Tài liệu Research paper a comparison the business strategy of unilever and procter and gamble in asian market

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THE UNIVERSITY OF DANANG UNIVERSITY OF ECONOMICS ---------- RESEARCH PAPER A COMPARISON THE BUSINESS STRATEGY OF UNILEVER AND PROCTER&GAMBLE IN ASIAN MARKET Academic advisors: Trịnh Thúy Hường Class: 42K01.5 Student’s name: Phan Công Anh Hồ Thị Vui Huỳnh Ngọc Toàn FONGSAVANH VILAYPHONE Danang, June,2020 INTRODUCTION------------------------------------------------------------------------------------iv Chapter 1 THEORETICAL BASIS--------------------------------------------------------------1 1.1 Multinational company---------------------------------------------------------------------1 1.2 Characteristics of multinational companies---------------------------------------------1 1.3 The purpose of development of multinational companies-----------------------------1 1.4 International business strategies of multinational companies-------------------------2 1.4.1 The International Strategy---------------------------------------------------------------2 1.4.2 The Transnational Strategy--------------------------------------------------------------3 1.4.3 The Global Strategy----------------------------------------------------------------------4 1.4.4 The multi-domestic Strategy------------------------------------------------------------4 Chapter 2 2.1 UNILEVER'S ASIAN MARKET STRATEGY----------------------------------6 General introduction about Unilever-----------------------------------------------------6 2.1.1 General infomation-----------------------------------------------------------------------6 2.1.2 History of formation---------------------------------------------------------------------6 2.1.3 Mission, vision, business goals---------------------------------------------------------7 2.1.3.1 Mission----------------------------------------------------------------------------------7 2.1.3.2 Vision------------------------------------------------------------------------------------8 2.1.3.3 Business goals--------------------------------------------------------------------------8 2.1.4 The organizational structure of Unilever----------------------------------------------8 2.1.5 Product-------------------------------------------------------------------------------------9 2.1.5.1 Food line for processing and eating-------------------------------------------------9 2.1.5.2 Hygiene and personal care product line-------------------------------------------10 2.1.5.3 A line of laundry products for clothing and household utensils---------------10 2.2 Unilever's Asian Market Strategy-------------------------------------------------------11 2.2.1 Strategy for the product----------------------------------------------------------------11 2.2.2 Strategy for the price-------------------------------------------------------------------13 2.2.3 Strategy for the Promotion-------------------------------------------------------------14 2.2.4 Strategy for the place-------------------------------------------------------------------14 Chapter 3 P&G'S BUSINESS STRATEGY IN ASIAN MARKETS---------------------16 ii 3.1 General introduction about Procter & Gamble----------------------------------------16 3.1.1 History of development----------------------------------------------------------------16 3.1.2 Business philosophy - purpose - values - Operating principles------------------19 3.1.3 Organizational structure, size and branch system----------------------------------21 3.1.4 Scope of activities-----------------------------------------------------------------------22 3.1.5 Success achieved------------------------------------------------------------------------23 3.2 P&G's strategy in Asian market---------------------------------------------------------24 3.2.1 Strategy for the product----------------------------------------------------------------25 3.2.2 Strategy for the price-------------------------------------------------------------------26 3.2.3 Strategy for the Place-------------------------------------------------------------------27 3.2.4 Strategy for the promotion-------------------------------------------------------------27 Chapter 4 4.1 COMPARE STRATEGY OF P&G AND UNILEVER------------------------29 Business situation of Unilever and P&G in recent years----------------------------29 4.1.1 Unilever----------------------------------------------------------------------------------29 4.1.2 P&G---------------------------------------------------------------------------------------30 4.2 General comments-------------------------------------------------------------------------31 4.3 Compare 2 strategies----------------------------------------------------------------------33 Conclusion--------------------------------------------------------------------------------------------37 iii LIST OF PICTU Picture 2. 1 Unilever 1......................................................................................................12 Picture 2. 2 Unilever 2......................................................................................................12 Picture 2. 3 Unilever 3......................................................................................................13 Picture 2. 4 Uniever 4.......................................................................................................13 Y Picture 4. 1 P&G 1............................................................................................................30 iv INTRODUCTION 1. Rationale Nowadays, as globalization is becoming popular and necessary for every country in the world, multinational companies are also formed quickly with the desire to reach out to the international market, creating an increase. growth in size and sales. Growth is indispensable to maintain for each company, so choosing the strategy to reach out to the international market plays an extremely important role for each company. The right strategy not only helps the company gain profits in the short term but also paves the way for long-term development. Markets around the world are different in culture, economy, income level, demographics, etc. Understanding different strategies of different companies has become an indispensable experience for each company. In the world, two famous corporations in the field of consumer goods, Unilever and P&G, are typical for approaching the market with different strategies that bring different advantages, especially in Asian markets. . 2. Objects and scope of research The scope of the study is the operation of Unilever and P&G in typical countries in Asia such as Japan, Vietnam, Singapore, ... The research period is conducted from the time when companies penetrate the market and the main ones. The book has changed to adapt to that market. 3. Methodology The paper is studied by methods of data collection and data analysis. 4. Layout of the thesis The paper consists of 4 chapters: v Chapter 1: Theoritical basic Chapter 2: UNILEVER'S ASIAN MARKET STRATEGY Chapter 3: P&G'S BUSINESS STRATEGY IN ASIAN MARKETS Chapter 4: COMPARE STRATEGY OF P&G AND UNILEVER vi Chapter 1 THEORETICAL BASIS 1.1 Multinational company Multinational companies are often referred to as MNC (multinational corporation) or MNE (multinational enterprise), which refers to companies producing or providing services in two countries, which can greatly influence relationships. international relations when they have a major economic impact on some areas with abundant financial resources, serving public relations and political corridors. Multinational companies operate and are based in many different countries. Multinational companies play an important role in the process of globalization, a new form of MNE is formed corresponding to the process of globalization - it is a global consortium enterprise. 1.2 Characteristics of multinational companies Centralized ownership: affiliates, subsidiaries, and agents around the world are owned by the parent company, even though they have specific daily activities that are not exactly the same. 1.3 The purpose of development of multinational companies First, there is the need to internationalize manufacturing and markets to avoid trade restrictions, quotas, import duties in countries of purchase, use of raw materials, cheap labor, and exploitation of local potential. Second, it is the need to use the competitiveness and comparative advantages of the host country, making the transfer of high-tech industries. Third, seek higher profits and risk dispersion. As well as avoiding the instability caused by the business cycle when manufacturing in a single country In addition, protecting the monopoly of technology or production know-how in an industry that does not want to be transferred is also a reason to expand the locality for production. Besides, cost optimization and market expansion are also the goals of MNC. The operation of MNCs, because it is carried out in an international environment, issues such as input markets, output markets, transportation and distribution, capital mobilization, payment ... have certain risks. The common risks of MNCs fall into the following two groups: - Risks in buying and selling goods such as: tariffs, transportation, insurance, supply-demand cycles, other macro policies ... - Risks in transition finance such as risks when local government policies change, risks of exchange rates, inflation, foreign exchange management policies, taxes, debt crisis ... 1.4 International business strategies of multinational companies 1.4.1 The International Strategy The product is manufactured in the domestic market and sold to other countries with minimum adjustments according to local requirements. Each Strategic Business Unit has the right to actively apply this strategy. This strategy is less under pressure to reduce costs and the pressure of local requirements (because production is primarily localized). But it is highly sensitive to exchange rate and political risks Features of the international strategy:  Exploiting comparative advantage, domestic position to turn into a competitive advantage  Entering into skills-deficient markets of MNC. Value is created by moving the core of competition from the country to abroad, where competitors are not able to develop, respond, and maintain in a similar fashion when expanding markets. foreign school  Centralizing product development functions such as R&D in the country, producing products according to domestic market demand standards. 2  Establish production and marketing divisions in key regions and countries where they do international business  Headquarters headquarters strictly control marketing strategies and products, local adaptation is limited.  International activities ranked second after the market in the country Limitations:  May miss opportunities in local market.  Not specifically grasping the needs of other localities.  Not a long-term strategy 1.4.2 The Transnational Strategy The strategy that MNC seeks to achieve global efficiency and respond locally, sharing the common mission of MNC but taking action that varies according to local requirements (standardizing where possible, adapting where required) Selecting an optimal location cannot guarantee that the quality and cost of the inputs there will also be optimal. Transfer of experience can be a core resource of competitive advantage, but experience cannot be transferred automatically. Features of the Transnational strategy:  Competitive advantage can be developed in any of MNC's operating units  Try to achieve low cost based on regional economy, economies of scale, effective learning as well as production differentiated products for customers in different areas, encourage opening up in places where developing operational skills in global operations  The product and skills line can be transferred between units in MNC, collective promote the development of skills in global learning institutions  The value created by innovation reinforces and exchanges ideas, products and processes 3 Limitation: Implementing this strategy has many difficulties. because local response increases cos Two trends need to be avoided: focus the company's operations too large on a central location, or because it wants to increase the level of local adaptability that distributes the company's operations across too many different locations. 1.4.3 The Global Strategy MNC expands overseas markets based on standardization and competitive costs; Value is created based on product design for the global market and the most effective production and marketing. The scale of production and distribution of products has been improved, facilitating development investment and reducing costs very positively; but difficult to meet local needs. Features:  Link SBU in many countries to share cheap resources, emphasizing the issue of ensuring the size of economic benefits.  Standardize global products to maximize profits by exploiting scale, regional economic learning (strategic location)  Not trying to meet local - Suitable for industrial products  Strategic objectives The strategy is to pursue a global low-cost strategy to support the "aggressive pricing" in the world. some of the most favorable positions on the global scale (outsource)  Decentralized decision at headquarters Limited: inappropriate in markets that need high adaptation 1.4.4 The multi-domestic Strategy 4 Strategic decisions and activities disaggregated by business unit of each country. This strategy has a high customer base but limits the exploitation of economic scale, learning and coordinating information. Features of the Mutil-domestic Strategy:  Focusing on competition in each market  Make a profit by offering customers a product that meets the tastes of different national markets, resulting in increased product value in the local national market and pushing up product prices  High local decentralization (proximity to location and culture)  Value created by empowering local administrators to adapt to local economic and legal economic environment  Suitable when available many branches in countries and the pressure to reduce costs is not large - Suitable for consumer products Limitations: high costs 5 Chapter 2 UNILEVER'S ASIAN MARKET STRATEGY 2.1 General introduction about Unilever 2.1.1 General infomation Unilever is a global corporation founded in the 1930s of England and the Netherlands that is world-renowned in the field of manufacturing and fast-moving consumer products including home and personal hygiene products, eat, tea and tea drinks. Typical Unilever brands are widely consumed and accepted globally such as Lipton, Knorr, Cornetto, Omo, Lux, Vim, Lifebouy, Dove, Close-Up, Sunsilk, Clear, Pond's, Hazeline, Vaseline, ... with sales of over millions of dollars for each brand has proved Unilever is one of the most successful companies in the world in the field of consumer healthcare business (Personel Care) .. Along with Proctol & Gambel (P&G), Unilever currently dominate the world on these products. Some basic information of Unilever Founded: Merged Lever Brothers and Margarine Unie in 1930 Headquarters: London and Rotterdam Industry: Manufacturing (Household Appliance, Food, Personal Care) Type: Mass Key employees: Paul Polman (CEO), Marijn Dekkers (chairman) Website: www.unilever.com 2.1.2 History of formation Unilever was founded with the original name of Lever Brothers, starting its soap business. The initiator of the initial business idea was Wiliam Hesketh Lever. In 1884, he bought 6 himself a small soap factory. He then focused on marketing his products, thereby increasing production by 20 to 450 tons per week. At that time, his workshop had two strategic products: Lever’s pure Honey and Sunlight. By March 1888, he decided to expand the factory to an area of over 23 hectares. In 1890, Lever decided to expand the market beyond Britain's borders with the first overseas markets being Australia, Canada, Germany, and Switzerland. In 1906, the company acquired Vinolia, a soap-making company. In 1910, the Company acquired Hudson’s - a major detergent manufacturer in the UK. From 1910-1915, Lever bought three more British soap-making companies, one of which was Pears, one of Unilever's rivals. By 1911, the Lever brothers had a huge market share, and one out of every three soap bars was Lever. After World War I, the company continued to expand into Africa. Until January 1930, a merger of Margarine onion (Netherlands) and Lever Brothers (England) created an Anglo-Dutch alliance with the new name Unilever. To avoid double taxation of the two countries, the company has split into Unilever PCl based in the UK and Unilever NV based in the Netherlands. 2.1.3 Mission, vision, business goals 2.1.3.1 Mission Activity to create a fresher future every day. Unilever's mission is to make everyone feel comfortable, improve their beauty and get rid of life's worries with products that are good for them and those around them. And they achieve this by creating and producing products that are affordable, suitable for all walks of life and society around the world. Inspire people through daily actions through our products to make a big difference to the world. Grow your company with a great caliber but still care about the surrounding environment. 7 2.1.3.2 Vision With the mission set out above, Unilever believes its products can improve the quality of human life. Therefore, for the sustainable development of the company, Unilever focuses on the issues of society and the environment, considers business activities and promotions that bring value to the company and the whole society.. 2.1.3.3 Business goals  Long-term goals: Meeting the daily needs of consumers around the world, recognizing the wishes and desires of customers in the future. Respond creatively and compete fairly with other brands to improve the quality of life. Especially the goal of sustainable development, developing the company separate from the bad influence on the natural environment.  Short-term goals: For each period, the company will have its own short-term goals depending on business strategies, market activities and the influence of the global economy. 2.1.4 The organizational structure of Unilever Unilever's structure is a combination of senior leaders including executives, nonexecutive directors, company executives, departments and employees. The departments will undertake their own functions, operating independently. However, there is still a connection between departments to create flexibility in business activities. Functional departments:  Materials supply department: finding and supplying raw materials to serve the increasingly complete production activities.  Accounting Department: is responsible for managing the entire capital and assets of the company, organizing the inspection and implementation of economic and financial policies, timely statistics, and the exact situation of assets and capital sources to help. The director regularly checks the company's business operations. 8  Planning Department: making plans for the company to help the implementation process be more convenient, avoiding mistakes in the implementation process.  Human Resources Department: Managing staff, recruiting personnel.  Marketing Department: Managing product image management. 2.1.5 Product This company owns many large-scale companies producing the world's consumer goods, foodstuffs, detergents and cosmetics. Unilever has more than 400 brands, among the most famous ones are OMO, Surf, Lux, Dove, Knorr, Comfort, Vaseline, Pond's, P / S, Signal, Close Up, AX, Rexona, Vim, Cif (Jif), Sunsilk, Sunlight, ... Currently Unilever is trading in 3 main product lines including: 2.1.5.1 Food line for processing and eating  Wall’s ice cream: Includes purely flavored diet products. The product is suitable for all audiences, with the convenient ability to help the brand be chosen by many people in the current balanced diet.  Knorr: Knorr is one of the largest and most favorite brands in Unilever in Vietnam market. With the spice products used in Vietnamese dishes, it brings an attractive flavor, suitable for the diets of Vietnamese people.  Lipton: Lipton is one of the leading beverage brands in the world and in Vietnam Lipton is loved by tea bags to suit the taste of all ages. With convenient features when stored in bags and reasonable price Lipton has become a major beverage brand in Vietnam.  Unilever food solutions: This is a brand used for high-class cooking by professional chefs with high expertise. With specific spices, brand standards are gradually becoming an indispensable choice for chefs in the world. 2.1.5.2 Hygiene and personal care product line 9  Lux, Vaseline, Hazeline: known for its shower gel, soap, and facial cleanser with a charming aroma, suitable for many ages.  Dove, Sunsilk, Clear: Famous in the Vietnamese market for hair care products from shampoos, conditioners to professional hair warmers.  Lifebouy: Soap firm is used almost at home in Vietnam  Closeup, P / s: With the main product is toothpaste with compatibility suitable for all ages this is a brand that many people choose to use on the oral hygiene market.  AX: brand of perfume products, hair gel for men  Rxonae: A popular deodorant brand worldwide  Pond’s: owns the skin care products trusted by many women because of its quality and reasonable price compared to cosmetic lines from other brands. 2.1.5.3 A line of laundry products for clothing and household utensils  Omo, Viso. Surf: These are cleaning brands that dominate the market in Vietnam today. With quality, easy-to-use laundry soap products, Unilever is trusted by many customers.  Comfort: Along with clothes cleaning products, comfort is a brand that includes clothing products with many scents suitable for many families in Vietnam.  Sunlight washing dishes, Sunlight cleaning floors, Cif: Sunlight has become a trusted kitchen cleaning brand that has been trusted for the past 15 years.  Vim: Vim is a cleaning product that cleans bacteria in the toilet with simple and effective use. With 3 current product lines, Unilever owns more than 400 outstanding brands including many famous brands in Vietnam, including OMO, Surf, Lux, Dove, Hazeline, Ponds, P / S, Close. Up, Vim, Cif, Sunsilk, Sunlight, .. 2.2 Unilever's Asian Market Strategy 10 From the beginning when penetrating into the Asian market, unilever was oriented to business under the Mutidomestic strategy. For a new market with a large customer base and diverse cultural, consumer habits, Unilever must make product differentiation to meet local needs. The favorable condition for unilever to implement this strategy is that countries in Asia have a large number of people in the same country. For example: China (1.3 billion people), India (nearly 1 billion people); Indonesia (200 million people),... In order to pursue this strategy, the company must build activities in almost every function to suit each target market. 2.2.1 Strategy for the product In product research and development in Asian markets, Unilever focuses on meeting the needs and tastes of each country. Each country will need different products with different characteristics. When the decision to enter a new market is made, unilever will select existing products that may be suitable for this market, or research to create a new product based on market resources and needs. Unilever's products are diversified, classified into many models to meet the diverse needs of customers. To pursue the Mutidomestic strategy, the company had a large number of industries with separate product segments. Products with specific characteristics in the same category will make it easy for customers to choose and fit the tastes of customers to change products. Food and beverage group products in Indonesia: 11 Picture 2. 1 Unilever 1 Food and beverage products at Phiplipine: Picture 2. 2 Unilever 2 Products of personal care group in Vietnam: 12 Picture 2. 3 Unilever 3 Products of personal care group in India: Picture 2. 4 Uniever 4 Besides the differences in product quality among countries, Unilever also focuses on product packaging design according to the tastes of each country. For example, in the Japanese market, eco-friendly products are encouraged to be manufactured and consumed. Products labeled as Green Power are Dove, Lux, Clear, Timotei and Lipton. 2.2.2 Strategy for the price For the price policy, at present, compared to other competitors in the Unilever market, there is a price segment for products that are spread out. This makes it easy to reach a 13 wide range of customers, everyone can access Unilever products as the company's original mission. The customer segments that the company wants to target are those with low and medium income. Those who have a basic need for using Unilever products. Having a large market share in 90 countries around the world, Unilever focuses on not only countries with developed economies in Europe but also poor countries in Asia. Unilever is also taking advantage of the development of a wide range of different product lines to meet the needs and income of millions of people around the world. in many different countries. Unilever is also the first company to introduce small packages of shampoo for poor customers. In many countries like China, Bangladesh, Pakistan, Sri Lanka ... Unilever is also considered as a "local company". 2.2.3 Strategy for the Promotion In advertising policy, Unilever focuses on exploiting traditional images, imbued with the identity of each country. The advertising style changed from classics, direct product introduction to metaphor in television ads is a prominent highlight in the ads of Unilever. The advantage of this style is simple, easy to understand and suitable for customers in many large markets. The ads of Sunsilk, Clear, Dove are now more closely following new market developments, have a more attractive storyline and not only limited to the introduction of pure products but have focused more on the impact factors. targeting specific customers, so that customers can remember, identify, distinguish and select its products among similar products in the market. 2.2.4 Strategy for the place With the low price segment of products and based on the demographic situation of the Asian market, Unilever's target customers are those who live in rural areas where there is a high demand for protective products. birth, daily consumer goods. In order to bring 14
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