Unilever’s Business Model Case Study

Unilever is a multinational brand that is known to us all. But have you ever wondered, what is the business model followed by Unilever? In this case study, we shall be discussing Unilever’s business model. This sample will clear all of your doubts. So without further adieu:

Unilever: overview

Unilever is a consumer goods-based organization that has its headquarters in Rotterdam as well as London. Reason being that brands is Anglo-dutch. The company was established in the year 1929 2nd of September. However, it was not “founded”. Rather it was formed with the merger of two different brands. Namely, the dutch brand “Margarine Unie” and the English brand “Lever Brothers”.

Moreover, It offers its consumer products in as many as 190 nations across the globe. Its product includes Food, energy drinks, baby food, tea, coffee, personal care, cereals, pharmaceuticals, among several others. In fact, Unilever is the world’s largest producer of soap.

Unilever rapidly grew in the latter half of the 20th century. Here, the brand diversified at a high rate. Thus, the company grew into a multinational organization from just soap producers. In fact, it acquired several other large consumer-based brands.

Unilever reached its height under Paul Polman’s guidance. During this time it also shifted its focus towards the health and beauty industry and moved away from the food sector. The reason being that the latter one was not showing promising results.

Moving on, we shall be looking at the areas in which the brand operates and brands owned by it in the next section.

Operating segments and owned brands

Unilever went on an acquisition run in the second half of the 20th century. Consequently, today it owns more than 400 minor brands. In addition to this, it also recorded that as many as thirteen brands under it had over one billion turnovers. The total turn was Unilever was 53.7 billion in the year 2017 alone.

Some of its famous brands include the following: Axe/Lynx, Dove, Omo, Heartbrand ice creams, Hellmann’s, Knorr, Lipton, Lux, Magnum, Marmite, Rexona/Degree, Sunsilk, and Surf.

Moreover, its business operations can be divided into three general categories. These areas are:

• Foods & Refreshments
• Home Care & Beauty
• Personal Care

In addition to this, Unilever has its R&D centers in China, England, Netherlands, as well as the USA. Nevertheless, we shall be looking at the business model of the same in the next section.

Direct-To-Consumers Business Model and supply chain

Unilever’s business model is the “direct-to-consumer” model. This business model, often also referred to as D2C is a strategy that allows organizations like Unilever to sell directly to customers. Thus, there is no middle man. In addition to this, it is also a “low barrier-to-entry” strategy. However, it is not relevant in this case. 

Moving on, this organization has created a well-established global supply chain based on this D2C business model. Plus brand also has a considerable understanding of its market and consumer base. Thus, Unilevers focuses on big marketing projects with aim of establishing a connection with consumers.

Apart from the strong value and supply chain, the brand is also quick to adapt to the new market conditions as well as economic conditions. Furthermore, the R&D is also closely integrated into the structure. AS a result, all the information and data collected by the company can be effectively used in product development. All of this adds up to make the whole system of “Unilever”.

Unilever Distribution Strategy

In order to complete the link, Unilever has a brilliant distribution strategy as well as the system in place. This works hand in hand with the well-established supply chain of the brand. Thus, Unilever can successfully provide sufficient supply to all of its suppliers across the globe.

Furthermore, with the D2C distribution channels, Unilever’s products are sold at:

• hypermarkets
• wholesalers and cash and carry
• convenience stores
• E-commerce
• out-of-home and direct-to-consumer

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