A Study of Unilever's Core Competences.doc

1、A Study of Unilevers Core Competences【Abstract】 Core competencies are those capabilities that are critical to a business achieving competitive advantage. The fierce competition today shifted out lots of companies, including many famous ones. However, there are some companies survived the competition

2、 and made big profits. The secret of these winners is that they have core competencies. This paper gives a brief introduction of core competences and the background of Unilever, and analyses the core competences of Unilever, showing the importance for corporations to develop core competences. 【Keywo

3、rds】Core competencies; Unilever; brand strategy; leadership; employee resources 、Introduction Core competencies are those capabilities that are critical to a business achieving competitive advantage. Senior management cannot focus on all activities of a business and the competencies required underta

4、king them. So the goal is for management to focus attention on competencies that really affect competitive advantage. II、The Background of Unilever Unilever was created in 1929 when Margarine Unie, a Dutch margarine company, and Lever Brothers, a British soap and foods company, merged. Today Unileve

5、r sells products in more than 170 countries and areas under the leading brands such as Dove, Lipton and Knorr. Its current workforce is about 300,000 employees worldwide. In 2012, its turnover increased by 10.5% to ?51.3 billion with a positive impact from foreign exchange of 2.2% and acquisitions n

6、et of disposals of 1.1%. Unilevers main competitors are P&G and Johnson& Johnson, it also faces the challenge of local brands such as Splash in Philippines and Longrich in China. III. Analysis of Unilevers Core Competencies A. Take the brand strategy as a core competence Unilever has already set up

7、a series of strategies to penetrate into different markets all around the world. As the brand is a special core competence, Unilever emphasizes on their classical brand building. In 2001 Unilever announced its new strategy Path to Growth which reduced the number of products in its portfolio from 1,2

8、00 to 400, shifting focus to Unilever brands and creating space for global growth. Unilever has realized that in the shot run, a companys competitiveness derives from the price and performance attributes of current product, while in the long run, competitiveness drives from the ability to build the

9、products at lower price. So it makes a brilliant decision on the price strategy based on their consolidate brand reputation. It creates high quality products with a relatively lower price that helps them quickly recognized by the market. Also, in recent years, new brands and upgraded products help U

10、nilever to enlarge the customer base and strengthen the market status. B. Take leadership as a core competence Unilever considers that leadership strongly influences their operations. It develops a new competency model, the Leadership for Growth Profile (LGP), which combines the following components

11、: Firstly, everyone in the company is expected to create growth vision. Secondly, everyone has to drive growth through implementation and to energize others for growth. Thirdly, it is important to secure commitment to growth. By defining a new set of LGP competence factors and using it for managemen

12、t development and recruitment, Unilever tries to change managers behavior and increase behaviors which are more linked with achieving strategic goals for growth. Thus the leaders in the company can make decisions very quickly to help the company save time and cost. Of course, the leaders in Unilever

13、 are sensitive to the current market conditions so that they can set up plans more effective and reasonable. The effective leadership defined as the value-based leadership will help the company to build up their core competence and will not be easily emulated by other competitors. Also, the quick de

14、cision-making benefits Unilevers consumers and attracts potential ones. IV. Conclusion After years of fierce competence with P&G and other famous brands, Unilever not merely survived but kept ahead and made big profits as well. The secret is that it succeeded to find out its competitive advantages a

15、nd build its own core competencies. Core competencies are crucial in todays competition. In order to survive and be competitive in the future, a company should find out or create its own competitive advantage and then build its own core competencies. And it is critical to enhance the core competencies with reference to changes of business environments. Reference: 1 C.K. Prahalad and Gary Hamel. The Core Competence of the Corporation,1990. 2 Unilevers Annual Report&Account of 2012. 3Xiao Ping. The Multi-brand Strategy of Unilever, 2011.