Harvard Case - Unilever Philippines: Making the Philippines Great Again
"Unilever Philippines: Making the Philippines Great Again" Harvard business case study is written by Jean François Manzoni, P.C. Abraham. It deals with the challenges in the field of General Management. The case study is 24 page(s) long and it was first published on : Nov 27, 2017
At Fern Fort University, we recommend Unilever Philippines implement a multifaceted strategy that leverages its existing strengths while adapting to the dynamic Philippine market. This strategy will focus on:
- Accelerated Growth: Driving growth through targeted product innovation, expansion into new market segments, and strategic partnerships.
- Digital Transformation: Embracing digital technologies to enhance consumer engagement, optimize operations, and gain valuable insights.
- Sustainable Development: Integrating sustainability practices across its value chain, building a strong reputation for social and environmental responsibility.
- Empowering Employees: Fostering a culture of innovation, collaboration, and empowerment to drive performance and attract top talent.
2. Background
This case study examines Unilever Philippines' journey to regain market leadership in the highly competitive Philippine market. The company faces challenges like intense competition, evolving consumer preferences, and economic volatility. Unilever Philippines aims to achieve sustainable growth, strengthen its brand image, and contribute to the country's development.
The main protagonists of the case study are:
- Unilever Philippines: A multinational corporation with a long history in the Philippines, seeking to regain market leadership.
- The Philippine Market: A dynamic and rapidly evolving market with diverse consumer needs and preferences.
- Competitors: Local and international brands vying for market share in various product categories.
- Consumers: The target audience for Unilever's products, increasingly demanding value, quality, and sustainability.
3. Analysis of the Case Study
SWOT Analysis:
Strengths:
- Strong brand recognition and established market presence.
- Diverse product portfolio catering to various consumer needs.
- Experienced and skilled workforce.
- Strong commitment to corporate social responsibility.
Weaknesses:
- Some product categories face declining market share.
- Limited digital marketing capabilities compared to competitors.
- Potential for operational inefficiencies.
- Challenges in adapting to rapidly changing consumer preferences.
Opportunities:
- Growing middle class and increasing disposable income.
- Expansion into new market segments like health and wellness.
- Leveraging digital platforms for marketing and sales.
- Building partnerships with local businesses and NGOs.
Threats:
- Intense competition from both local and international brands.
- Economic volatility and fluctuating consumer spending.
- Rising costs of raw materials and manufacturing.
- Changing consumer preferences towards natural and organic products.
Porter's Five Forces Analysis:
- Threat of New Entrants: Moderate, due to high barriers to entry in some categories.
- Bargaining Power of Buyers: High, due to numerous options and price sensitivity.
- Bargaining Power of Suppliers: Moderate, with some raw materials subject to fluctuations.
- Threat of Substitute Products: High, due to the availability of alternative brands and product categories.
- Competitive Rivalry: Intense, with numerous players competing for market share.
Key Findings:
- Unilever Philippines needs to address its weaknesses and capitalize on its strengths to remain competitive.
- The company must adapt its strategies to the evolving market dynamics and consumer preferences.
- Investing in digital transformation and innovation is crucial for long-term growth.
4. Recommendations
Accelerated Growth:
- Product Innovation: Develop new products tailored to specific consumer needs, focusing on health, wellness, and sustainability.
- Market Expansion: Explore new market segments like premium and niche products, targeting specific demographics and lifestyles.
- Strategic Partnerships: Collaborate with local businesses and NGOs to expand reach, access new markets, and enhance brand image.
Digital Transformation:
- E-commerce Platform: Develop a robust e-commerce platform to reach a wider audience and provide convenient shopping experiences.
- Digital Marketing: Invest in digital marketing strategies to engage with consumers online, leveraging social media, search engine optimization, and targeted advertising.
- Data Analytics: Utilize data analytics to gain insights into consumer behavior, optimize marketing campaigns, and improve operational efficiency.
Sustainable Development:
- Eco-friendly Products: Develop and promote products with sustainable packaging and ingredients, minimizing environmental impact.
- Community Engagement: Engage in community outreach programs to address social issues and contribute to the well-being of local communities.
- Transparency and Accountability: Implement transparent reporting mechanisms to showcase the company's sustainability efforts and commitments.
Empowering Employees:
- Talent Management: Invest in employee development programs to enhance skills, knowledge, and leadership capabilities.
- Employee Engagement: Create a culture of collaboration, innovation, and employee empowerment to foster a positive work environment.
- Diversity and Inclusion: Promote diversity and inclusion in the workplace, leveraging the unique perspectives and talents of all employees.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Mission: The recommendations align with Unilever's core competencies in brand building, product development, and marketing, while contributing to its mission of sustainable growth and social responsibility.
- External Customers and Internal Clients: The recommendations address the needs of both external customers (consumers) and internal clients (employees), fostering a win-win scenario.
- Competitors: The recommendations aim to differentiate Unilever Philippines from its competitors by focusing on innovation, digital transformation, and sustainability.
- Attractiveness: The recommendations are expected to generate positive returns on investment through increased market share, enhanced brand image, and improved operational efficiency.
6. Conclusion
By implementing these recommendations, Unilever Philippines can achieve sustainable growth, strengthen its brand image, and contribute to the development of the Philippines. The company can leverage its strengths, address its weaknesses, and capitalize on emerging opportunities while mitigating potential threats.
7. Discussion
Alternative Options:
- Mergers and Acquisitions: Acquiring local brands or companies could provide access to new markets and product categories. However, this option carries significant financial and operational risks.
- Outsourcing and Offshoring: Outsourcing certain operations could reduce costs and enhance efficiency. However, this option could impact employee morale and potentially compromise quality control.
Risks and Key Assumptions:
- Economic Volatility: Economic instability could impact consumer spending and affect the company's financial performance.
- Technological Disruptions: Rapid technological advancements could necessitate significant investments in digital transformation and innovation.
- Regulatory Changes: Changes in government regulations could impact the company's operations and product development.
8. Next Steps
Timeline:
- Year 1: Implement key digital transformation initiatives, launch new product innovations, and strengthen sustainability practices.
- Year 2: Expand into new market segments, build strategic partnerships, and further develop employee empowerment programs.
- Year 3: Monitor progress, adapt strategies as needed, and continue to invest in innovation and sustainability.
Key Milestones:
- Q1 2024: Launch e-commerce platform and pilot new product innovations.
- Q2 2024: Develop a comprehensive digital marketing strategy and implement sustainability reporting mechanisms.
- Q3 2024: Initiate employee development programs and explore strategic partnerships.
- Q4 2024: Evaluate performance, adjust strategies, and plan for future growth.
By taking decisive action and implementing these recommendations, Unilever Philippines can position itself for sustained success in the dynamic Philippine market, making a positive impact on both its business and the country's development.
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Case Description
The case tells the story of the turnaround of Unilever Philippines (ULP) between 2013 and 2016. The Philippines Leadership Team (PhLT) set a vision to rediscover the greatness of the Philippines by achieving a growth rate of at least 10% a year, becoming a disciplined execution machine so that it could generate consistent results, and connecting with the hearts and minds of the Filipino consumer. The case discusses the key factors that led to the success of the turnaround including the cohesiveness of the PhLT, empowering the extended leadership team, and focusing on the core. ULP crossed the billion euro revenue threshold in 2015 after two years of double digit growth. The case ends with Rohit Jawa, the Managing Director, reflecting on two key questions. First, what needed to change to sustain the growth of the company since "what got the company here may not get it there"? Second, how could he ensure that the positive changes made would outlast the current PhLT?
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