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Porter s five forces and value chain unilever

It also dictate the actions need to be taken to provide value to customers and gain a competitive position in the industry by outperforming its rivals and competitors and also by fully utilizing its core competencies in a particular, individual product or in services.

The position of a business or firm in an industry, its relative position or standing to its rivals and five forces of competition, all are related to business level strategy. The foundation of any business-level starategy is the customers of an organization.

What they need, what services they want and they can be ultimately satisfied, all these matters are concerned with the upper-level management and thus the importance of business level strategy is also very crucial for these factors.

Unilever PLC Porter Five Forces Analysis

Business level strategy of Unilever is very important determinant of its overall performance and market performance. It take care of its customers by focusing on demographic, geographic, lifestyle choices, tastes and values, personality traits, consumption patterns and brand loyalty.

  1. It also focus on its low cost and has a wide base of customers so all these factors together give it a competitive advantage over others in the same industry.
  2. Its competitive advantage based on three Generic Strategies can be analyzed in the following way.
  3. For example, it is easy for consumers to switch from one firm to another.
  4. By increasing the switching cost for the customers.
  5. It take care of its customers by focusing on demographic, geographic, lifestyle choices, tastes and values, personality traits, consumption patterns and brand loyalty.

Its competitive advantage based on three Generic Strategies can be analyzed in the following way: Cost Leadership Unilever compete for a wide range of customers based on price. Its products Prices are based on internal efficiency to obtain a margin that allows it to sustain its business above average profit or returns and cost to the customers. Based on this cost and return analysis that determine the price, make customers to purchase a particular product.

This strategy works well when the product or service is standardize, have generic qualities, fulfill customer needs and offer lowest price with best quality. In order to become a cost leader a business should keep an eye on the price strategy followed by its competitors and its continuous efforts to keep its prices low relative to its competitors.

Rivalry, new entrants, suppliers' power, substitute products, and buyers' power. This analysis for Unilever is as follows: Rivalry Unilever competes on the basis of its prices since the low cost products of Unilever and its broad range of products allow it to enjoy a big family of customers.

Competitive Rivalry or Competition with Unilever (Strong Force)

It is because of its diversified product line that allows it to enjoy above average profit and allow it to maintain low cost advantage over its competitors in the market. Suppliers Unilever as a Cost leader is able to absorb greater price increases before it must raise price to customers.

  • Entrants Unilever creates barriers to market entry through its continuous focus on efficiency and reducing costs and because of its economies of scale;
  • The position of a business or firm in an industry, its relative position or standing to its rivals and five forces of competition, all are related to business level strategy;
  • Similarly, the moderate level of the overall supply adds to such significant but limited influence of suppliers;
  • In addition, consumers have access to high quality of information about consumer goods, making it even easier for them to decide when transferring from Unilever to other providers.

Entrants Unilever creates barriers to market entry through its continuous focus on efficiency and reducing costs and because of its economies of scale. As Unilever deal with a wide variety of products so it also focuses on its value chain.

It identify and evaluate the ways in which it can use its resources to identify and evaluate the ways in which its resources and capabilities of workers can add value.

Unilever’s Five Forces Analysis (Porter’s Model) & Recommendations

It focuses on its primary as well as support activities to achieve this objective. We believe we are well placed to help people understand how their brand choices and small actions, when added to those of others, can make a big difference across the world. For example, Unilever's detergent brands are used in 125 billion washes a year. That is the equivalent of 14 million washes every hour. Unilever annual report, Web Differentiation Unilever is providing value to its customers through unique features and characteristics of its products.

This is done through high quality, features, high customer service, rapid product innovation, advanced technological features, image management, etc Unilever Creates Value by: Lowering Buyers' Costs with Higher quality and quicker response to problems. Rivalry Brand loyalty is the strongest point for Unilever to have its competitive advantage.

Focus Unilever focus more on the demographic features of population, it targets all age groups and offer a wide variety of products to the people of all ages. It also focus on the emerging markets like a few years ago it started to focus more on India because its an emerging market. Apart from that its wide variety of products more and its attention to its value chain make it capture a big market share.

  1. This section of the Five Forces analysis presents the influence of suppliers on companies.
  2. This section of the Five Forces analysis presents the influence of suppliers on companies.
  3. Managers at Unilever PLC can not only use Porter Five Forces to develop a strategic position with in Personal Products industry but also can explore profitable opportunities in whole Consumer Goods sector. They can identify game changing trends early on and can swiftly respond to exploit the emerging opportunity.

It focuses on customer needs and customer satisfaction. It also focus on its low cost and has a wide base of customers so all these factors together give it a competitive advantage over others in the same industry.