Chinese Business Case Study: Unilever In China

CASE STUDY: UNILEVER IN CHINA

Every multinational corporation has a business strategy that allows it to compete with its competitors. Unilever – one of the most influential companies in the world – offers consumer goods including foods, beverages, cleaning agents and personal care products etc. has developed an extensive global network in almost every country also developed its unique set of business strategies. This essays is aim at analyzing the international strategy that Unilever used in Chinese market.

Overview of Unilever:

Unilever PLC was founded in1894, is a fast-moving consumer goods (FMCG) company. The Company's segments include Personal Care, Foods, Home Care, and Refreshment. The Company's geographical segments include Asia/AMET/RUB

- Chinese market is growing rapidly and is an attractive market size due to great number of Chinese population

- To acquire resources and secure key supplies

- To access cheaper factors of production and reduce cost

- To transfer technology and managerial know how

- To increase foreign competition and protect their home market share

- To prevent themselves from the uncertainties of their domestic market

SWOT analysis

Strength

1. Strong popular brands and recognized as a global one

2. Evolving portfolio and developing channels

3. R&D focus and integrated supply chain

4. Cost efficiency through economies of scale and making use of local resources like cheaper labor Weakness

1. Dependence on distributors and retailers

2. Products can be easily substituted in emerging markets like China

3. Had various leadership thereby leading to conflicts

4. Cultural differences in China lead to lack understanding of Chinese customers

Opportunities

1. Potential in constants change in tastes and preferences

2. Emergence of health conscious consumer

3. Business enhancement for environmental conservation Threats

1. Strong competition and price wars among regional and global competitors

2. Products

Special localized strategies like hiring of local employees, setting up an R&D unit, and planning for stock market listing were initiated to strengthen the company's position in China. Unilever China responded to the complex needs of the country's consumers by developing a portfolio of brands-both local and global, and incorporated traditional Chinese sciences with technological enhancements. The company aimed to identify itself as the brand that was quality conscious and consistently endeavored to meet local needs and tastes.

Despite many struggles throughout the years, Unilever has built and sustained a successful business in China.

What led to the failure of Unilever in 1990s in China

1. The company has too many companies with diverse management with little focus on one main brand.

2. Political environment is complex and it took time to understand deeply about the country’s situation and how the government tends to act.

3. The unsatisfactory cooperation with their Chinese Partners.

4. The differences in the management styles and cultural