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Analyzing the Internal and External Environments Impacting Unilevers Success

Introduction

The success of a business is directly related to the management strategies and its environment. This is a report on the internal and external environments that affects the operations and success of Unilever. An investigation of the organization's internal factors takes on the strengths and weakness of Unilever's whole opportunities and threats illustrate the eternal environment. The Pestle analysis also gives insights on the general environmental research concerning success. These findings have been collected from contemporary sources over the web.

Due to its suitability for growth, Canada is the best environment for Unilever and is likely to register significant growth and market expansion within five years. Unilever Canada has to ensure that it expands market penetration to cover the diverse Canadian market. Ways to gain access to the market include increasing brand variety, collaborations, employee motivation, applying technology, and enhancing sustainability and social responsibility. A potential setback of this program may be the global economic crisis that has been the case due to the pandemic. The report gives Strategic Environment Analysis, company performance review, and developmental focus. Recommendations are also part of this report.

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Company and Host Country Strategic Environment Analysis

Unilever is an Anglo-Dutch franchise founded in 1930 by a merger between the Dutch Margarine Uni and British Lever Brothers as the parent companies. The organization is one of the largest manufacturing companies worldwide, with more than 400 brands and over 150,000 employees. Its products range from food to personal care commodities that have reared far in the global market. This analysis will provide the standpoint and progress that the organization has in Canada. A SWOT analysis will be appropriate in investigating the organization.

Internal Environment

Strengths

Unilever boasts of one of the biggest franchise companies in the globe. The organization, therefore, has global brand recognition, which makes it known in a country like Canada. Unilever is present in more than 190 countries globally due to its several products that reach many hands in a day. Unilever is also boasting of more than 400 brands that bear its patent as the mother company; most of these brands are used daily; hence the organization remains relevant to people in ordinary life. According to research and reports, another strength of Unilever comes from its strong financial position, reflected by the revenue it gathers annually. Unilever record revenue of more than $200 million in the U.S. in 2019 from its deodorants products (Ionescu-Somers and Brassey, 2019). The organization has invested significantly on marketing research before exploring the viabilities of the target market. This strength enables the organization to come up with better marketing strategies.

Weaknesses

Unilever faces potential substitution of some of its products, especially the ones that can be commercialized. Factors like cheap labor available in Africa and Asia can lead to the emergence of other similar products (O’Riordan, 2017). Another weakness of the company is the inability to shift towards natural products. The customer preference is moving towards more natural and homemade products. A significant portion of Unilever's revenue and brand reputation remains with the retailers. Retailers are small-scale sellers that are vulnerable to any market risks. The current Coronavirus has led to low incomes in households; hence consumers prefer cheaper alternatives to Unilever's products.

External Environment

Opportunities

The organization is one of the best in market research. This strength provides Unilever with the opportunity to expand its market penetration on the global stage. Its strength in diversity makes it easy to invest in variety. According to Ionescu-Somers and Brassey (2019), Unilever can also provide alternative goods besides the consumer goods it offers to the market. Unilever can additionally tap the demands of emerging countries. There are several new markets and regions, especially in Asia and Africa. The organization is significantly gearing towards sustainability and health promotion in its products to discover new markets. Unilever has also started investing in technological ventures to enhance its operations (Sim, King, and Price, 2016). The active involvement of Unilever in the quest to find a solution to the ongoing pandemic is also an opportunity for growth.

Threats

Unilever's product line is filled with other providers who are potential threats in terms of fierce competition. Companies such as Gamble, Mondelez International, Nestle are excellent examples in this case. There are also newly emerging companies in the same sector. Another imminent threat to Unilever is the global economic crisis courtesy of the Coronavirus pandemic. The organization appears to be struggling with its financial endeavors, especially in its new markets. Unilever is on the verge of brand damage because it is working to achieve sustainability.

PESTLE Analysis

Unilever is a multinational company that operates in various environments. This analysis provides the political, environmental, social, technological, economic, and legal settings surrounding the company's success.

Political

The organization thrives in a politically peaceful environment with minimal distractions. This has been shown by a study of several organizations and their political climate that has permanently reduced performance. In the case of Unilever, political stability in several countries in which it has operations boosts the company’s performance. In contrast, with operation spanning across five continents, the company faces challenges navigating through region and international politics such as Brexit-European Union-US politics. However, political stability in individual countries in EU, North America, and Asia in which the company has most operations, provide opportunity for it to grow (Nugent, 2017). Countries with minimal political challenges, such as Canada and New Zealand, provide the conducive political environment for Unilever to succeed

Economic

The economic environment of a country of operation directly impacts the success of an organization. Unilever is an organization that now relies on the retail market to distribute its goods to consumers. The economic success of a host country means that the standard of living in that country can provide the desired need for the organization (Lynch, 2011). The financial stability of a country is a prime environment for growth for an organization like Unilever. Higher wages lead to economic growth since many customers can afford goods supplied by the organization. The current financial crisis brought by the novel covid-19 pandemic poses a challenging growth structure for the organization because sustaining its supply to the demand in the market (Nicola et al., 2021).

Social

Multinational businesses face socio-cultural Factors in the environments of operation. These cultures directly affect the types and kinds of goods they supply to their customers. Unilever is one of the organizations that now depend on the social-cultural activities of its host country in this case. Factors like health crises in a country directly affect an organization's operations like Unilever (Czinkota et al., 2009). Health standards required in a country have so much to do with consumer goods supplied to the market. Environmental concerns such as global warming and sustainability also directly influence the operations of Unilever in several host countries. Other social-cultural activities like gender Behaviors provide an opportunity for growth for the organization in terms of their diversification.

Technological Factors

Technology is one of the central areas for growth that organizations have to factor in in their strategies. Being in cosmetic industry, the company is prone to technological advances primarily in communication, production, and supply chain (Laursen, and Andersen, 2016). Factors like automation and enhancement of business operations within the organization ensure that efficiency has been achieved (Baki, and Alexander, 2015). Improving and enhancing transportation procedures to confirm with the technological advancements is an opportunity for growth for Unilever. On the other hand, automating services has been a growing trend in several organizations. This appears as a threat and an opportunity for Unilever in its operations

Legal

In conjunction with ecological factors, Unilever is better positioned to exercise its legal duties on the environment. Countries have several restrictions that require conformity with the contemporary setting that the business operates (Frias-Aceituno et al., 2013; Kwilinski et al., 2019). Several countries also highly regarded consumer rights regarding goods and services, especially for international companies. There are also concerns about the protection of patents and rights two specific intellectual properties. All these factors provide Unilever with the opportunity to grow and thrive in an environment of legal friendliness.

Ecological

Ecological consideration is a growing team in the business environment. Unilever is one of the organizations that directly gets its products from the natural environment. The increasing concerns of sustainability, for example, provides the organization with opportunities to expand its growth in terms of environmentally-friendly commodities (Kashmanian et al., 2011). There are also growing concerns about coming up with environmentally friendly businesses. This scenario gives Unilever an excellent chance to explore its goals to be sustainable in all its operations.

Host Country

Canada

Canada is the best host country for an organization like Unilever due to its internal and external factors. First, the government has a diverse culture that accommodates all backgrounds and ethical groups within the country. This scenario provides a diverse market for several organizations within the country and outside. As indicated by data from the Global Economy (2020), Canada is also a politically stable country. It is one of the most peaceful countries, with several with minimal cases of political unrest over the past years. The Canadian economic system is also sustainable for all forms of business expansion, World Bank ranked it 12 in ease of doing business index (World Bank, 2020). Therefore, it welcomes investment not only internally but also from across the globe. The country is a champion of environmental and social factors that directly relates to businesses. It, therefore, provides the best operating environment, especially for an organization like Unilever.

As opposed to many countries, Canada has one of the lowest corporate tax rates in the American region and globally. This means that the tax rates in the country are flame are friendly not only for the consumers but also for the corporate (KPMG, 2021). Additionally, the country has one of the best labor industries in the world. The Canadian government is very keen on the labor force bought from the Kano education system and immigrations that the country registers in huge numbers. This gives the country the best chance to provide its Job industry with the most skilled labor force.

Company Performance Review

Founded in 1949 in Canada, Unilever has since grown to be a household name. The company has over 400 brands in the manufacturing industry. Among the products manufactured by Unilever are detergents, food preparations, and soap. There are over 800 companies in Unilever whose headquarters are in Toronto. The annual revenue for Unilever Canada is 1.66 billion U.S. dollars. Unilever Canada has more than 3400 workers across the country.

Since its inception, the company has been committed to promoting corporate social responsibility. Corporate social responsibility involves and judgments of a farm or a corporate company in activities that benefit the employees, consumers, and the society that the company is based. Unilever Canada has increased its social participation over the years. It has participated in several social activities and development projects that benefit the people living around the company’s location (Deresky, 2016). A statement released by Unilever's chairman in 1999 indicates the company's Ending Commitments to ensuring corporate social responsibility the financial performance of Unilever Canada has seen arise rise in the level of profits recorded every year. There has been a trajectory in the financial performance of the company.

Currently, Unilever Canada registers an annual return have made it possible to have over 400 branches of the company, with over 3400 full-time employees. Unilever Company has contributed to the growth of the Nation Bible job creation and payment of taxes. Unilever dominated the ice cream industry in 2017 with a market share of 34.7% (Buckley and Hordern, 2020). This was the leading market share in Canada by Unilever. Between 2017 and 2021, Unilever has increased the global market share by over 50%. Magnum, the top ice cream brand for Unilever, sells over 1 million units annually. Unilever Canada has enjoyed a significant market share in the industry due to its diversified brands (Statista, 2017). Unilever has over 400 brands ranging from food items, detergents, soaps, and other household items. Sales have also increased significantly. Almost every person now purchases Unilever products. The wide range of goods to choose from has enabled the sales trajectory to rise very fast.

Company Development Forecast in the Host Country Market

According to this analysis, Canada is one of the most suitable environments for Unilever to grow. The financial trends in the country by Unilever Canada show that there is a lot of room for growth in terms of market share. The organization is likely to expand more to reach other parts of the country due to its suitable environment (Lawrence et al., 2019). These can be shown by their PESTLE analysis that gives Unilever more opportunities than threats to expand and operate in Canada. The market share is likely to be boosted by the stable economic system of the country, which has so far been the best among the developed countries from the SWOT analysis, Unilever has one of the best financial systems that promise is a good market share when the innovation decides to establish itself in Canada.

The Canadian markets promise many sales for any organization. Unilever is in the best position to maximize sales thanks to the diversity and the capacity of a Canadian market. As shown by the financial standpoint, the Canadian market is diverse and is still new and unexplored. In the next five to ten years, Unilever's presence in Canada will have increased significantly. The increase in the number of outlet stations for Unilever products will also increase profits for the company. More job opportunities will be created, and more taxes will be paid to the government. In the next decade, Unilever will be among the best-performing companies in Canada and the world.

Recommendation on Business Strategy in the Global Market

Unilever Canada has had positive performance. The sales have been high, returns and profits have also been increasing year in year out. However, if taken into consideration, several recommendations would help the company even get to greater heights. First, the engagement of Unilever Canada should consider having more alliances. Collaborations with other companies help increase the market coverage. It also helps to benchmark and learn tips that other companies may be used to increase their returns. Alliances help reduce the tension that comes with competition from similar products of other companies. It is healthy to engage with competitors once and create a product that attracts more customers.

Second, employees should be more motivated. Activities such as bonding sessions and team-building activities help to create more confidence in the employees. The nature of Unilever, especially in production, is a technicality in work. Most workers are involved in heavy manual jobs in the production process, which tires them physically and emotionally. The management should come up with strategies for promoting employees based on merit.

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Unilever Canada should also consider closing down branches with minimal returns and opening others in areas with a higher potential. There are areas where some outlets have been set up but are not doing well. Most of these areas are around office spaces, and thus business may not thrive well. These businesses should be relocated to sites with higher business traffic to ensure that the shops are accessible by more customers. Unilever Canada is performing well, and if they considered the above recommendations, they would perform even better.

References

Baki, G. and Alexander, K.S., 2015. Introduction to cosmetic formulation and technology. John Wiley & Sons.

Buckley, T. and Hordern, A., 2020. Unilever's ice cream deliveries show anything can be sold online - BNN Bloomberg. [online] Bloomberg. Available at: [Accessed 28 April 2021].

Czinkota, M., Ronkainen, I., Moffett, M., Marinova, S., & Marinov, M. (2009). International Business – European Edition. West Sussex: Wiley.

Deresky, H. (2016). International Management: Managing Across Borders and Cultures (Texts and Cases). (9th ed). London: Pearson.

Frias-Aceituno, J.V., Rodríguez-Ariza, L. and García-Sánchez, I.M., 2013. Is integrated reporting determined by a country's legal system? An exploratory study. Journal of cleaner production, 44, pp.45-55.

Ionescu-Somers A.M., Brassey J. (2019) Unilever’s Super Stretch Goal for 2020. In: Lenssen G., Smith N. (eds) Managing Sustainable Business. Springer, Dordrecht.

Johnson, G., Whittington, R., Scholes, K., Angwin, D. and Regnér, P., 2017. Exploring Strategy: Text and Cases.(11. utg.). Harlow: Pearson Education Limited.

Kashmanian, R.M., Wells, R.P. and Keenan, C., 2011. Corporate environmental sustainability strategy: Key elements. Journal of Corporate Citizenship, (44), pp.107-130.

KPMG, 2021. Canada: Corporate tax rate reduced to 8% (Alberta). [online] KPMG. Available

[Accessed 28 April 2021].

Kwilinski, A., Drobyazko, S. and Derevyanko, B., 2019, November. Synergetic and Value Effects in Corporate Mergers and Acquisitions of International Companies. In Proceedings of the 34th International Business Information Management Association Conference (IBIMA) (pp. 13-14).

Laursen, L.N. and Andersen, P.H., 2016. Supplier involvement in NPD: a quasi-experiment at Unilever. Industrial Marketing Management, 58, pp.162-171.

Lawrence, J., Rasche, A. and Kenny, K., 2019. Sustainability as opportunity: Unilever’s sustainable living plan. In Managing Sustainable Business (pp. 435-455). Springer, Dordrecht.

Lynch, R., 2021. Strategic management. SAGE.

Nicola, M., Alsafi, Z., Sohrabi, C., Kerwan, A., Al-Jabir, A., Iosifidis, C., Agha, M. and Agha, R., 2020. The socio-economic implications of the coronavirus and COVID-19 pandemic: a review. International journal of surgery.

Nugent, N., 2017. The government and politics of the European Union. Palgrave.

O’Riordan, L., 2017. The Rocky Road to Achieving Stakeholder Value in Business Strategy. In Managing Sustainable Stakeholder Relationships (pp. 417-478). Springer, Cham.

Parboteeah, P. and Cullen, J.B., 2011. Strategic international management. South-Western Cengage Learning

Sim, S., King, H. and Price, E., 2016. The role of science in shaping sustainable business: Unilever case study. Taking Stock of Industrial Ecology; Clift, R., Druckman, A., Eds, pp.291-302.

Statista, 2021. Top ice cream companies: market share Canada 2017 | Statista. [online] Statista. Available at: [Accessed 27 April 2021].

The Global Economy, 2020. Canada Political stability - data, chart | TheGlobalEconomy.com. [online] TheGlobalEconomy.com. Available at: [Accessed 28 April 2021]

World Bank, 2020. Ease of doing business index (1=most business-friendly regulations) - Canada. [online] worldbank.org. Available at: [Accessed 27 April 2021].

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