Macro Environment for Unilever

1. Brief Description of Unilever

In the 1890s as before Unilever was born, it was mainly a British soap maker company called Lever Brothers which only product they sold is Sunlight Soap. This idea was founded by William Hesketh, the founder of Lever Brothers to maintain the cleanliness in Victorian England. As their company has grew larger and is successful in United Kingdom, they expand their company globally. The secret behind their success is that the founder, William Hesketh not only focus on marketing their products but also manufacturing them.

On the other side of the history, in 1872, a company that produces margarine were founded by Jurgens and Van den Bergh. In that moment of the time, there are many competitors in margarine industry hence in 1920s, Jurgen and Van den Bergh decided to join their company with another margarine manufacturer in Bohemia. Then in 1927, three margarine manufacturers including Jurgen and Van den Bergh were formed and is known as Margarine Unie which located in Holland.

With both companies having a common vision of enlarging their company, Lever Bros and Margarine Unie were merged in 1930 which then the Unilever company is founded. However not too long after Unilever were formed, their raw materials have been reduced within 30% to 40% in the first year itself. Unilever knew they had to react quickly to build an efficient system control as this problem attack. So, in September of 1930, Unilever established the ‘Special Committee’ to stabilize British and Dutch operate and concern as an internal cabinet for the organization.

In 1930s, Unilever has expanded their business to the America Latin. To ensure that their business did not fall back, Unilever has started a new strategy which involving creating new products which involves foods and chemical manufacturers in the 1940s. Unilever realized that they must not only widening their product categories, instead they must create a business relationship with another company in order for them to expand. So, in 1944, Unilever merged with a tea manufacturer company, Thomas J. Lipton company and Pepsodent the brand of toothpaste and in 1957, Unilever has cooperated with UK frozen food maker. As in 1961, Unilever has also cooperated with US Ice cream manufacturer, Good Humor.

In the 1980s Unilever made a revolutionary restructuring by selling most of its subsidiary business to concentrate the company's core business. Eventually, foods and health and personal care products were Unilever’s core business. In 1986, Unilever has collaborated with Chesebrought-Pond’s in US as part of their restructuring process. This collaboration has made a huge earning for Unilever. In 1987, Unilever has bought over Chesebrought-Pond.

Now, Unilever has become the world’s most consumed brand in foods and health and personal care products. Unilever has two main parenting companies which are Unilever NV in Rotterdam and Netherland and Unilever PLC in UK. Nestle and Procter & Gamble (P&G) are two major competitors for Unilever. However, Unilever business is still blooming as they have many brands and have many categories of product selling throughout the world.

1. Elements of Macro Environment

PESTEL is one of the framework used to analyse macro environment. The acronym of PESTEL is political, economic, social, technological, environmental and legal. In some part, there will be an extra element which is International and in some cases, it will only be PEST.

1. Political Factor

Political factor refers to how a political environment can intervene the economy. It depends on the stability of the political environment and how it behaves. This may include political stability and instability on the overseas market, government policy, taxes, labour law and also foreign trade policy. It is clear that these factors can make a huge impact on an organization, especially a global company. The company must always be able to follow the current political changes from time to time.

1. Economic Factor

Economic factor refers to how profitable and how they run the business of an organization. This may include inflation, economic growths, interest rates, and exchange rates. For example, if an inflation occurs, this may affect the company which they need to increase the price of their products and services. Besides, it may affect the purchasing power of the consumer as well. This factor can make a huge impact for a company especially in a trading state.

1. Social Factor

Social factor also known as socio-cultural factor refers to how a social environment of a market, cultural trends and demographics can affect an organization. For example, a certain items will be the most buy items when there’s Holiday season or cultural events. This may include career attitudes, age distributions, health consciousness, and popular growth. This factor makes the organization the need to understand the trend where the consumer needed the most.

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