Demonstrate a Sound Understanding Of What Is Meant By The Organisation’s Internal Analysis And The Mct’s That Can Be Applied.
Critically Evaluate The Organisation’s Internal Environment Utilising These Mct’s.
Demonstrate a Sound Understanding And Critical Analysis Of What Is Meant By Mission, Vision And Values And The Importance Of Aligning These With Internal Stakeholders And The Corporate Social Responsibility Agenda.
Identify Key Strengths And Weaknesses From The Internal Analysis And Their Impact On The Organisation.
The major channels or systems of digital marketing are required for creation, acceleration and transmitting the product values from producer to the customer terminal, via digitalized networks (Chaffey and Ellis-Chadwick 2019). Unilever is a popular British organization for transactional consumer goods that has headquarters in London, UK and Rotterdam in the Netherlands. The products of this particular organization involve cleaning agents, personal care products, foods and beverage and beauty product. Unilever is the 7th most valued company in entire Europe and is referred to as one of the oldest multinational organizations in the world (Unilever UK & Ireland. 2020). They are doing business in over 190 countries in the world, and they own more than four hundred brands with a total turnover of 53.7 billion euros in the year 2017. The following report outlines a brief discussion on digital marketing in Unilever with relevant details like external analysis, internal analysis and market entry strategy.
An external analysis refers to the examination of the overall environment of the industry. It is an objective assessment of the changing world, where the enterprise could easily operate for having an early warning system to identify the respective potential threats or opportunities (Ryan 2016). Every business or organization could easily operate within a changing world and are referred to as the subject to forces that are quite powerful than they are and are also beyond control. An organization is highly influenced by force in their respective external business environment. Any specific business-related strategy requires to undertake account of every force so that the threats and opportunities could be recognized and the company could easily navigate the method for success after matching its internal strengths to the external opportunities. Innovation is included in the business, once the threats and weaknesses are identified successfully (Tiago and Veríssimo 2014). The external analysis comprises of two parts, which are known as macro and environmental analyses.
The organizational macro environment is responsible for affecting business, and it comprises of several factors that when left unchecked, could easily destroy a business. This particular environment includes major influences that affect the total economy of the business. The economy and clients are considered as the main influences within the macro environment, which affect any business and criticality is reduced to a high level for this purpose (Leeflang et al. 2014). One of the most accurate tools for macro-environmental analysis is PESTLE analysis. This particular tool is responsible for examining the influences of political, economic, social, technological and legal and environmental factors of a business. These factors could be easily controlled by the companies directly. PESTLE analysis of the UK based manufacturing company, Unilever is as follows
Macro Environmental Analysis
Political: The first and foremost factor of PESTLE analysis is political. Unilever is subjected to different regulatory restriction as well as a guideline in the United Kingdom. The major political factors involve different external factors such as regulatory factor (Kannan 2017). The total impacts of these governmental policies, as well as regulations, directly impact the organization. Such distinct policies are being obtained from the UK government and could be referred to as tax reformations for directly affect the organization. This political stability of the province, where the organization is working for gaining maximum competitive advantages. Proper intra-governmental relationships are also considered as the source of opportunities for different globalized organizations, such as Unilever with few competitors. Moreover, the threat factors involve a few distinct policies of the government that can easily pertain to the population of the health. The organizational products are spread in different countries like China, Russia, India and many more (Baltes 2015). As a result, the political policies and regulations of these countries affect the organizational products and services.
Economic: The second distinct ad important factor of PESTLE analysis is the economic factor. The respective state of the economy refers to customers are less likely to consume expensive products and hence cheap, yet quality products are in high demand. The organizations that are rising to compete against Unilever within the European Union provides maximum advantages to few locations like in France. The customers directly impact these products, which are being supplied by the organization of Unilever (Royle and Laing 2014). However, when the products are not in demand, the profits and cash flows in Unilever would be negatively impacted. Since Unilever is in several markets all over the world, they have mainly focused on the matter of inflation and whims of customers. There had been several opportunities for their economic stability in the business.
Social: The next significant factor of PESTLE analysis is the social factor. Unilever has decided on focusing on the development of a stronger reputation. The organization eventually focus on the issues associated with the environmental as well as social factors. After proper consideration of several products of the organization focus on personalized care and wellbeing, so that the business can express a stronger expectation of helping their customers to ensure maximum competitive advantages (Stephen 2016). Different social factors incorporate these beliefs as well as the lifestyle of the individuals and majorly the regional culture. The products and services of Unilever are referred to as the most basic needs so that major opportunities are gained in the business. The countries, in which population are extremely high are considered as highly conscious regarding the local products that maxims can become threats or opportunities for the global market. The specific trend to use these cheaper and local brands could also become a significant threat for the globalized producing organization, such as Unilever.
Technological: Another vital and significant factor of PESTLE analysis is the technological factor. The moderate R&D sector within the realm of good producing manufacturing industry has always been an excellent opportunity for organizations such as Unilever (Yasmin, Tasneem and Fatema 2015). Major improvements in the KMS with such technological advancement are being considered as an opportunity. As a result, the incremented trend of being automatic within the business policies is a better chance to expand this business for Unilever. Moreover, the other popular technological factors involve the marketing trend with the help of the Internet as well as any other latest technological tactics. Hence, technological impacts should be high for making the business a successful one. Unilever is constantly producing newer products and is retailing them via online. They have been emphasizing on the development of digital marketing as well as selling methodologies. Due to the higher level of automation, Unilever has been allowing to supply these products to the respective store locations promptly.
Legal: The various legal elements are present for binding their competitors with Unilever. Several regulations, such as health safety regulations, are referred to as the major opportunities for Unilever, being a better manufacturing industry. Such distinct legalities often act as the bindings that could eventually expand the organization most effectively. However, few advantages are present for these legal issues, and they are provided with a much more organized business environment to the connected company, like Unilever (Taiminen and Karjaluoto 2015). They own more than four hundred brands for foods, personal care and food as well as various other industry. Every brand, as well as the location of the store, is subject to monitor the safety of products, copyright and laws about the safety and health of the staff as well as regional and international taxes.
Environmental: Another major and noteworthy factor of PESTLE analysis is the environmental factor. This specific factor can easily include the higher standard or expectation over the waste disposal related strategies. A major focus should be given on the overall sustainability of the business. Climate change is considered as a subsequent factor that provides a major threat and even an opportunity for these globalized organizations (Indris and Primiana 2015). Several threats are present for their competitors, and hence the major opportunities would be incremented to a high level.
The micro environmental analysis involves all types of micro factors, which impact the business strategies, performances and decision-making procedure. It is essential for gaining success in the business for the core purpose of conducting micro environment analysis before starting the decision-making process. The major factors of microenvironment involve customers, employees, media, shareholders and competitors. These factors are the amalgamation of both external environmental factors and internal environmental factors. In the respective marketing environment, different micro factors do not impact the businesses eventually (Murgor 2014). The main reason is that all the businesses are different in sizes, capacities, financial resources and strategies. Unilever is majorly competing in the globalized customer goods market.
The micro-environmental analysis could be completed with the help of the Five Forces Analysis or Porter's Model. It shows the requirement for strategically prioritizing competition and even the subsequent bargaining power of the customers within the industry environment. For ensuring long term success, it is required that the organization should address the issues associated with these forces. The organizational strengths and market position are enough for sending these forces. Competition is well identified in the process, and the consumers are referred to as the most significant forces in the respective organization environment. Five forces analysis of Unilever is provided below:
Competitive Rivalry or Competition: It is a strong force for Unilever. Competition is a significant force in the industry environment of the company. It is required for identifying the external factors, which could easily present the effect of firms on each other (Grant 2014). Due to the stronger force of this competitive rivalry against the organization of Unilever is based on different external factors as well as their distinct intensity. High aggressiveness and lower switching costs are referred to as the significant strong forces for Unilever. Several firms are operating within the customer goods industry. It would impose a stronger effect on the company, and these firms are highly aggressive; hence increasing intensity of competition. They even experience stricter competition for the low switching costs.
Bargaining Power of Buyers or Customers: The industry and business environment of the company is dependent on the overall response of the customers to the products. As a result, the subsequent influence of the buyers over business performances is being considered based on three vital factors, which are lower switching expenses, high quality of information as well as the small size of the individual buyers. Although the first two factors act as strong forces and the latter acts as a weaker force for Unilever (Wong et al. 2015). Buyers could easily compare different products based on online information, and hence it is referred to as a stronger force.
Bargaining Power of the Suppliers: The impact of the suppliers on the industry environment of Unilever after affecting the total level of supplies accessible to the businesses. Bargaining power of the suppliers in Unilever is dependent on different factors like moderate size of the individual supplier, reasonable suppliers’ population and even moderate overall supplies. Unilever comprises of larger suppliers such as foreign businesses, which supply oil and paper, which is the average supplier is reasonable in size. It does not provide maximum advantages to the organization, and hence the impact is moderate in the business.
The threat of the Substitutes: It is a weaker force for Unilever. The substitutes could quickly reduce the revenue as well as the strength of businesses in the environment of the customer goods industry. The primary external factors affecting this particular force include lower switching cost, lower substitute availabilities and more economical performance to the price ratio of its substitute (Milovanovic and Wittine 2014). Only lower switching costs is a strong force, and the remaining two are weak forces for Unilever. Such switching costs could easily allow the clients in more comfortable utilization of substitutes for the products of the company. It enforces a stronger force over the organization as well as the entire industry. The overall effect of the substitution is being weakened for the lower availability of these substitutes.
The threat of the New Entrants: The final force of Unilever is the threat of the new entrants. Although it is a weaker force, they are competing with all types of established firms and more different firms within the market of consumer goods. The primary external factors, affecting the organization of Unilever include lower switching costs, higher costs of brand developments and top economies of scale.
Apart from the above mentioned two vital tools of external analysis, the organization of Unilever in the United should also focus on their significant opportunities and threats that are relevant to the business. These threats and prospects could be identified by conducting a SWOT analysis on Unilever, and these are as follows:
Opportunities: Unilever should take up the benefit of different growth opportunities in the goods markets in the entire international market. Business development is subsequently facilitated with such diversification. One of the significant opportunities for Unilever is business diversification (SHTAL et al. 2018). It would be helpful for them in the reduction of different market-based threats for improvement of business resilience. The second distinct opportunity of the organization would be product innovation that could increment the health-conscious customers. The organization has the chance of making the business much more sustainable as well as environmentally friendly for attracting and retaining the customers. The external strategic factors help out the market is growing and developing subsequently.
Threats: Few threats are also present in the business of Unilever that are needed to be eradicated successfully. They are facing high competition, that is a distinct threat based on the strengths of all other companies in a similar industry. The competitors eventually threaten to reduce the market shares of the company and even to correspond to financial performances. Moreover, they have a threat from the retailers as well since they sell their brands. The brands are referred to as house brands, generic brands and store brands (Ximei et al. 2015). As a result, the increasing popularity of the house brands of the retailers has become a significant threat to the business of Unilever, and it is needed to be analysed for ensuring proper and effective business under every circumstance.
One of the significant recommendations for the organization of Unilever to eradicate the threats and gain success from the opportunities would be the inclusion of diversification. Product unification and diversification could easily differentiate their market position to a high level, and they would be able to do business efficiently. Moreover, it would be boosting their performances subsequently, and competition would be addressed majorly.
Internal environmental analysis is required for analysing the internal environment of an organization. It is an examination of the organizational competency, competitive viabilities and cost positions within their market place. Proper conductions of the internal analyses eventually incorporate different measures, which give useful data regarding organizational strengths, weaknesses, threats and opportunities (Milovanovic and Wittine 2014). Different conditions of the business are well depicted based on different strategies and market opportunities in the boosting performances.
Unilever has been following a few distinct strategies and resources in their organization, to ensure that maximum competitive advantages are being gained under every circumstance. Different businesses could easily leverage the digitalized channels like social media, electronic mails, search engines as well as any other website for connecting with the prospective and current clients. While traditional marketing exists in printed advertisements, physical marketing and phone communication; digital marketing could occur online and electronically. It refers to the fact that there exist several limitless possibilities for brands like emails, videos, website based marketing opportunities and social media.
Mission Statement of Unilever: The corporate mission of Unilever is to add vitality t life and to help out people in feeling good, look good and get maximum advantages from the organization (Unilever UK & Ireland. 2020). The statement underscores the process of company satisfying clients in several aspects of the lives.
Vision Statement of Unilever: The corporate vision statement of Unilever provides proper development direction to the company. This vision presents the needs of the organization for doing to succeed in the long term.
Resources and Capabilities of Unilever: These are the sources of competitive advantages as well as the primary sources of profitability within any particular organization. The resources and capabilities empower the organization of Unilever to drive the business and also face competition with the products and services for the requirement of clients. The significant resources of Unilever include land, labour, capital, management, time and information (Unilever UK & Ireland. 2020). The capabilities, on the other hand, include significant opportunities, which are needed to be analysed so that maximum advantages are gained eventually.
CSR in Unilever: Corporate social responsibility in the organization encompasses a broader range of interactions in a society. It refers to responsibly management of a multiplicity of different relationships regularly with the shareholders, governments, communities, consumers, employees and even the suppliers in Unilever.
For understanding the internal environment, the organization should be considered based on its strengths and weaknesses. Detailed SWOT analysis of Unilever for identifying the strengths and weaknesses is as follows:
Strengths: The organizational and business strengths of Unilever are being identified for understanding the internal environment of the company. These strengths are internal strategic factors are based on the conditions of the company like production procedures, significant investments, organizational structure and human resources (Milovanovic and Wittine 2014). The first and foremost strength of Unilever is its stronger brands. They can penetrate the markets for properly competing against different firms. The next strength of this organization is a broad product mix that shows the extension of the business growth of the company. Moreover, Unilever can gain economies of scale in their business for supporting production efficiency that is required for competitive pricing strategies. As a result, they can achieve immense competitive advantages in the industry, so that global growth is sustained.
Weaknesses: In spite of having a stronger market position, Unilever comprises of different weaknesses that restrict the potential growth. The most significant weakness of this particular organization is imitable products. Unilever does not provide any unique product or service to the customers. As a result, there is a high chance that the organization would be facing top competition in the existing market (Weismann, Buscaglia and Peterson 2014). Moreover, they lack a strong direct influence on the consumers after consideration of the fact that retailers are those who directly affect the buyers. Hence, based on internal strategic factors, Unilever should emphasize the overall importance of significant diversification, enhanced marketing efforts and better innovation.
The marketing models, concepts and theories or MCT are needed to be utilized for critically analysing the internal environment of the organization of Unilever. These theories and models are required to be considered for aligning the mission, vision and values of the company with relevant details. Moreover, corporate social responsibility is also being kept on top priority for understanding the various weaknesses of the business identified in the SWOT analysis (Kang and Montoya 2014). Suitable recommendation for eradicating the weaknesses of the company includes the acquisition of the related firms within the consumer goods industry. Furthermore, the organization should consider innovation in its products and services for ensuring great opportunity for boosting business performances to a high level. They would have to utilize their strengths like economies of scale for product innovation and also for addressing the competition as well as the threat of product imitation.
Unilever has been doing business for several years and has eventually expanded its business to a high level (Osipov, Volinsky and Grishin 2014). However, they would also be able to grow the business to underdeveloped countries such as Africa. Although they had been doing business in the country for several years, Unilever should consider entering into the most remote parts of Africa. Being an underdeveloped country, Africa would be able to provide maximum competitive advantages to their business. A mix of two frameworks, called CAGE and HOFSTEDE, would be suitable for understanding the market entry strategy to Africa. The CAGE framework helps in identification of cultural, administrative, geographic and economic differences within their host country (UK) and Africa for addressing various international strategies. It is also being utilized for understanding various patterns of capital; people flow information and trade (Masiero, Ogasavara and Risso 2017). The cultural factors affecting Unilever’s market entry strategy include different language, ethnicity, religion, lack of trust and differences in value and principles. The administrative factors affecting Unilever’s market entry strategy include lacking a colonial tie, shared regional trading blocs, conventional currencies and political hostilities.
The geographic factors affecting Unilever's market entry strategy include physical distances, lack of land borders, the difference in the time zone and climate. The economic factors affecting Unilever's market entry strategy include rich and poor differences, high costs in financial and HR issues (Johnson 2016). Regarding HOFSTEDE framework, since, the UK and Africa are entirely two different countries, there is a high chance that there would be significant issues related to cross-cultural communication. These issues are mainly analysed based on uncertainty avoidance, power distances and individualism-collectivism. The combination of CAGE and HOFSTEDE frameworks hence helps in denoting the fact that there could be significant challenges related to communication, geographic issues and economic differences while entering into the market of Africa. However, Unilever would be able to eradicate the issue successfully (Musso and Francioni 2014).
The most suitable and effective strategy for market entry in Africa includes direct exporting. It is selling directly into the international market ad it involves exporting to the customer without a third party involvement. As Africa is a developing country, the participation of a third party would be increasing the costs to a high level, and they might not be able to afford the expenses eventually (Tulung 2017). For this purpose, digital marketing would be beneficial and recommended for the organization to ensure maximum success in the business. The existing challenges of lack of unification and innovation and high costs would be resolved with this type of market entry strategy successfully, and the company would gain maximum competitive advantages in the African market in short notice.
One of the significant issues that the respective organization would be facing after entering into the African market is lowered costs for goods and services. As it would be an international market for Unilever, there is a high chance that transportation costs would be increased. However, since Africa is a developing country, they would not be able to increase the expenses majorly. The second issue that is being highlighted in the CAGE and HOFSTEDE framework is cultural dominance (De Beule, Elia and Piscitello 2014). There would be a massive difference between the culture of the UK and Africa; hence the organizational growth might be hampered in such a situation. However, these issues can be resolved with proper recommendations. An essential recommendation would be hiring local employees in the business of Africa during the initial stage of the company. The local people would be able to understand the requirements of the customers and they would be able to gain maximum advantages.
Therefore, from the above discussion, a conclusion could be drawn that digital marketing can encompass all types of marketing efforts, which utilize an electronic device over the Internet connection. As digitalized marketing comprises of vast options or strategies related to it, the respective organization could quickly obtain creativity and also experiment with few marketing tactics within their budget. Moreover, the organization can utilize different tools such as analytics dashboards to monitor the return on investment and success of the campaigns than any traditional promotional content like a printed advertisement. Digital marketing is the proper utilization of several digital channels and tactics to connect with clients, in which they could spend a maximum of the time remaining online. The respective branding assets of a business include online brochures, email marketing and digital advertising are considered as the significant parts of digital marketing. The various marketers could easily support a massive campaign via the paid and free channels at their disposal. The above-provided report has appropriately analysed the importance of digital marketing in the organization of Unilever with relevant details related to their external and internal analyses and strategy for market entry.
Baltes, L.P., 2015. Content marketing-the fundamental tool of digital marketing. Bulletin of the Transilvania University of Brasov. Economic Sciences. Series V, 8(2), p.111.
Chaffey, D. and Ellis-Chadwick, F., 2019. Digital marketing. Pearson UK.
De Beule, F., Elia, S. and Piscitello, L., 2014. Entry and access to competencies abroad: Emerging market firms versus advanced market firms. Journal of International Management, 20(2), pp.137-152.
Grant, R.M., 2014. EXTERNAL ENVIRONMENT.
Indris, S. and Primiana, I., 2015. Internal and external environment analysis on the performance of small and medium industries (Smes) in Indonesia. International journal of scientific & technology research, 4(04).
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Kang, W. and Montoya, M., 2014. The impact of product portfolio strategy on financial performance: The roles of product development and market entry decisions. Journal of Product Innovation Management, 31(3), pp.516-534.
Kannan, P.K., 2017. Digital marketing: A framework, review and research agenda. International Journal of Research in Marketing, 34(1), pp.22-45.
Leeflang, P.S., Verhoef, P.C., Dahlström, P. and Freundt, T., 2014. Challenges and solutions for marketing in a digital era. European management journal, 32(1), pp.1-12.
Masiero, G., Ogasavara, M.H. and Risso, M.L., 2017. Going global in groups: a relevant market entry strategy?. Review of International Business and Strategy, 27(1), pp.93-111.
Milovanovic, B.M. and Wittine, Z., 2014. Analysis of External Environment's Moderating Role on the Entrepreneurial Orientation and Business Performance Relationship among Italian Small Enterprises. International Journal of Trade, Economics and Finance, 5(3), p.224.
Murgor, P.K., 2014. External environment, firm capabilities, strategic responses and performance of large scale manufacturing firms in Kenya (Doctoral dissertation, University of Nairobi).
Musso, F. and Francioni, B., 2014. International strategy for SMEs: Criteria for foreign markets and entry modes selection. Journal of Small Business and Enterprise Development, 21(2), pp.301-312.
Osipov, I.V., Volinsky, A.A. and Grishin, V.V., 2014. Gamification, virality and retention in educational online platform. Measurable indicators and market entry strategy. arXiv preprint arXiv:1412.5401.
Royle, J. and Laing, A., 2014. The digital marketing skills gap: Developing a Digital Marketer Model for the communication industries. International Journal of Information Management, 34(2), pp.65-73.
Ryan, D., 2016. Understanding digital marketing: marketing strategies for engaging the digital generation. Kogan Page Publishers.
SHTAL, T.V., BURIAK, M.M., AMIRBEKULY, Y., UKUBASSOVA, G.S., KASKIN, T.T. and TOIBOLDINOVA, Z.G., 2018. Methods of analysis of the external environment of business activities. Revista ESPACIOS, 39(12).
Stephen, A.T., 2016. The role of digital and social media marketing in consumer behavior. Current Opinion in Psychology, 10, pp.17-21.
Taiminen, H.M. and Karjaluoto, H., 2015. The usage of digital marketing channels in SMEs. Journal of Small Business and Enterprise Development, 22(4), pp.633-651.
Tiago, M.T.P.M.B. and Veríssimo, J.M.C., 2014. Digital marketing and social media: Why bother?. Business horizons, 57(6), pp.703-708.
Tulung, J.E., 2017. Resource Availability and Firm’s International Strategy as Key Determinants Of Entry Mode Choice. Jurnal Aplikasi Manajemen, 15(1), pp.160-168.
Unilever UK & Ireland. 2020. [online]. Accessed from https://www.unilever.co.uk/ [Accessed on 08 January 2020].
Weismann, M.F., Buscaglia, C.A. and Peterson, J., 2014. The Foreign Corrupt Practices Act: Why it fails to deter bribery as a global market entry strategy. Journal of Business Ethics, 123(4), pp.591-619.
Wong, A.C.N., Luo, Y., Jing, X., Franzenburg, S., Bost, A. and Douglas, A.E., 2015. The host as the driver of the microbiota in the gut and external environment of Drosophila melanogaster. Appl. Environ. Microbiol., 81(18), pp.6232-6240.
Ximei, L., Ming, Z., Xu, H., Lilin, P. and JunRong, D., 2015. Small hydropower financing in China: External environment analyses, financing modes and problems with solutions. Renewable and Sustainable Energy Reviews, 48, pp.813-824.
Yasmin, A., Tasneem, S. and Fatema, K., 2015. Effectiveness of digital marketing in the challenging age: An empirical study. International Journal of Management Science and Business Administration, 1(5), pp.69-80.