THE ISLAMIA UNIVERSITY OF BAHAWALPUR Strategic Management Of UNILEVER 21 BCG

The islamia university of bahawalpur strategic

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THE ISLAMIA UNIVERSITY OF BAHAWALPUR
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Strategic Management Of UNILEVER 21 BCG Matrix Market Share High 1.0 Medium 0.50 Low 0.0 ? Industry Classification: Industry Industry Indicators THE ISLAMIA UNIVERSITY OF BAHAWALPUR Ice cream Detergents Soap Home & Personal care Beverages (Tea) Knorr Dove High +20 Medium 0 Low -20 INDUSTRY SALES GROETH RATE (%)
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Strategic Management Of UNILEVER 22 Classification Tea Mature Industry growth lagging GDP growth. Low profit margins Reduced sales volumes Ice cream Growth 0.5kg per capita yearly consumption Double digit revenue growth Large Capex and advertising spend Soap Mature ULEVER Growth company within mature industry Lux sales doubled in 3 years High profit margins Introduction of liquid hand wash Detergen t Growth 11% rise in Surfs market share Low penetration, 50% population uses laundry soap Double digit turnover growth Shampoo Growth Lowest penetration in Asia. Clear Shampoo highest growth in comparable regions STARS - Ice cream: Unilever has the first mover advantage in the capital intensive ice cream segment. With around 65% market share, ULEVER is the only major operator in the industry. The company is in the process of increasing production capacity and strengthening its distribution channel. In CY07, sales were restricted by lost trade confidence, delay in factory expansion resulting in plant shutdowns, and adverse weather conditions. However, going forward with per capita consumption at a low 0.5 liters per annum tremendous growth potential exists in the ice cream segment. We expect segment revenue growth of CAGR 19% in CY08-CY12E. QUESTION MARK – Frozen foods: According to matrix, UNILEVER’s frozen foods like Knorr and some products of household care business units like Dove are question marks as they are operating in a growing market without high market share, thus holding the sales growth of the company’s 400 leading brands by 0.6%. THE ISLAMIA UNIVERSITY OF BAHAWALPUR
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Strategic Management Of UNILEVER 23 Therefore it can be noticed that not the whole divisions are under performing, as a result UNILEVER needs to invest more in these business units to keep up with the fast growing market because they are already successful but need better performance. Brands such as Knorr and Lipton in food and Dove in the household product sector are among the core brands that raise concern for UNILEVER. As they operate in a growing market more investment is needed to boost sales and margin and as it is unlikely that these units achieve sufficient cost reduction benefits, UNILEVER may turn to its cash cow businesses to offset such investment. As part of its path to growth strategy UNILEVER must build on these businesses to improve performance as the market share must grow if they are to become stars otherwise they may face alternative solutions that could include the sale of the business, which should be the last alternative because of the growing divisions inside the business.
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