Strategy and long term financial target At the heart of Unilevers strategy is a

Strategy and long term financial target at the heart

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Strategy and long-term financial targetAt the heart of Unilever's strategy is a concentration of resources onareas where we have leading category and brand positions andwhich offer excellent opportunities for profitable growth, especiallyin personal care, developing and emerging markets and Vitality. Thefocus is primarily on developing the business organically, butacquisitions and disposals can also play a role in accelerating theportfolio development.To execute this strategy we have reorganised the business tosimplify the organisation and management structure and to improvecapabilities in marketing, customer management, and research anddevelopment. The result is better allocation of resources, fasterdecision-making and a lower cost level. This transformation, knownas the One Unilever programme, allows us to leverage our scaleboth globally and locally.Unilever's long-term ambition is to be in the top third of our peergroup in terms of total shareholder return. We expect underlyingsales growth of 3-5% per annum and an operating margin in excessof 15% by 2010 after a normal level of restructuring charges of 0.5to 1 percent of turnover. Return on invested capital is targeted toincrease over the 2004 base of 11%. Over the period 2005 – 2010,we aim to deliver ungeared free cash flow of €25-30 billion. It shouldbe noted that previous and planned disposals and the additionalrestructuring plans will have reduced ungeared free cash flow byabout €2.5 billion over this period, while enhancing the ongoingcash generating capacity of the business.THE ISLAMIA UNIVERSITY OF BAHAWALPUR
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StrategicManagementOfUNILEVER10Internal and External Audit of UnileverStrengths:Customer’s Loyalty.Latest state of the art facilities and technology for producinghigh quality products.International brand strength.Committed to business ethics, safety, health, environment andcommunity.UNILEVER’s key competitive advantage over other marketparticipants is the retail reach of the company. UNILEVERservices 500,000 outlets with 50 % through direct distributionand remaining via wholesalers. UNILEVER is enjoying market edge of 41% in FMCG industry.UNILEVER is at number one in ice cream segment and having14% market share all over the globe.Weaknesses:The biggest challenge in safeguarding market position is tobecome cost leader.Operational complexity due to a large number of products inportfolio and due to diverse work force.Strategic alliance with other small mills for manufacturingpurpose is the weakness as well as a threat for UNILEVER.Although UNILEVER claims that it is a part of its cost reductionstrategy but it can not hide the reality that it shows weaknessof UNILEVER.Opportunities:THE ISLAMIA UNIVERSITY OF BAHAWALPUR
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StrategicManagementOfUNILEVER11Markets of developing countries can be proved a profitablesegment because people are consumption oriented ratherthan saving or investment oriented.
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