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.
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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.
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.
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.