Acknowledgement

I have taken efforts in this report. However, it would not have been possible without the kind
support and help of many individuals and organization. I would like to extend my sincere thanks
to all of them. First and foremost, I would like to thank for guiding me and educating me with
the knowledge that I needed for the completion of this assignment.

I would like to express my gratitude towards my parents for their kind co-operation and
encouragement which help me in completion of this report. I would like to express my special
gratitude and thanks to industry persons for giving me such attention and time. My thanks and
appreciations also go to my colleague in developing the report and people who have willingly
helped me out with their abilities.

Thanking You

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Executive Summary

This Assignment (report) focuses in Strategic Management in Unilever Sri lanka Company, The
purpose of this report is Unilever Sri lanka’s Ansoff’s growth-vector matrix to derive corporate
strategy directions for future plans of the organization, Directional policy matrix (GE matrix) and
make effective decisions about the future growth of its product portfolios, Based on above planning
techniques develop possible alternative strategies (substantive growth, limited growth or
retrenchment) and appropriate strategy methods that can be used by the organization to execute
the selected strategy.
As the Unilever Sri lanka is successful, there is a less chances of retrenchment. Then finally from
suitable business units the 4 strategic options are suggested. The suggested strategic options are
evaluated by the criteria of suitability, acceptability and feasibility. A strategic option that match
with suitability, acceptability and feasibility is considered and then a best suitable option from
these 4 strategic option is selected and then will be executed by the Unilever Sri lanka.

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 Contents
Acknowledgement .......................................................................................................................... 1
Executive Summary ........................................................................................................................ 2
Industry Profile ............................................................................................................................... 4
History and background .............................................................................................................. 4
The SWOT Analysis of Unilever Limited .................................................................................. 4
Question 01 ..................................................................................................................................... 6
Ansoff’s growth-vector matrix ................................................................................................... 6
The summary of Ansoff’s Matrix of Unilever Sri Lanka ........................................................... 8
Question 02 ................................................................................................................................... 10
GE matrix .................................................................................................................................. 10
Question 03 ................................................................................................................................... 12
Question 04 ................................................................................................................................... 14
Conclusion .................................................................................................................................... 19
References ..................................................................................................................................... 20

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Industry Profile

Unilever is a British-Dutch transnational consumer goods company co-headquartered in London,

United Kingdom and Rotterdam, Netherlands. Its products include food and beverages (about 40
percent of its revenue), cleaning agents and personal care products. It is the world's largest
consumer goods company. Unilever is one of the oldest multinational companies; its products are
available in around 190 countries (Anon., n.d.).
The Company is a Home and Personal Care as well as Foods and Refreshment products is
distinguished by many of the world’s best known and most trusted brands, including Wall’s,
Lifebuoy, Vaseline, Peps dent, Lux, Pond’s, Sunlight, Rinso, Blue Band, Dove, Rexona, Clear and
others.

History and background

Hindustan Unilever Limited was established in 1933 as Lever Brothers India Limited by Lever
Brothers. In 1956, it became known as Hindustan Lever Limited, as a result of a merger between
Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. The company was
renamed in June 2007 as “Hindustan Unilever Limited”.

The SWOT Analysis of Unilever Limited

Strength of Unilever Limited

1. Strong brand equity
2. Strong Cash Reserves
3. International Exchange Rate
4. Use of creative advertising
5. Investing in training employees
6. Organized into four Main division
a. personal care / food
b. Refreshment / homecare

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Weakness of Unilever Limited
 Since it an overseas stock
 Innovation time cycles
 Expensive labor
 Global help desk India and ire land
Opportunities of Unilever Limited

 Business diversification
 Product innovation
 Increase of environment concern
 Market development
Threats of Unilever Limited

 Tough competitive rivalry

 Product imitation
 Increase in popularity of house brands

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Question 01

Ansoff’s growth-vector matrix

It is a decision making tool for corporate planning and provide a framework for analyzing a range
of strategic options in relative to risks and return. It is a planning tool that assist companies such
as Unilever Sri Lanka to determine the product and marketing strategy. Ansoff’s Matrix is a useful
tool for examining a company’s product range. The four main options are:

1. Market penetration
2. Product development
3. Market development
4. Diversification

Unilever Srilanka: Ansoff matrix

EXISTING

Market Penetration Product Development

ANSOFF'S
“MARKET

MATRIX
S”

Market Extension Diversification

NEW

EXISTING “PRODUCTS” NEW

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Market Penetration: (EXISTING Market, EXISTING Product)

It is a growth option where Unilever Sri Lanka focuses on selling their existing products in existing
Sri Lankan market (Selling more of the same to the same types of people). Market penetration
reduces risk for Unilever Sri Lanka because they already well known reputed brand in Sri Lanka,
so they don’t need to undertake any research and development to develop into new market.
For example:
Ponds, Life buoy, Surf Excel, Lux

Market development: (NEW Market, EXISTING Product)

It is a growth option where Unilever Sri Lanka focuses on selling their existing products into new
market. Which have higher risk, because they are targeting new customers in unknown market. As
the market development for any company becomes more integrated with the company’s expansion,
acquisitions and partnerships, therefore Unilever is also focusing on all these respects.

Product development: (EXISTING Market, NEW Product)

It is a growth option where Unilever Sri Lanka focuses on selling new product in existing market.
Which incurs research and development cost. (Re branded, re packaged products, new flavors, and
new varieties).

For example:
The best example of the improvements in the process was the development of a new laundry
detergent formula that allowed for more concentration and less packaging fitting the needs of
today’s eco-friendly and mobile customers.

Diversification

Diversification Strategy is the strategy where we Develop a new product and target them in a
new market.

1. Related Diversification: (NEW Market, NEW Product)

2. Unrelated Diversification: (NEW Market, NEW Product)

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  Home and personal care businesses share similar production technology and customers
 Food and refreshments businesses share similar suppliers
 Home care and food businesses have no common attributes
I have chosen 5 strategic business unit of Unilever Sri Lanka to suggest to derive corporate strategy
directions for future plans of the organization.

The summary of Ansoff’s Matrix of Unilever Sri Lanka

(Existing product) (New product)

(Existing market) Market penetration Product development

Shampoo(Dove) Laundry detergent(Surf
Hand wash(Lifebuoy) Excel)
Soap (Lifebuoy)
Deodorant
Market development Diversification

(New market)

Shampoo (Dove)

Unilever offers high quality Shampoo, dove which are made to international standard, and Dove
which offers in different sizes and Price. They are one of the best Shampoo manufacturers in Sri
Lanka along with Head & Shoulders and Pantene Company.

Growth option - I would suggest Unilever’s dove shampoo to undertake market penetration as
dove was the market leader in past few years such as 2011 and 2012. Unilever’s dove should
improve their distribution network all area and give more threats to their competitors such as
Head & Shoulders and Pantene.

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Hand wash(Lifebuoy)

Unilever offers quicks wash Hand wash(Lifebuoy) to their customers in different types such as
Nature Hand wash, Kitchen fresh hand wash, color changing hand wash, cool fresh hand wash,
and mild care hand wash.
They are facing a huge competition from Dettol.
Growth option – I would Unilever Hand wash(Lifebuoy) to undertake market penetration, because
there is a consistent growth of sales, for example. In 2014, the sales growth was 40% and 22% in
2015. So improving the distribution channel and with the help of marketing team, they can achieve
more growth in future.

Laundry detergent (Surf Excel)

Unilever offers variety of Laundry detergent to satisfy their customers. One of Unilever Laundry
detergent have been named Surf Excel brand. Their main competitor is P& G Ariel (detergent) and
Tide. Surf Excel is now available in Europe, Latin America, Asia and Africa, with a comprehensive
range of offerings including bars, powders, liquids, tablets and capsules. (Anon., 2018).

Growth option - I would suggest Surf Excel to undertake product development. As they are the
market leader which hold 3/4th of share in the laundry market, in Sri Lankan Market. So adding
new products would be beneficial as the industry is more profitable. Turnover grew by 1.4%
Underlying sales growth of 5.5%. Net profit from continuing operations grew by 10%. Strong
cost savings programs delivered €1 billion in the year (Anon., 2017 ).

Soap (Lifebuoy)

Unilever offers variety of Soap to satisfy their customers. One of Unilever Soap have been named
Lifebuoy. Their main competitor is Dettol. Lifebuoy is now available in Europe, Latin America,
Asia and Africa, with a comprehensive range of offerings including bars, Shower gel liquids and
body washes.

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Growth option - I would suggest Lifebuoy to undertake product development as Lifebuoy was the
market leader. They have a good recognition for Soap. Unilever should improve their distribution
network all area and give more threats to their competitors such as Dettol, Velvet.

Question 02

GE matrix
GE matrix is a tool to perform a business portfolio analysis on the Strategic Business Units (SBU)
of a company such as Unilever Sri Lanka. It measures the attractiveness and strength of the
business units of Unilever Sri Lanka.

 If the strength of the business unit and attractiveness is high, Unilever SriLanka should
invest.
 If the strength of the business unit and attractiveness medium, Unilever SriLanka should
retain or selectively invest.
 If the strength of the business unit and attractiveness is low, Unilever SriLanka should
divest.

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So with this GE matrix, Unilever SriLanka can identify:

 Identify which Strategic Business Unit of Unilever SriLanka should receive more or less
investment.
 Develop growth strategies for Unilever SriLanka.
 Decide which business unit of Unilever SriLanka should no longer be retained
(Disinvested).
The summary of GE Matrix of the Unilever SriLanka

Skin Care Category (Ponds)

This is the only category in the high industry and high business strength cell. Hence, HUL should
invest and grow in this sector. This sector is driven by innovation and high distribution, hence,
HUL should invest in R&D and continue its stronghold in this category

Bath and Shower and Category:

These 2 categories are in the medium
High industry attractiveness and high SBU strength cell. This means these categories are selective
growth segments. Because of the high competitive strength in this industry, HUL should continue
its dominance in these categories. Selective brands in each of these categories should be invested
in and brands with low growth prospects can be divested from. The revenue from these categories
can be used to invest in the growth of the Skin Care Category

Hair Care Category:

These 2 categories are in the medium growth and medium SBU strength cells. The growth
prospects of these 2 categories are not attractive and HUL should consider divesting from these.
However, if there is a strategic advantage in these categories, the company should consider
investing only in certain brands or segments of these categories

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Question 03

The alternatives strategies can be classified into 3, they are:

 Limited growth
 Substantial growth
 Retrenchment

For Unilever SriLanka, I have suggested Limited growth for the all 4 alternative strategies such
as:

 Market penetration is suggested to both, as these Shampoo and Hand wash products two
products started to grow recently in Sri Lankan market. So market penetration will help them
to capture market share in Sri Lankan market.

 Product development is suggested to both Laundry detergent and Soap products, as these two
products are well established products in Sri Lanka and they are already in market
development, as their products are exported over 45 countries. So product development will
help them to remain competitive with innovating new products in Sri Lankan market.

Unilever Sri Lanka is already having substantial growth, such as vertical integration on Sustainable
dairy and Sustainable palm oil, which is manufactured under company’s backward integration
programme.

With the above planning strategies and with the help of Ansoff’s and GE matrix, I’m going to
develop strategies for the business units of Unilever Sri Lanka. From these 10 business units, I am
going to develop 4 strategies. They are:

 Strategic option 01 - Increase sales growth of 50% in Dove Shampoo.

 Strategic option 02 - Add a new product category (herbal or medicinal) in Hand wash product.

 Strategic option 03 - Add a new product to the soap category

 Strategic option 04 - Increase sales growth of 20% in Laundry detergent product.

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Dove Shampoo
I would develop a strategy for Unilever Sri Lanka to achieve 50% growth of sales in future year.
Because Dove Shampoo was introduced in 2014, and they find it a difficult competition among
Head & Shoulders and Pantene in the same starting years. But they have started to contribute
revenue for the Unilever Sri Lanka from 2015.

Due to increase in sales growth 60% on their shampoo unit, which was improved due to improved
distribution efforts that has increased market penetration of the product giving the brand stronger
market presence. So achieving 50% sales growth would match with the performance of the Dove
Shampoo and with the help of their distribution network of Unilever Sri Lanka.

Soap
I would develop a strategy for soap (Lifebuoy) to achieve 20% growth of sales in the future year.
Because Soap (Lifebuoy) is experiencing a consistent sales growth over the year, in 2014, they
achieved the sales growth of 40% and 22% in 2014. Which shows that they have capability to
growth consistently in Sri Lankan market. So if Soap (Lifebuoy) improves their marketing
strategies such as promotion and advertising and with the help of their strong distribution network,
they are able to achieve this strategy as sales growth of previous years are matching with this.

Hand wash (Lifebuoy)

Lifebuoy Hand Wash is experiencing a rapid growth sales volume, they have expanded market
share to 40% in 2015 and their sales of Lifebuoy Hand Wash was supported by the 88 distributors.
I would develop a strategy for Unilever Lifebuoy Hand Wash to add herbal or medicinal Lifebuoy
category in their Hand Wash product. there is a chances of being success, as many people are tend
to health conscious and also it can be used for medicinal purposes, so it can be consumed by all.
So developing this strategy would also give competitive advantage over their competitors such as
Velvet and Kumarikka as they are newly developing herbal Hand Wash.

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Laundry detergent (surf excel)
I would suggest Laundry detergent surf excel to develop a new surf excel Aloe vera in their
detergent category. surf excel introduced Aloe vera, which gentle care, which achieve a
satisfactory sale in Sri Lankan market.
It is higher chances of earning more revenue in the Washing Powder industry and the Surf Excel
is worth around Rs.17.76 billion per annum (Anon., 2018).

Question 04

The strategic evaluation of the Unilever Sri Lanka.

Increase sales Add a new Add a new Increase sales

growth of 50% in product category product to the growth of 20% in
Dove Shampoo (herbal or Laundry soap products.
medicinal) in detergent (surf
Hand Wash excel)
it product.
Acceptability   

Suitability  

Feasibility    

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Strategic option 01

Increase sales growth of 50% in Dove Shampoo.

Acceptability –They are undertaking market penetration, which less risky and also it would
increase shareholder wealth, if successful. Dove Shampoo which would have a positive publicity,
as most people concern about their health and there will be less restriction by the government. It
is least risky compared to other growth option and are sold in Sri Lankan market, where they high
recognition for Uniliever products.

Suitability - In 2015, Unilever planned to capture more market share and sustained growth over
the coming years. They have sales growth of 60% in 2015. It indicates that their core competencies
are matching with this strategy. But however it would be difficult because there are strong players
such as Head & Shoulders and Pantene in Sri Lankan market, so there is less chance of achieving
50% growth in sales.

Feasibility – Dove Shampoo were struggling in the starting years. In 2015, Unilever increased their
range of products under Dove Shampoo, where they achieved sales growth of 60% in a year, which
was supported by their research and development, marketing team and they have a strong
distribution channel, which made all Unilever products available in many areas. So this indicates
that Uniliever can achieve in this strategic option (increase sales by 50%) within one-year time
scale as their financial strength is high. they had a turnover of 1743 million per year in 2015.

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Strategic option 02

Add new product category (herbal or medicinal) in Hand Wash product.

Acceptability – Lifebuoy Hand Wash is the market leader and it offers Lifebuoy Hand Wash in
different type, if they launch herbal or medicinal Lifebuoy Hand Wash, which would satisfy
patients, customers and public as it is for medicinal purpose, but however we cannot make sure
that every customer may try it and like it. If this strategic option is not successful, it can reduce
shareholder wealth due to promotional and distributional cost as it is more risky than market
penetration. Government may encourage to sell as it is a medicinal product.

Suitability –Uniliever’s turnover was 1,743 million in 2015, which indicate that they have financial
resource to develop this herbal product. And Uniliever is tend to be innovative every year so
developing this herbal product would match with their core competencies. This would give them
a competitive advantage as Herbal Lifebuoy Hand Wash is new to the market.

Feasibility – Lifebuoy Hand Wash sales was expanding rapidly due to their strong distribution
network around 88 distributors and 132 territories including wholesale and retail outlet. So if this
strategy is implemented, there are some chances for this strategy to be success as Uniliever have
strong distribution, marketing team and also may undertake strong advertisement campaign as they
are strong financially.

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Strategic option 03

Add a new product to the Soap category.

Acceptability – Uniliver’s soap are the market leader in Soap industry, so adding new product soap
category would satisfy most of customers such as kids and youth. It is risky than market penetration
but as they have a good recognition in Sri Lanka launching this product in soap category would
guarantee a satisfactory sales and generate more revenue to shareholders. They will undertake
production method that will not harm environment and they undertake CSR programs, so less
government interference.

Suitability – Uniliver tend to innovate new products every year, so launching soap match with their
core competencies. But however, UNILIVER have lots of soap category, so this would not give a
much impact or threat to their competitors such as Velvet or Kumarika as they also offer variety
of soap.

Feasibility - Uniliver soaps and hand wash business unit contributes highest revenue compared to
other business units. If this strategy is implemented, there is a higher chance of being success as
they are well recognized brand in Sri Lanka with strong distribution network. Advertising expense
of Lifebuoy is higher than any other soap firms in the Sri Lanka.

Strategic option 04

Increase sales growth of 20% in Laundry detergent (Surf Excel) products.

Acceptability – there is a consistent sales growth in the on the UNILIVER washing powder
products in last previous year as UNILIVER developed new range of washing powders products
in last two years, so it indicates UNILIVER have more demand for washing powder product,
customers will be more satisfied if UNILIVER washing powder products are available all areas in
Sri Lanka with the help of distribution network. In 2014, there was a sales growth of 40% and 22%

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in 2015. So UNILIVER washing powder product is contributing revenue and adopting this strategy
would increase the wealth of shareholders

Suitability - UNILIVER is anticipating slow but sustained growth in washing powder product and
its segmentation, so the sales were increasing slowly year by year for UNILIVER washing powder
products, so this is matching the strategic option to increase sales by 20%.

Feasibility – UNILIVER washing powder is experiencing a consistent sales growth due to the
financial strength of the UNILIVER Company. So when they implement this strategy, there is a
higher chances of achieving it as they have a strong marketing team and distribution channel. In
my point of view, UNILIVER should develop the strategic option 04, Increase sales growth of
20% in washing powder products. Which is acceptable, suitable and feasible. They experience
consistent growth of sales in previous years.

In 2014, sales growth increased by 40% and 22% in 2015. And they are contributing revenue to
UNILIVER in overall. And this strategy would be achieved as UNILIVER have strong marketing
team and distribution network and there is less risk as they are undertaking market penetration.
Unlike other options, which lacks:

Strategic option 1, where there is stiff competition from Head & Shoulders and Pantene.
(acceptability)
Strategic option 2, higher risk due to new category of Hand wash they produce. (suitability)
Strategic option 3, due to the tough competition from competitors and variety of Soap they offer.
(suitability) All the strategy suggested for UNILIVER is considerable but the
strategic option 04 is the most suitable option.

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Conclusion

In my point of view, Ansoff’s matrix have helped the Unilever Sri Lanka to derive corporate
strategy directions for their business units such as product development is suggested to Soap, Hand
Wash and market penetration is suggested to soap, Dove Shampoo.

GE matrix have suggested ideas whether they should invest further or divest the Unilever Sri Lanka
units. Unilever Sri Lanka should invest more on the business units such as soap, Hand wash and
shampoo as their strength and market attractiveness is high, identified by the GE matrix. And
Unilever Sri Lanka have 10 business unit from those I have suggested 4 alternative strategies. All
of these strategies have limited growth. Such as market penetration and product development.

These strategies have been given arguments why they have been suggested. The 4 alternative
strategies are:
 Increase sales growth of 50% in Dove Shampoo.

 Add a new product category (herbal or medicinal) in Hand wash product

 Add a new product to the soap category.

 Increase sales growth of 20% in washing Powder products.

From these strategic option, increase sales growth of 20% in soap product is the best option
compared to other options as it matches the three criteria. Such as suitability, acceptability and
feasibility, whilst other 3 options fail to cover all the three criteria.

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 References
1. Anon., 2017 . Unilever Sri Lanka continues to reinforce leadership through transforming
laundry market. [Online]
Available at: http://www.ft.lk/lifestyle/Unilever-Sri-Lanka-continues-to-reinforce-
leadership-through-transforming-laundry-market/8-644335
2. Anon., 2018. Our brands. [Online]
Available at: https://www.unilever.com.lk/brands/?category=408126&brand=413170-
410037
3. Anon., 2018. Unilever introduces Surf Excel with aloe vera. [Online]
Available at: http://www.dailynews.lk/2018/06/25/business/154857/unilever-introduces-
surf-excel-aloe-vera
4. Anon., n.d. Wikipedia. [Online]
Available at: https://en.wikipedia.org/wiki/Unilever

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