CHANGE TO
GROWTH
WHO UNILEVER IS ???
BRAND REGION EMPLOYEE
Over 400 Brands Over direct employee
Over 190 countries
All around the world 172.000+
Around the world
HISTORY BEGAN ON 1930
1930 1940 1980 1990
Limited resources Globalization Mapping Region
Limited delivery High Cost Brand Focus
Nearly collapse Tough Competition Global Strategy
Full business merger Start to decentralized
UNILEVER Problems Occurs Start to Restructuring
Multiple manager
UNILEVER STRUCTURE BEFORE 1980
HQ
D
COUNTRY A COUNTRY B COUNTRY C COUNTRY D COUNTRY
IZE
Finance
A
MarketingL
TR
Sales
E N
Factory
Operation MARKET BRAND PERFORM
E C
D
Decentralized Concept Unilever
BU 1 1. Marketing Strategy by Country
BU 5 BU 2 2. Strong Local Brand
3. Decision on Country Level
BU 4 BU 3 4. Performance by Area
BUILDING STRONG BRAND
Operation MARKET BRAND PERFORM
IN MULTIPLE MARKETS
Decentralized Works Great Before
1980
National Culture
was important
Inefficient Logistic
International & Communication
exposure still low
High Trade Barrier
Before 1980
Operation MARKET BRAND PERFORM
However, in 1990 Unilever facing a
problem
> Have to built 1.600 Brand
SALES 15%
> High Overhead cost
> High Operational Expense
> Not all Brand & Area Performed
PROFIT 13%
SOME FACTORS
BRAND SALES
1600
STOCK 7%
7%
PRICE
400 93%
Contingencies of Organizational Design
External Organizational Organizational
Technology
Environments Size Strategy
Consumer prefered Increase Business Globalization & Line Unilever Going to
Global Brand Size Production Global Competition
UNILEVER CHANGING STRUCTURE IN
1994
CHANGE IN 1994
HQ
- Building 4 Core Division
EUROPE N. AMERICA ASIA - Regional Business Group
FOODS Personal Home care Chemicals
Why Unilever need to change structure?
Globalization Create Homogenous
Market
Reducting Manufacturing & Marketing Cost
CHANGE STRUCTURE IN 1994 STILL
TRACED PROBLEMS
No Fit between structure & Strategy
Still too many brands resulted
Higher cost structures
Less efficient manufacturing concept
HQ
N.
EUROPE ASIA
AMERICA
FOODS Personal Home care Chemicals
UNILEVER STRUCTURE AFTER 2000
HQ
Strategic in HQ
Execution in
FOOD HOME PERSONAL
Region / Area /
DIVISION CARE
Country
Manufactur by
EUROPE AMERICA OTHERS
E D Region / Area
L IZ Performance
RA global & area
T
Marketing Develop Manufactur
E N Administration by
C
area
Centralized Structure Unilever
1
1. Building only 1 Global Brand
5 2
2. Cross Financial Performance
3. Efficiency Manufactur Process
4. Execution manage by area 4 3
CENTRALIZED STRUCTURE HAVE GREATE IMPROVEMENT
No Trade Barrier Consumer prefer
After 2000- Global Brand
Cutting Brands from
1.600 to 400 brands
Effiency Manufactur
& Distribution
VIDEO
UNILEVER RESULT AFTER CHANGE
- Efficients & reducing OPEX manufacture
400 Brands contribute 55% sales
- Increasing marketing Expense
+57% growth from
- Increasing Brand awareness
emerging market in 2013 - Sharp sales & marketing strategies
& adapting local uniqueness in
each country
3% reduce turnover
- Headquarter have the ability to
control strategic decision making
Global Brand strategic - Need more time to elevate &
decision making
UNILEVER BUSINESS PROCESS AFTER
CENTRALIZED
Supplier Manufacture Distributor Retailer Consumer
GLOBAL / REGION LOCAL EXECUTION GLOBAL
STRATEGIC &
LOCAL ADAPTING
Summary
Centralized Decentralized
Decision making in Headquarter Decision making in each area
Performance by HQ / Region Performance by each area
Strategic by HQ & executed in area Strategic by area
Global Brand Mulitple Brand
Slow local responsiveness Fast local responsiveness
External Organizational Organizational
Technology
Environments Size Strategy
Summary
Centralized Decentralized
Core Competencies Transfer Duplication activities in various area
Coordination & Objectives Coordination problem
Experience & Location curve economies The cost of manufacture & others activities
No local responsiveness Local Responsiveness
Less empowerment More empowerment
Conflict of interest Fast decision making
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