SWOT Analysis of Unilever 2020


Name Unilever
Industry Consumer goods FMCG (Fast Moving Consumer Goods)
Founded 1929
HeadquartersRotterdam, the Netherlands London, the United Kingdom. 
CEO Alan Jope
Revenue $58.22 billion (2019)
CompetitorsP & G, Kimberley Clark, Henkel, L’oreal, Colgate-Palmolive, Nestle


Unilever is an Anglo-Dutch firm resulting from merging Margarine Unie, a Dutch company, with Lever Brothers, a British corporation. Founded in 1930, it now owns more than 400 brands across different industries, including food, household cleaning, personal care, and many more. Unilever is co-headquartered in London, the UK, and Rotterdam, the Netherlands. With more than 150,000 employees, the giant is one of the largest consumer goods companies in the world and it is the 7th most valuable company in the world (Unilever, 2020). Some of its most popular brands include Ben & Jerry, Lipton, Knorr, Vaseline, Dove, Persil, Domestos, Heinz, and many more. 

Unilever Strengths 2020:

  • One of the largest global companies.

    Unilever is present in more than 190 countries and it is perhaps impossible to find a consumer who hasn’t bought one of their products. In addition to this, it is also one of the largest companies to date; all of this expertise helps it retain its market share (Unilever, 2020).

     
  • More than 400 brands.

    The company is unique due to its hugely diversified portfolio of brands and products across numerous markets. The top 13 brands account for more than €1 billion in revenues as of 2016. More than half of the company’s growth was delivered by Dove, Knorr, and Lifebuoy, brands that aim to improve the environmental and social impact. 

  • Solid financial performance and strategies.

    In 2019, Unilever’s revenues reached €52 billion. Nearly €22 billion was generated by personal care and beauty brands, while more than €19 billion came from refreshments and foods (Unilever, 2020). Shahbandeh (2019) reports that Dove, for instance, was the leading brand for deodorants in the US and generated more than $203 million. 

  • Heavy investments and research.

    Given the strong financial position, it is undoubtedly one of the main companies with leading development initiatives. Their brands continuously develop new product ranges, ensuring that they remain up-to-date with consumer trends. 

  • Great diversity hedges against the COVID-19 crisis.

    Given the wide range of consumer products that include more than 400 brands, Unilever has both product and regional diversity that minimizes its exposure to the pandemic considerably (Wood, 2020). 



Unilever Weaknesses 2020:

  • High threat of substitution.

    Many products commercialized by Unilever can be easily imitated or substituted. This can be a major issue especially in the regions with cheap labor and raw materials, such as Asia and Africa. 

  • Shifting towards natural products.

    Most people replace Unilever’s products with natural and/or traditional alternatives. Given the consumer shift towards home-made, hand-made, or all-natural products, the threat remains in the Western world, but also in cheaper countries.

     
  • Highly dependent on retailers.

    Unilever’s performance and even brand reputation directly depend on retailers’ performance.

  • The recent coronavirus pandemic led to a decrease in income, especially for lower-income people (Parker, Minkin, and Bennett, 2020). This can make numerous consumers buy much cheaper substitutes in order to cope with the new economic realities. 

Unilever Opportunities:

  • Expansion.

    Unilever is one of the largest companies in the world, so it has the opportunity to expand its operations beyond consumer goods. The company can use its financial strengths to employ diversification strategies that could perhaps low the threat of substitution. 

  • Tapping into emerging countries.

    On one hand, the globalization process and global media led to the promotion of the Western lifestyle in Asia. This means that Unilever could use this advantage in order to position itself as a successful brand that helps locals to join the Westerners. On the other hand, India and China now have the so-called “newly affluent trillion-dollar consumers”, providing a golden chance for the company to leverage this consumer base who is well-known for trying to mimic the consumerism in the West. 

  • There is a strong trend toward healthy products and sustainability.

    Unilever can take advantage of this opportunity in order to create new products that address the needs of the Millennial generation, allowing them to expand globally even more. 

  • Using financial resources to invest in new technologies.

    Green et al. (2020) reported that they are currently working for Microbac Laboratories, partnered with Unilever, in order to create a mouthwash that can reduce the viral load of SARS-CoV-2 by 99.9%. This is a tremendous opportunity to expand its operations. 

Unilever Threats 2020:

  • Numerous global competitors.

    Companies such as Nestle, Proctor & Gamble, Mondelez International, and Colgate Palmolive put competitive pressure on the company. While this can hardly shake the company, it is worthwhile to notice that high competition has a major negative effect on pricing strategies and, in the end, profits. 

  • Global economic crisis.

    Askew (2020) states that the company is preparing to cope with the new economic downturn as a result of the pandemic. The gloomy outlook is not only risky, but leaves Unilever and other companies wondering which one of the huge arrays of possible outlooks will come true, based on the duration and scale of lockdowns, the impact of restricted living, and the timeline of a possible vaccine for Sars-CoV-2. 

  • Enhanced scrutiny.

    As briefly mentioned above, the demands for sustainability, responsible sourcing, and overall corporate social responsibility are higher than ever. They teamed up with Google in order to reimagine the future of sustainable sourcing. The company has been criticized before for some of its strategic moves, and consumers keep offering harsh glares not only towards Unilever but to most international players, especially that many companies cut corners in the past. This means that Unilever needs to focus on sustainability as a core part of its strategy to avoid brand damage that could make consumers turn to other firms. 

Unilever SWOT Analysis Conclusion:

All in all, Unilever is a global player that has tremendous opportunities and strengths. These can be used to mitigate some of its risks, but it is extremely important to consider the developing consumer trends, the needs of the millennials, and the focus on sustainability.

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References:

Unilever (2000). About Unilever.

Unilever (2020a). Full-year growth led by emerging markets and Home Care.

Unilever (2020b). Half-year results reflect Unilever’s agility and resilience.






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