Although Unilever’s Path to Growth strategy involves all components of the general environment, two segments that are especially relevant are the global and sociocultural segments. A major strength of the company’s global environment is its geographic diversification of its major product markets. In 2003, Unilever had sales and marketing efforts in 88 different countries. The key is that it gave decision-making power to its managers in different countries so that they could tailor their products to the market’s specific preferences and consumers’ local tastes. Thus, it was the cross-country preferences of consumers that determined what products Unilever would carry. The global segment provides an enormous opportunity for Unilever. The case states that emerging country markets show the greatest potential for sales growth. Major competitors such as Procter & Gamble and Kraft Foods had sales in roughly 140 to 150 different countries in 2003, and Nestle, Unilever’s main rival, had market penetration in almost every country in the world. If Unilever is able to expand its operations into 50 or more new countries and concentrate its advertising campaign on consumer preferences, it could significantly increase its market share in the global economy.
Another important piece of Unilever’s general environment is the sociocultural segment. One of the company’s founding values is understanding and improving consumers’ lives. A major strength of Unilever lies in its ability to anticipate consumer trends and demands and then cater to their needs. For example, market research indicated that nutrition was the number one concern in the United States, Germany, and the United Kingdom, and that weight was the number three concern. The focus of peoples’ attitudes became living healthier lifestyles. To move with the trend Unilever acquired SlimFast. SlimFast was the U.S. market leader in the weight management and nutritional supplement industry, with a 45% market share. The acquisition seemed promising in the beginning. Approximately 94% of SlimFast’s sales were in North America, which presented a huge opportunity to diversify into foreign markets such as Germany and the United Kingdom. Unfortunately the healthy lifestyle that peop...
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...l investment costs. Unilever would likely have to spend millions just to enter a new country. It would have to deal with different governments and laws and regulations as well. If such investments were to go sour, Unilever could find itself with millions or even billions of dollars/euros of fixed costs in an unprofitable country.
Lastly, Unilever should focus on restructuring SlimFast and turning it into a profitable part of the company. One of Unilever’s major strengths is its ability to acquire and then integrate new firms. Unilever should focus its marketing and R&D departments towards finding products that will satisfy consumer needs. It needs to focus on healthy, low carbohydrate drinks and diet bars to get it back atop the market. At first, success could be measured in terms of whether or not SlimFast once again becomes profitable. If it achieves profitability, then it can measure success based upon market share. Some possible disadvantages would be compromising SlimFast’s values and principals. SlimFast is a company that used only natural ingredients in its products. If the company does not buy in to the new strategy, then the whole restructuring could be a disaster.
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