The problems and challenges faced by Unilever worldwide

I was asked to identify what are the problems and challenges faced by
Unilever worldwide? Before identifying the problems and challenges I studied
about the Unilever. After browsing KFC’s website I found Unilever is a multi-
local multinational with consumers, employees, business partners and
shareholders on every continent. It started its journey in the 1890s. William
Hesketh Lever, founder of Lever Bros, invented revolutionary new product
Sunlight Soap – that helped popularize cleanliness and hygiene in Victorian
England. The Unilever Group was created in 1930 when Lever Brothers
merged its businesses with those of the Dutch margarine producer,
Margarine Unie. Unilever has operations in around 100 countries and its
products are on sale in 50 more. Unilever has two divisions – Foods and
Home & Personal Care. Food brands include such well-known names as
Lipton, Knorr, Hellmann’s, Magnum and Bertolli. Home and personal care
brands include Dove, Lux, Omo, Pond’s and Sunsilk.

Every day, around the world, 150 million people choose Unilever’s products
to feed their families and clean themselves and their homes. And obviously it
faces challenges and problems worldwide every day. After studying several
articles and website I have found same challenges Unilever face all over the
world. Here, are those challenges I note down briefly -

 Competition: Competition is one of the main threats that Unilever has

to face. Unilever has to face huge competition as its competitor is very
strong all over the world. The only direct competitor for Unilever is Procter
& Gamble since both are giant companies. Furthermore Unilever has
many other sub competitors who provide substitutes to their products and
the closeness of such products are also high.

 Competition among company brands (self-cannibalization):

Unilever comprises of several brands which consist of contradictory
brands resulting duplication of effort and money. This is become a
problem for the company.

 Economic situation: The economy was under recession in the given

time period. And there was still the effect of world recession even though
it was at the recovery stage. The inflation is rising and Purchasing Power
of customers has been decreasing. Thus the sales of the products
affected. Personal care products would be affected by this recession. Thus
the company is facing this challenge. Also, unstable exchange rate,
improved globalization and urbanization are challenges for Unilever.

 Challenges facing leaders: In some country, Unilever facing

challenges call 'Unilever Capability', this involves making sure that
companies have the right capabilities to act successfully in the market.
This is most often connected with people, so this means getting the right
talent into the business and developing it in the right way so that it has
the right competencies and skills to drive the business successfully.

 Excellent Execution: this is the one of the main challenge facing by

Unilever some countries in the world. Once Unilever has the strategy
right, which is probably 5% of the job, the other 95% is actually execution,
and given the vast geography and the complexity of the environment, this
is a difficult task and it’s one of the main challenges Unilever has in the
overall sector and as a business in general.

 Raw Materials Costs: The Company wanted to maximize the

performance. So Unilever must constantly juggle the dynamics of market
demand and production efficiencies, creating precise strategies to
balance the two. This becomes real challenge for them because cost of
raw materials is increasing when the inflation is rising simultaneously.

 Political: global peace situation was not that stable, corporate taxes
were high around the globe, there were many trade agreements, Labor
related restrictions and tough laws, consumer protection laws were really
strong , further liberalization of economies etc.

 Changing communication landscape: Unilever believe the greatest

challenge facing its brands is the changing communication landscape.
Coupled with this is the issue of a not-so-progressive mindset amongst
the brand thinkers and the agencies. Unilever’s objective is to produce
the next generation of brand communication, sift the real developments
from the hype, and have it travel across multiple markets.

As it operates all over the world so it has to deal with the changing culture
of all over the world. And it is not easy to deal with cultural changes.
Unilever has to add new features to its products or has to change some
 features or may be has to introduce new product. It depends on what
market want.

Advertising will never be the same again and where repositioning is a

drawn out, considered and cerebral process that is going to involve
mixing new media with the old rather than rejecting traditional
communication tools. TV will be here to stay, the interruptive process will
still exist but it will exist in a way that delivers relevance to consumers
and makes them feel comfortable with what they are being
communicated about.

In summary, I can say that Unilever like many other global brands are in a
rapidly changing world so it will face new challenges every day. Also,
Unilever will face several risks and issues which are similar to the risks faced
in the past. Therefore, the strategies of Unilever should be strong enough to
fight against the risks. However as the conclusion it can be stated that the
current strategy of Unilever is in a way that the company can achieve more
profits.