3. E-Business Strategy

In order to further enhance on the value of its products to consumers, Unilever has adopted an e-business strategy that seeks to make use of the internet as well as the information technology. The e-business strategy mainly focuses on cost reduction and enhancement of efficiency while dealing with supply and distribution networks. Consumers can order and purchase their preferred product brands online, thus eliminating the additional costs of distribution that comes with physical distribution networks. The company also targets to reach a wider market through its online marketing and advertisement campaigns. The e-business strategy has also seen Unilever become a member of Transora, which is a B2B marketplace that comprises of numerous other companies (Loudon 45). Transora offers a data pool combined with solutions together with services which are cost-effective in supporting user needs as well as helping the industry to optimize on data synchronization value. This has helped consumers achieve high convenience in their acquisition and use of Unilever range of products.

Procter & Gamble has equally initiated an e-business strategy that is slightly different in focus to that of Unilever. P&G does not sell its products directly on the internet although it fully utilizes the internet to manage its supply chain efficiently. The company also uses the internet to internally share results of its R&D strategy, transportation, retail partner’s logistics, customer information, feedback mechanism, as well as video conferencing and billing and payment. All these factors significantly help in the company’s quest to lower its overall cost of operations and basically pass the benefits to its consumers (Kalakota & Robinson, 23).

Proposals on Improvement of Unilever Value Chain

Unilever is a huge global company whose operations have been grouped into very large divisions. Each of the three divisions of the company manufactures quite a range of products with related market usage. However, some range of products has not been profitable to the company and their continued existence only tends to increases operation costs of the company. This reduces the impact of the value addition efforts that the company pursues throughout in its strategy. Such products whose market value and performance are generally weak should be discontinued and instead the company needs to focus more of its attention on products with higher return value.

The company also needs to pursue mergers and acquisitions as a perfect way of attaining sustainable market growth and development. This strategy is more beneficial particularly because it cushions against the effects of exchange rate fluctuations and ensures higher probability chances of gaining access into more conservative global markets, such as China and India. Unilever also needs to increase its R&D activity in order to match those of its fiercest rivals, such as Procter and Gamble. This will lead to higher innovations, which will in turn increase product quality, and thus enhance the competitive position of the firm. The widened product portfolio is affecting Unilever’s overall value chain. Only about 20 per cent of its products produce 80 per cent of its total revenues while the bulk of its products, representing 80 per cent, are less productive. Thus, the is need for the company to further reduce on its product portfolio

Conclusion

Value chain refers to the series of value adding activities which companies subject their finished products and services as they seek to build competitive market advantages over their competitors. The Unilever particularly focuses on three main strategies as it seeks to build this competitive market position. These strategies include research and development, high diversification of company structure, and e-business. The research and development strategy helps the company to innovate highly on its range of products and consequently improve on the general quality. The highly diversified structure allows Unilever to integrate global products into local markets by accurately blending the tastes. E-business strategy involves the use of internet to execute product-related activities, such as marketing, supplies, and distribution. Customers effectively obtain value from this range of strategies mainly through reduced costs and improved quality. However, Unilever needs to adopt and utilize acquisition and mergers as a perfect way of gaining foothold into global markets, particularly in China where the economy is expanding at a high rate. Unilever’s main rival Proctor and Gamble spends more resources in research and development activities and has mainly adopted the acquisition and merger strategy for market expansion.