Unilever Vs Nestle free essay sample

Today we live in a global economy in which the time taken for people to move between continents has been significantly reduced and in which Internet and other connections make instant connections possible. Businesses and organisations now have to recognise that they now operate in a global market place and to develop appropriate strategies. A global strategy is an organisational plan that takes into account these new global realities. Both Nestle and Unilever have developed global distribution and marketing networks, based on their powerbrands i. . market leading brands that are recognisable in nearly every country in the world. Both Nestle and Unilever have many powerbrands. Key aspects of global strategy include: 1. Treating the global market as the domestic market, in terms of attention to detail, without being complacent or ingnorant. 2. Creating a global marketing mix, recognizing regional and national differences, such as differences in language and tastes. 3. Creating global p roduction and distribution systems, e. We will write a custom essay sample on Unilever Vs Nestle or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page g. superfactories covering major areas of the world. Concentrating on powerbrands the most successful brands and products. Because the global market is so large there are substantial benefits to be gained from economies of large scale production, marketing and distribution. Rather than producing thousands of different products it makes sense to narrow down the range to a much smaller number in order to support these brands across the globe. Unilever Unilever is one of the world’s leading suppliers of consumer goods, including household favorites such as Persil, Knorr, Hellmann’s, Lipton, and Dove. To keep up with consumer needs and increase operating margins, Unilever wanted to consolidate its 1600 brands to 400. By consolidating its brands, Unilever plans to focus on stronger product innovations, strengthening marketing efforts, building a world-class supply chain, and simplifying business processes. Dubbed Unilever’s Path to Growth strategy, the company has already saved â‚ ¬1. 6 billion from global procurement efficiencies. Maintaining 1,600 brands across the world was very difficult for Unilever to control. Unilever had a decentralized IT infrastructure which lacked the integration needed for a truly efficient global company. To reach its Path to Growth goals, employees at Unilever needed fast, easy access to information on both a regional and global basis. To get to this point, the IT department launched the Unilever Information Program (UIP) to develop an infrastructure to support the Path to Growth strategy. One of the greatest priorities for the UIP was to find a quick data integration solution to allow user access to any number of data sources for in-depth analysis. The UIP provided Unilever with the following ; †¢Better understand consumer needs and plan with its key global customers †¢Monitor the health of its top 400 power brands and competitors †¢Identify how to improve and streamline supply chain management worldwide †¢Provide business intelligence (BI) and financial reporting on a global basis By using the UIP Unilever are strengthening their relationships with retail customers. They will also be outsourcing transactional operations in IT, finance and human resources so that they can focus on growing global brands. Unilever has deep roots in local cultures and markets around the world that gives them a strong relationship with customers and is the foundation for their future growth strategy. They plan to bring their wealth of knowledge and international expertise to the service of local consumers. They view themselves as a truly multi-local multinational. Unilever’s future strategy is as follows; â€Å"We aim to build a winning portfolio by extending our leadership positions and our presence in high growth spaces. We are improving our core capabilities. Bringing all this ogether as ‘One Unilever’ will ensure that we capitalise on both our local roots and global scale. † This implies that they are trying to become a fully integrated company with the use of their UIP system and then apply their international experience and knowledge in local markets. Nestle With such an enormous product portfolio, Nestle uses six umbrella brands: Nestle, which accounts for 40 percent of the business, Purina pet foods, Maggi, Nescafe, Nestea, and Buitoni. Nestle uses a regional strategy, which is in turn the starting point for local market business strategies. To understand Nestles strategy of cost-efficient global growth, unwrap a Kit Kat. Nestle acquired the chocolate-covered wafer bar in 1988 when it bought Britains Rowntree. Today its a $1 billion business and the company is pushing Kit Kat as its answer to the Mars bar, the worlds most popular chocolate. Last year Nestle started producing Kit Kats in Russia and Bulgaria for Eastern Europe. A Latin American launch is planned this year. Kit Kat is already selling briskly in Japan, Australia and India, and a re-launch is under way in Thailand. Unlike Coca-Colas, Kit Kats formula is different almost everywhere. A Russian Kit Kat is a fraction of an ounce smaller than a Bulgarian one, and the chocolate is coarser and not as sweet as that in a German Kit Kat. In Japan, strawberry-flavored Kit Kat is all the rage. Each of these product variations is the result of thorough market research on local tastes. There is no global consumer for the food-and-beverage business. This is a deep belief we have, says Brabeck. For all Nestles global reach, Brabeck dismisses the idea of global brands. We believe there is no such thing as a global consumer, especially in a sector as psychologically and culturally loaded as food. As a result, Nestle retains its brand strength by using local brands, such as Rolo in the U. K. or the Rossyia confectionary range in Russia. Moreover, product formulations also vary from market to market to reflect local tastes. Every single day, billions of customers have to make the choice to pick our [products], he says. This means having a local character. For this reason, he dismisses the notion of global advertising. Yes, we tried once to make a global Nescafe campaign. On paper it was efficient, but it was a flop. Either they are not relevant or they are offensive. Nestle uses a differentiated marketing strategy customizing their products specifically for local tastes. This has proved very successful for them and they look to continue this strategy. Conclusion Unilever is using a slightly adapted global strategy. They have global powerbrands which are mostly unaltered from country to country. They are focused on integrating their company and becoming more efficient. Nestle however is using a full differentiated strategy with products fully adapted to each countries local market. In theory this is a far superior strategy but the main difference between the two companies is their product categories. Nestle is heavily involved in the food category while Unilever is primarily involved in the hygiene, cleaning and personal care category. Does this mean that Unilever’s products can afford to be less adapted than Nestle’s? I don’t think so. I believe that Nestle has a far superior strategy and will gain a significant competitive advantage from their strategy in the future.