Integrating supply chains: Coty Cosmetics integrates Unilever Cosmetics International

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Integrating supply chains: Coty Cosmetics integrates Unilever Cosmetics International

Introduction

One of the corporate strategies used by many of the organizations is mergers and acquisitions that relate to buying, selling, integrating different companies. Integrating supply chain is an activity that requires planning and concentration as number of benefits and costs remain associated with such activities and this will be the major focus of this essay. This essay reflects the analysis for a case study in which the supply chain of two big cosmetics manufacturers namely Coty Cosmetics and Unilever Cosmetics International were integrated. The paper will also be highlighting the strengths, weaknesses, opportunities and threats of such acquisition. Coty enjoys a position of one of the world's largest manufacturer of cosmetics and fragrances and in mid-August 2005, the company took a decision to acquire a subsidiary of Unilever global conglomerate, named Unilever Cosmetics International. The acquisition was made by Coty cosmetics with a hope to become larger player in the fragrance market for expensive perfumes.

Discussion

Coty while planning for acquisition was having an idea that this strategy would reap economies of scalefor the company. The sale of Unilever Cosmetics International by the Unilever Group was a part of their consolidation theme that was initiated by the company in the year 2005. Operational enhancements were conducted by Unilever for the purpose of their future sustainability. Unilever group consider the sale of one of their business units as a mean to support growth and development, protect themselves against the fluctuations of exchange rate and continue their global expansion(Graul, Henricks, Olp, & Strohecker, 2006). The nature of deal was considered by Coty's management as urgent because the cost savings and retaining of key personnel makes this acquisition deal of a complex and significant nature. A number of challenges were created as the supply chain of the new company will be expanded over ten countries, employing ERP systems of four different natures. The company will have to cater multiple distribution channels. In addition to the creation of process or function owners, the company will have to operate with unique processes in each customer country that was a major requirement to be included in the integration planning effort. The new company in order to remain competitive and enjoys the benefits of acquisition, introduced a new system with the name of “customer facing” systems.

SWOT Analysis

As the ideas ...