quantity of resources required for a given production activity.
The government of the United Kingdom has endeavored to foster healthy competition throughout the nation. Microeconomic policies assist businesses in monitoring the conduct of competitive sectors, wherein all market participants are given the opportunity to compete with one another. There are several microeconomic reforms that use corporate structures and privatization as strategies.
The government of the United Kingdom has attempted to enhance microeconomic reforms so that long-term obstacles to economic growth can be addressed. Inefficient resource allocation, underdeveloped infrastructure, an unstable price structure, and underemployment of available labor could all impede economic growth. As a result, producers raise their prices and customers purchase inexpensive imported items, depressing economic growth. In order to achieve microeconomic goals, policymakers must eliminate obstacles to the efficient allocation of resources, which, in an ideal world, would be performed automatically by markets. In this instance, pricing measures in the United Kingdom have stabilized market forces but prevented the market from charting its own course.
Due to the increased competition caused by privatization and deregulation, businesses will be able to lower costs and boost production in an effort to maximize profits. There have been implemented competition policies and licensing laws by the government. Unilever has replaced human labor with automated systems in order to reduce production expenses. Some opponents consider this as a forerunner to national unemployment.
Microeconomic policies are extremely beneficial since they tend to foster competitiveness among market participants. Some businesses struggle as a result of competition, while others lower prices and progress toward the profit margin. Those who are unable to remain solvent leave the market. When a company's revenue yields a greater profit, it will invest and grow its operations. As a result, the company will require additional staff, hence increasing employment prospects and indirectly stimulating economic growth (Yip, 2007).
Economic repercussions of Britain's membership into the Economic Monetary Union (EMU)
The Economic Monetary Union is the adoption of a single currency by the member states of the European Union. This was accomplished through the establishment of a single European Central Bank and the creation of a unified monetary policy. Due to the economic ramifications, this adoption of a single currency has produced a range of contradictory responses. Some may argue that the implementation of EMU is unimportant because it concentrates solely on the financial services industries (Smith & Grant, 2003).
Critics of the Economic Monetary Union assert that combining economies of varying sizes will be damaging. This will result in the entire economy of Europe falling to the lowest common denominator. Simply put, the economic strength of the member states will be accomplished by achieving a balance among the participating economies. The economies that do poorly will drag down those that are regarded to be prosperous. Despite this dismal perspective of EMU, euro financial assets will ultimately be very desirable due to the elimination of exchange risk and improvement in liquidity. In addition, the stability of the macroeconomic climate is of great assistance in mitigating risks associated with financing and investments. The introduction of the euro as the unified currency in the European Union has undoubtedly increased price transparency. A user of the euro has no concerns regarding the use of a different currency (Smith and Grant, 2003).
On the area of the Union, businesses can confidently compare prices without fear of the actual value being affected by conventionally highly volatile exchange rates. The unified EMU area is externally capable of being self-sufficient and independent of Asian or American influences. Consequently, collaboration has a political impact. By continuously cooperating in the development and enhancement of the framework for the common market's policies, ill will between states will be eradicated, fostering better relations between nations. The enterprises of the European Union, of which our organization is a part, will boost their profitability by eliminating currency exchange transaction expenses. Other trade-focused advocates of this worthwhile enterprise assert that no money would be wasted due to fluctuating currency rates. Europe's ability to compete with the Far East and the United States is enhanced by its ability to trade as a bloc.
Unilever is recognized as a robust corporation with a lengthy history, notwithstanding the challenges that have been mentioned. It is an unquestionable fact that its future is without bounds. This is evident by how well organized and developed it is. It also deals with all of its stakeholders in a way that benefits both parties. In addition, because it operates in numerous nations around the world, it has always adhered to the rule of law when interacting with the various governments and doing its business.
Identify the mission and responsibilities of the organization; investigate its economic environment and behavior.
Vision, mission, and goals and objectives of Unilever
Almost everyone has undoubtedly ever utilized Unilever's items. Daily, almost two billion individuals utilize their products. Because of a well-articulated vision and mission statement, the company has been able to amass an enormous consumer base. The claims are supported by specific objectives and methods for achieving those objectives. The corporation also prioritizes environmental protection while concentrating on economic expansion. Unilever is one of the most successful global corporations of recent times because to its noble aim. Unilever believes that success is exclusively contingent on upholding the greatest levels of corporate conduct toward customers, workers, and the community. In recent years, there has been an emphasis on procuring raw resources in a sustainable manner. The areas in which Unilever operates have benefited immensely from the company's extensive corporate social responsibility initiatives.
Unilever's primary objective is to meet the needs of all people in the world. The firm anticipates the desires of its customers by responding creatively and aggressively to market factors. Because its methods are thoroughly anchored in the local cultures of the regions in which it operates, this company has a solid reputation. This has helped it grab and sustain an even larger global market share than its competitors. Its long-term success stems from its dedication to customer satisfaction and its goods' exceptional performance and quality standards. Staff and management work as a cohesive one and are eager to adopt and implement new ideas as soon as possible.
An analysis of the degree to which Unilever accomplishes its stakeholders' objectives.
This corporation's success has been linked to the soaring ties it has cultivated and maintained with a variety of individuals and groups serving as its most immediate stakeholders. Customers, input suppliers, and shareholders are its stakeholders. Other stakeholders include the government, regulatory authorities, society, academics, and individuals who are concerned with the corporation's products and their effects on customers (Jones, 2005).
This corporation accomplishes its goals through engaging its stakeholders in novel and diverse ways. Depending on their respective interests, several levels and methods of stakeholder participation are used. The corporation ensures that consumers' needs are satisfied as well. It continually dispatches its staff to the field in order for them to analyze and comprehend the diverse preferences, demands, and trends of its present and targeted consumers.
Additionally, the company hosts a number of meetings with local governments and civil society organizations. Changes in legislation, licenses, trade conditions, tariffs, and tax matters are the essential basis for involvement with governments. In addition, it collaborates with affiliated companies in a variety of fields, such as nutrition, and performs numerous research projects with the objective of enhancing its goods and market share. The most significant engagement with stakeholders occurs at the local level, then at the regional level, and eventually in the global arena. There is always room for improvement in global partnerships between intergovernmental and non-governmental organizations. This relationship brings in much-required expertise and knowledge in a number of key areas, as well as bringing on board initiatives with a practical component.
This organization employs numerous methods to ensure the satisfaction of its stakeholders. Regarding environmental considerations, for instance, there is no doubt that the company has built a welcoming environment that will ensure the longevity of its operation. It collaborates with various partners to ensure the safety of the environment and provides education on the significance of preserving a healthy environment. In Kenya, for example, Unilever is utilizing its social responsibility capacity to plant more than a billion trees over the next five years.
The company protects and defends the legal rights of its consumers. Strong cooperation exists between Unilever and the governments and organizations it deals with directly or indirectly, such as labor unions. This organization involves its stakeholders because it is primarily concerned with protecting its lawful commercial interests. To ensure that its goals adhere to business ethics, the company supports the establishment of competition laws. In addition, it ensures that employees conduct themselves in accordance with the laws and regulations of fair competition (Jones, 2005).
This company is so committed to its employees that it fosters an environment based on mutual trust. This is why it offers its employees safe and advantageous working circumstances. It grants its employees all basic liberties.
Unilever's social responsibilities and the approach it employs to fulfill all of its social commitments
This company thinks that its personnel must maintain a constant level of corporate behavior towards consumers, society, and immediate competitors if it is to succeed. Unilever's operational standards are characterized by a high level of adherence to company norms, principles, and regulations since they are adopted by all employees. The corporation fulfills its obligations with a high degree of honesty, uprightness, integrity, and sincerity. It respects human rights with regard to its employees' employment and compensation by ensuring that their interests are always first. It not only respects the rights of its employees, but also those of persons and other businesses with whom it conducts business (Jones, 2005).
Unilever ensures that its employees comply with the laws of each country in which it operates. The corporation has committed itself to progress in a culture of shared trust and value, in which everyone is held accountable for the firm's performance and reputation. This company searches, employs, and supports competent applicants based on the academic merits, experience, and skills required for each advertised position. The administration is committed to ensuring the socioeconomic well-being of its employees, and to that end, it does not permit child labor or forced labor. The personnel is permitted to freely associate with one another and with others outside the organization. The personnel benefits from an efficient communication system and receives consistent consultation support from the organization's higher management.
On the other side, consumers gain from this company because they are given with high-quality, branded goods and services at predictable pricing. They are offered products of great usability and safety for their anticipated use. Prior to introducing a new product to the market, Unilever ensures that consumers are well-informed about it through advertising and branding (Jones, 2005).
Similarly, this corporation's suppliers have reaped substantial benefits because they have formed mutually beneficial working relationships with it and its other business partners. Unilever incorporates society into its corporate activities and guarantees it has met its social obligations to the entire community.
This company cares about the environment in which it operates because it is devoted to making continuous organizational improvements with an eye toward continuously monitoring environmental consequences with the goal of creating long-term sustainability. The company has implemented fair competition policies for its employees. They have a natural tendency to conduct themselves in accordance with the principles of free and fair competition in the performance of their duties.
The business maintains a high level of integrity because neither the personnel nor the management accept nor offer bribes. There is a rule requiring timely reporting of corruption to management. It maintains a high level of transparency because its accounting records are regularly examined and reported. The code of conduct is also reviewed, and those who violate it must adhere to the processes outlined by the joint secretaries.
This corporation has a management board that guarantees compliance with the stated principles. They also ensure that the outlined principles are applied precisely. In addition to making significant decisions, this board meets regularly to review emerging concerns and monitor the entire organization.
The company ensures that its consumers meet their nutritional, sanitary, and personal care demands on a daily basis. The firm produces brands that make people happier and more successful in life. Its primary purpose is sustainability, which serves as the business's backbone. Through the things it sells to consumers, it seeks to inspire individuals. The corporation is in contact with the community since it considers customer satisfaction to be a crucial aspect of its development. In order to achieve success, the firm maintains the highest possible corporate standards at all times.
Unilever operates in numerous industries, with nutrition, hygiene, and personal care being among the most significant. The nature of this company's operation elucidates the future duties it assumes. It collaborates with healthcare organizations such as the United Nations Children's Education Fund (UNICEF) and the World Health Organization to promote its customers' healthy diets and living conditions (WHO). This firm has devised new policies that promote correct eating and educate consumers on the significance of using healthy products in order to deliver healthy nutrition to society. The organization participates in global hygiene-related campaigns. Through these programs, it has been possible to prevent on a larger scale a number of diseases associated to poor hygiene.
This corporation guarantees that the environment is appropriately managed by taking into account aspects such as agriculture, aquatic life, and water. It has also implemented effective marketing campaigns that sustain global fisheries and water conservation efforts.
How economic systems strive to allocate and effectively utilize Unilever's resources
Unilever's primary objective is to utilize available resources to maximize profit in the numerous nations in which it operates. Its multifaceted products and standing as a market leader in all other respects and obligations stem from a more profound origin. This company has expanded into the global economy and is acknowledged as a responsible member of society. Having occupied such a large area, this organization has been the primary target of companies that disagree with its commercial practices. Being one of the largest FMCG firms with geographically and functionally diverse interests. This company employs multiple economic systems to ensure that economic resources are allocated appropriately. It employs central planning in which the management determines and designs the production of the types of goods and services required by potential consumers. After identifying these products, they are manufactured and distributed to the designated regions.
The process of selecting the essential commodities and services on a global scale requires careful consideration and an appreciation of the exercise's complexity. Several individuals are frequently involved in this process, in which companies and suppliers are given production guidelines. This company has planners who estimate and plan the allocation of the necessary resources to produce the anticipated output. This company has hired a large number of individuals who exploit these non-human resources effectively to create optimal production and are compensated accordingly. The firm also controls the number of employees in order to budget for the salaries and wages they will receive. The purpose of arranging this allocation of resources is to motivate people to achieve maximum production. The management also determines the selling pricing for various commodities.
By utilizing a free market economy, the company always bases the prices and quantities of its products on the forces of demand and supply. The general public will generate demand and supply, which will subsequently set prices and output amounts. Both producers and consumers rely heavily on the ultimate market prices to determine how much will be produced, supplied, and purchased. Unilever's management does so for a variety of reasons, including the reward of an enterprise, providing enough information to producers and consumers, pricing that reflects costs and advantages, and the ease with which resources can be optimally allocated and utilized (Yip, 2007).
The corporation assumes the risk of creating goods and services with the intention of receiving a profit after sales. Additionally, there is a fundamental requirement to increase earnings and minimize expenses. To achieve this, Unilever relies on the superior market intelligence that enables it to source supply at low prices and strategically price its commodities. In addition, it features very efficient methods for systematizing manufacturing in the most competent manner and searching for economical resources. Constantly, consumers are in need of market-guiding knowledge.
This company must disclose the costs of the numerous products it is putting on the market. Prices are the focal point of any business because they send signals to both suppliers and customers. A product's price must be disclosed to consumers. The amount of money consumers spend on a product reflects its genuine worth and the greatest possible utility they may derive from it.
It is also noteworthy that Unilever continues to discover and innovate feasible new ideas for all the things it can produce. By doing so, it is able to increase demand for new items and generate larger and better profits. Additionally, the firm concentrates on acquiring and transporting the resources required to develop new items. When a range of complementary and substitutable products are available on the market, customers have various options for consumption, and competing enterprises must change their pricing and volumes to maximize profits and establish a foothold in the market.
The influence of social welfare and industrial policy initiatives on Unilever and the greater community.
The primary objective of designing industrial policies within companies is to define a plan of action that will provide assistance in accomplishing manufacturing- and industry-dependent development goals. These policies claim that market failures impede free markets, and as a result, many nations fail to meet their development goals. For this reason, the government can solve the problem of market failures by intervening and guaranteeing that competition is free and fair. Important industrial policies tend to favor huge companies like Unilever. The widespread acceptance and support for these policies stems from the fact that they give a more effective means of addressing market shortcomings. In order to address market failures, governments can improve access to high-quality information, bolster legal and institutional frameworks, provide enough infrastructure support, and provide commercial entities with the requisite environment for industrial and economic growth.
In an effort to prevent or eliminate market failures, planners prioritize industrial policies that encourage and maintain a level playing field. There are certain inevitable externalities that increase costs, and as a result, some actions are more vital and urgent than others because they try to reduce these costs and realize the benefits of economies of scale. There are a number of externalities, both internal and external to businesses and nations, that inhibit free and fair competition. Examples of these externalities include the reoccurring rigidity of the labor market and the insufficiency of funds for growth promotion. The cost of acquiring information is also a significant externality that inhibits free and fair competition. There are also industrial policies that focus on overcoming information externalities, thereby creating an environment that enables organizations to comply with international standards, engage in experimentation, develop new product lines, and gain access to new markets while expanding existing ones. Since Unilever makes effective use of industrial policies, it appears to enjoy a favorable economic climate in which producers can locate the necessary resources.
An efficient market economy that provides access to markets and economic capital promotes economic progress. The purpose of industrial policy is to support the industrial sector and its expansion. As a non-governmental organization, Unilever establishes vital circumstances for the total consolidation of pluralism and democracy in the nations in which it operates. Therefore, the improvement of non-governmental organizations has an effect on the growth of individuals and society as a whole. Social welfares are extremely significant to society since they lead to the development of initiatives that are individually beneficial and adaptable to societal needs. Projects that are useful to society should be entrusted to the private sector, which is close to society and understands its demands.
How Unilever's market arrangements vary from the ideal of perfect competition
Market structure is the method in which a business faces competition when delivering goods and services. Both extremes occur, depending on the market in which one operates and the type of items that are dealt with. The market structures that theoretically exist are perfect competition, monopolistic competition, oligopoly, and monopoly. It is impossible to determine which of these existing market structures dominates the Unilever products market. This is due to the fact that there is no clear distinction between them. However, perfect competition is a significantly different structure than the other three. A vast array of Unilever's consumer goods are distributed globally. Unilever is able to compete in all market arrangements with the exception of perfect competition as a result of its complicated organizational structure and extensive product portfolio.
A market is characterized by perfect competition when there are many sellers and buyers present. This indicates that no single player will have a significant impact on the market as a whole. In this market system, the presence, removal, or change in strategy of a distributor has no effect on price or demand. The market forces are permitted to operate in full force. In this market, customers perceive all products to be identical, resulting in indiscriminate product selection. However, this is not the case for the vast majority of home products. Consumers are quite discerning when choosing such products, particularly those that affect their health and attractiveness. The previously mentioned extensive array of Unilever household products influences the health and beauty of the final customer. These effects, whether immediate or long-lasting, are reflected in the product's advertising slogan: giving vigor to life. Considering the company's characteristics, Unilever is not the type of company whose market presence cannot be felt by both competitors and consumers. Therefore, it is a complete falsehood to assert that the market system in which Unilever operates is characterized by perfect competition (Yip, 2007).
When there are little barriers to market entry, monopolistic competition predominates. Therefore, a company's market existence will be defined by its inventiveness and capacity to overcome the few existing restrictions. These limits may not necessarily be pecuniary, but rather anything that can impede the expansion and performance of a market participant. Due to their small market share, the many companies operating in this type of market structure have little influence. Globally, Unilever's market share cannot be characterized as small because it is highly variable. Geographic diversity, typified by expansion and forays into emerging markets, is essential. The possibility of a tiny market share cannot be ruled out altogether, but it can be mentioned as a plausible possibility. This is visible in the penetration of new markets already occupied by competitors, as well as in instances where competitors are proving too powerful to cut into the corporation's market share. In this scenario, the products are highly distinct, allowing for easy differentiation between products from different companies.
The Unilever products are readily identifiable and readily available in a sea of household goods from which consumers can choose. Therefore, Unilever's marketing strategists must employ non-price competition techniques. Advertising is the most prevalent non-price approach accessible to Unilever in situations where its competitors offer near replacements for its products. The corporation's implementation of an ambitious research and development program has resulted in the creation of the most optimal innovative product designs. All of these features characterize monopolistic competition, one of the dominant market structures (Yip, 2007).
Oligopolistic market structure develops when a small number of enterprises control the market and thus generate the majority of market revenue. This is evident from its market share, which, according to the Fortune 500 list of the largest companies in Europe in 2000, placed it at the fifty-fourth position with revenues of $45 679 million. This dominant market share combined with tight European Union standardization regulations makes it difficult for new items to enter the market.
In contrast, monopoly implies that there is just one supplier. Therefore, no competition is anticipated. The lone provider determines prices, supply volumes, and quality control standards. This hypothetical structure is unlikely to prevail absent the influence of regulators such as governments and other bodies empowered by international pacts and agreements. High entry barriers make it impossible for new companies to enter the market. It is difficult to navigate the current market structure. Due to their ability to affect national security, it can only be found in government-distributed specialized products. Therefore, we can confidently assert that this structure does not exist in Unilever's goods.
In conclusion, all market arrangements besides monopoly are utilized by Unilever. However, the perfect monopolistic structure has less weight given that this company's market share is sufficient to fend off any possible high-caliber competitors. Any company interested in the production and distribution of household goods can only succeed by franchising with Unilever or merging with it. The reduction of trade barriers and restrictions by the European Union has resulted in the concentration of European resources, which has created both opportunities and challenges for mainstream organizations. It is a significant milestone for Unilever and other multinational corporations to see different regions enter into agreements to form trading blocs. By establishing regional offices, the typically complex management structure can be simplified. These regional offices will be based on predetermined blocs.
How market pressures and Unilever's response are related
Market forces are the demands and supplies that reflect all price-conscious sellers and purchasers of market-available goods. The desires of sellers and purchasers are at opposite ends of the spectrum. The seller will seek the highest feasible price, while the customer will prefer to acquire the item for free if possible. Since taking items freely is not possible, they want the lowest possible prices. With an increase in demand, the price is anticipated to rise, whilst an excess supply will cause the price to fall. Such diverse wants constitute endless market forces. Noting that market forces are only possible when there are no external interferences is important.
The previously mentioned diverse portfolio of Unilever products can be categorized as follows: detergents and washing powder, beverages, and butter and margarine. Daily demand for fast-moving consumer goods necessitates that both buyers and suppliers be attracted to these products. In fact, demand is projected to increase due to the world's growing population and rapid urbanization.
Every company's objective is to maximize profits and decrease cash outflows as much as feasible. Unilever, being no exception, has made significant efforts to remain competitive in order to maintain and expand its market position in both Europe and the global market. We are currently investigating the company's reaction to the dynamic difficulties posed by shifting market dynamics, as well as the impact on its revenue and long-term reputation.
The company makes a concerted effort to maintain its market share. The broad geographical diversity of Unilever's products is the company's greatest asset. This will be reflected in the final returns since the poor performance of one region is likely to be offset by that of another. In 2002, the firm operated in eighty-eight different nations to make this point. Each region's management teams have autonomy in decision-making so that the items offered for distribution in their various regions are tailored to satisfy the needs of the consumers. This great strategy enables both the avoidance of obsolescence and the delivery of the market's most relevant products.
Paying close attention to human capital presents a tremendous potential for the corporation's long-term strategy. This global organization believes that highly driven human capital will have a favorable effect on future prospects. For this reason, the company has invested in the development of its human resources through the recruitment and training of people with diverse specialties and credentials. To ensure that every talent in society is utilized, one can enter the company's incredible human resource pool via the graduate trainee program or direct entry for specific skills (Yip, 2007).
The creation and implementation of a well-detailed safety, health, and environmental policy is a noteworthy technique that may appear to be more welfare-based than economic. This has a lasting perspective and a broader scope than what is immediately apparent. However, this does have short-term benefits. A worker who is always safety-minded will provide better results than one who pays little regard to safety. It is also important to note that certain economic blocs, such as the European Union, cannot accept a company's products if it has not taken any concrete steps to conserve and safeguard the environment. The most recent example is the dedication to sustainable black tea sourcing that resulted from Rain Forest Alliance accreditation. Unilever's ability to launch its Rain Forest Alliance-compliant tea on the European market is one of the direct benefits of this tea's sustainable source (Smith & Grant, 2003).
The firm embarked on an aggressive growth strategy in the year 2000 in response to several years of dismal global performance. Next, we will review the precise action elements of the strategy. First, the confusion surrounding the vast number of brands was addressed by reducing them to the four hundred most essential core products. The removal of the failing brands from the market resulted in a 75% to 93% rise in sales of the leading brands.
Additionally, the company has been able to get into emerging markets by penetrating those already occupied by competitors such as Procter & Gamble, Nestle, and Kraft Foods. Unilever's capacity to conduct research and identify consumer wants trends is one of the company's most significant assets. With this knowledge, the response is to provide accommodations for them. As an example of this proactive approach, the most pressing issues in the world today are nutrition and weight. The majority of individuals are currently devoting their attention to healthier lifestyle choices. In order to follow this trend, Unilever acquired Slimfast, a company that provides weight management services and nutritional consulting. Globally severe competition has compelled the corporation's upper management to pursue acquisitions. Ben & Jerry, Slimfast, and Best Foods are among the top twenty purchases globally. This ability to undertake massive purchases and form conglomerates has put the company in a position to enjoy a competitive edge. The firm saved EUR750 in expenses and saw its operating margins increase by 15.7% in the first three quarters (Smith and Grant, 2003).
The conduct and competitive strategies of Unilever, as well as the role of Competition and regulatory agencies
Unilever is diligently collaborating with the Competition Commission to strike a balance between its earnings and legality. Given their differing motivations for promoting competition, it has been difficult for both parties to strike a compromise.
Competition Commission will always seek to ensure a level playing field for all industry participants. Additionally, it ensures that no one gets unfair advantage by penalizing the eventual consumer. To accomplish this, the commission closely monitors the interaction between market rivals and partners. Changes in the structure of organizations, including concentrations through mergers and acquisitions, are very useful for eliminating market competition. The recent planned acquisition of the body and laundry division of United States-based Sara Lee by Unilever is being assessed in accordance with European Union Merger Regulation.
The commission attempts to determine the eventual impact of the elimination of competing suppliers on the shelf costs of a variety of household cleaning goods. Through such a strategy, the business is able to avoid the costs that would have occurred from intense competition and advertising. Nonetheless, if this is perceived as an attempt to gang up on competitors and force them out of business, it will be deemed undesirable, and the commission will inform the appropriate bodies accordingly. Sanctions and license suspension may be the most severe consequences a firm can face if convicted. In spite of this negative view of the work of the Competition Commission, there remains plenty to be accomplished.
As part of its expansion strategy, the company has adopted a previously indicated path-to-growth master plan targeted at increasing its market share. Its unrivaled, vast infrastructure has played a crucial role in the nation's entry into emerging markets. The other strategy has emphasized internal management structures and the development of global leadership. Every member of the management team has internalized the concept of growth, resulting in a well-oiled management machine. Only via the constant enhancement of organizational structure can quick decision making and enhanced accountability be achieved (Jones, 2005).
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Jones, G. (2005). Renewing Unilever: Tradition and Transformation Oxford University Press, London.
Smith, D., and S. Grant (2003), UK Current Economic Policy, third edition, Heinemann, New York.
Yip, G. S. (2007). An Integrated Approach to Global Customer Management Oxford University Press, London.