Today’s business scenario is much more competitive than it was a decade ago. Entry of new competitors in the market for a particular sector increases the competitiveness, which led to more aggressive marketing strategies undertaken by the organizations. Therefore, employees are also expected to provide the highest level of productivity at any given point of time. Thus, organizations should have some strategies or policies to provide all the necessary knowledge and training to their employees and keep a tap about any issues with them. Knowledge management is one such strategy of providing the right people in the right time about the right knowledge (Hislop 2013). Knowledge management involves organizational strategies, understanding of knowledge already exists and creating of a sustainable development plan to overcome any issues (Fuller 2012). It also helps in smooth communication of knowledge within the organizations.
Unilever is one of the most prominent multinational organizations in fast moving consumer goods category. They are having hundreds of products covering all the segments around the world. They also have one of the most sustainable knowledge management programs in the industry. This report will discuss about the sanitary product department of Unilever.
This report will discuss about the knowledge management analysis of Unilever and the issues attached with it. Here, in this report, sanitary items of Unilever will be discussed. It will also discuss about the existing knowledge and strategic gap of Unilever with the help of few analytical tools and a few recommendations to overcome the issues.
Unilever is the leading multinational in consumer products category. Their product category ranges from tea and coffee to everyday’s household items. They have their operations across the globe (About 2017). In Australia, Anglo-Dutch FMCG Company Unilever is the subsidiary of Unilever, catering to the market of Australia and New Zealand. In Australia also, they cater to various sectors and have the product range for the all the customers segments. Unilever is most known for their consumer goods and sanitary products. They are second only to P&G in sanitary products market.
Steps for developing knowledge management strategy
Knowledge management is not only to provide knowledge to the employees of an organization. Knowledge management also creates a sustainable development plan for optimal utilizations of available knowledge base to meet the organizational goals (Holsapple 2013). Therefore, numbers of dimensions are there for optimal implementation of Knowledge management.
- Knowledge management of the organizations should be related with the organizational strategy. If these two factors are not allied then knowledge management will not meet the corporate goals of the organizations (Birasnav 2014). The main motive of knowledge management process is to meet the goals of the organizations. Therefore, the goals or the objectives of organizations are first to be acknowledged.
- Organizational culture of the organizations should promote free interactions among the employees to avoid the resistance from them in case of certain organizational changes (Haslam 2014). Free interaction will promote to address any issues with the employees and to track the existing knowledge along with the areas of improvement.
- Organizational environment and systems such as the external factors should be favorable in order to optimal implementation of knowledge management (Hueske et al. 2015).
- Leadership and management are also the key factors for the knowledge management (Chi et al. 2012). Organizations should employ various knowledge management related roles Knowledge administrator, Community or Team supervisor to implement its strategies at every level. Ideal knowledge management involves top-down management systems. Top-down structure enable the managers at all levels to lead by example and struggle to keep the employees organized to meet the organizational goal in a most efficient manner.
- Proper and suitable technology is necessary through which employees can communicate effectively (Krogh 2012). This will help the organizations to determine the existing knowledge gap (Durst and Runar 2012).
To achieve successful knowledge management, organizations should recognize critical objectives. These critical objectives are outcomes at individual levels, department levels and corporate levels. It will help the organizations to concentrate on the work processes, information management and procedures for capturing of knowledge. An effective knowledge management process not only focuses on the avoidance of knowledge or strategic gap, but also focuses on the improvement of the organizational behavior. Ideal knowledge management process provides huge opportunities to improve the communications among the employees within the organizations.
Knowledge management enables the organizations to deliver relevant information at the time of requirement due to organized structure and support. To determine the knowledge management policies of Unilever, various analytical tools such as SWOT analysis, knowledge gap analysis and strategic gap analysis has been used (Rao 2012).
In the sanitary goods industry, Unilever has some of the most renowned brands in their portfolio. Penetration of these products in the new market is not at all difficult because of their strong brand identity. Wide product range or portfolio is also very helpful to cater to the different market range and different customer base. Thus, it led to the increase in revenue and less business risk. Availability of their products in every corner of the globe is another advantage of them. Failure in one market will not affect their position as it can be adjusted from the other markets. Economies of scale are creating a positive impact in the performance of Unilever as it helps in competitive pricing to stay ahead in competition. Promotional budget of Unilever is huge which increase their brand identity and helps in rapid penetration and expansion of market.
Unilever have the product portfolio, which are very easy to imitate. Several market followers already imitated the consumer items they are producing. Unilever have a diverse product line but all are in the consumer product category. Therefore, any issues in consumer product market will affect the sales performance of Unilever. Moreover, Unilever is entirely depended on the retailers to deal with the end customers. Therefore, they lacks in customer knowledge and expectations. These are all the internal strategic factors or weaknesses of Unilever, which contributes in the knowledge gap of them.
Unilever already started to diversify in other sectors. They introduced health and nutritional products for the growing demand of health conscious customers. This will help them to diversify their business risk among number of sectors. Sanitary goods category where Unilever is operating currently is more of necessity than luxury sectors. Therefore, market for this kind of product will always be there and more and more market is developing. Unilever has the aggressive marketing approach to penetrate in to new market. Unilever have excellent network of distribution channels which can helps them in pushing new products in the market quite efficiently.
Market for consumer goods is highly competitive in nature having number of close substitutes. Brands do not have much impact in these sectors. Customers are more inclined towards the particular products rather than the brands. Therefore, Unilever as a brand do not have much impact on the preference pattern of the customers. Brands of the rival firms also have more or less same brand value of Unilever. Therefore, Unilever do not enjoy the leadership in terms of brands in the market. Rival firms also have good market penetration and market presence like as Unilever. Hence, Unilever do not have any untapped market left for them. Markets of sanitary products are highly saturated with availability of number of substitutes products. There is very less chance of entering new market.
Having analyzed the SWOT factors of Unilever, threats and weaknesses are being identified (Macdonald 2012). These shortcomings will help to identify the knowledge and strategic gap of Unilever. One of the weaknesses of Unilever is lack of customer knowledge due to the dependence on retailers. The messages of expectations of the customers are not properly conveyed to the organization, which affects in the introduction of new products in the market according to the taste and preference of the customers. Employees are also not aware about the latest developments in the market.
Knowledge management gap
Main issue, which Unilever is currently facing, is steep competition from its rivals. While, diversified products portfolio is beneficial for the organizations but diversifying the same products for the same markets is of no benefits. Unilever diversified the same product to for the particular region to increase the market share. However, lack of customer knowledge caused eating of the share of their product by their other product. Having duplicating the products rather than diversifying is affecting their market share. This is their prominent knowledge gap (Tortoriello, Reagans and Mcevily 2012).
Strategic management gap
Unilever operates in highly competitive market having large number of substitutes (Srivastava 2013). Therefore, pricing is key factors to determine the market share. Unilever have products across every price segments. However, as discussed earlier, brands have very less to do in the fast moving consumer goods category. Hence, competitors are taking away the market share by offering prices that are more competitive to the customers. This is a huge strategic gap for Unilever (Hubbard, Rice and Galvin 2014).
Another strategy that can yield value for Unilever is strategic acquisitions. It will give them the edge that is necessary to counter their rivals. Acquisitions of any organizations having goodwill and notable market presence in the respective region will give Unilever a ready to go option in a new market or region.
Customer relationship management is another strategic gap for Unilever. They do not have any specific strategy or policy for customer relationship (Al 2012). The sector where they are currently operating is entirely based on customer feedback and word of mouth. Rival companies are beating Unilever in having an efficient and effective customer relationship management.
Operational infrastructure: Unilever wants to have the position of market leadership around the world with having operations in every part of the world but contradicting laws and regulations in different countries are the barriers in that desired state (Borchert et al. 2014). Customers are expecting more affordable and healthy products from them and these gaps made them to go with the existing and traditional products with minor modifications. Employees are expecting competitive products to increase the market share but lack of employee knowledge is affecting.
Cultural infrastructure: Unilever are expecting and trying to have a dynamic and universal data management service, which will be capable of meeting all the criteria of modern day business. However, they are having traditional rigid systems of data centres.
Technological infrastructure: From the cultural point of view, Unilever is already maintaining a diverse work culture (Patrick and Kumar 2012). They are intending to increase the representation level from the minority groups across all managerial levels.
Implementation of knowledge management strategy
There are few steps to develop and implement the knowledge management strategy on an organization:
Most tacit communication or expression resides on the employees rather circulating. Therefore, socialization is the process of sharing the residing tacit thought within the organizations. This will help the organizations to have access with all the employees (Wang and Wang 2012). Having an ideal and efficient knowledge management process, organizations are better equipped to tap the individual and departmental knowledge.
The next step is to convert the tacit communication into explicit. This can be done with the help of different theories and models. This process is known as externalization. It helps in decoding the tacit communication of the employees. This move from tacit to explicit knowledge makes the key data or information more organized and usable.
Now the explicit communication will have been circulated within the organization in a manner, which must be understandable to all the employees. The resided knowledge will now be shared among all. This process is known as combination (Liebowitz 2012).
The last step will be to convert the explicit knowledge to tacit again in order to promote the applicability of the resided knowledge. This process is known as internalization (North and Kumta 2014).
Following all these steps will help the organization to get access of the knowledge of the employees and sharing it among them to provide certain outcomes from it (Urbancova 2013).
- Identifying the prime groups of performance oriented employees. Since they are the most productive employees, therefore, their knowledge is important for the Unilever to gain the market share. They can notify the organization about the latest trends in the market (Meihami and Meihami 2014).
- Holistic need analysis for the employees is necessary to recognize the main requirement and issues with the employees. Having proper knowledge of the employees will increase their job satisfaction, which in turn have positive impact on the sales turnover.
- Entire report of the needs analysis should be formatted according to the goals and objectives of the organization to conclude a universal strategic focus.
- Introduction of effective communication tools within the organization. It will help both the employees and the organizations to have smooth flow of knowledge.
- Introduction of innovation and research and development programmes to avoid the knowledge gap (Bozeman and Melkers 2013).
- Unilever should implement the policy of cost effectiveness to stay ahead in the competition. Higher price of their products is badly affecting their market share which can be overcome by the the policy of cost effectiveness.
- As discussed earlier that the fast moving consumer goods are very sensitive to changing taste and preference pattern of the customers. Therefore, latest update about the expectations of then customers is very important for Unilever. This issue can only be solved by extensive market research. It will help the organization to have the latest and updated information about the market they are operating (Bryman and Bell 2015). Introducing of products according to the outcome of the market research will meet the customer’s expectation and will have positive impact on the sales turnover.
- To keep tap about the requirement of the existing customers and the potential customers, customer relationship management is the most effective tool. This tool will help the organization to obtain the feedback from the existing customers and the issues associated with them.
Knowledge management is the concept of determining and filling the knowledge and strategic gap in the organization. Employees are one of the key stakeholders for the organizations. Therefore, effective communication with the employees will enable the organization to address the internal issues and to gain the current trend in the market.
However, having discussed the concept of knowledge management along with its various aspects, it can be concluded that knowledge management is the most effective tool for smooth communication within an organization. This report also discussed about the necessity of knowledge management for Unilever. Several issues are there that Unilever as an organization is facing. All of these issues are associated with the knowledge or strategic gap of Unilever. Here in this report, knowledge gap and the strategic gap are being discussed from the perspective of Unilever. All the potential threats and the weaknesses of Unilever are also being evaluated with the help of SWOT analysis.
Currently Unilever is facing issues regarding their knowledge gap of not responding to the current expectation of the customers and the employees. They are also facing the strategic gap of not having effective strategy to counter their rivals in the market. This report has discussed about some recommendation to overcome these issues of Unilever. It is recommended that, Unilever should implement a holistic approach to include all the key stakeholders in their internal communication. It will help them to address any issues within the organization and can always be updated about the current market trend. Unilever should introduce the latest and easy way of technological communication tools. Technology in communication will ensure smooth and effective communication among the employees within the organizations. However, the efficiency of these recommendations will be determined by the way Unilever will apply in their internal organizational structure.
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