SWOT analysis is a strategic planning framework that business managers can use to analyze the company’s situation successfully.
Using the Unilever SWOT analysis framework, they may identify their internal strategic factors, such as strengths and weaknesses, and their external strategic elements, such as opportunities and threats.
Only by continually examining the SWOT analysis of Unilever and enhancing itself does Unilever Inc. continue to project a threatening presence in the corporate world. Therefore, this organization will benefit significantly from a Unilever SWOT analysis.
SWOT analysis of Unilever
Strengths of Unilever
Unilever Inc. possesses many advantages that will enable it to succeed in its primary industry. Focusing on these advantages will be aided by a Unilever SWOT analysis.
1. Global presence
A multinational company with a presence all over the world is Unilever. It is active in 190 different nations worldwide. It, therefore, has a substantial global footprint. This increases its public recognition and promotes its publicity.
As a result, it can apply its global thinking through local implementation.
This indicates that it can work toward its universal objectives and continue to win over customers. Nearly one-third of the world’s population, or about 2.5 billion people, consume Unilever products daily. Email marketing to grow your business helps in boosting sales.
2. Sales economy
As demonstrated by Unilever’s marketing mix, economies of scale promote production efficiency required for competitive price tactics. The company has grown its market presence via years of international expansion, a strength supporting the appeal of the brand.
3. Effective brand portfolio
Unilever has a strong brand portfolio and now owns more than 400 brands. In 2017, it brought in a total of 53.7 billion euros. The most astounding aspect is that only 13 of these brands generate more than one billion euros.
Their efficient digital marketing has given excellent results. Axe/Lynx, Dove, Omo, Heartbrand ice cream, Hellman’s, Knorr, Lipton, Lux, Magnum, Marmite, Rexona/Degree, Sunsilk, Surf, Glow, and Lovely are a few of the well-known brands.
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4. Leading industry
Unilever is among the top ten manufacturers of goods for customers. The three main divisions of Unilever are food and refreshments, home care, cosmetics, and personal care products. These industries have generated 50 million euros in income over the past three years.
Weaknesses of Unilever
1. Higher technological funds
Even so, spend adequate money to improve its technical sites. Higher funds in the technology area. Given that many of its rivals are ahead of it in this area, it is still far behind. This makes it seem highly inconvenient because they lower the team’s mood.
SWOT analysis of Unilever: weaknesses
2. Channel capacity
In a typical year, Unilever could communicate with over one in three persons on the planet. Therefore, brand value and marketing initiatives wouldn’t have been an issue. The new standards, however, in these epidemic scenarios are social isolation and quarantine.
As a result, most consumers shop online.
Therefore, internet sales increased by roughly 61 percent in 2020. However, Unilever’s online presence suffers greatly. Because of this underrepresentation, only 9% of its total revenue was generated through internet sales. It is a serious flaw.
3. Developing a brand connection
The world is changing quickly. Therefore, Unilever needs to adapt its coping mechanisms immediately. It requires a change in its outdated branding and communication strategies.
Not just the messages but also the medium need to change. In this instance, social branding is significant. Unilever will pay a steep price down the road if they are keen on keeping these customs.
4. Imitable products
The imitability of Unilever’s products is one of its flaws. For instance, even if the corporation makes significant investments in its product development procedures, competing companies can copy the designs of Dove and Rexona goods.
In addition, while having a wide range of products, Unilever has negligible diversification outside the consumer goods sector.
Furthermore, given that retailers are the ones who directly influence customers, the corporation has less direct power over them.
Therefore, the weaknesses highlight the significance of diversification, innovation, and increased marketing efforts based on the internal strategic considerations in this area of the SWOT analysis of Unilever.
Opportunities of Unilever
SWOT analysis of Unilever: opportunities
New markets are developing due to the government’s decision to assist with economic growth. This has helped Unilever in broadening its already expansive corporate perspective.
Consumers in emerging markets are aspirating to western lifestyles due to globalization and the spread of global media, which presents Unilever with a huge opportunity as it capitalizes on this broad and diverse consumer base that aspires to match westerners’ taste and preferences for consumer goods.
1. Business diversification
Unilever has a large number of items to sell, but it also has a large number of new products it could introduce. Its presence is now known to people. So, the corporation will benefit from this.
Increased interest and investment in the company might result from business diversification. This will increase the profit and serve as publicity.
2. Product innovation
Product innovation is another area in which Unilever can excel. Many of the items are produced using conventional techniques. But by innovating them, the products can be made to fit the wants of contemporary consumers.
People will get more interested in the company as a result. A better sales rate will be the final outcome if marketing and advertising are done correctly.
Threats of Unilever
The most crucial component of a SWOT analysis is threats. A SWOT study of Unilever will identify the dangers to this community that has been impeding it.
Competition is rising as more new businesses are emerging in this emerging market. This makes it more competitive.
Proctor and Gamble is Unilever’s most dangerous competitor in the consumer goods industry. In 2020, this corporation outsold Unilever $10 billion. Despite the real pandemic crisis, this company’s revenue increased by 4.8 percent.
On the other hand, Unilever reported a decrease in its revenue of 2.4 percent.
SWOT analysis of Unilever: threats
1. Impact of pandemic
A pandemic is now underway. One of the top businesses in the consumer products sector is Unilever. Although the epidemic hasn’t significantly influenced sales, the severity of the problem hasn’t diminished in any way.
This epidemic has impacted the manufacturing, distributing, and purchasing of Unilever products. Unilever’s business strategies have undergone significant modifications as a result, which is worth mentioning in the SWOT analysis of Unilever.
2. Fluctuations in currency
Due to the massive health catastrophe the world is currently experiencing, everyone is confined to their homes, and all activity has ceased. This brings on these changes in currency. Currency fluctuation typically indicates that a country’s currency has lost some initial value and is now worth less in another currency.
Currency changes have been prompted by the pandemic in China, Argentina, Brazil, India, and many other nations. The turnovers for 2020 have decreased by 2.4% as a result of this.
3. Enhanced competition
The arrival of Asian multinational corporations into the global arena has increased the stakes in the worldwide competition for dominance in the FMCG market segment and upped the ante for Unilever.
This means that Unilever may have to fight off the effects of the current economic downturn and brand-new competition from Asian giants that are expanding abroad.
4. Regulations by government
If the government does not follow its profit-based goal, the rules and regulations it imposes could seriously threaten Unilever. Plastic packaging is used in many Unilever products; thus, the threat is real.
If the business follows its “zero tolerance against plastic” tenet, the government can simply sue it.
The administration has also expressed concern over the low rates of afforestation and high deforestation rates. One may immediately identify the threat because Unilever is to blame for a significant portion of these trees being down.
SWOT analysis of Unilever: thoughts and suggestions
Now that we are finishing up the SWOT analysis of Unilever, here are some tips from industry professionals for Unilever to up their market strategy:
- Enhancing the company’s employees’ health and safety.
- Improvement of the populace by a wide margin.
- Lessening the impact on the environment by 2030
- Encourage your staff to be inventive.
- Achieving the team’s objectives will boost morale.
Managers must take into account several internal and external strategic elements in developing their strategies, as highlighted by this SWOT analysis of Unilever.
For instance, because they affect corporate stability and performance, the disadvantages of inadequate business diversification and the imitability of products are significant.
In this regard, it is suggested that Unilever diversify its business by purchasing similar companies that are not in the consumer goods sector. Additionally, Unilever must view product innovation as a chance to improve operational performance.
It is advised that the business utilize its advantages, such as economies of scale, for product innovation to combat imitation and competition.
SWOT analysis of Unilever: conclusion
In conclusion, it can be argued that Unilever’s main strengths are its consistent profit line and its global presence. Its excessive reliance on retailers would be considered its worst flaw.
Despite how small it may seem, carrying this burden is quite tricky. Unilever benefits in numerous ways from a SWOT analysis. It would theoretically enable the executive directors to dissect and evaluate the company’s current strategic approach.
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