Here’s what you’ll learn from Unilever’s strategy study:
- How to make the most out of the opportunities you meet.
- How to be proactive with market changes and thrive by adapting quickly.
- How product innovation becomes the source of competitive advantage.
- How strengths like in-depth knowledge of specific markets become powerful expanding factors.
- How to grow by taking advantage of unparalleled localization.
- How growth opportunities are revealed by empowering your management.
- How sustainability can be used as a brand lever.
With over 2.5 billion people consuming its products on any given day, it’s difficult to find any corner of the world where Unilever has not reached.
What started as one soap brand has now become one of the world’s largest consumer brand conglomerates, spreading into beauty and personal care, home care, and food and refreshments.
Unilever's market share and key statistics:
- Staggering turnover of €52.4 billion in 2021
- Portfolio of 400+ brands, 13 of which feature in Kantar Worldpanel Global Top 50
- 14 brands with a $1 billion turnover
- Over 53,000 supplier partners
- Number of employees worldwide: 148,000
- Owning 280 factories, 270 offices and 450 logistics warehouses globally
- A reach spanning over 190 countries
From innovative strategies and impeccable management to effective marketing and commitment to sustainability, there are several reasons behind the success of this multi-industry giant.
In this study, we analyze them closely to highlight how Unilever has been able to continuously expand its horizons over the years and across countries as well as continents, gaining a competitive edge while growing exponentially.
Humble beginnings: How did Unilever start?
Although it wasn't until 1929 that the company we now instantly recognize as Unilever was formed, its story goes way back to the late 19th Century.
In fact, it is set in two different countries simultaneously, with two major companies operating in seemingly different industries coming together and setting the foundation of Unilever.
In many ways, it can be said that it set the tone for what sort of brand Unilever was going to be in the coming years.
More than just soap
William Hesketh Lever began his career in the 1880s as a salesman in his family's grocery business. At the time, The Long Depression was still affecting the global economy, and many companies were struggling to survive.
Amidst the chaos, Lever saw an opportunity to step into the manufacturing of soap, which he believed had great potential for growth.
Thus, in the 1890s, as the founder of Lever Brothers, William Lever penned his ideas for Sunlight Soap: "to make cleanliness commonplace; to lessen work for women; to foster health and contribute to personal attractiveness, that life may be more enjoyable and rewarding for the people who use our products."
Mission and vision statements were hardly a thing during the Victorian era. Yet, Lever was well ahead of his time. They envisioned changing attitudes towards hygiene and personal care in the UK and solve customers’ problems simultaneously.
Soon, the company was not only making waves in the British Isles, but also began expanding its reach in many parts of Europe, North America, Australia, and South Africa.
The first bar of Sunlight Soap was in 1884
In the early 1900s, much of Britain's consumption of butter and margarine was sourced from Dutch and Danish companies. However, with the threat of WWI and trade coming to a standstill, the British government asked Lever to produce margarine as well.
Recognizing that the required raw materials, including oils and fats, were quite similar for soaps and margarine, William Lever welcomed the opportunity with open hands.
From there on, Lever became more than a soap company as it took its first step towards forming a multi-brand legacy that would inspire and lead the world of consumer brands for the next century and probably, beyond.
A manufacturing company through and through
Not only did Lever plan to manufacture its products, but it also extended its operations to produce its raw materials itself.
From mills to crush seeds for vegetable oil to whole transportation and packaging operations, Lever became a well-established vertically integrated company, taking giant strides to redefine the consumer goods industry.
The Dutch side of things
Before Lever Brothers had set foot in the margarine industry, there was already intense competition in the Dutch market.
To see off new entrants exporting their products at lower prices and to make the most of the global economic situation, two Dutch giants Jurgens and Van den Bergh joined hands in 1908.
A few years later, in 1920, these two companies combined with Schitt and established their operations in the Netherlands as Margarine Unie NV and in England as Margarine Union Limited.
This put them in direct competition with the Lever Brothers and what ensued was a tussle of giants for most of the following decade.
Putting Uni and Lever together
Both the Dutch and English companies knew they would benefit from synergies if they came together rather than going head-to-head in the soap and margarine industries.
Thus, after two years of discussions, they merged in 1929 to form Unilever, which was owned by two holding companies, Unilever Limited and Unilever NV, with setups in both countries.
The structures for the holding companies were identical, and the profit-sharing was on an equal basis.
This merger allowed the company to foray into multiple industries and establish dominance with its hold on manufacturing operations.
Key takeaway 1: cash In on opportunities
With the amalgamation of two companies – Lever Brothers and Margarine Unie – Unilever was formed.
From Lever entering an utterly new soap manufacturing business to competitors Jurgens and Van den Bergh combining, there are countless examples of the founders of Unilever realizing an opportunity and being quick to grab it.
Navigating The Great Depression – Initial Challenges
Unilever was still in its early years when the Great Depression struck, and the company was riddled with challenges on all fronts.
Its products’ prices plummeted 30% to 40% within the first year while at the same time butter came forward as an even cheaper alternative, further lowering the demand for margarine. The company’s agricultural products, such as cattle cake, also took a major hit and its retail grocery and fish shops saw a major decline in revenues.
Things did not look too bright for the company that had already shown so much promise and growth. However, just as William Lever had come out of the Long Depression as a successful business, Unilever responded proactively to this crisis too.
Responding to the challenge
The 1930s saw fresh faces managing the operations at Unilever with Francis D'Arcy Cooper at the helm of affairs.
This new management’s initial response to the Great Depression was to form a special committee that would oversee the firm’s operations in both Netherlands and UK. It also supervised two further committees; one that would handle the company’s business in Europe and one for other regions.
These actions helped the company mitigate the immediate effects of the recession and lay the groundwork for further changes.
Restructuring & redistributing assets
Initially, the Dutch group contributed two-thirds of Unilever's total profits while the British side accounted for the remaining. However, owing to trade conflicts in Europe, similar to those preceding WW1, the equation was reversed, and the British group's contribution increased.
Therefore, in 1937, Cooper convinced the company’s boards that it was time for restructuring, and Unilever needed to align itself with its original goal of equal profit sharing. As part of this dynamic shift, one significant action was selling the Lever Brothers Company in the United States and other Lever Brothers' assets outside Britain to Unilever's Dutch group.
This allowed the two factions to operate with nearly equal profit volumes and assets and overcome the trade challenges.
Key takeaway 2: proactively adapt to the situation
Had Unilever not set up the special committee and undergone the changes it did in the 1930s, it is possible it would not have survived the Great Depression. But with pro-activeness and resilience, it was able to tackle the challenges successfully and come out on the other side stronger than before.
Growth Through Localization & Innovation
Following the years of the Great Depression and WWII, the world’s economic landscape completely transformed. At that point in time, Unilever was establishing itself in various countries and needed a strategy to localize its products, marketing efforts, and management.
It realized that growth in new markets now was not limited to or even dependent on increasing production capacities or lining up products. It needed to have a strong footing in research and development to keep up with changing consumer preferences and increasing competition.
This meant that the company had to make some much-needed changes in its approach and it did just that.
Heading into new markets
Unilever was growing and expanding its operations into many new countries and diverse communities. This meant more local challenges wherever it set up operations. However, much of the management was still under the control of Dutch and English representatives of the parent companies.
Undoubtedly, the people from the parent head offices were capable managers and had contributed to the company's growth, but the challenge here was different. Markets such as India, Brazil, or even the USA did not function in the same way as European Markets.
Customers had different preferences, supply chains were unique, and external influencing factors, such as laws and regulations, were also always specific to the respective regions. Therefore, Unilever's management needed local players who could understand what was required in their region and develop effective strategies to achieve it.
Hence, in the 1940s, Unilever started a localization policy referred to as 'ization.’ The Dutch and English representatives were recalled, and local positions were handed over to local executives.
It began to be implemented as early on as 1942, with the company’s Indian subsidiary going through the process of Indianization. Australianization, Brazilianization, and more followed it. These centers had greater autonomy in decision-making and marketing, which enabled the company to penetrate further into these new markets and localize its products.
Unilever continued with this localized, decentralized management system throughout WWII and several years following. However, they did encourage Unileverization, sharing a common mission across their various subsidiaries during this time, and took it up more rigorously later on.
Embracing research & innovation
The embracing of research did not occur before facing a few setbacks. For instance, the market for soap, Unilever’s main product, revolved around color, scent, and application on fabrics. This changed when in the 1950s, their competitor in the US Market, Proctor & Gamble, introduced Tide. This nonsoap synthetic detergent powder was far superior and solved many plumbing problems caused by insoluble soaps.
For some years, Unilever remained behind its competitors until it found a way to solve the shortcomings of new detergent.
Tide was formed from petrochemicals, and its residues in sewerage systems and rivers were causing major problems. Now, Unilever had the chance to explore chemical technology and retain its position in the market. By 1965, they had launched their very own biodegradable version of the product.
It wasn’t just soap where Unilever invested in research. The company also established 11 research centers, including laboratories, all around the world to come up with innovative solutions for food preservation, health, and animal care. That was going to define the company as one that looked ahead into the future and relied on improving itself to remain at the top.
Another significant example of Unilever's constant innovation can be seen in its margarine. When butter was short in supply, margarine became a convenient alternative – one of the reasons why the Lever Brothers started manufacturing it in the first place. However, butter soon became available widely again, and that too at lower prices. Now, there was not much that made margarine an enticing option to customers.
Unilever's laboratory in Vlaardingen was tasked to find a way to improve the quality of margarine and make it stand out, whether through better nutrition, flavor, or convenience. The solution came in the form of enhanced refining of soybean oil, a key raw material in margarine production.
Benefiting from tariff lift
A major boost to Unilever's operations was the formation of the European Economic Community and its efforts to make Europe a common market in the 1950s and 1960s.
Previously, Unilever has based its factories and production in various European countries to avoid tariff restrictions. It was, however, an inconvenient solution. Not only did they have to bear additional costs of production in expensive locations, but such a spread-out production system posed the challenges of supply, logistics, capacity, and more.
Through the common market, there was no need to restrict themselves anymore. Unilever now took its production to wherever costs could be minimized, and operations could be consolidated. Thus, they were able to produce in greater quantities and accelerate their processes.
Key takeaway 3: innovate & solve
Unilever's growth in 1940 to 1960s had a lot to do with improving their products and their management system to cater to modern problems. This helped them stay ahead of the competition and keep their production up-to-date and cost-effective all the while delighting customers.
Expansion & Acquisitions Till The 1990s
As a well-known multi-industry firm, Unilever was no stranger to acquisitions and takeovers. They expanded in the US Market in 1937 by adding the tea manufacturer Thomas J. Lipton Company to their portfolio. Later on, in 1944, they also entered the toothpaste industry by acquiring Pepsodent.
In the post-WWII era, they continued to take over larger firms like Birds Eye, a UK frozen foods company, in 1957. By 1961, they had also taken control of US ice cream producer, Good Humor.
Unilever acquires Birds Eye parent company T. J. Lipton in 1943
However, these were only gradual acquisitions that allowed them to explore new product lines. From the 1980s, Unilever's approach took an aggressive turn, and they set their eyes on bringing many more brands under their banner.
The shopping spree of the 80s
Unilever’s targets changed in the 1980s. They wanted to expand but with a plan to strengthen their hold in industries in which they had resources and expertise and the market had a lucrative potential for growth. This meant they were sticking to foods, detergents, toiletries, etc. but were ready to eliminate the competition.
Thus, they began by selling off their ancillary business and services, such as transporting, packaging, and initiating their acquisitions. In 1984, Unilever oversaw a hostile takeover of the British tea company Brooke Bond for £376 million. The company complemented Unilever’s Lipton in the USA, and now, the road was clear for further growth.
One of Unilever’s biggest acquisitions was of Chesebrough-Pond in 1986. The company owned some very high-potential and popular products in the USA like Vaseline Intensive Care and Pond's Cold Cream. Moreover, with over $3 billion in annual sales, it was the perfect chance to cement itself in the personal product business internationally.
Another major market that the company dominated with its acquisitions in the late 1980s was the perfume and cosmetic industry. It simultaneously became the owner of Shering-Plough's perfume business in Europe, Calvin Klein in the US, and Fabergé Inc. The latter was bought for $1.55 billion and handed Chloe, Lagerfeld, and Fendi perfumes to Unilever.
Now, the company was a force to reckon with, if not the leader in its primary industries and in the markets it predicted would generate the most gains.
The global giant
Unilever clearly showed its aggressive intent in the 1980s, and they were not going to stop in the 1990s.
By 1992, the conglomerate consisted of over 500 businesses in 75 countries. In the mid-1990s, they went on to acquire over 100 more companies. From buying personal care giant Helene Curtis for $770 million to sweeping the US ice cream market by buying Philip Morris's Kraft General Foods’ division for $215 million, there was no shortage of the treasure chest Unilever had.
By 1999, they had grown from 500 businesses to 1600 brands. But this brought them back to where they started the extensive series of acquisitions, with many companies that didn't have the potential to grow or simply didn't fall in with Unilever's strengths.
It was time for a major strategy shift and to go back to the basics. Out of 1600 brands, 400 were generating 90% of the revenue. Unilever decided to let go of the remaining 1200 and put all its efforts into strengthening its already powerful brands.
This has been their path ever since and one that has enabled them to maintain their position as one of the top consumer products companies in the world.
Along with buying their competitors, Unilever did not stop introducing new products into the market. In 1984, their product Whisk overtook P & G’s Cheer in the US laundry detergent market.
Two years later, Whisk was introduced in Britain, along with Breeze, a soap powder the company had only seen of in Surf. Unsurprisingly, Unilever recorded a 50% growth in operating profits for detergent products while it also experienced increasing returns in the food industry.
This multi-pronged strategy of introducing new products and acquiring ones with potential did not allow Unilever to capitalize fully on the market's potential for growth and left little room for competitors to adjust.
Standing out from the competition
From Lever Brothers and Margarine Unie taking on their rivals head-on to Unilever PLC establishing its unique identity despite battling against giants P&G and Nestle, the company has always embraced healthy competition.
One of the main reasons Unilever has been so successful in standing out is its expansion in over 190 countries through products they specialize in and dominate in. Moreover, it hands significant decision-making power to local managers to strengthen their position in diverse markets. Both P&G and Nestle have not been able to grow as much in terms of reach.
Another, key aspect that differentiates Unilever is its emphasis on and funding towards Research & Development. They continue to improve their products and adapt to changing consumer needs by providing enhanced solutions.
Last but not least, Unilever’s sustainable plans set them apart from major competitors, whereby they show their commitment to the collective betterment of people and societies.
Key takeaway 4: stick to your strengths
Unilever’s origins lay in soap and margarine – industries they knew very well and had the potential to grow in. They expanded their portfolio but stuck to their strengths and, as a result, grew exponentially.
Changing Product Groups With Evolving Markets
Throughout the nearly 100 years of Unilever, they have acquired and sold brands and expanded their reach into many territories. Naturally, they experiment with product groups and divisions to decide which suits their goals best and when.
At times, their product groups have had a significant influence on their strategies, whereas at other times, they were merely playing advisory roles. But whatever the situation, Unilever has kept an eye on how operations and revenues were affected and carefully reorganized their groups accordingly.
Understanding complex markets
There is no one fixed way to distribute product groups. Sometimes, they require to focus on research and distribution while emphasizing localization from time to time. For instance, the food industry, from which many of Unilever's top brands belong, undergoes changes every few years. It can be categorized into three regional groups.
Firstly, the global fast-food category. Fried chicken, burgers, soft drinks, etc., are famous worldwide, from Asia to Europe and beyond. The core products remain the same, and the tastes do not differ greatly.
The next category is international foods. These are products that belong to one country but are also popular in other countries as well—for example, Chinese, Indian, and Italian foods.
Hence, the third category leads to national foods – those that represent and are popular in their country of origin. For Unilever's base region, the UK, pies, puddings, steaks, etc., are considered national foods.
Now, that is only one way to look at food markets. Another method or problem, as you may call it, is that a product may not even be defined or preferred the same way in different regions.
For example, take something as simple as tea - a globally consumed product. The British like their tea hot and with milk; Americans prefer it iced; Middle Easterners drop the milk and add sugar.
Therefore, Unilever cannot keep its product groups fixed or stringent and must recognize where it can churn out the most profits.
Giving more autonomy to product groups
Until the 1960s, Unilever's localization policy played a major role in its decisions and actions. Product groups served advisory or assisting roles with little power. That was how to company was progressing, and there was no need for change.
Carrying on the example of food products, during and post-WWII, raw material sourcing was a crucial factor in the production of Unilever foods. But then, when the 60s came, and firms, along with Unilever, started to invest in research, the dynamic shifted towards preservation technology and logistics.
Gradually, the power of determining revenues was handed to product groups, and local managers took a backseat. A pivotal change made in the new structure was introducing three separate food units: edible fats, frozen foods and ice cream, and a general food and drinks group.
These groups proved fruitful and helped the company expand in the European and North American markets.
Rising consumer awareness
The 1970s was the time the marketing arena transformed. With every brand wanting to stand out, they popularized concepts, such as healthy eating and natural ingredients.
The surge in demand for low-calorie foods was also a result of effective marketing. The challenge for Unilever was that all three of its food groups contained low-calorie products. It came in the way of their progress and dented their profits.
But how could they form a system that resolved this problem and kept local managers and product groups intact?
Unilever formed a committee called “Food Executive” consisting of three directors. Its role was to control all food products instead of leaving it to specific groups or managers.
Now, there are 5 product groups: edible fats, meals and meal components, beverages, ice cream, and professional markets. They play an essential role as advisors (more valued than in the 1960s) but are not responsible for profits.
Simultaneously, local managers are allowed to oversee the regional needs and preferences of consumers.
Key takeaway 5: balancing decentralization and product groups
Managers and product groups are both vital components of a multinational firm. To ensure their products satisfy consumers’ wants, Unilever continues to come up with ways to combine the two productively.
Unilever Strategy - Management Dynamics Over The Years
One of the key factors that have fueled Unilever's growth ever since 1929 is its evolving management dynamics that have allowed the company to stay true to its roots while adapting to the local areas it operates in.
Think globally. Act locally!
Think globally and act locally has been at the heart of Unilever's operations and enabled it to make a mark in even the most far-flung areas successfully. As a result of trial and error, Unilever's management dynamics over the years showcase the company's drive to excel, innovate, learn, and get the job done.
Let's delve deep into the management dynamics to better understand the growth of the company.
Given that both the parent companies of Unilever had a tradition of scaling their business through export as well as local production that British and Dutch expatriates mostly ran, it comes as no surprise that Unilever, too, had the same management style initially. British and Dutch executives ran the show, at least for the first decade. However, in the early 1940s, Unilever began changing things by hiring local managers to lead the operations in respective parts of the world, as already highlighted in Chapter 3.
The localization and decentralization began with the subsidiary in India in 1942. Key roles were given to Indian managers, who were also provided with the freedom and flexibility to run operations on their own with little involvement from the head office on a day-to-day basis.
This process of localization of management, in addition to the growing competition as well as the alienation of the subsidiaries during World War 2, led to decentralization, with each subsidiary becoming a self-reliant and self-sufficient unit.
This is where the senior management decided that while decentralization has indeed paid off, it would be in the company's best interest to guard against too much of it. Hence, to ensure that the Unilever culture, vision, and mission were shared among all subsidiaries, Unileverization was promoted.
It has now become a long-standing practice at Unilever to regularly train managers from around the world, be it at a Unilever Four Acres facility or hired facilities in local areas, to ensure that Unilever's values are ingrained and followed everywhere.
The Unilever management matrix, which mainly consists of local talent and initiative with centralized control, is empowered to think transnationally. From nurturing local talent to cross-posting managers worldwide so that they can gain diverse experiences, better understand the Unilever culture, and establish unity, an array of practices are followed.
Break communication barriers
Given the sheer size and scale of Unilever around the globe, effective communication across borders is an essential need for it. It doesn’t come as a surprise that the most relevant and used language for all forms of communication is English.
Hence, Unilever actively looks for employees with fluency in the English language when hiring and regularly invests to develop the English language as well as communication skills in general for its employees through various training programs.
Pick the cream of the crop
Alone you can only go so far; together the sky is the limit with what you can achieve. Unilever takes it a step further by hiring the best as well as the brightest and then unifying them to achieve remarkable results.
While it comes as no surprise that Unilever pays huge emphasis on onboarding the right people, the way how it goes about the process of recruitment offers a lesson to other businesses. Right from the mid-twentieth century, Unilever has continued to pioneer employee section systems.
From getting involved in universities to spot talent early on to sponsoring an extensive range of business courses, Unilever has done it all. Plus, trainees – as part of a group – are offered on-job experiences and courses at training facilities, allowing Unilever to create a holistic network of individuals whose informal experiences act as a glue that drives the company.
In addition to this, the vast system of attachments that allow employees to work on temporary assignments and projects in different parts of the world further grooms them offers them exposure and provides the 'know-how' of how Unilever functions. This empowers them and helps them further the unique Unilever way of working wherever they go next.
The company's formal structure, together with the informal exchanges leads to the transfer of ideas, enhances communication, and fosters collaboration, which in turn, boosts innovation and helps solve problems, allowing Unilever to continue to grow.
Modern workforce and workplace
Being resourceful is the new corporate approach of Unilever, which accounts for a number of organizational changes to prepare for the future, including:
- Tapping the open talent economy to boost the workforce whenever needed
- Harnessing the power of digital to drive business growth
- Being more creative and thinking out of the box to achieve goals
- Creating a better work-life balance and work environment
One example of Unilever’s unique approach to setting itself up for success in the future and unlocking its capacity to grow is its “YourFreelo” program in which internal resources of the company are offered holistic support through freelancers with different perspectives and handy skills.
Iterative improvements thanks to trial & error
From the outside, it may appear that it is Unilever's transnational strategy that has helped pave its way to success. While that wouldn’t be wrong to conclude but if we delve deep, we can find that it’s the messier revolution brought to the fore by continuous trial and error that has driven the company.
Hiring and training managers and leaders carefully, as well as linking decentralized units with a common culture, are the primary reasons behind the company's growth. That being said, the company has cautiously treated the path of an informal transnational network, realizing that it can elevate risks and lead to complacency.
To guard against it, the company continues to shake up the system every now and then, shifts roles, and responsibilities and evolves in the dynamic business world where change is the only certainty. By rethinking, reviewing, and reforming the strategies, the company manages to tackle the tricky waters and win.
Key takeaway 6: Develop bold middle-management
One of the major reasons behind the success and growth of Unilever has been its management, which doesn’t shy away from taking bold steps when needed. In addition to this, Unilever continues to invest in human capital and experiment as well as explore to stay a step ahead in the ever-evolving dynamic age.
Sustainable Living Plan – The Game-Changer For Business Growth
Seldom do businesses as large as Unilever get a chance to re-invent themselves and throw caution to the winds by taking the difficult long-term approach that can even negatively impact their bottom line.
In 2010, Unilever did just that by launching the Unilever Sustainable Living Plan (USLP), pioneering a new business model.
Playing their part in the environment
At the core of the plan lies Unilever's commitment to doing right by people and the planet with its purpose-driven ambition of halving its environmental footprint while doubling its size and making the world a better place for 8 billion people.
Fighting climate change by ending deforestation, ensuring food security by championing sustainable agriculture, and investing in water, safety, and hygiene to uplift people's lives, Unilever set the bar higher than ever before.
Has Unilever been successful in achieving its targets? You bet it has.
By pushing the company in a unique way, further than ever before, in its quest to build a sustainable and equitable future, Unilever has delighted all stakeholders, appealed to the masses, and showed how companies can lead from the front by taking a stand at issues that matter.
Following are some of the highlights of the USLP more than ten years after its launch depicting how Unilever has made an explicit positive contribution to address the key challenges:
- Reached over 1.2 billion worldwide with health and hygiene programs
- Lowered the environmental footprint per customer by one-thirds
- Reduced greenhouse gas emissions by two-thirds
- Achieved 100% renewable grid electricity across all plants
- Achieved zero landfills across all factories
- Cut down on over €1 billion on costs by reducing waste and enhancing energy as well as water efficiency
"Brands with purpose grow; companies with purpose last; and people with purpose thrive."
Embedding sustainability into the business has yielded remarkable results for Unilever.
Unilever's purpose-led brands have contributed immensely to Unilever's growth in a day and age where sustainability has become mainstream as around two-thirds of consumers opt for a particular brand because of its stand on social issues, and more than 90% of millennials prefer brands that strive to elevate humanity.
According to Unilever, its purpose-driven brands contribute to almost 75% of the company's growth and are growing 69% faster than the rest of the business, depicting that the huge bet has indeed paid off.
While Unilever could have easily waited for consumers and governments worldwide to push it to embrace sustainability rather than do it all by itself – that too ahead of the time – it portrayed itself as the leader with the focus on the bigger picture which stands by its values and is not afraid to do the right thing even when the odds are stacked against it.
Key takeaway 7: Make sustainability part of your business strategy
Pioneering sustainability businesses, Unilever started a movement for social change in 2010 that helped it re-invent itself for good. It has paid off for the company, making customers fall head over heels for their brands.
Why is Unilever so successful?
Unilever is always in transition, equipping itself to continue making a difference well into the future. It isn’t perfect given its fair share of products that don’t seem sustainable or advertising campaigns that don’t go hand in hand with its values. However, it is a company on a big mission to transform the world, setting an example for the rest to follow.
Performance beyond expectations In challenging & uncertain circumstances
The year 2020 was volatile and unpredictable in ways more than one for all businesses operating around the globe. From supply chain bottlenecks to change in the way consumers shop and employees work, there were an array of disruptions, leading to an uncertain business environment.
Yet, in the face of such adversity, Unilever has stayed true to the values that have always made it a force to be reckoned with – resilience and agility – and hence, not only survived but also thrived.
While underlying operating profit fell by 5.8% in 2020, the company experienced a boost in underlying sales growth of 1.9%. This can be mainly attributed to the company’s long-term planning, flexibility, and sustainable objectives.
Hence, where other companies focused on driving growth temporarily, Unilever developed their current and future strategies on sustainability and inclusiveness for growth. An example is their stronghold in emerging economies of China, India, and the USA, where they have always looked to include locals and contribute to society’s uplift.
Moreover, Unilever went ahead with a major shift in its legal structure in 2020 to stabilize and unify its operations worldwide. Formerly run by cross-border companies, Unilever NV and Unilever PLC, Unilever has consolidated itself into the single umbrella of Unilever PLC, becoming stronger than ever.
Below is a graph of Unilever's annual revenue in Euro Millions
Growth by the numbers
List of key strategic takeaways
- Impact-driven Businesses Succeed
Now more than ever, it has become difficult for companies to achieve a competitive advantage. So, what can a business do? Be relevant to society and offer a multi-stakeholder return, benefiting all and crafting real change. It definitely pays off.
- Always Be Proactive and Flexible
Change is the only certainty, so you need to embrace it. Your best bet is to be on the lookout for potential opportunities that present themselves from time to time and grab them with both hands. You can do that if you remain agile and act quickly.
- Prioritize Investing In Human Capital
Your single most important asset is your people. Empower them so that they can help you elevate your brand. Right from hiring the ‘right’ people to nurturing them, you need to continuously invest in human capital in order to achieve lasting success.
- Take Risks To Grow
You can only reach the top with iterative improvements made possible by continuous innovation and risk-taking. Keep experimenting, testing, and exploring: if you achieve the desired result, you win, if you don’t, you learn.
- Encourage Sustainable Living And Make It Effortless
Weave sustainability into your processes and value chains. From the raw material used to the packaging, make sure you use eco-friendly practices to add value to the lives of people. This way you can win consumer goodwill and trust.
- Stay Intune With The DNA Of Your Brand
In the quest to do more and become more, you can easily forget to stay true to your ultimate purpose. Go back to the drawing board whenever needed, regularly communicate your purpose to your target audience, and stand up for what you stand for to separate yourself from the rest.
Unilever’s journey from one soap brand with a handful of sales and customers to the leading multinational consumer goods company with billions of consumers worldwide has been incredible and offers a number of lessons, including:
While we don’t know what the future holds, we are pretty much certain that Unilever is here to stay and dominate, doing right by the people and planet.