External Environment and the Organization
Unilever is one of the largest companies in the world and produces dozens of different products under numerous brands. As a result, this creates the necessity for developing a leadership strategy that enables the company to simultaneously control such brands over numerous international markets (The changing face of Unilever: Out with the old and in with the new 2009, pp. pp. 24-27).
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It is interesting to note that there are three distinct market orientations that dictate, to a certain extent, the manner in which a company acts within a competitive environment. These consist of:
- a customer-oriented strategy – focuses on collecting data on determining the wants and needs of consumers
- a competitor oriented strategy – focuses on gaining information on current competitive strategies within the same market and responding based on the gathered information
- or an inter-functional coordination strategy – advocates the use of better internal methods of communication and collaboration in order to help the company function simultaneously on customer-oriented and competitor oriented strategies.
What these factors reveal is that the external market environment that a company finds itself in has a distinct impact on the way in which it chooses to operate. In other words, there is a correlation between the external environment of a company and the subsequent operational design it chooses to utilize.
In the case of Unilever, studies such as those by Maljers (1992) show that it focuses more on an analyzer strategy (Maljers 1992, pp. 46-52). The basis behind this assumption is connected to the fact that Unilever expands through the development of new brands in order to enter new consumer markets while at the same time focuses on creating a cost-effective business (Maljers 1992, pp. 46-52). As such, it implements a competitor oriented strategy while utilizing an analyzer leadership design. For example, while it may be true that Unilever takes into account consumer tastes when it comes to product development, it is usually the case that it tries to beat local competitors by being a cost-efficient choice while at the same time having the best branding and marketing for that particular product.
Some of the more interesting product development innovations that I encountered while researching this topic are the following:
- use of biodegradable plastic
- indicating on the packaging that it was made through recycled paper
- placing a label which shows that the product was made through “green” processes (i.e. environmentally safe).
Due to the current predilection of consumers to be more environmentally aware of their consumption of products, many are preferring to be “green”. This comes in the form of preferring products which denote that they help to conserve environmental resources and are a more “moral” choice as compared to utilizing products which adversely impact the environment. By shifting the current packaging of Unilever’s ice cream product line towards the use of biodegradable plastic, recycled paper and indicating that it was made through environmentally safe methods of production, this would enable the company to potentially access new consumer markets (i.e. consumers who are environmentally conscious) without having to actually create a new product. It should also be noted that the use of certain types of recycled products is actually a low-cost alternative as compared to traditional methods of packaging due to the government subsidies that come for companies that choose to utilize recycled paper in their production line. As such, this new level of awareness should be taken advantage of in the company’s packaging so as to entice consumers to choose Unilever’s products over its competitors.
Maljers, FA 1992, ‘Inside Unilever: The Evolving Transnational Company’, Harvard Business Review, 70, 5, pp. 46-52.
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‘The changing face of Unilever: Out with the old and in with the new’ 2009, Strategic Direction, 25, 5, pp. 24-27.