UNILEVER

Unilever

Unilever

Global Financial Environment

Unilever is one of the most international companies in the world. It has some 300 operating units in 88 countries and its products - over 1,000 strong successful brands - are marketed in over 150 countries worldwide. Unilever employs 255,000 people. It produces mainly pre-packaged branded foods (such as Rama margarine, Magnum ice cream, Lipton tea and Calvé mayonnaise) and products for home and personal care (such as Omo detergent, Timotei and Organics shampoo and Rexona deodorant). Unilever also has a thriving professional cleaning business, DiverseyLever, which provides cleaning and hygiene products for the industrial and institutional markets.

Unilever in Ghana operate as nearly as is practicable as a major entity (http://www.unileverghana.com/). Corporate strategic leadership lies with the seven-member Executive Committee of which the chairmen of Unilever N.V. and Unilever plc are the principal executive officers. Unilever's total sales (1999) amount to US$ 43.7 billion with operating profit at US$ 4.6 billion. Forty-six per cent of Unilever's sales are in Europe, 22 per cent in North America and 32 per cent in other parts of the world. Unilever invests approximately US$1 billion in research and development and in 1998 US$ 5.7 billion was invested in the marketing of her brands. At the heart of Unilever's strategic focus and purpose is the drive to meet the everyday needs of people everywhere and to serve consumers and customers creatively and competitively (http://www.unileverghana.com/). To achieve this, Unilever tailors brands to the needs of different regions and countries.

The Ghanaian retail industry is highly consolidated with Brothers Ghana Limited, P&G and Pfizer dominating the sector. Unilever is facing intense competition in the retailing business from other supermarkets and discount stores. Besides its major competitors like P&G and Pfizer, Unilever faces competition from numerous other small players and local store operators. Unilever operates through multiple store formats. Besides Ghana, Unilever also operates in many European countries and Asian Countries. Unilever also faces intense competition from P&G, which has also largest retail market share in the Ghana.

Unilever has gone through a process of rapid change during recent years. In the mid-1990s it was felt that as a business Unilever was not delivering the required volume and profit growth. The company was not quick enough on its feet and it was diluting its energy by trying to focus on too many different areas. Also, in terms of professionalism, though generally acknowledged as a professional company, Unilever felt it could improve even further. And finally, though knowledge of the local markets was excellent, not enough had been done to leverage the size of the Unilever business and exploit the potential economies of scale.

One of the goals therefore clearly was to increase focus and results-orientation. An example of this is the fact that clear directions were agreed in terms of focus on a limited number of product categories. “Focus” in this context means giving priority to these categories when it comes to investment decisions. One of the more prominent consequences was the sale of the chemicals business ...