Unilever Essay

Unilever is a modern multinational corporation employing over 180,000 people on six continents. It has research laboratories in England (Colworth and Port Sunlight), Holland (Vlaardingen), Connecticut (Trumbull), New Jersey (Englewood Cliffs), India (Bangalore), Pakistan, and in Shanghai. With gross revenues from its worldwide operations in 2005 at €40 billion, Unilever is a major company, with its stock listed jointly on many stock exchanges as a Dutch firm (Unilever NV) based in Rotterdam, and as an English company (Unilever plc) based in London. However, the company has a unified board of directors and operates as a single firm.

Unilever Beginnings

The duality in Unilever’s stock listing originated with its foundation in the 1930s when the Dutch margarine manufacturer, Margarine Unie, merged with Lever Brothers Company, a British soap maker. Their common motive for uniting was the ingredient palm oil, which was used in both the manufacturing of soap and margarine. The merger joined a soap maker with a food manufacturer, which have continued to be their major business focuses since the 1930s.

With the economies of scale achieved from the merger, the dual company was able to initiate new businesses in Latin America. During World War II, it was under some duress, as its Dutch center was in Nazi-occupied Holland. However, after the war, it recovered from its business losses on the Continent and began to expand again in the areas of soap making and foods.

Post–World War II Operations

In 1972, it bought the Canadian operations of A&W Restaurants, which are famous for selling root beer and fast food. It sold the chain in 1995. In the early days, soap was 90 percent of Unilever’s revenues. However, by the 1980s, soap and edible fats sales were only 40 percent of revenues. In order to grow, it purchased the Brooke Bond Company in 1984, which manufactures PG Tips tea under the Brooke Bond label. Today Unilever claims that 35 million cups of PG Tips tea are consumed every day in Great Britain.

Unilever expanded its position in the skin-care market from soap to other products through the acquisition of Chesebrough-Ponds. The Unilever product list added food (Ragu spaghetti sauce), toothpaste (Pepsodent), skin-care products (Pond’s cream and Vaseline), hairspray (Aqua-Net), and nail polish (Cutex). It continued its expansion into cosmetics in 1989 with the purchase of Faberge, the Calvin Klein cosmetic line, and the Elizabeth Arden line. The latter was sold in 2000 to FFI Fragrances.

When Unilever purchased Helene Curtis Industries in 1996, it established itself as a major company in the United States. The acquisition gave it control of the Suave and Finesse hair-care products, as well as Degree deodorant. It continued its American expansion in 2000 with the purchase of Best Foods. Then in April 2000, it purchased both Ben & Jerry’s and SlimFast on the same day.

Today Unilever owns over 400 brands. Some are local brands, limited to only a few countries. Others, such as Lipton Tea, are widely recognized. It is also the largest ice cream manufacturer in the world. Most of its ice cream is marketed under the “Heartbrand,” with Popsicle, Klondike, Breyers, and Ben & Jerry’s being the exceptions. Almost all of Unilever’s products are either in the food and beverage category, or in the home and personal care category. This is consistent with the origins of the company as a food producer and a soap maker.

Because of its presence in some of the more environmentally sensitive areas of the world, where tea and palm oil are produced, Unilever has taken a strong stand as an environmental champion. Since 1998, it has undertaken to engage in various forms of sustainable agriculture in producing its food products or ingredients used in personal care products. In 2007, it recruited the Rainforest Alliance as a certification agent. The Alliance certifies that Unilever teas produced in east Africa are grown through environmentally sound ways. By 2010, the company plans to market its Lipton and PG Tips teas in Europe as certified teas. By 2015 it will market globally as certified.

Bibliography:

  1. David A. Aaker, Brand Portfolio Strategy: Creating Relevance, Differentiation, Energy, Leverage, and Clarity (Free Press, 2004);
  2. Allen P. Adamson, BrandSimple: How the Best Brands Keep It Simple and Succeed (Palgrave Macmillan, 2007);
  3. Jason Clay, Exploring the Links between International Business and Poverty Reduction: A Case Study of Unilever in Indonesia (Oxfam Publishing, 2005);
  4. Geoffrey Jones, Renewing Unilever: Transformation and Tradition (Oxford University Press, 2005);
  5. J. Reader, Fifty Years of Unilever (Trafalgar Square, 1980);
  6. Ben Wubs, International Business and National War Interests: Unilever between Reich and Empire, 1930–1945 (Routledge, 2008).

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