Unilever

MANAGEMENT SOURCE : UNILEVER.COM, 2009

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

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

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 1957, acquired Bird’s Eye

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 - 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]

Confusion – of accountability and responsibility

Conflicting priorities in the special committee

Decision making became constipated

Structural detritus , accumulated over decades

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

Unilever

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