Unilever Internal Environment Analysis

1.3 Internal Environment Analysis

Internal environment consist of organisational internal factors that influence for successful management decisions (Hitt, Ireland &Hoskisson, 2007). In fact, internal environment analysis allows managers to understand the effectiveness of current strategies and effectiveness of resource usage in support of those strategies (Henry, 2008). Moreover, it gives insights to recognise company’s potential of competitive advantage and the areas which need corrective actions to survive in the market (Campbell et al, 2002.; Xu, 2005). Nevertheless, in order to analyse the internal environment of Unilever Sri Lanka in local and international context, the author will use Porter’s value chain analysis, stakeholder analysis

In order to achieve this goal, the Unilever changed their strategy to provide nutrition and quality food and other products by purchasing palm oil and raw materials from certified sources and producing food products according to the globally recognized dietary guidelines. Moreover, Campbell et al (2002) suggests that, “value added can be increased by reducing production cost below those competitors” (p. 42). However, Unilever has achieved reduction of cost by renewing electricity and recycling the packaging materials. Furthermore, Unilever has joined with transportation companies to reduce the cost of production as well as strengthen the competitive advantage. This confirmed by the Campbell et al (2002), “the combination of complementary core competence adds to the competitive advantage of all the collaborating companies”. Thus, Unilever also installed an ERP and SAP platform in order to reduce management difficulties because of broad product

1) assures that, the external environment analysis aid to keep business ahead among the competition within the market. In this case, the external environment analysis carried out above consist of PESTEL and Porter’s five force frameworks to analyse macro and micro environment of Unilever Sri Lanka (Pvt) limited. On the other hand, the analysis of internal environment of Unilever Sri Lanka consist Porter’s value chain and stakeholder analysis (see Appendix H and I). Moreover, the both analysis are base on the information from local and international context as the organisation is multinational company. However, the summary of identified key drivers of change in external environment attached in Appendix G for further clarification. Nevertheless, the SWOT analysis and the summary of SWOT analysis attached in appendix