UNILEVER

The Success Story of Unilever
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THE SUCCESS
STORY OF UNILEVER

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THE SUCCESS STORY OF UNILEVER

Prepared for
Mrs. Kausar Jafri
Associate Professor of English
IBA, Punjab University

Prepared by
Umaid Faisal 40
Mohsen Siraj 23
Umar Farooq 55
Hassan Kibzai 52

January 27, 2010

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HISTORY:

As one of the most successful consumer goods company ever, millions of families
used Unilever products and brands to feel good, look good and get more of live.
With huge range of food, personal care and home goods, sold around the world.
Consumers would choose a staggering 330000 products.

BEGINNING:

From the humble beginning, this is the story of earlier pioneers whose innovation
and vision lets the creation of the global company that changed the life of
consumers and employees alike. This is the story of Unilever and the two
products that started it all.

INUSTRIAL REVOLUTION:

Their journey begins late in the 19
th
century with the Industrial Revolution in full
swing, strength and replacing much of it form in the favour of industrial
improvement. A great population and increasing gap between rich and poor
created a shortage of butter.
As the result, Britain imported butter from Netherland. But Dutch capacity was
already reaching its limit. However, the strict competition between two rival
family businesses, the Yerkuns and Wentenburgs whose driving innovation.
They realize that huge demand increases production and it was the key to success.

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MARGARINE:

They invented Margarine developed and formed in 1869 under the order of
Napoleon; it was designed to be long a lasting version of butter to help soldiers
fighting in a war. Initially the Margarine did not taste very good but the rivalry
between the two families resulted in significant developments and improvements.
Innovations followed innovations, new technology like refrigeration used to
import animal fats from the US. The company went to strength to strength.
Unilever wasn't formed until 1930.
In 1900s founding companies produced products made of oils and fats,
principally soap and margarine. At the beginning of the 20
th
century their
expansion nearly outstrips the supply of raw materials. Improving the
flavour and adding vitamins that would enhance the nutritions of the
families all over the world.

At the same time, another visionary was building a business that would
quickly spread around the globe. English wholesaler William Lever had a
revolutionary idea Instead of selling soap and butter to shops in bulk,
they would cut off blocks into smaller pieces and packages Creating a
brand that was ready for consumers to use. The simple idea had created a
mass produce product that makes clearing, cleanliness and hygiene
affordable for everyone. Turned merchandising on his head. Transforming
the life of poverty stricken low class.

The William Lever idea stretch beyond sells. He realized that the
successful business needed a solid foundation if it wished to run long time.
In a society dominated by class, he had a revolutionary idea, by paying
people properly and reducing the hours and treating the employees fairly
can boast productivity. At the same time, he started pension schemes,
unemployment and sickness benefits. Work canteens and the concept of
eight hours working a day.

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He used his wealth to build Fort Sunlight for his
employees to live in and enjoy.

1910s: Tough economic conditions and the First World War make trading
difficult for everyone, so many businesses form trade associations to
protect their shared interests.

1920s: With businesses expanding fast, companies set up negotiations
intending to stop others producing the same types of products.

Lever brothers, the old name of Unilever changed into Unilever after the
merger of Lever brothers & margarine Unie in 1930 so Unilever is
created.

Unilever's first decade is no easy ride: it starts with the Great
Depression and ends with the Second World War. But while the
business rationalizes operations, it also continues to diversify.

1950s: Business booms as new technology and the European Economic
Community lead to rising standards of living in the West, while new
markets open up in emerging economies around the globe
.
1970s: Hard economic conditions and high inflation make the 70s a tough
time for everyone, but things are particularly difficult in the fast-moving
consumer goods (FMCG) sector as the big retailers start to flex their
muscles.

1980s: Unilever is now one of the world's biggest companies, but takes
the decision to focus its portfolio, and rationalize its businesses to focus
on core products and brands.

1990s: The business expands into Central and Eastern Europe and further
sharpens its focus on fewer product categories, leading to the sale or
withdrawal of two-thirds of its brands.

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The 21st century the decade starts with the launch of
Path to Growth, a five-year strategic plan, and in 2004
further sharpens its focus on the needs of 21st century consumers with its
Vitality mission. .

2009: Unilever announces its new corporate vision working to create a
better future every day with brands that help people look good, feel good
and get more out of life. It is the sense of social responsibility that
ingredient in Unilever success to this day.

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THE SCIENCE BEHIND SUCCESS:

INTRODUCTION TO UNILEVER:
On any given day, two billion people use Unilever products. From feeding your
family to keeping your home clean and fresh, Unilever brands are part of
everyday life. With 400 brands spanning 14 categories of home, personal care and
foods products, no other company touches so many people's lives in so many
different ways.
UNILEVER AT A GLANCE:
People:
163, 000 Employees at the end of 2009.
Nationalities:
20 Nationalities among our top tier managers.
Contributions:
89m invested in community programmes worldwide in 2009.
Countries:
170 countries in which Unilever products are sold.
R&D:
891m spent on R&D worldwide in 2009.

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VISION STATEMENT:

Our mission to develop brands that help people look good, feel good and get
more out of life is founded on the expertise of our scientists and technologists
who find innovative solutions to current and future consumer needs, and deliver
these through our portfolio of branded goods.
Our track record is second to none, and our philosophy of using leading-edge
R&D to drive world-class innovation can be seen at every stage in our history,
from the development of vitamin-enriched margarine during the depression of the
1930s to the launch last year of toothpaste containing optical-effect technology
which instantly makes teeth appear whiter.
By helping improve people's diets and daily lives, we can help them keep
healthier for longer, look good and give their children the best start in life.
We also believe that the very business of conducting business in a responsible
way has a positive social impact. We create and share wealth, invest in local
economies and develop people's skills both inside our organization and in the
communities around us.

RESEARCH AND DEVELOPMENT:

Consumer research plays a vital role in brands'
development. They constantly developing new
products and developing tried and tested brands

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to meet changing tastes, lifestyles and expectations. And strong
roots in local markets also mean it can respond to consumers at
a local level. Unilever is recognized as a world leader in R&D, both in terms of
innovation (new products and mixes) and renovation (refreshing existing
products).
A strong R&D reputation:
We typically file between 250 and 350 new patent applications a year and our
portfolio contains more than 20 000 patents and patent applications. By focusing
our efforts in global and regional centres, with small implementation teams in the
countries and factories, we make the best use of resources and bring bigger
innovations to market more swiftly than ever before.
Areas of Innovation:
Innovation is the engine of Unilevers growth; the
lifeblood of business. Our future depends on our
ability to bring bigger & better innovations to market
more quickly than our competitors.

In a fast changing market, the importance of innovation is
only going to grow. Research and Development (R&D) plays a key role in
delivering proprietary breakthrough innovations. At Unilever, R&D is treated as
an investment aligned closely with their overall business strategy.

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LOGO:
We help people feel good, look good and get more out of life
with brands and services that are good for
them and good for others. Our identity
expresses Unilever's core values, with
each icon representing an aspect of the
business.
ICONS EXPLAINED:

Sun
Our primary natural
resource, the sun evokes
Unilever's origins in Port
Sunlight and can
represent a number of our
brands. Flora, Slim Fast
and Omo all use radiance
to communicate their
benefits.

Hand
A symbol of sensitivity,
care and need. It
represents both skin and
touch.
Flower
Represents fragrance.
When seen with the hand,
it represents moisturisers
or cream.

Bee
Represents creation,
pollination, hard work
and bio-diversity. Bees
symbolise both

DNA
The double helix, the
genetic blueprint of life
and a symbol of bio-
science. It is the key to a

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environmental challenges
and opportunities.
healthy life. The sun is
the biggest ingredient of
life, and DNA the
smallest.

Hair
A symbol of beauty and
looking good. Placed next
to the flower it evokes
cleanliness and fragrance;
placed near the hand it
suggests softness.

Palm tree
A nurtured resource. It
produces palm oil as well
as many fruits coconuts
and dates and also
symbolises paradise.

Sauces or spreads
Represents mixing or
stirring. It suggests
blending in flavours and
adding taste.

Bowl
A bowl of delicious-
smelling food. It can also
represent a ready meal,
hot drink or soup.

Spoon
A symbol of nutrition,
tasting and cooking.

Spice & flavours
Represents chilli or fresh
ingredients.

Fish
Represents food, sea or
fresh water.

Sparkle
Clean, healthy and
sparkling with energy.

Bird
A symbol of freedom. It
suggests a relief from

Tea
A plant or an extract of
a plant, such as tea. Also

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daily chores, and getting
more out of life.
a symbol of growing and
farming.

Lips
Represent beauty, looking
good and taste.

Ice cream
A treat, pleasure and
enjoyment.

Recycle
Part of our commitment
to sustainability.

Particles
A reference to science,
bubbles and fizz.

Frozen
The plant is a symbol of
freshness, the snowflake
represents freezing. A
transformational symbol.

Container
Symbolises packaging - a
pot of cream associated
with personal care.

Heart
A symbol of love, care
and health.

Clothes
Represent fresh laundry
and looking good.

Wave
Symbolises cleanliness,
freshness and vigour.

Liquid
A reference to clean
water and purity

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SLOGAN:

FEEL GOOD, LOOK GOOD
AND GET MORE OUT OF LIFE

FOOD BRANDS:
Unilever is one of the world's leading food companies. Our passion for
understanding what people want and need from their food - and what they love
about it - makes our brands a popular choice.

1. Badami:
"Badami" is Walls response to the traditional kulfi.

2. Blue Band
Blue Band is essential for a familys healthy growth and
development and to enjoy a lifestyle full of vitality.

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3. Brooke Bond A1:
Brook Bond A1 is the strong cup of tea that gives the strength
to face challenges and stand up for what you believe in.

4. Brooke Bond Supreme:
Brooke Bond Supreme is part of life for the Pakistani
consumer, bringing families closer together with its rich taste
and traditions

5. Cornetto:
The Cornetto experience consists of a delicious, crispy-baked
wafer, coated inside from top to bottom with a chocolate
Layer, rich ice cream inside, topped off with sauce and chocolate chips.

6. Energile:
Bringing Vitality to your life.

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7. Flora:
Flora margarine spread is an important source of good fats
which help keep your heart healthy.

8. Knorr:
Knorr believes in adding magic to every day meal
moments.

9. Lipton:
Lipton is Tea Tea is Lipton.

10. Magnum:
Celebrate pleasure with the tempting Magnum range an
irresistible combination of thick, cracking chocolate with
creamy vanilla ice cream.

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11. Pearl Dust :
Lipton Pearl Dust is the Sindhi soul that imbues intimacy
and warmth in a couples relationship

12. Rafhan:
From the highly nutritious and healthy Corn Oil to the lip
smacking Desserts Rafhan today offers a complete meal package with the
cherry on top!

13. Wall's Desserts
At Walls, we like to think we have one of the best jobs in the
whole world; making delicious frozen dessert treats for the
whole family.

PERSONAL CARE BRANDS:
Unilever personal care brands, including Dove, Lifebuoy, Lux, Pond's, Rexona
and Sunsilk, are recognized and respected around the world. They help consumers
to look good and feel good and in turn get more out of life.

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14. Clear
Clear spells confidence for the young Pakistanis of today.

15. Close Up
Our mouths are our gateway to life. We use them to eat, drink,
talk, laugh, smile and what not!

16. Fair & Lovely
Asias leading fairness brand.

17. Lifebuoy shampoo
Providing healthy hair to all Pakistani consumers.

18. Lifebuoy soap
Lifebuoy's goal is to provide affordable and accessible
hygiene and health solutions.

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19. Lux
Lux brings out the star in you!

20. Pond's
Making a real difference to women's skin and the way
they live their lives.

21. Rexona
With Rexona you know your deodorant wont let you down.

22. Sunsilk
Sunsilk provides real solutions to women's everyday hair
needs everywhere.

HOME CARE BRANDS:
In many parts of the world we lead the home care market, with brands such as
Omo, Surf, Comfort and Cif. It's more than just hygiene with homes and clothes
that are clean and cared for, we help you get more out of life

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.
23. Comfort
Comfort was launched in Pakistan in July 2007 and is
available in 3 variants: Comfort Floral Pink, Comfort Classic
Blue and Comfort Pure White.

24. Rin
Consumer insight shows that one of the leading drivers that
indicate a good wash is the level of whiteness and brightness
that clothes have after the use of a detergent powder. Rin is formulated to offer
whiteness and bring back life in your everyday clothes.

25. Surf excel
Remember when you were a child? How you were free to
explore, returning home covered in dirt and other stains that you wore like the
badges of an intrepid discoverer?
HEALTH, HYGIENE & BEAUTY:

Unilever aims to help people feel good, look good and get more out of life. At the heart
of this mission is hygiene - and health through hygiene.

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UNILEVER LEGAL STRUCTURE:

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DIRECT COMPETITOR COMPARISON:

UL KFT NSRGY.PK PG Industry
Market Cap: 85.00B 54.74B 183.22B 183.43B 671.92M
Employees: 163,000 97,000 278,000 127,000 3.00K
Qtrly Rev Growth (yoy): 13.20% 26.20% 5.60% 1.60% 9.90%
Revenue (ttm): 57.71B 47.66B 107.21B 79.25B 924.07M
Gross Margin (ttm): 52.25% 37.17% 57.57% 51.79% 26.19%
EBITDA (ttm): 8.70B 7.90B 17.32B 19.10B 87.70M
Operating Margin (ttm): 12.98% 13.87% 13.42% 20.28% 6.06%
Net Income (ttm): 5.52B 2.80B 8.75B 10.78B N/A
EPS (ttm): 1.90 2.59 3.22 4.06 0.86
P/E (ttm): 15.88 12.11 16.73 16.12 14.35
PEG (5 yr expected): 1.96 1.84 2.81 1.88 1.57
P/S (ttm): 1.47 1.15 1.71 2.31 0.71

KFT = Kraft Foods Inc.
NSRGY.PK = Nestl
PG = Procter & Gamble Co.
Industry = Food - Major Diversified

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FINANCIAL STATEMENTS:
Consolidated
income statement

million
2009

million
2008

million
2007

million
2006

million
2005
Continuing
operations:

Turnover 39,823 40,523 40,187 39,642 38,401

Operating profit
5,020 7,167 5,245 5,408 5,074

Net finance costs
(593) (257) (252) (721) (613)
Income from non-
current investments
489 219 191 144 55

Profit before
taxation
4,916 7,129 5,184 4,831 4,516
Taxation (1,257) (1,844) (1,128) (1,146) (1,181)

Net profit from
continuing
operations
3,659 5,285 4,056 3,685 3,335
Net profit from
discontinued
operations
80 1,330 640

Net profit
3,659 5,285 4,136 5,015 3,975
Attributable to:
Minority interests 289 258 248 270 209
Shareholders
equity
3,370 5,027 3,888 4,745 3,766

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Combined earnings per share
(a)

2009

2008

2007

2006

2005
Continuing operations:
Basic earnings per share 1.21 1.79 1.32 1.19 1.07
Diluted earnings per share 1.17 1.73 1.28 1.15 1.04
Total operations:
Basic earnings per share 1.21 1.79 1.35 1.65 1.29
Diluted earnings per share 1.17 1.73 1.31 1.60 1.25
Consolidated balance sheet

million
2009

million
2008

million
2007

million
2006

million
2005
Non-current assets 26,205 24,967 27,374 27,571 28,358
Current assets 10,811 11,175 9,928 9,501 11,142

Total assets
37,016 36,142 37,302 37,072 39,500
Current liabilities (11,599) (13,800) (13,559) (13,884) (15,394)

Total assets less current
liabilities
25,417 22,342 23,743 23,188 24,106

Non-current liabilities
12,881 11,970 10,924 11,516 15,341

Shareholders equity
12,065 9,948 12,387 11,230 8,361
Minority interests 471 424 432 442 404

Total equity
12,536 10,372 12,819 11,672 8,765

Total capital employed
25,417 22,342 23,743 23,188 24,106

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Consolidated cash
flow statement

million
2009

million
2008

million
2007

million
2006

million
2005
Net cash flow from
operating activities
5,774 3,871 3,876 4,511 4,353
Net cash flow
from/(used in)
investing activities
(1,263) 1,415 (623) 1,155 515
Net cash flow
from/(used in)
financing activities
(4,301) (3,130) (3,009) (6,572) (4,821)

Net
increase/(decrease)
in cash and cash
equivalents
210 2,156 244 (906) 47
Cash and cash
equivalents at the
beginning of the
year
2,360 901 710 1,265 1,406
Effect of foreign
exchange rates
(173) (697) (53) 351 (188)

Cash and cash
equivalents at the
end of the year
2,397 2,360 901 710 1,265

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BCG MATRIX:

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STARS:

High growth rate & high market share
Lux
Sunsilk
Walls
Fair & lovely
Rafhan
Energile

CASH COWS:

Low growth rate & high market share
Surf excel
Ponds
Lipton
Close up
Blue band
Lifebuoy soap
Rexona
Knorr

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DOGS:

Low growth rate & low market share
Wheel
Supreme tea
Lifebuoy shampoo

QUESTION MARKS:

High growth rate & low market share

Clear shampoo

Rin

Comfort

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STRENGTHS:

Strong company image
Strong brand portfolio
Success of the slogan
Quantity & variety
Effective & attractive packaging
High quality man power
Solid base of the company
Innovative aspects
Corporate behaviour
Health & personal care products
Help people getting more out of life

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WEAKNESSES:

High prices of products
Substitutes products
Policy of spending for the social responsibility
Lack of control in the market
Dual leadership
Decrease in revenues
Reduced spending for research & development

OPPORTUNITIES:

Changing life style of people
New markets
Increase the volume of production
Focus on R&D
Low income consumers
Help in improving people diet & daily lives
AXE
IGLO

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THREATS:

Competitors(P&G,)
Political effects
Legislative effect
Environmental effect
Economic crises
Obstacle faced

Change in life style of people
Chance for price war
Increase in production & labour cost

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COMPETITIVE STRATEGY:

1. Reorganize organizational structure to focus on needs and wants of consumers &
brand management.
2. Implement Unilever believers, product & brand extensions, use advertisement
that connects with consumer needs & increase consumer focus on health &
nutrition products.

BOARD OF DIRECTORS:

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CONCLUSION:

Unilever's corporate vision helping people to look good, feel good and get more
out of life shows how clearly the business understands 21st century-consumers
and their lives.
The archivists are responsible for the collection and management of Unilevers
archives which span several centuries. There are minute books, financial records,
a wealth of advertising and examples of packaging.
The desire to be clean, active, energetic and healthy is common to every person,
whether young or old, whether rich or poor. To billions in the developing world,
health is simply the absence of illness. For them, health is the ability to go to
work, to provide a square meal for their families. For their children, health is the
ability to play, to go to school, to work towards a better future. For the affluent,
health is more than just physical well being. For them the signs of good health
being active, energetic, feeling good, looking good allow them to get the most
out of life. Yet for the millions of mothers who lose their children to diarrhoea
and upper respiratory infections, health is simply about staying alive.
The 21st century started with the launch of Path to Growth a strategy to
transform the business, leading to more acquisitions and the rationalisation of
manufacturing and production sites to form centres of excellence. This was
followed by the One Unilever programme, aligning the organization behind a
single strategy, simplifying the business and leveraging the scale more effectively.
As the end of the 2000s draw to a close, the whole world is experiencing
unprecedented economic uncertainty. Unilever was born at the time of the Great
Depression of the 1930s and has had to deal with many economic and financial
crises since. Being able to respond quickly to rapidly changing market conditions
will ensure it emerges from the recession stronger than ever.

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As the analysis show that the diversity of products, Leadership,
Socially responsible, Research and Development, Innovation,
Vision, Legal structure, Financial records are the factors of success.

UNILEVER

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The Success Story of Unilever

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