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Unilever Strategic Management Assignment

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Company : Unilever
International ICT Business - Telkom University 2015
*Dhaifina Idznitia Apriyani Naimi
*Isradila
*Nurul Fithri Sylvani
*Amasel A. Swasono
*Lui Anbar Rhainata

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Unilever Strategic Management Assignment

  1. 1. UNILEVER ANALYSIS Group Members: Dhaifina Idznitia Nurul Fithri Sylvani Amasel A. Swasono Isradila Lui Anbar Rhainata
  2. 2. COMPANY PROFILE PT Unilever Indonesia Tbk is one of Indonesia’s leading Fast Moving Consumer Goods (FMCG) companies. The Company’s portfolio of Home and Personal Care as well as Foods and Refreshment products is distinguished by many of the world’s best known and most trusted brands, including Wall’s, Lifebouy, Vaseline, Pepsodent, Lux, Pond’s, Sunlight, Rinso, Blue Band, Royco, Dove, Rexona, Clear and others. Line of Business: Manufacturing, marketing and distribution of consumer goods including soaps, detergents, margarine, dairy based foods, ice cream, cosmetic products, tea based beverages and fruit juice Ownership: Foreign Direct Investment Date of Establishment: 5 December 1933 Stock Exchange Registration: 11 January 1982 Stock code: UNVR
  3. 3. UNILEVER’S VISION ELEMENT To earn the love and respect of Indonesia by touching the lives of every Indonesian every day . Focus : The vision of Unilever is specific directed to Indonesian. It can be seen clearly that the objective focuses on providing good products for Indonesian. Flexible : It can adapt with the things happen everyday Executable : The statement of Unilever’s vision is realistic by looking at the words “by touching the lives of every Indonesian every day. Easy to communicate : It is simple vision statement and easy to understand because it stated clearly that the focus is for Indonesian.
  4. 4. MISSION ELEMENT MISSION ELEMENT PRODUCT S MARKET TECHNOL OGY SURVIVAL GROWTH PROFIT PHILOSOPH Y SELF CONCEPT PUBLIC IMAGE EMPLOYEE CUSTOM ERS
  5. 5. UNILEVER’S MISSION ANALYSIS: We work to create a better future every day Mission element: Philosophy: The mission above is about philosophy. Unilever wants tell consumer that their product is good. With the philosophy, they try to sell good products that can affect to the customers future. Public Image: The mission is not only telling about their philosophy but also public image. Because they want to have their customers’ trust that they can give good product to the customers.
  6. 6. Mission Element : Customer: Focus the business on satisfying customer needs instead of spotlighting your product or service, The Unilever focus on brands and services that are good for their customer, to make them look good and feel good. That’s what the customer need. Employee: The Unilever mission statement motivate their employee’s significant work to serve better and how the mission contributes to people’s lives. Technology: The Unilever’s mission is produce brands and services that are good for their customer and good for others. In fact, producing good brands and services must use a great technology. So, in their mission they success to describe that they use great technology to produce their brands and services. Public image: Companies also need develop their image. I think the Unilever success to deliver their image to the consumer because they We help people feel good, look good and get more out of life with brands and services that are good for them and good for others.
  7. 7. We will inspire people to take small every day actions that can add up to a big difference In unilever mission point 3, they explain their customer, which is Indonesian people in all of aspect. Mission element: Public image: in their mission they success to build an image to their customer that they can inspire people to take small action that can make a big different change for the world. We will develop new ways of doing business that allow us to double the size of our company while reducing our environmental impact. According to the mission elements above, the last mission figures the public image and self-concept, because it does not only mention about the way and the target of the company, but it also mentioned the awareness of the environmental aspect as mentioned “….reducing our environmental impact ”.
  8. 8. FIVE FORCE MODEL BY PORTER TO DETERMINE INDUSTRY ATTRACTIVENESS
  9. 9. DESCRIPTION Numbers: 1. Highly unattractive 2. Mildly unattractive 3. Neutral 4. Mildly attractive 5. Highly attractive
  10. 10. RIVALRY AMONG COMPETITOR Current Future Number of Quality balance competitor 2 3 Product Features 4 4 Capacity increase 3 3 Diversity Competitor 2 2 Overall 11 12
  11. 11. DESCRIPTION Rivalry among competing firms is usually the most powerful of the five competitive forces. Rivalry increases when consumers can switch brands easily; when barriers to leave the market are high; when fixed costs are high and other reasons. In this case we can take Unilever Company. Their biggest competitors are P&G (Procter & Gamble) and Nestlé. Between them, Unilever is world's third-largest consumer goods company measured by 2012 revenue.
  12. 12. BARRIERS TO ENTRY Current Future Economic of scale Small Large Product differentiation Little 5 5 Big Brand identification Low 3 2 High Switching cost Low 2 3 High Access to distribution channels Ample 2 4 Restricted Capital requirement Low 4 5 High Access to latest technology Ample 4 5 Restricted Government protection Non existent 4 5 High Experience effect Unimportant 5 5 Very Important
  13. 13. DESCRIPTION The threat of entry in food industry is, however, low. As already mentioned, Unilever is one of the leading companies in food business. It already competes with other food giants (Nestlé, Kraft Foods or Mars Foods). Due to positions of the mentioned companies, it would be difficult for new companies to enter the market. Relatively high barriers to entry will have to be overcome in order to success. Besides restrictive government policies and the need of large financial resources or diversification of products, there will be also lack of tradition, experience and advantages that incumbents already possess. It is very hard for a new entrant to enter the market because it is very difficult to set up a business where the costs are too high. The competition from entrants is thus relatively insignificant.
  14. 14. BARRIER TO EXIT Current Future Aspects Specialization 5 5 Cost to exit 5 5 Government & Social Restrictions 4 4 Overall 14 14
  15. 15. DESCRIPTION Exit barrier are factors which make it difficult for a business to contemplate leaving a particular industry or market. As already mentioned, Unilever is one of the leading companies in food business. It already competes with other food giants (Nestlé, Kraft Foods or Mars Foods). Due to positions of the mentioned companies, it would be difficult for leaving the market because they already have high in assets specialization, High in cost to exit.
  16. 16. AVAILABILITY OF SUBSTITUTES Current Future Availability of close substitutes 2 3 User’s switching cost 3 3 Substitute producer’s profitability & aggressiveness 2 3 Substitute price / value 3 4 Overall 10 13
  17. 17. DESCRIPTION In case of Unilever foods, one of the possible substitutes would be a homemade product. The customers might use alternates due to various reason, such as the cost of preparing a homemade pasta sauce will be lower than actually buying a bertolli pasta sauce. Recently, there is an increasing trend of eating out. Using service can also be considered to be substitute to purchasing food. But the restaurants and caterers can also providing customers with Unilevers product. In doing so, Unilever benefits from people’s using services. It can be thus concluded that the threat of subtitutes to unilever foods is not high due to the potition of unilever as the leading compaies in food business.
  18. 18. POWER OF BUYER Current Future Number important buyers Few 5 5 Many Buyer switching cost Low 1 1 High Buyer threat of backward integration High 2 2 Low Buyer threat of forward integration Low 2 2 High Contribution to quality or service of buyers product Small 3 3 Large Buyers profitability Low 3 3 High Overall 16 16
  19. 19. DESCRIPTION With regards to all the Unilever’s competitors, a customer has a wide range of products to choose from. It is to be acknowledged that although one customer might stay loyal to one particular product or brand, the buyer’s costs of switching from one product to another is not high. This is, however, relative since for Unilever supplies with food retailers such as Tesco’s or Carrefour, such distributors risk losing their customers (thus decrease in profits) by not providing Unilever food products. In many cases, the importance of the buyers’ price sensitivity needs to be emphasized. Given that a consumer is offered two similar products of the same quality but different prices, there is a higher possibility that the cheaper product will be chosen. Even though one might stay loyal to the brand, the other can incline to try a rival product. The power of buyers is therefore of high importance.
  20. 20. POWER OF SUPPLIER Current Future Number important suppliers Few 4 4 Many Availability of substitute for supplier product Low 3 4 High Differentiation or switching cost of suppliers’ product High 4 4 Low Supplier contribute to quality or service of the industry product Low 4 4 High Importance of the industry to suppliers profit Small 5 5 Large Overall 22 21
  21. 21. DESCRIPTION It can be stated that in terms of food production there is a wide range of raw materials providers that Unilever can choose from. Unilever has a policy of local buying and local manufacturing. Which provides itself an edge to brake power of its suppliers and make them weaker to negotiate at its own terms. This strategy help to prevent supplier’s from switching to other competitors and charge higher rates. Also Unilever treat its supplier’s fairly so as to create more loyalty among them like customers.
  22. 22. OVERALL ASSESSMENT Current Future Barriers to entry 29 34 Barriers to exit 14 14 Rivalry among competitors 11 12 Power of buyer 16 16 Power of supplier 22 21 Availability of substitutes 10 13 Current Future Overall Industry Assessment 102 110
  23. 23. CONCLUSION In the future the attractiveness of this industry can be stable or even stronger. The product life cycle withstand because people use their products in their daily life
  24. 24. INTERNAL ASSESSMENT Unilever SWOT, IFE and Value Chain Analysis
  25. 25. SWOT ANALYSIS
  26. 26. STRENGTH 1.Contribution of home and personal care to net sales is 72.9% 2.Marketing and selling expenses increased by 12.5% to Rp6.6 trillion 3.Strong portfolio of brands and diversified product range 4.Contribution to Total Turnover is 27% in 2013 5.Holding 15% shares of total in Indonesian Stock Exchange 6.Cash position in 2013 increased by 13.7% or Rp31.5 billion 7.Unilever operates in nearly 190 countries around the world and hence, has a global footprint combined with top of the mind brand recall among consumers worldwide. 8.Unilever has a distinct competitive advantage over its nearest competitor, Proctor and Gamble because of its flexible pricing and expertise in distribution channels that manage to reach the nook and the corner of the globe.
  27. 27. WEAKNESS : 1.Finance income decreased by 61.5% to Rp14.5 billion 2.Sales growth for the year was 12.7%, lower than previous year growth of 16.3% 3.The Company’s collection period weakened from 30 days in 2012 to 33 days in 2013 4.No direct connecting with customer 5.Excellent in R&D lead to high in price 6.Employ 6,719 employees in 2013 7.The biggest weakness that Unilever faces is that it operates in an uber competitive market where the other global giants like P&G and Nestle in addition to a host of local players challenge its dominance at every turn and raise the stakes in the Trillion Dollar FMCG (Fast Moving Consumer Goods) space.
  28. 28. Opportunities : 1.The diversity of Unilever’s competitor is low 2.Unilever Indonesia goes into 2014 on the back of market share gains and robust growth in almost all categories 3.Keeping with product innovation based on consumer expectation 4.The high customer satisfaction can be seen from the title of prime index of consumer satisfaction. 5.Since 1982, PT. Unilever Indonesia, Tbk has been listed on the Indonesia Stock Threats : 1.Substitute products in the market 2.The company sells its products through a network of about 370 independent distributors covering outlets throughout Indonesia 3.In the second half of the year, the Indonesian macro economy experienced another test with high inflation (post fuel subsidy cut), increased interest rate and weakening of the Rupiah 4.Government laws and regulation quite challenging 5.Many smuggling of
  29. 29. INTERNAL FACTOR EVALUATION Strengths Weigh t Ratin g Weighted Score 1. Contribution of home and personal care to net sales is 72.9% 0.12 4 0.48 2. Marketing and selling expenses increased by 12.5% to Rp6.6 trillion 0.08 2 0.16 3. Strong portfolio of brands and diversified product range 0.09 3 0.27 4. Contribution to Total Turnover is 27% in 2013 0.08 3 0.24 5. Holding 15% shares of total in Indonesian Stock Exchange 0.11 4 0.44 6. Cash position in 2013 increased by 13.7% or Rp31.5 billion 0.09 4 0.36
  30. 30. Weaknesses Weight Rating Weighted Score 1. Finance income decreased by 61.5% to Rp14.5 billion 0.11 4 0.44 2. Sales growth for the year was 12.7%, lower than previous year growth of 16.3% 0.05 2 0.10 3. The Company’s collection period weakened from 30 days in 2012 to 33 days in 2013 0.06 3 0.18 4. No direct connecting with customer 0.08 4 0.32 5. Excellent in R&D lead to high in price 0.06 3 0.18 6. Employ 6,719 employees in 2013 0.07 2 0.14 Total 1.00 3.31
  31. 31. VALUE CHAIN ANALYSIS
  32. 32. Inbound Logistics Unilever works with the agriculture industry to get the raw materials Raw materials enter the manufacturing site Production and Operation Raw materials are processed to add more value End products are packaged. Ready to be shipped Outbound Logistics Products are shipped to distributors Marketing and Sales The product is promoted through different media such as television, social media, magazine, etc Service •They’re collecting complaints from customers or distributors. Primary activities:
  33. 33. SUPPORT ACTIVITIES: Procurement •Unilever works with the agriculture industry to get the raw materials Technology Development They spent a lot of capital on Research and Development to reduce environmental impact. Human Resources Development Because they are in manufacturing industry, they rely on machine and their employees. That’s why they have so many employees and take care of their employees. Firm Infrastructure The good management of Unilever planning and financing also add values for their customers and stakeholders.
  34. 34. EXTERNAL ASSESSMENT Unilever EFE & CPM Analysis
  35. 35. EXTERNAL FACTOR EVALUATION FOR UNILEVER Opportunities Weight Rating Wt.Score 1. The diversity of Unilever’s competitor is low 0.06 2 0.12 2. Unilever Indonesia goes into 2014 on the back of market share gains and robust growth in almost all categories 0.10 3 0.30 3. Keeping with product innovation based on consumer expectation 0.08 3 0.24 4. The high customer satisfaction can be seen from the title of prime index of consumer satisfaction 0.13 4 0.52 5. Since 1982, PT. Unilever Indonesia, Tbk has been listed on the Indonesia Stock Exchange 0.12 4 0.48
  36. 36. THREATS WEIGH T RATING WT.SC ORE 6. Substitute products in the market 0.15 4 0.60 7. The company sells its products through a network of about 370 independent distributors covering outlets throughout Indonesia 0.06 3 0.18 8. In the second half of the year, the Indonesian macro economy experienced another test with high inflation (post fuel subsidy cut), increased interest rate and weakening of the Rupiah 0.10 3 0.30 9. Government laws and regulation quite challenging 0.12 3 0.36 10. Many smuggling of product from Cina 0.08 3 0.24 Total 1.00 3.34
  37. 37. COMPETITIVE PROFILE MATRIX (CPM) Unilever Nestlé Critical Success Factors Weight Rating Score Rating Score Advertising 0.10 3 0.30 2 0.2 Product Quality 0.20 4 0.80 4 0.8 Price Competitiveness 0.15 3 0.45 4 0.6 Management 0.10 4 0.40 3 0.3 Financial Position 0.15 4 0.60 4 0.6 Customer Loyalty 0.05 2 0.10 3 0.15 Global Expansion 0.20 4 0.80 3 0.6 Market Share 0.05 4 0.20 3 0.15 Total 1.00 3.65 3.4
  38. 38. STRATEGIES IN ACTION Unilever Company Analysis
  39. 39. LONG-TERM OBJECTIVES Sourcing 100 percent of agricultural raw materials sustainably by 2015, including 100 percent sustainable palm oil. Unilever buys 3 percent of the world's annual supply of palm oil. Change the hygiene habits of 1 billion people in Asia, Africa and Latin America to help reduce diarrhea -- the word's second biggest cause of infant mortality. Unilever will push sales of its Lifebuoy soap brand and teach consumers when to wash their hands to achieve this aim. Make drinking water safer in developing countries by extending sales of its Pureit home water purifier. Improve standards of living by working with agencies such as Oxfam and the Rainforest Alliance to link 500,000 smallholders and small-scale distributors to the Unilever supply chain. Unilever also intends to improve the nutritional quality of its food products -- with cuts in salt, saturated fats, sugar and calories -- and link more than 500,000 smallholder farmers and small scale distributors in developing countries to its supply chain Earlier this year, Unilever announced a plan to use 100 percent sustainably sourced paper for packaging by 2020, and the company has ranked at the top of its sector for sustainability in separate rankings developed by Two Tomorrows and Climate Counts.
  40. 40. DEFINITION OF STRATEGIES Definition 1. A method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem. 2. The art and science of planning and marshaling resources for their most efficient and effective use. The term is derived from the Greek word for generalship or leading an army.
  41. 41. CONCEPT OF STRATEGIES Strategy as action, inclusive of objective setting. With this concept, three types of actions involved in strategy: a) Determination of long term goals and objectives b) Adoption of courses of action c) Allocation of resources Strategy as action, exclusive of objective setting. It states that strategy is a way in which the firm, reacting to its environment, deploys its principal resources and marshals its efforts in pursuit of its purpose. The people who believe this version of the definition call strategy a unified, comprehensive and integrated plan relating to the strategic advantages of the firm to the challenges of the environment.
  42. 42. VARIOUS STRATEGIES THAT HAS BEEN IMPLEMENTED 1. Winning with brand and innovation is about development on new product, such as hair product, male grooming product, home and personal product and also food and beverages. 2. Winning with market place. Unilever Indonesia promoting their goods by selling directly to the public with evidence of quality in real condition. Besides that, Unilever Indonesia also boost the volume growth in the islands outside Java. 3. Winning with continous improvement. Unilever Indonesia supports the plan Program Master Plan for the Acceleration and Expansion of Indonesian Economic Development (MP3I) with pioneering oleochemichal plant in Seimangkei, North Sumatra. The project will run in the period 2013-2014, with an investment of Rp 1.45 trillion. 4. Winning with people. Unilever focuses in perfecting management trainee program (MT) is strong because Employees (people) is the most important element in business continuity Unilever.
  43. 43. VERTICAL INTEGRATION Backward Integration As a multi-national company, their Procurement team is purchasing from tens of thousands of suppliers worldwide. They control their supplier by using this strategic decision called Supplier Qualification System (USQS). Their procurement organization first selects their suppliers, then those selected are invited to register in USQS and this system is how they qualify those suppliers to do Forward Integration Unilever has PT Technopia Lever, a 51% owned subsidiary that engages in distribution, export, and import of goods under the Domestos Nomos trademark. They also sold their product through a network of about 500 independent distributors covering hundreds of thousands of outlets throughout Indonesia. Products are distributed through its own central distribution centers, satellite warehouses, depots
  44. 44. INTENSIVE STRATEGIES 1. Market Penetration. To improve the market penetration, Dove have a unique strategy. Dove send its representative to different market segments and give them a task to identify the needs and wants of the different market segments. The most famous technique used for this is sampling. 2. Market Development. Unilever is extending the practicality of its market development strategy by stimulating the product innovation and research and development sector for the new product development. As the market development for any company becomes more integrated with the company’s expansion, acquisitions and partnerships, therefore Unilever is also focusing on all these respects. 3. Product Development. The best example of the improvements in the process was the development of a new laundry detergent formula that allowed for more concentration and less packaging fitting the needs of today’s eco-friendly and mobile customers
  45. 45. DIVERSIFICATION Unilever exhibits a related linked corporate diversification strategy, which means that related linked diversification exists when “the different businesses that a single firm pursues are linked on only a couple dimensions, or if different sets of businesses are linked along very different dimensions.” For example, it may follow that Unilever’s: •Home and personal care businesses share similar production technology and customers •Food and refreshments businesses share similar suppliers •Home care and food businesses have no common attributes Unilever’s successful implementation of this strategy helps it to sustain its market leadership.
  46. 46. DEFENSIVE Retrenchment. The crisis forced some companies to stop production and laying off employees. However, what is done by PT Unilever Indonesia is the opposite. In a crisis situation, they instead do business expansion by building a new plant which can absorb approximately 1,000 workers which is located in Cikarang, Indonesia. Source: http://www.kemenperin.go.id/artikel/1858/Unilever- Bangun-Pabrik-Rp-500-M Divestiture. Unilever successfully divested its frozen food businesses in the past few years. As a part of a five-year program, the company targeted to reduce its number of the brands from 1,600 to only 400. Unilever has been divesting its business to focus its resources on the core food portfolio Liquidation. Unilever did liquidation for personal care product manufacturing facility in 2012. Not only personal care product facility, Unilever Tea Facility liquidated in 2014
  47. 47. COST LEADERSHIP - PORTER'S 5 FORCES MODEL For cost leader businesses like Unilever a cost leadership strategy may help to remain profitable even with: •Rivalry. Unilever competes on the basis of its prices since the low cost products of Unilever and its broad range of products allow it to enjoy a big family of customers. It is because of its diversified product line that allows it to enjoy above average profit and allow it to maintain low cost advantage over its competitors in the market. •Customers. As it’s a part of Unilever’s competitive advantage that it offer low prices that help it to retain its customers and to earn profit. •Suppliers. Unilever as a Cost leader is able to absorb greater price increases before it must raise price to customers. •Entrants. Unilever creates barriers to market entry through its continuous focus on efficiency and reducing costs and because of its economies of scale. •Substitutes. As there are many substitutes available in the market to Unilever’s products so for Unilever its more likely to lower costs to attract customers to stay with their product, invest to develop substitutes, purchase patents and invest in R&D.
  48. 48. DIFFERENTIATION - PORTER'S 5 FORCES MODEL Effective differentiators can remain profitable even when the five forces appear unattractive. Analysis of Unilever’s differentiation strategy porter’s five forces is as follows: •Rivalry. Brand loyalty is the strongest point for Unilever to have its competitive advantage. It means that customers will be less sensitive to price increases, as long as the firm can satisfy the needs of its customers. As Unilever always strive to satisfy the needs of its customers so intense rivalry for Unilever is not a threat •Suppliers. Because differentiators charge a premium price they can more afford to absorb higher costs and customers are willing to pay extra too so bargaining power of suppliers is low here that give a competitive edge to Unilever. •Entrants. Brand Loyalty provides a difficult barrier to overcome
  49. 49. FOCUS Unilever focus more on the demographic features of population, it targets all age groups and offer a wide variety of products to the people of all ages. It also focus on the emerging markets like a few years ago it started to focus more on India because its an emerging market. Apart from that its wide variety of products more and its attention to its value chain make it capture a big market share. It focuses on customer needs and customer satisfaction. It focuses on innovation, quality and R&D. It also focus on its low cost and has a wide base of customers so all these factors together give it a competitive advantage over others in the same industry.
  50. 50. STRATEGY ANALYSIS AND CHOICE
  51. 51. SWOT MATRIXPT. UNILEVER INDONESIA, TBK.
  52. 52. SO Strategy Strength : Contribution of home and personal care to net sales is 72.9% Opportunity : Unilever Indonesia goes into 2014 on the back of market share gains and robust growth in almost all categories Strategy : Develop more distribution channels WO Strategy Weakness : No direct connecting with customer Opportunity : Unilever Indonesia goes into 2014 on the back of market share gains and robust growth in almost all categories Strategy : 1. Increase the marketing to get close with the customer in introducing the products 2. Improve the customer care service to know customers’ needs and wants
  53. 53. ST Strategy Strength : Contribution of home and personal care to net sales is 72.9% Threat : Substitute products in the market Strategy : Improve R & D to take competitive advantage according to product diversification WT Strategy Weakness : Sales growth for the year was 12.7%, lower than previous year growth of 16.3% Threat : The company sells its products through a network of about 370 independent distributors covering outlets throughout Indonesia Strategy : Pursue vertical integration by owning subsidiary that engage in distribution, export, and import.
  54. 54. SPACE MATRIX PT. UNILEVER INDONESIA, Tbk.
  55. 55. FINANCIAL STRENGTH RATING AVERAGE Net profit (net income) increased by 12.7% to 30,757,435 million dollars 5 Net cash flow from operating activities in 2013 was Rp6,241,679million, up from Rp5,191,646 million years ago. 4 Working Capital which began to decline from year to year 2 EPS increased from 546 to 634 at December 31, 2013 5 TOTAL 16 4
  56. 56. INDUSTRY POSITION RATING AVERAGE Community needs and high dependence on consumer goods 4 Increased sales of consumer goods in Indonesia is rated third, after China and India 4 Market growth products daily necessities pretty good 4 Household goods industry and consumer goods is one industry will still prevail in times of crisis 5 17 4,25
  57. 57. STABILITY POSITION RATING AVERAGE Macroeconomic stability was maintained as indicated by the decline in interest rates and inflation (although there will be a bit of turmoil) -2 The issue of the use of formaldehyde in several industries including consumer goods in industry -4 The decline in average income community (the possibility of a global crisis) -3 -9 -3
  58. 58. COMPETITIVE POSITION RATING AVERAGE Funds huge ad campaign -1 Awards for the products of Unilever and ICA (Indonesian CSR Award) which indicates consumer satisfaction -2 Strong Distribution Network -2 Branding -2 TOTAL -7 -1,75
  59. 59. CONCLUSION FP Average is 4,00 IP Average is 4,25 SP Average is -3,00 CP Average is -1,75 Directional Vector Coordinates: x-axis (CP + IP) : -1,75 + (+4,25) = +2,50 y-axis (SP + FP) : -3,00 + (+4,00) = +1,00 Koordinat xy {(2,50 ),( 1,00)}
  60. 60. MATRI X 1 1 2 2 CONSERVATIVE AGGRESIVE COMPETITIVEDEFENSIVE CP FP IP SP
  61. 61. Based on the Strategic Position and Action Evaluation (SPACE) Matrix it can be concluded that PT. Unilever Indonesia, Tbk. located in Aggressive directional vector of Profiles. Strategies that can be taken : * Integration Strategies (forward, backward, and horizontal integration) * Intensive Strategies (market penetration, market development, and product development) * Diversification strategy or combination
  62. 62. BCG MATRIX PT. UNILEVER INDONESIA, TBK.
  63. 63. PT. UNILEVER INDONESIA, Tbk. Has 2 division, which is home & personal care and food & ice cream. Home & personal care has the biggest contribution up to 78% of the total revenue and 22% of growth rate. Food & ice cream contibution to 22% of total revenue and 19% of growth rate.
  64. 64. FOOD & ICE CREAM MARKET SHAREMARKETGROWTH
  65. 65. IE MATRIX PT. UNILEVER INDONESIA, Tbk.
  66. 66. I II III IV V VI VII VIII IX THE IFE TOTAL WEIGHTED SCORES Strong 3.0 to 4.0 Average 2.0 to 2.99 Weak 1.00 to 1.994.0 3.0 2. 0 1.0 THE EFE TOTAL WEIGHTED SCORES High 3.0 to 4.0 Medium 2.0 to 2.99 Low 1.00 to 1.99 3. 0 2. 0 1. 0
  67. 67. EXPLANATION The IFE total weighted score for Unilever is 3.31 and the EFE total weighted score is 3.34. Therefore, our IE matrix falls more around ‘I’ cell. The company should adopt Grow and Build Strategies. We recommend Market Development and Product Development for UNILEVER. UNILEVER can introduce existing products to new geographical area that are rural markets and markets of developing nations. On the other hand UNILEVER can also modifying its existing products and introduce variants in order raise its market share
  68. 68. GRAND STRATEGY MATRIX PT. UNILEVER INDONESIA, Tbk.
  69. 69. The grand matrix helps us to determine the strategy that firm must pursue, based on its competitive position and market growth. UNILEVER lies in Q1 which represents excellent strategic position of company. For these firms, continued concentration of current market and products is an appropriate strategy. UNILEVER has abundant resources so backward, forward and horizontal integration may also prove effective.
  70. 70. QSPM PT. UNILEVER INDONESIA, Tbk.
  71. 71. EXTERNAL FACTOR EVALUATION FOR UNILEVER Opportunities Weight Ratin g Wt.Scor e 1. The diversity of Unilever’s competitor is low 0.06 2 0.12 2. Unilever Indonesia goes into 2014 on the back of market share gains and robust growth in almost all categories 0.10 3 0.30 3. Keeping with product innovation based on consumer expectation 0.08 3 0.24 4. The high customer satisfaction can be seen from the title of prime index of consumer satisfaction 0.13 4 0.52 5. Since 1982, PT. Unilever Indonesia, Tbk has been listed on the Indonesia Stock Exchange 0.12 4 0.48
  72. 72. MODEL FRAMEWORK
  73. 73. COMPETITIVE ADVANTAGE EXTERNAL AND INTERNAL ANALYSIS
  74. 74. INTERNAL Intimate relationship with suppliers and distributors. Unilever treat its supplier’s fairly in purpose to create loyalty among them like customers Unilever has extensive distribution channel, spread across the country. Therefore for rural area in Indonesia, Unilever could deliver its products. Unilever divide their customers based on their product division such as Personal Care, Foods, Refreshment and Home Care. Most of their customers can be from any ages and different demographic because they provide many range of product to all ages.
  75. 75. EXTERNAL Market potential is quite large; approximately 250 million people live in Indonesia. These people are attractive target market for consumer goods product High satisfaction of consumers, proved by Indonesia Customer Satisfaction Award (ICSA) 2010 and Indonesia Most Trusted Company Award 2010, both from SWA Sembada Magazine. High dependance of consumer on some consumer goods brands. This is reflected on consumer loyalty on some brands consumer goods products such as Pepsodent and Sariwangi.
  76. 76. GENERIC STRATEGY STRUCTURE PRODUCT DIFFERENTIATION PRODUCT INNOVATION PRODUCT DESIGN HIGHER PRODUCT QUALITY UNIQUE PRODUCT COMPETITIVE ADVANTAGE SALES GROWTH / HIGHER MARKET
  77. 77. EXPLANATION The generic strategies as developed by Porte (1980; 1985) for achieving a competitive advantage position by an organization are: product differentiation and cost leadership. Product differentiation being the most commonly used one of these two strategic typologies. A differentiation strategy involves the firm creating a product/service, which is considered unique in some aspect that the customer values because the customer’s needs are satisfied. On the other hand, cost leadership strategy emphasizes low cost relative to that of the competitors.
  78. 78. UNILEVER GENERIC STRATEGY We can conclude from our research study, it can be established that that manufacturing organizations/ Unilever Company must pay greater attention to the products the manufacture in terms of quality design, innovations and unique features. It is safe to suggest that executive management needs to make sure that they provide adequate satisfaction to their customers. Which means that management should put additional emphasis and pay more attention to product differentiation as it is an important instrument for achieving competitive advantage which leads to greater organizational performance which translates to higher profits.
  79. 79. STRATEGY REVIEW, EVALUATION, AND CONTROL PT. UNILEVER INDONESIA
  80. 80. REVISED EFE MATRIX Opportunities Weight Rating Wt.Score 1. The diversity of Unilever’s competitor is low 0.06 2 0.12 2. Unilever Indonesia goes into 2016 on the back of market share gains and robust growth in almost all categories 0.10 3 0.30 3. Keeping with product innovation based on consumer expectation 0.08 3 0.24 4. The high customer satisfaction can be seen from the title of prime index of consumer satisfaction 0.13 4 0.52 5. They innovate eco-friendly products 0.12 4 0.48
  81. 81. THREATS WEIGHT RATING WT.SCO RE 6. Substitute products in the market 0.15 4 0.60 7. According to the inflation in recent year, it threats Unilever to change their pricing strategy 0.06 3 0.18 8. In the second half of the year, the Indonesian macro economy experienced another test with high inflation (post fuel subsidy cut), increased interest rate and weakening of the Rupiah 0.10 3 0.30 9. Government laws and regulation quite challenging 0.12 3 0.36 10. Many smuggling of product from Cina 0.08 3 0.24 Total 1.00 3.34
  82. 82. REVISED IFE MATRIX Strengths Weigh t Ratin g Weighted Score 1. Contribution of home and personal care to net sales is 72.9% 0.12 4 0.48 2. Marketing and selling expenses increased by 12.5% to Rp6.6 trillion 0.08 2 0.16 3. Strong portfolio of brands and diversified product range 0.09 3 0.27 4. Contribution to Total Turnover is 27% in 2013 0.08 3 0.24 5. Holding 15% shares of total in Indonesian Stock Exchange 0.11 4 0.44 6. Cash position in 2016 increased 0.09 4 0.36
  83. 83. SOURCE : HTTP://WWW.4-TRADERS.COM/UNILEVER- 6290/FINANCIALS/ Weaknesses Weight Rating Weighted Score 1. Finance income decreased by 61.5% to Rp14.5 billion 0.11 4 0.44 2. Sales growth predicted is only 4.4% 0.05 2 0.10 3. The Company’s collection period weakened from 30 days in 2012 to 33 days in 2013 0.06 3 0.18 4. No direct connecting with customer 0.08 4 0.32 5. Excellent in R&D lead to high in price 0.06 3 0.18 6. Number of employee increased in 2016 0.07 2 0.14 Total 1.00 3.31
  84. 84. STRATEGY EVALUATION ASSESSMENT MATRIX Have Major Changes Occurred in the Firm Internal Strategic Position? Have Major Changes Occurred in the Firm External Strategic Position? Has the Firm Progressed Satisfactorily Toward Achieving Its Stated Objectives? Result Yes Yes Yes Take corrective actions
  85. 85. REVISED STRATEGY Based on the changes in internal and external environment, Unilever can take corrective actions such as raise capital with stock or debt and allocate resources differently, because there is a change in EFE that Unilever innovate eco-friendly products, which means Unilever need a new resource and enhance their technology to produce that products.
  86. 86. MARKETING PT. UNILEVER INDONESIA Tbk
  87. 87. HOME CARE
  88. 88. SUNLIGHT HIGH PRICELOW PRICE HIGH QUALITY LOW QUALITY MAMA LIME SUNLIGHT SABUN COLEK SLEEK
  89. 89. PERSONAL CARE
  90. 90. POND’S HIGH PRICELOW PRICE HIGH QUALITY LOW QUALITY KIEHL’S MAYBELLINE CITRA THE BODY SHOP THE FACE SHOP REVLON POND’S GARNIER NIVEA ACNES THE FUK
  91. 91. FOOD & DRINK
  92. 92. WALL’S HIGH PRICELOW PRICE GOOD TASTE BAD TASTE HAAGEN DASCH ES LILIN BASKIN ROBBINS DAIRY QUEENWALLS CAMPINA DIAMOND ES KADO ES DUNG2
  93. 93. FINANCE
  94. 94. CAPITAL Net Working Capital -3000 -2500 -2000 -1500 -1000 -500 0 500 2009 2010 2011 2012 2013 Series 1 Column1 Column2
  95. 95.  Net working capital is used in various other financial formulas that deal with cash flows  An increase in net working capital is considered a negative cash flow and not available for equity NET WORKING CAPITAL = CURRENT ASSETS – CURRENT LIABILITIES
  96. 96. ASSETS 0 5000 10000 15000 2009 2010 2011 2012 2013 Total Assets Series 1 Column1 Column2
  97. 97. FINANCIAL OBJECTIVES All our activity combines to deliver the single goal of creating shareholder value
  98. 98. R & D Objectives: a. Perfecting a formulation so that it is aesthetically pleasing and stable when stored; b. developing packaging that suits the product format, c. delights the consumer and minimizes environmental impact; and d. ensuring the product is ready for large scale factory production
  99. 99. R & D The company operates in more than 100 countries, has a R&D budget (€928 million — currently about $1.3 billion -- worldwide in 2010) and boasts a dozen brands that each ring up sales of about €1 billion ($1.4 billion) annually
  100. 100. MANAGEMENT INFORMATION SYSTEM IN UNILEVER
  101. 101. MIS TECHNOLOGY USED BY UNILEVER GDSN (Global Data Synchronization Network) RFID (Radio Frequency Identification Device) Ariba Unilever Private Exchange ISIS
  102. 102. IMPLEMENTATION OF MIS IN UNILEVER Kalido's Master Data Management and Dynamic Information Warehouse to create reference data and analyse transaction data The information is translated into relevant, actionable data by the new software, so that executives can take decisions to improve supply chain efficiency and ensure shops do not have a shortage of Unilever products
  103. 103. IMPLEMENTATION OF MIS IN UNILEVER Unilever also extensively uses SAP's supply chain management and enterprise resource planning software
  104. 104. IMPLEMENTATION OF MIS IN UNILEVER Collect customer information such as name, address, screed name, profile picture, email address and telephone number, shopping habits, preferences.
  105. 105. HOW? Getting personal information when customers registers for prize draws, sign up to receive information, or fill out survey Using cookies or other tools (such as web analytics tools) to automatically collect information about when you use Unilever sites
  106. 106. BUSINESS ETHICAL ISSUES
  107. 107. MARKETING FRAUD Different and contradicting marketing strategies and messages. With Dove brand, they use “The Dove Campaign For Real Beauty” in their advertisement, but with AXE brand, they send the message that “if you use Axe, more women will become attracted to you”. The strategies actually contradict each other in the message they send and Unilever owns both of these companies. They said Unilever is hypocrite because with the omission lying. They have affect awareness, behavior and intentions of its customers. They also dishonest with their customers. It is unethical.
  108. 108. EMPLOYEES EXPLOITATION Unilever Pakistan has three types of workers; permanent workers, contract workers and day laborers. Their contract workers earned less than minimum wage. The minimum wage in 2007: 4600 rupees per month but the workers actually earned: 4000 rupees per month. And also they get no job protection/ welfare benefits. Different with the contract workers, their day laborers get daily wage in 2007: 80 rupees ($1.33). They also retained employees through third party service providers. The reason they employed new employees to work on contract or daily basis because they want to reduce the number of permanent workers and reduce associated welfare benefits provided.
  109. 109. PRICE FIXING On 13 April 2011, Unilever was fined €104 million by European Commission when it was found guilty of fixing prices of detergents along with its competitors (P&G and Henkel) in 8 European countries The Scandal: 1. Policy to improve environmental performance of detergent 2. Shrunk the quantity in each unit and sold at at same prices 3.Collective increase of prices by them and competitors later
  110. 110. LOBBYING Former CEO Niall FitzGerald admitted that management at regional units in some 90 countries accepted and gave “sweeteners” or “Facilitation payments” to conclude business dealings.
  111. 111. RESPONSE ON PRICE FIXING Unilever's Reaction Co-operated in investigations with EC and received 25% rebate on fines Training managers for better understanding of laws Improving internal procedures Aim to improve global compliance program
  112. 112. UNILEVER RESPONSE ON ANY ETHICAL ISSUES New CEO (2009) - Paul Polman wants company to be loved and cleaning unethical acts. "bad guys" --> "good guys saving the world" 2010 - Unilever's Sustainable Living Plan By 2020 - double turnover by behaving ethically
  113. 113. SOURCES https://bizgovsocfive.wordpress.com/2012/11/23/unile ver-an-ethical-company/ https://prezi.com/hzdc3acupxr0/unilever-ethical- issues/ Unilever - Overview of controversial business practices in 2007
  114. 114. SOCIAL RESPONSIBILITY ISSUES
  115. 115. OUR CSR PROGRAM IS ALIGNED WITH THE THREE PILLARS OF THE USLP: 1. Improving Health and Wellbeing in the Community 2. Reducing our Environmental Impact on the Community 3. Enhancing Livelihoods
  116. 116. IMPROVING HEALTH AND WELLBEING IN THE COMMUNITYvarious community-led programmes and interventions in schools and communities The Youth Health Programme made to get its messages on reproductive health, HIV/ AIDS prevention and personal hygiene out to more students. The programme, implemented by the Unilever Indonesia Foundation and its partners, Unilever Indonesia is also actively involved in building HIV and AIDS awareness in the work place in collaboration with the IBCA (Indonesia Business Coalition on AIDS). focusing on sanitation and personal hygiene The School Health Programme focuses on embedding good health and hygiene habits among primary school children, such as hand washing with soap at 5 critical times. These messages are reinforced by empowered students who work with their peers as ‘little doctors’. In 2013, the programme reached 3.5 million children, supported by 100,000 Little Doctors.
  117. 117. IMPROVING HEALTH AND WELLBEING IN THE COMMUNITY reproductive health and nutrition. The Kids’ Program is implemented through trained cadres who work with mothers and caregivers through Posyandu and early years education programs to help them and their pre- school children adopt healthy nutrition and hygiene habits during the crucial ‘golden age’. The program benefited 208,632 under-fives in 2013, facilitated by 4,510 cadres
  118. 118. REDUCING OUR ENVIRONMENTAL IMPACT ON THE COMMUNITY This is related to the environmental sustainability issues in the next chapter.
  119. 119. ENHANCING LIVELIHOODS  One of the USLP goals is to source 100% of our agricultural raw materials from sustainable sources by 2020. The inputs we are investing behind this goal through our farmer and community development programs are already yielding multiple benefits for small-scale farmers and contributing to the long-term security of our supply chain.  This program focuses on three of our key commodities: black soybean, coconut sugar and tea.
  120. 120. ENHANCING LIVELIHOODS black soybean Unilever collaborated with the Ministry of Agriculture to initiate the trial of a black soybean farmers development program in Ngawi, East Java. This involved training the farmers’ association (gapoktan) and farmers’ groups to observe and record how they cultivate their crops. coconut In December 2013, Unilever Indonesia Foundation held a Coconut Sapper’s Day at which the sappers presented their aspirations and learnings from the Farmers Field School. In addition, through a collaboration with the Energy Research Centre of Gadjah Mada University Unilever are conducting research to help farmers reduce energy usage and costs during the processing of the coconut sugar by modifying the stoves that farmers use at present.
  121. 121. ENVIRONMENTAL SUSTAINABILITY
  122. 122. http://www.unilever.com/images/slp_Unilever-Sustainable-Living-Plan-2013_tcm13- 388693.pdf
  123. 123. Unilever is committed to making continuous improvements in the management of their environmental impact and to the longer-term goal of developing a sustainable business. Unilever will work in partnership with others to promote environmental care, increase understanding of environmental issues and disseminate good practice. Source : Unilever Annual Report 2013
  124. 124. ACTIVITIES Smarter Greener Living (SGL) Launched in 2013, it is program to step up the active participation of all ULI employees in the Unilever Sustainable Living Plan (USLP), particularly the Reducing Environmental Impact pillar of the Plan.  The Green and Clean program This is a program which concern to the proliferation of waste. It is a serious challenge to the environment in urban areas across Indonesia, contributing to health problems, pollution and even major flooding in large cities like Jakarta.
  125. 125. GREENHOUSE GAS FOOTPRINT Unilever greenhouse gas impact per consumer use has increased by around 5% since 2010*
  126. 126. ENVIRONMENTAL ISSUES The impact on the environment from the use of its products, in terms of water, waste and emissions of greenhouse gases. It already had all the data relating to the manufacture, processing and transport of its products, and has been making good progress in reducing all those direct impacts over the last 10 years or more. But those direct impacts turned out to be relatively insignificant when compared with what happens when customers actually use these products.http://www.theguardian.com/sustainable-business/blog/unilever- sustainable-agriculture-plan
  127. 127. ENVIRONMENTAL ISSUES (CONT’D) India Mercury Scandal Unilever’s Subsidiary Hindustan Lever had a mercury thermometer production plant in Kodiakanal. Mercury not properly disposed and exposed to local nature sanctuary. There was no safety precautions for workers as a result many were ill and some even died. When mercury gets into contact with water it becomes poisonous and kills wildlife. Soil contamination levels were between 600 – 800 times the legal level
  128. 128. ENVIRONMENTAL ISSUES (CONT’D) Borneo Palm Oil Suppliers RPSO is a non for profit organization that works with palm oil suppliers and stakeholders to develop and implement global standards for sustainable palm oil. Before 2008 most of Unilever’s suppliers were not RPSO certified and untraceable. As a result deforestation has increased in Borneo as uncertified suppliers expand into the peat lands and rainforest. Greenhouse gases are the highest globally in Indonesia from deforestation. Natural habitat of orangutans getting destroyed as a result the Borneo orangutans are now endangered.
  129. 129. TARGET FOR REDUCING THE IMPACTS For reducing those impacts unleashing an unprecedented search for innovative solutions across the entire company. Some of those innovations will require reformulating the product itself, or completely redesigning the packaging. Some will require a very different engagement with the customer, with a view to 'co-creating' the environmental benefit by using the product in a different way. http://www.theguardian.com/sustainable-business/blog/unilever- sustainable-agriculture-plan
  130. 130. RESPONSE ON ENVIRONMENTAL ISSUES India Mercury Scandal  Unilever's Reaction Unilever didn’t accept the claims about the mercury scandal that it affected the environment and workers health greatly  Unilever said how the working conditions were safe when they were clearly not as many were ill  Only cleaned up its operation two years after the scandal which shows their lack of social responsibility for the area
  131. 131. RESPONSE ON ENVIRONMENTAL ISSUES Unilever's Reaction Pressure from groups like Greenpeace In 2008 Unilever committed to a sustainable palm oil plan By 2015 buy all palm oil from certified sustainable sources By 2020 buy all palm oil from traceable certified sustainable sources The sustainable palm oil plan is also committed to the RPSO, working with suppliers to stop deforestation and to stop illegal plantations on peat lands Finally becoming more responsible for the environment more ethical
  132. 132. INTERNATIONAL BUSINESS STRATEGY
  133. 133. WORLD WIDE AREA
  134. 134. WORLD WIDE AREA
  135. 135. ASIA PACIFIC AREA
  136. 136. EXPALANATION Regarding to the data that we found, Unilever has already expanded in 18 countries around asia pacific include developed and developing countries. We think that Unilever no need to expand their product in Asia Pacific area because they already expand their product to the profitable market around asia pacific area. The strategy that Unilever use is Global Strategy. A global strategy used by the Unilever is preferable to localized strategies because Unilever can more unify its operation and focus on establishing a brand image and reputation that is uniform from country to country. It strategy implies to the Unilever success in building strong character brand such as Dove, Sunsilk, Rexona and Lux. Moreover, with global strategy Unilever should coordinated its marketing, operational, and distribution worldwide.
  137. 137. SINGAPORE
  138. 138. STEP 1: MARKET ATTRACTIVENESS ASSESSMENT GDP Growth of Singapore
  139. 139. STEP 2: RISK OF POLITIC/SECURITY Political Risk in Singapore is relatively low. In fact according to the Political and Economic Risk Consultancy, PERC, Singapore enjoys the lowest political risk in Asia. Singapore being a democratic country has elected representatives to rule the nation. It has since Independence, enjoyed relative political stability, which has transformed into better business opportunities for the nation.
  140. 140. Security The Singapore Government has put in place extensive measures to combat terrorism and has arrested a number of terrorist suspects. These measures are on several levels including military, internal security, border, infrastructure security and civil defense. To bolster its preparedness, Singapore participates actively in international counterterrorism efforts. Beside that violent crime is rare in Singapore.
  141. 141. STEP 3: BUSINESS INITIATION EASINESS ASSESSMENT
  142. 142. EASINESS INVESTMENT PROCEDURE IN SINGAPORE Singapore is a top transportation hub for sea and air cargo with its busy container ports hosting 200 shipping lines with links to 600 ports in over 120 countries. Changi International Airport offers over 4,000 weekly flights into 57 countries. One Door Integrated services ( one- stop service ) is one of One Form of Innovation in the Framework Significantly increase the Public Service in the administration of the Investment Process. Singapore wear Bizfile ( register their businesses by using the online system ) so as to make the licensing business in Singapore only takes one day , if all the fittings already meet existing requirements and affordability. Provisions for recruiting local human resources is not difficult because Singapura is Asia’s most “network ready” country and is rated to have Asia’s best business environment. The workforce is the best skilled in Asia Pacific and the most motivated in the region while labour regulations are the most business conducive in Asia. Foreign talent is very welcome and immigration laws are the least restrictive in the world.
  143. 143. GOVERNMENT SUPPORT The Government is well known for its pro-business policy regardless of world economic situations and crisis, while promoting assets such as integrity, quality, reliability, productivity, rule of law and enforcement of intellectual property rights. Banking services in Singapore prioritizes customer satisfaction , including interest and taxes are much cheaper Who ever wants to borrowed money fast and straightforward process
  144. 144. CREATIVE ECONOMIC DEVELOPMENT SINGAPURA Creative economic development policies in Singapore rests on two sources , namely the study of the Advisory Council on Culture and the Arts ( ACCA , 1989) and Renaissance City Plans ( RCP , 2000) Since it was first launched in 2000 , RCP implementation of the third stage started in 2008 and is supported by an investment of USD 23:25 million Currently the arts and cultural sector in Singapore has been growing rapidly , with an average of 80 events per day . Singapore society is slowly starting to see arts and cultural activities as a vital part of their lives. Singapore government seems very serious to develop creative industries , starting from forming Ministry of Information and the Arts ( MITA ), which later became the Ministry of Information and Communication Art ( MICA ) Since this policy was developed , value-added ( VA ) in Singapore's media industry is growing at a value of approximately S $ 5.5 billion and bring in revenues of up to approximately S $ 22.4 billion.
  145. 145. CONT…. Financing models for creative industries in Singapore are as follows :  Government finance actors who develop creative industries in line with the vision of Singapore . They financed between 30 % -70 % of the proposals submitted.  The funds in the form of grants or loans (banking / venture capital)  Government makes venture capital or provide facilities to establish a private venture capital  Cooperation with venture capital principals at least 2 years of a maximum of 5 years . This cooperation depends on the type of business . If the use of high technology , cooperation can be developed over five years  Profit sharing divided proportionally according to the value of its investment.  If the form of loans , the interest that is applied ranges from 4 % - 5 % a year.  Granted tax relief to not have to pay corporate taxes for new companies for 2 years .
  146. 146. STEP 4 : INDUSTRY ATTRACTIVENESS
  147. 147. COMPETITION There is no doubt that the manufacturing sector has been pivotal in contributing to Singapore’s economic success, and continues to drive the nation’s economic growth. In the 2nd quarter of 2006, the sector registered a quarter-on-quarter Gross Domestic Product (GDP) growth of 10.5%, following a strong year-on-year GDP growth of 9.0% posted in 2005. According to the 2005 Economic Survey of Singapore released by the Ministry of Trade and Industry (MTI), the manufacturing sector attracted $8.5 billion of fixed assets investment commitments in 2005, surpassing the $8.3 billion in 2004. This demonstrates Singapore’s attractiveness and competitiveness as a hub for the full chain of manufacturing activities.
  148. 148. ACCESS TO END-USERS Unilever is one of the world’s leading suppliers of fast moving consumer goods (FMCG) with a presence in more than 100 countries. With a portfolio that includes some of the world’s best-known and most loved brands, such as Lipton, Wall’s, and Dove, Unilever meets the everyday needs of their customers for nutrition, hygiene and personal care. Global functions undertaken by Unilever in Singapore include: brand development, supply chain management, customer development, procurement, engineering, HR, IT and finance. Unilever also manages some of its top global brands from Singapore.
  149. 149. STEP 5: COUNTRY RANK & IDENTIFICATION OF KSF For Singapore, the top five factors in order of importance are 1. A good customer relationship, 2. Ability to identify and focus on a market niche, 3. A good service and delivery system, 4. Availability of financial resources, 5. A good and responsive management system
  150. 150. STEP VI : SPECIFIC INTERNAL COMPETITIVENESS ASSESSMENT
  151. 151. MANAGEMENT CONTROLLING SYSTEM Control is defined as the relationship between the procedures and systems relating to achieve objectives of the company. The concept of management control provides information on the performance of managers and business unit or division and control strategic produce information relating to the financial performance and the level of competition the company long- term
  152. 152. ENVIRONMENTAL MANAGEMENT IN SINGAPORE For Unilever, if they want to add another factory or manufacturing unit in Singapore, they should follow the Environmental Controlling Management. This are a few of examples that Singapore provide that related to environment. Singapore faces the following constraints: Small land area Densely-populated No natural resources No energy sources Little water resources
  153. 153. EXAMPLE OF CONTROL ENVIRONMENT Preventive Controls 1. Judicious siting of industries 2. Development and building plan control 3. Inspection of completed premises
  154. 154. CONT….. Building Plan Controls: 1. Check building plans of new developments 2. Check pollution control facilities of industrial developments 3. Check completed developments for compliance with pollution control requirements before occupation and use of developments Water Quality Monitoring 1. Water in reservoirs remains suitable for treatment for potable use 2. Inland water supports aquatic life 3. Coastal waters remain suitable for recreational use
  155. 155. Management controlling system is not only about control environment, but also information and communication system, control activities and monitoring. Because Singapore has constraints about their land, we think it’s important to Unilever to think about Singapore constraints if they want to develop Unilever in Singapore. And beside that, Singapore has strong policies in controlling and monitoring their environment.
  156. 156. RECRUITMENT SYSTEM
  157. 157. DEPARTMENT FOR CAREER OPPORTUNITY Brands and Development Supply Chain Human Resource Finance Information Technology Customer Development
  158. 158. UNILEVER CORE MISSION “the right people, in the right place at the right time”
  159. 159. UNILEVER DEVELOPS CAREERS ACROSS TWO MAIN PATH :  As HR Business Partners supporting a local business unit or group in core areas of talent management, leadership development, organizational design and change management  As Managers within the HR Expertise teams (talent, learning and reward) defining global HR policies and processess
  160. 160. RECRUITMENT CHANNEL  External Recruitment Channel : 1. Walks-in and write-ins 2. Employee referrals 3. Advertising 4. Private placement agencies and Professional search firms
  161. 161.  Internal Recruitment Channel Internal organizational policies, such as “Promote from within wherever possible”, will give priority to individuals inside the organization. Such a policy will ensure that all positions except entry level positions will be filled from within the ranks. Although this is promising once one is hired, it may reduce the number of applicants. Current employees are a major source of recruits for all. In fact for Unilever this short of recruitment is occurred only with special purpose experienced employee recruitment.
  162. 162. CORPORATE APPRAISAL SYSTEM Condition and productivity of companies affected by the productivity of each worker . When the productivity of each worker as a whole increases, the productivity of the company will increase as well . If the productivity of the company increased , then the company should increase wages . Wage system based on productivity began to be implemented in Singapore when the country experienced a recession in 1985-1986 . At that time, employers and workers faced with two difficult choice , namely dismissal or cutbacks (PHK ) some workers or a decrease in wages . To maintain the same wages , business estimates need to lay off about 10 % of workers . Conversely if the need to retain all the workers to keep working ( without layoffs ) , wages need to be reduced by about 15% . Finally workers and employers agreed to choose the second alternative , namely the 15 % reduction in prorated salary
  163. 163. Flexible Wage System was then developed in SINGAPORE and is associated with productivity and Based Wage System Productivity (Productivity - Linked Wage System) . Wage system based on productivity consists of two groups of components , namely wages fixed salary component and a variable wage component . Fixed wage component is always accepted regardless of the condition of the company . Granted only if the variable wage worker productivity increased and the good condition of the company . The amount of wages variable depending on the condition of the company and the productivity of each worker .
  164. 164. STEP VII : BUSINESS STRATEGY FORMULATION
  165. 165. PRELIMINARY INVESTMENT Unilever invested about $32 million to establish its new global leadership development centre Mostly Unilever invested in R&D, it relates to the Unilever Food Center in Singapore Unilever Food Center has an eco-friendly environment, they also invested in current assets, such as building and infrastructure to support the activities
  166. 166. DEVELOPING VALUE STRATEGY Through a mass-market positioning, much of the company’s growth strategy is to leverage the value of key brands by cross-sectoral brand extensions, thus taking advantage of customer brand recognition and loyalty, and creating marketing efficiencies.
  167. 167. STRATEGY ESTABLISHMENT  Investment for growth and balancing short term and long term interests  Unilever reframed spending by putting in place mandates according to country and shifting money toward creating digital assets.  Unilever enhanced its global planning services and reframed its use of technology to ensure all of its brands were operating on the same platforms.
  168. 168. THANK YOU 

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