Harvard Case - Mãe Terra and Unilever (A)
"Mãe Terra and Unilever (A)" Harvard business case study is written by Lynn Sharp Paine, Ruth Costas, Priscilla Zogbi. It deals with the challenges in the field of General Management. The case study is 33 page(s) long and it was first published on : Dec 12, 2019
At Fern Fort University, we recommend that Unilever implement a comprehensive strategy to integrate M'e Terra into its operations. This strategy should prioritize building a strong brand, leveraging existing resources, and fostering a collaborative partnership that respects M'e Terra's values and culture. This approach will enable Unilever to achieve sustainable growth in the emerging markets while upholding its commitment to corporate social responsibility.
2. Background
This case study explores the partnership between Unilever, a multinational consumer goods giant, and M'e Terra, a Brazilian social enterprise focused on sustainable agriculture and community development. Unilever aims to expand its presence in emerging markets, particularly Brazil, through its 'Sustainable Living Plan' which emphasizes environmental and social responsibility. M'e Terra, with its strong local presence and commitment to sustainable practices, presents a valuable opportunity for Unilever to achieve its goals.
The main protagonists are:
- Unilever: A global consumer goods company seeking to expand its market reach and enhance its sustainability initiatives.
- M'e Terra: A Brazilian social enterprise dedicated to promoting sustainable agriculture and community development.
- Paul Polman: Former CEO of Unilever, a key driver of the company's 'Sustainable Living Plan.'
- The M'e Terra team: A group of passionate individuals committed to their mission of empowering rural communities.
3. Analysis of the Case Study
This case study can be analyzed through the lens of strategic, operational, and cultural considerations:
Strategic Framework:
- Porter's Five Forces: The case highlights the competitive landscape of the Brazilian consumer goods market, with intense competition from local and international players. Unilever's partnership with M'e Terra could provide a competitive advantage by differentiating its product offerings with a strong sustainability focus.
- SWOT Analysis:
- Strengths: Unilever's global reach, strong brand portfolio, and established distribution channels. M'e Terra's local expertise, sustainable practices, and community engagement.
- Weaknesses: Unilever's potential for cultural insensitivity in navigating a new market. M'e Terra's limited resources and production capacity.
- Opportunities: Expanding into the growing emerging markets, leveraging M'e Terra's sustainable practices for brand differentiation, and developing innovative products with a social impact.
- Threats: Competition from established local players, potential cultural clashes, and the risk of losing control over M'e Terra's brand identity.
Operational Framework:
- Supply Chain Management: Unilever needs to ensure a seamless integration of M'e Terra's production processes into its existing supply chain. This requires careful consideration of logistics, quality control, and potential scalability challenges.
- Product Development: Unilever can leverage M'e Terra's expertise in sustainable agriculture to develop innovative products that cater to the local market and resonate with consumers seeking environmentally conscious options.
Cultural Framework:
- Organizational Culture: Unilever must be mindful of M'e Terra's unique culture and values, ensuring a respectful and collaborative partnership. This involves understanding the social enterprise's commitment to community development and its emphasis on ethical business practices.
- Cross-cultural Management: Successfully integrating M'e Terra into Unilever's operations requires effective communication, cultural sensitivity, and a willingness to adapt to different perspectives.
4. Recommendations
Unilever should implement the following recommendations to ensure a successful partnership with M'e Terra:
1. Build a Strong Brand:
- Joint Marketing Campaign: Develop a co-branded marketing campaign that highlights the sustainability and social impact of the partnership, appealing to environmentally conscious consumers.
- Product Differentiation: Develop unique product offerings featuring M'e Terra's ingredients and sustainable practices, creating a distinct brand identity.
- Community Engagement: Engage with local communities through initiatives that support M'e Terra's mission, building brand loyalty and trust.
2. Leverage Existing Resources:
- Distribution Network: Utilize Unilever's existing distribution channels to reach a wider market for M'e Terra's products.
- R&D Expertise: Provide access to Unilever's research and development resources to enhance M'e Terra's product innovation and production processes.
- Financial Support: Provide financial support to M'e Terra for capacity building, infrastructure development, and expansion.
3. Foster a Collaborative Partnership:
- Shared Decision-Making: Establish a joint steering committee with representatives from both organizations to ensure transparency, alignment, and mutual understanding.
- Respect for Values: Acknowledge and respect M'e Terra's commitment to social responsibility and community development, ensuring that the partnership aligns with its core values.
- Cultural Sensitivity: Implement training programs for Unilever employees on cultural awareness and cross-cultural communication, fostering a respectful and inclusive work environment.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The recommendations align with Unilever's 'Sustainable Living Plan' and its commitment to responsible sourcing and community development. They also leverage M'e Terra's expertise in sustainable agriculture and community engagement.
- External Customers and Internal Clients: The recommendations cater to the growing demand for sustainable products and address the needs of both Unilever's customers and M'e Terra's stakeholders.
- Competitors: The recommendations aim to differentiate Unilever's offerings in the competitive Brazilian market by emphasizing sustainability and social impact.
- Attractiveness: The partnership has the potential to generate significant revenue for Unilever while contributing to positive social and environmental change.
6. Conclusion
The partnership between Unilever and M'e Terra presents a unique opportunity for both organizations to achieve their respective goals. By implementing the recommended strategies, Unilever can expand its presence in emerging markets, strengthen its sustainability credentials, and contribute to positive social change. M'e Terra, in turn, can gain access to resources, scale its operations, and amplify its impact on rural communities.
7. Discussion
Alternatives:
- Acquisition: Unilever could acquire M'e Terra, gaining full control over its operations and brand. However, this could risk alienating M'e Terra's stakeholders and compromising its social mission.
- Independent Partnership: Unilever could maintain a purely commercial partnership with M'e Terra, focusing on product sourcing and distribution without significant involvement in its operations. This approach might limit the potential for brand integration and social impact.
Risks:
- Cultural Mismatch: Potential cultural clashes between Unilever and M'e Terra could hinder collaboration and compromise the partnership's effectiveness.
- Loss of Control: Unilever's involvement could lead to a loss of control over M'e Terra's brand identity and social mission.
- Scalability Challenges: M'e Terra's limited production capacity could pose challenges in meeting Unilever's demand.
Key Assumptions:
- Commitment to Sustainability: Both organizations are committed to upholding their sustainability principles throughout the partnership.
- Cultural Sensitivity: Unilever will demonstrate cultural sensitivity and respect for M'e Terra's values and practices.
- Effective Communication: Open and transparent communication will be maintained between both organizations.
8. Next Steps
- Establish a Joint Steering Committee: Form a committee with representatives from both organizations to oversee the partnership and ensure alignment.
- Develop a Joint Marketing Plan: Create a comprehensive marketing strategy that highlights the partnership's sustainability and social impact.
- Pilot Product Launch: Launch a pilot product featuring M'e Terra's ingredients and sustainable practices to test market response and refine the partnership model.
- Capacity Building: Provide financial and technical support to M'e Terra to enhance its production capacity and operational efficiency.
- Continuous Evaluation: Regularly evaluate the partnership's performance against key performance indicators (KPIs) and adjust strategies as needed.
By taking these steps, Unilever and M'e Terra can build a successful partnership that fosters sustainable growth, empowers local communities, and sets a new standard for responsible business practices in emerging markets.
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Case Description
The case concerns the sale of Mae Terra, one of Brazil's leading brands for packaged organic foods, to the consumer goods giant Unilever in 2017. Working with Unilever management, Mae Terra's CEO Alexandre Borges must determine whether and how to keep Mae Terra's B Certification, which attests to its commitment to having a positive social and environmental impact, and what internal governance mechanisms will enable MaeTerra to maintain its mission, values, and practices even as it is integrated into a large volume-driven multinational whose governance follows standard listed company principles.
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