Executive summary
This report entails the critical strategic marketing strategy of Unilever in the UK regarding international expansion. The foreign market is competitive and can create significant challenges for Unilever in terms of sales and revenue. Unilever is acquiring appropriate practices and ready to get into competition at the international level. The company is facing intense competition, digital marketplace, and sustainability issues. Due to its strategic marketing, internationalization approach, and educational campaigns, the key challenges can be tackled significantly. It has to expand its operations at the international level by reducing costs of operations, streamlining the raw materials transportation process, and looking at joint ventures at the international level.
Many subsidiaries of Unilever are gaining international fame and development due to their strategic market performance. An increase in sales and revenue is easy to attain on the basis of socio-economic interactions (Awards, 2019). The institutionalization and tackling risk and transaction cost-related issues are vital parts of the strategic plan by Unilever.
Furthermore, investors’ protection, contractors’ enforcement, intellectual property rights, and economic outcomes will be gained by adopting different modes to enter into the market. The functioning of the market mechanism by Unilever in the UK needs effective implementation of a marketing strategy that can continue to strengthen its business in the home market. It has to work with strategic alliances, joint control mechanism, and undertake investment opportunities.
Introduction
Unilever is a global consumer products company that deals in a wide range of products like food, beverages, personal care items, etc. Unilever believes in long-term strategic growth that can be attained by genuine purposeful performance (Maljers, 2005). The brand managers undertake a critical stance to spread the positive image of the company in the society while consumers focus more on brand image.
Unilever in the UK is operating across new divisions, and its portfolio includes iconic brands to meet the specific needs of consumers. The company is spreading a positive societal image with impeccable integrity. The challenges the company is facing in internationalization are related to intense competition, digital presence, and global opportunities.
Strategic plan
The internationalization path is necessary for firms to enter into the global world competition. Unilever has planned to enter in global market UK so that it can introduce its products at an international level. The internationalization strategy that Unilever will follow is ‘think global and act globally.’ This strategy is to focus on crucial competition at the global market and to adapt the comprehensive strategy by keeping in mind consumer preferences. Unilever focuses on three components of internationalization, i.e., firm-level, industry level, and country level.
The firm-level competition intends to compete with its rival brands to sell products on a global scale. It is also focusing on adding minor adaptations in products where necessary, engaging customers and to coordinate its actions (Relations, 2019). The comprehensive strategy at the industrial level tends to unify its operations to establish the brand image. This reputation at the international level implies that Unilever should coordinate its distribution and marketing activities. The successful implementation of brand concepts in the UK is vital to capitalize on growth performance. The optimal market entry strategy is a part of internationalization because its major rivals, such as Procter and Gamble, are developing new ways of product development, so Unilever strives to respond to changes at a faster pace.
Wholly-Own Subsidiaries (WOS) by Unilever are a vital strategy to enter into a foreign market. Principal shareholders of the company are Leverhulme Trade Charities Trust and Prudential Corpn plc. United Holdings and NV Elma hold 50% deferred shares in Unilever plc. The subsidiaries of Unilever are NV Elma and United Holdings and work under an individual shares basis. Some other subsidiaries of Unilever are Lipton, Sunsilk, Knorr, Exe, etc.
Unilever is facing sustainability challenges due to global innovation; thereby, it is creating initiatives like implementing the innovative solution, digitalization, and engaging entrepreneurs to tackle the key issues (UNILEVER, 2019). Sustainability challenges influence the strategic positioning of the UK, so it is working to safeguard the working environment and build sustainable leadership. The strategic framework, like institutional theory, applies to the working environment of Unilever to establish outcomes at the firm an industry level. The competitive strategies to acquire foreign competition are inherent to increase sales. The stable market performance by Unilever in the UK is attributable to strategic decision making while focusing competition with main rivals. The company’s decision to face intense rivalry from emerging markets is tackled by innovation and introducing the product in the UK, US, and Europe.
The institutional distance is about the analysis of risk and transactional cost of Unilever in the target market. In the UK, Unilever is targeting middle consumers by offering necessities and improving lifestyles. It is reaching out to customers by fulfilling their needs regarding personal care, hygiene, and nutrition. The institutional approach is to expand business based on customers’ needs and to keep ahead of their preferences. Improving product quality, innovation, and knowledge-based framework for consumers is a part of the decision making strategy. Unilever is acquiring the cost of transactions, thus gaining economies of scale.
Due to its corporate social behavior and healthy relationship with retailers, the company has implemented its strategic positioning at a different level. The competing foreign market as a marketing strategy is acquired under educational campaigns, global partnerships with development institutes, and healthcare projects with Australia and Brazil (Worldwide, 2019). A competitive presence at the international level is attributable to strategic decision making. Unilever’s competitive position is further accelerated by innovation. It is investing in research and development to acquire mass marketing strategies through cross-sectoral brand extensions. Competing at the international level is risky because global expansion on behalf of other institutions needs to focus on transaction costs, transportation, and prices of raw materials.
The strategic alliance undertakes different hybrid entry modes, such as franchising, licensing, and distribution arrangements. The market expansion tactics like franchising and licensing are carried out by Unilever. This brand value is promoted by the franchising of Unilever in different states. The company has regulated its merchandized processing through franchising. Licensing to various companies is carried out to generate revenue. There are different contractual agreements that Unilever has followed in order to get involved at the international level. Unilever has adopted opportunistic behavior to increase its loyalty rates.
The brand licensing is significant to tackle ethical complications and shape loyalty. Unilever in the UK is engaged in different licensing contracts to promote its identity at the international level. The licensing agreements are intended to protect intellectual property rights, thereby getting benefits from market size expansion. Licensors also demand high royalty rates when there is increased revenue and sales due to the brand name. Under institutionalization and licensing, Unilever has entered at the international level market and gained popularity. More influential brand-related programs are also being used at small kiosk outlets such as the Smile project in Nigeria to showcase different products at the international level.
Conclusion
Unilever should expand in the UK due to favorable socio-economic and political atmosphere. The intense competition among similar brands in the UK is creating hurdles for Unilever, but it can face challenges by improving its strategic decision making power and internationalization approach. The foreign expansion is easier when a company brings innovation and focuses on research and development of the product (Worldwide, 2019). With licensing, franchising, and contractual agreements, it can expand at an international level with less chance of unethical behavior. The controlled environment in the UK regarding stable economic policies is significant for business expansion.
References
Awards, Y. (2019). The Unilever Young Entrepreneurs Awards. Retrieved 22 November 2019, from https://www.unilever.pk/about/unilever-young-entrepreneurs-awards/
Maljers, F. (2005). Inside Unilever: The Evolving Transnational Company. Retrieved 22 November 2019, from https://hbr.org/1992/09/inside-unilever-the-evolving-transnational-company
Relations, I. (2019). Annual Report and Accounts 2018 Highlights. Retrieved 22 November 2019, from https://www.unilever.com/investor-relations/annual-report-and-accounts/
UNILEVER, F. (2019). Retrieved 22 November 2019, from https://www.unilever.com/Images/unilever-annual-report-and-accounts-2018_tcm244-534881_en.pdf
Worldwide, m. (2019). Unilever’s grocery market share worldwide 2012-2020 | Statista. Retrieved 22 November 2019, from https://www.statista.com/statistics/254613/unilevers-grocery-market-share-worldwide/
