A company that was founded in 1930 during the merger between Margarine Unie, a Dutch company and Lever Brothers, a British based soap and detergent company. Before the merger both the company were buying raw materials from same suppliers and similar distribution channels. Both the companies were promoting and marketing their household products. After the founding of UNILEVER, it went on acquiring and merging companies and increasing their food and household product range. During the mid 1970s half or more of the profits of the company came from its west African plantations which produced bulk vegetable oils for margarine and washing powders. At regular intervals, the top officials / executives took the initiative to introduced new strategy to give company the much needed focus on marketing its food, household and personal care products. Before the launch of the Path to Growth strategy, the company had 1600 brands altogether and accounted for a total sales of 41.2 billion Euros in 99 with strong operations in 88 countries. Analysts regarded Unilever as a company wherein individuals join the company during or immediately after their college and leave when they have crossed their age for retirement. It was a cradle to grave company.
Tags: Unilever path to growth, Unilever business strategy, Unilever-dove strategy, Business strategy of Unilever, business objectives for dove/ Unilever, Unilever growth strategy
[...] Patrick Cescau said that since the launch of Path to growth strategy, they have made growth as their number one priority. Because he believes that growth is the very most important thing for success and sustainability of any business. Throughout the 1980's and 1990's, Unilever's growth was mere in volume. Hence the path to growth strategy was launched in order to achieve and sustain the required growth rate. Patrick Cescau believes that the five year term plan strategy achieved most of the many things that were listed in its objective sheet. [...]
[...] During Path To Growth Strategy: Inspite of receiving doubts and criticism from analyst, Unilever's two co- chairman went ahead with the plans to put Path to Growth Strategy in action. In the following twelve months of Launching Path to Growth Strategy. Unilever: - Made twenty new acquisitions. Bought some of the best businesses like Best Foods, Slim Fast and Ben & Jerrys Ice Cream. - Reduce the company's Brand Portfolio of 1600 Brands to 970 brands. Company cut loose some brand that were declining in sales and few that were not appropriate for company's future strategy. [...]
[...] AIM OF THE PATH TO GROWTH STRATEGY: 1. Sizing down the brand portfolio of 1600 brands to 400-500 popular and powerful brands Slicing down lesser known and profit margin brands and focusing their key attention on leading brands with higher profit margins Focusing company's more resources on Research and Developments and promoting ‘power' brands To increase sales and growth of the company bringing innovation to their products and acquiring new companies and brands Realizing the goal of bringing atleast 5-6 percent growth in sales annually and achieving 16 percent growth in operating profit margins by the end of Better position in the market as compared to its competitors like Nestle, Procter & Gamble, Kraft, Group Danone, Campbell Soup and General Mills Bringing double digit earnings per share by the end of The aim to focus on advertising and promoting higher selling and margin brands was to increase their pricing power with supermarket retailers Increasing the savings to a target of 3.9 billion Euros by the end of the five year term plan. [...]
[...] Four Alternative Strategy against Unilever's Path to Growth Strategy Unilever's key element of Path to Growth Strategy were: 10. Sizing down the brand portfolio of 1600 brands to 400-500 popular and powerful brands Slicing down lesser known and profit margin brands and focusing their key attention on leading brands with higher profit margins To increase sales and growth of the company bringing innovation to their products and acquiring new companies and brands The company will also have to cut its workforce by 10% which means at least 25000 employees will be losing their jobs The five year plan of the strategy would cost approximately 5 billion Euros and shutting down and selling of 100 factories. [...]
[...] (Annual Reports, 2005) Current Strategic position of the company and comparing it with the Path to Growth Strategy: Key Financials (unaudited) Second Quarter 2009 Turnover Million) 10458 Operating Profit Million) 1320 Operating Profit Before RDIs* 1523 Million) Net Profit Million) 833 Net Profit Before RDIs* 997 Million) Earnings per Share 0.27 Earnings per share before RDIs* 0.33 Source: Adopted from Web 4. The company today has a brand portfolio of 400 brands across 14 categories of home, personal care and food products. [...]
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