1. What is the source of Unilever’s advantages over its competitors?
Unilever
has a broad channel of distribution compared to its market rivals. It
especially makes use of small scale retail outlets. Even though such outlets do
not use several freezer cabinets when selling ice cream from Unilever, they
have a significant multiplication effect towards the distribution of ice cream
from Unilever. The company has also been retailing its other products using the
aforementioned outlets thereby boosting its overall power of distribution. In
addition, the company enjoys economies of scale that have been largely
generated by a strong brand name in the market. In other words, Unilever is
capable of producing in large scale without the fear of inadequate marketing
opportunities. As a result, it readily enjoys the benefits associated with
large scale production. Some of these benefits include high volume of sales,
improved profitability and large trade discounts from other trading affiliates.
Moreover, the strong brand image associated with Unilever has made it possible
for the company to implement its strategies both at the national and
pan-European levels.
2.
What are Unilever’s main strengths?
Where so its weaknesses lie? What, if any, would you do about its weaknesses?
Unilever
has several strengths in the European market in spite of the stiff prevailing
competition. Firstly, it has a along reputable history in the production of
consumer goods. In other words, it is a well known global brand. This makes it
easy for the company to market its products. Besides, it has a ready access to
manufacturing resources across the globe. Moreover, the company is strong in
terms of its ability to harness synergy of resources.
Unilever
works closely with its distribution partners such as small scale retailers.
Hence, it has developed a cordial relationship with its various chains of
distribution and therefore capable of reaching out the widest market. The
company has a strong base and appreciation for intensive research and
development. This has led to variety of products in the market that meet the
various tastes and preferences of consumers.
On
the other hand, the greatest weakness of Unilever especially in its European
market is lack of participation in the confectionary market unlike its
competitors. Other weaknesses include fall in revenues, reduced expenditure in
research and development as well as poor management of brands. These weaknesses
can be minimized by revamping brand management skills, boosting research and
innovativeness, exploring untapped markets and also developing a confectionary
division for it ice cream brand.
3.
Should Unilever go further in
launching truly Pan-European products, like those associated with Mars Ice
cream and Nestle Kit Kat ice cream? How important, if at all, are such products
to the overall Unilever strategy?
The
company should indeed go ahead and launch truly Pan-European products in the
market bearing in mind that its competitors have already rolled out such
products. The prevailing market competition is quite stiff and therefore the
company should fully entrench itself in the European market. A product such as
ice cream is important to Unilever because it cultivates early consumption habit
among young consumers ( who are mainly minors). By targeting consumers who are
still in their tender ages, the company will not merely be promoting future
markets; it will also be improving its brand loyalty. Therefore, it will act as
a potential marketing strategy for both the current and future marketing needs
of the company.
