Unilever is a corporation that has historically concentrated on two product lines derived from oil and fat like butter and soap. Now these main elements are still visible in the product categories Foods & personal care.
Today, Unilever's mission is "to add vitality to life and to do this in a sustainable way." (1) The values the company has selected are those of a corporate company of the size of Unilever; integrity, positive impact, continuous commitment (to a longer term goal), aspirations, working with others.
Unilever has started a corporate change program where the two main categories – Foods and Home and Personal Care– that have long divided the company, are subject to a (internal) merger.
On a corporate slide (1) we can read:
FROM: Fairly independent Business Groups and Countries often acting as a loose federation (3 of everything!)
TOWARDS: An integrated European business that optimizes synergy and scale at European and country level, through One Unilever
The internal reorganization should save costs, also by concentrating on information systems; One common IT platform (SAP). Outsourcing is part of this program where the objective is to become more flexible and at a lower cost level.
Italy is taken as an example. Three locations in Italy have been reduced to one, creating a new culture, reducing infrastructure and support costs and optimizing the channel coverage "going where the growth is," are some of the benefits.
The three regions – Europe, the Americas and Asia Africa – "are primarily responsible for building relationships with customers, managing supply chain networks, and deploying brands and innovations effectively, focused on excellent execution in the marketplace. delivery of in-year financial results including growth, profits and cash flow, and in-year development of market shares. " (2)
Beside the split in three regions and one business the organization is supported by five functional teams: Finance, HR, IT, Communications and Legal. These are "responsible for providing value-adding business partnering, strategic support and competitive services to the whole business." They are all organized around the same basic principles of business partners, shared services and expertise teams. " (2) The first three functions are those that have been outsourced.
After this change program, the stakeholders are clearly demanding more. That became clear when the new CEO of Unilever was announced recently. Mr. Paul Polman will take over the position of CEO from Patrick Cescau was retires after being 35 years in duty of Unilever.
Polman is currently responsible for the region America for the rival company Nestle. This announcement cave the stock price an impuls of 5%.
Some of the main risks areas that have been defined in the annual report (2) are:
- The increasingly competitive environment, the further consolidation in the marketplace and continued growth of discounters. Proposed measure: … we will continue to invest in selected brands and high growth market areas
- Change initiatives. The risks of … continuing restructuring of the business which is designed to simplify our operations and leverage our scale more effectively
- People. Unilever's performance targets require it to have the right caliber of people at all levels.
- Corporate reputation.
- Potential economic instability. Around 44% of Unilever's turnover comes from the developing and emerging economies.
- Price and supply of raw materials and commodities contracts
Unilever has always been a complex company, which is still visible in its anglo-dutch structure. The Dutch origin starts in the late 19th Century, "Jurgens and Van den Bergh – two family businesses of butter merchants – have thriving export trades to the UK. – margarine – which, they realize, could be mass-produced as an affordable substitute for butter. "
Later, over in the North of England in the mid-1880s, a successful wholesale family grocery business run by William Lever starts producing a new type of household soap. The product contains copra or pine kernel oil, which help it lather more easily than traditional soaps made of animal fats. Unusually for the time, Lever gives the soap a brand name – Sunlight – and sells it wrapped in distinct packages. "(3)
The company has been oriented around these two product categories which have a similar source: Oil and chemicals.
A recent study – Unilever between Reich and Empire – explored how the Anglo-Dutch multinational, survived the war. "The decision of Unilever to decentralize its business conglomerate stand the company in good stead during the war. A great deal of autonomy for the national companies, allowing these subsidiaries to adapt to the different conditions in the various countries, increased Unilever's chances of survival. The antiquated organizational structure was in fact perfectly suited for the war-time situation. (4)
(1) – website
(2) – annual report
(3) – drhalimahali.wordpress.com/2008/04/24/dutch-unilever-jews-fitna-hdc-all-mixed-up/
(4) – [http://www.eur.nl/english/pressroom/releases/2006/march/wubs/]