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UNILEVERA TROUBLED GIANT
SOURCE : UNILEVER.COM, 2009
MANAGEMENT SOURCE : UNILEVER.COM, 2009
SOURCE : UNILEVER.COM, 2009
SOURCE : UNILEVER.COM
SOURCE : UNILEVER.COM
BACKGROUND NOTE
UNIE ,[object Object],     had ventured into the margarine business ,[object Object],     companies, Margarine Unie NV, based in the        Netherlands and Margarine Union Ltd, based in the UK STRATEGY  :  GROWTH TOOL  :  MERGER
LEVER ,[object Object]
 By 1887, introduced ‘SUNLIGHT’, the world’s 1st packaged laundry      soap ,[object Object]
 He expanded his business from UK to Australia, North America        and other parts of Europe ,[object Object],     BROTHERS LTD, by 1894, they went PUBLIC ,[object Object]
 Launched its innovative product , VIMSTRATEGY  :  GROWTH TOOL  :  ACQUISITION
UNIE LEVER Unilever GROUP
UNILEVER  PLC UNILEVER  N.V. B.O.D. B.O.D.
PROBLEMS WITH THE STRUCTURE ,[object Object]
 Incapable of striking a balance between British and Dutch      interests ,[object Object],     two holding companies ,[object Object],[object Object]
 In 1944, acquired Pepsodent
 In 1957, acquired Bird’s Eye
 In 1961, acquired Good Humor
 In 1978, acquired National Starch and Chemical      Corporation STRATEGY  :  rigorous GROWTH TOOLS  :  integration ( fwd & back) 	   acquisition 	   Diversification ( related & unrelated)
ORGANIZATIONAL STRUCTURE (1930 to 1979) ,[object Object],    decentralized control ,[object Object],    above the two boards of directors of the company ,[object Object],[object Object]
PROBLEM WITH THE STRUCTURE Concept of strategically independent units led to high cost structure from duplication of manufacturing facilities at various locations
1980 to 1995“the sleeping giant” ,[object Object]
 Product divisions established to co-ordinate regional operations
 Focus on the following four industries, as a part of core strategy       – Foods, Personal Care, Home Care and Specialty Chemicals,         divesting from all other businesses ,[object Object],     during 1995 alone the company acquired 38 companies ,[object Object],STRATEGY  :  FOCUSED GROWTH TOOLS  :  DIVESTMENT 	   ACQUISITION
List of acquisitions ,[object Object]
 1986 - NAARDEN                  INTERNATIONAL ,[object Object],                 POND’S ,[object Object]
 1989 - ELIZABETH ARDEN
 1989 - CALVIN KLEIN’S                 FRAGRANCE  BUSINESS ,[object Object]
 1993 - EMPIRE OF                  CAROLINA INC. ,[object Object],                 KRAFT GENERAL                     FOODS UNIT List of Divestments ,[object Object],                & ANCILLARY BUSINESS  ,[object Object],                COMPANY ,[object Object],                 OTHER AGRICULTURAL                         PRODUCTS ,[object Object],                 PROFESSIONAL                          CLEANING PRODUCTS
BEFORE after BUSINESSES BUSINESSES FOOD HC PC SC
PROBLEMS WITH THE STRUCTURE ,[object Object],     the company became inflexible to adapt to the market dynamism ,[object Object]
 Organizational fatigue
 Excess of bureaucracy
 Confusion – of accountability and responsibility
 Conflicting priorities in the special committee
 Decision making became constipated
 Structural detritus , accumulated over decades
 Absolute chaotic condition
 Extra levels of complexity were imposed on an already convoluted      structure
1996 TO 1999breakthrough restructuring ,[object Object],     Unilever got dissolved , to give way to a 7- Member Executive       committee ,[object Object],     Irishman) not carrying a British or a Dutch passport ,[object Object],     wide business   coordinators and the network of Regional       Directors were swept away to form a single team of 14 business       Presidents ,[object Object],     geographical regions ,[object Object],[object Object]
 Introduction to the new management      incentive system (Variable Pay) STRATEGY  :  SUSTAINABILITY TOOL  :  restructuring
ACQUISITIONS ,[object Object],    PRODUCTS ,[object Object],     SANITIZER ,[object Object],     COMPANY DIVESTMENTS ,[object Object],    FRANCHISEE ,[object Object]
 1998- PLANT BREEDING INTERNATIONAL CAMBRIDGE LTD.,[object Object]
PROBLEMS WITH THE STRUCTURE ,[object Object],     June 1999 shrank to £ 20 Billion by January 2000 (Stock prices       Plunged) ,[object Object],     Brands) ,[object Object],     frequent restructuring over the years ,[object Object]
 There was no Fit between the company’s organizational structure and      its strategies (Persil Power shook the giant to its foundations) ,[object Object],    needs a crisis to convince it of the necessity for fundamental change,      and that for Unilever this situation had already arrived long ago
2000 TO 2004PATH TO GROWTH STRATEGY ,[object Object],     Year Growth Strategy ,[object Object]
 Laying off over 25, 000 employees ( ~ 10% of the employee      base) ,[object Object],     Home & Personal Care (HPC), headed by two executive          Directors separately ,[object Object],     Regional Groups ,[object Object]
 Unilever Shut down more than 100 manufacturing units for     cost reduction
… ,[object Object],     blood ,[object Object],     on leading brands) ,[object Object],     Core” ,[object Object],     categories but outside their scope STRATEGY  :  CONSOLIDATION TOOL  :  restructuring
 UNILEVER- REGIONAL GROUPS SOURCE: WWW.UNILEVER.COM, 2009
ACQUISITIONS ,[object Object]

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