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Report on Strategic Management of Unilever
Organization Introduction
Lever Brothers Pakistan Limited is a multinational organization. Unilever PLC Lond on its parent company. Unilever is a European based company with headquarters in London and their shares are quoted at the stock exchange of several European countries. They deal in all kinds of products from animal foodstuff to foods and detergents plus other personal and consumer products. Unilever has its subsidiaries in over 80 countries of the world, to which it spreads its vast knowledge and resources. William Lever (its originator) commences business in England as a g rocer. He established Lever Brothers in 1827 in England Sunlight was the first product of Lever Brothers, which makes the beginning of the marketing of branded products at the same time Margarine Uni was established in Nether Land by Simon Van Berg and Anton Jurgens. These two companies in term of: •
Buying raw material
•
Selling finished fini shed goods
Consequently both the companies loosing out money in term of profit. These problems led to think of the mergers in 1930. These two companies merged together and renamed the business as Unilever PLC / the word UNI is taken from margarine Uni and Lever taken from Lever Brothers. Its head quarter was established in England and Rotter Dam.
Unilever has 500 operating companies in 80 countries. It has 0.3 million employees and Sign up to vote on this title turnover of sales in 23000 million pounds. poun ds. The global business proportion is 60% in UsefulAn Not useful Europe 20% in North America and 20% in rest of the world. identified b oard of board directors control the activities of subsidiary companies throughout the world. Lever Brothers Pakistan Limited started its operations in 1948. A merger of Sadiq Vegetable
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Brooke Bond Pakistan Limited was incorporated in 1948. Company’s 40% shares are held by Unilever, 21% by financial institutions, 24% by individuals, and 10% by insurance companies. The company is quoted on Karachi and Lahore Stock Exchange market. The company is manually engaged in the blending, packaging and marketing of tea. It also has a small business in the sale of packing apices. The company employ around 850 persons. And has three manufacturing locations situated in Karachi and Khanewal. It also have three regional sales offices. The head office of the company is located in Karachi. After the amalgamation of Lever and Brooke Bond, Unilever will have a majority shareholding in the combined company and it will provide a comparable level of technical, management and financial resources. The proposed merger will benefit the consumer in term of price and quality. Acquisition Lever Brothers Pakistan Limited acquire the shares of Pakistan Industrial Promoters Limited, Mehran International Limited and Ambrosia International Limited, which is known as Polka Group of Ice Cream Companies. Product Mix
At present Lever Brothers Pakistan Limited is engaged in marketing of diversified varieties and classes of products and playing p laying a dynamic role in boosting consumer product market. It stand at a unique position due to its honesty and integrity. Lever Brothers Pakistan Limited has both product length and depth i.e. it has by length a large of product lines available and under each product line there are lots of variants like different weights, 100mg, 500mg, 1000mg, sache pack, family pack or in case of ice creams different brands have lots of flavor available which determines its product depth So different no of product lines are called product length and no of products in each product line are called depth de pth of product line. Lever Brothers Pakistan Limited’s main Sign up to vote on this title product groups are listed below:
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Brooke Bond Pakistan Limited was incorporated in 1948. Company’s 40% shares are held by Unilever, 21% by financial institutions, 24% by individuals, and 10% by insurance companies. The company is quoted on Karachi and Lahore Stock Exchange market. The company is manually engaged in the blending, packaging and marketing of tea. It also has a small business in the sale of packing apices. The company employ around 850 persons. And has three manufacturing locations situated in Karachi and Khanewal. It also have three regional sales offices. The head office of the company is located in Karachi. After the amalgamation of Lever and Brooke Bond, Unilever will have a majority shareholding in the combined company and it will provide a comparable level of technical, management and financial resources. The proposed merger will benefit the consumer in term of price and quality. Acquisition Lever Brothers Pakistan Limited acquire the shares of Pakistan Industrial Promoters Limited, Mehran International Limited and Ambrosia International Limited, which is known as Polka Group of Ice Cream Companies. Product Mix
At present Lever Brothers Pakistan Limited is engaged in marketing of diversified varieties and classes of products and playing p laying a dynamic role in boosting consumer product market. It stand at a unique position due to its honesty and integrity. Lever Brothers Pakistan Limited has both product length and depth i.e. it has by length a large of product lines available and under each product line there are lots of variants like different weights, 100mg, 500mg, 1000mg, sache pack, family pack or in case of ice creams different brands have lots of flavor available which determines its product depth So different no of product lines are called product length and no of products in each product line are called depth de pth of product line. Lever Brothers Pakistan Limited’s main Sign up to vote on this title product groups are listed below:
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Lux (in 4 varieties) Rexona (in 2 varieties) Liril Hamman Fair & Lovely Soap Fabrics And Home Care Fabric Wash
Surf Excel Power Surf
Sunlight Washing Powder Soap Wheel Home Care Vim Dish Washer / Scourers
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Vim NSD Bard (in 2 varieties)
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Lifebuoy Shampoo Skin Care
Fair & Lovely Skin Cream and Lotion Dental Care
Close-up Tooth Paste Pepsodent Oil And Dairy Based Foods Banaspati Dalda Cooking Oil
Dalda Cooking Oil(Soya Bean) Dalda Sunflower Oil Planta Margarine
Blue Band
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Yellow Label – Danedar
Richbru Top Star Taaza Leaf Supreme Brooke Bond Dust Teas
Pearl Dust
Ruby Dust Laojee
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Mixture Tea
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Taaza Ice Cream
Cornetto (in 3 varieties)
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Feast (in2 varieties)
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Minimill Sola Jet Spot Ice Lolly Wall’s Kulfi Panda Pop Corn g Three Vision Of Lever Brothers Pakistan Limited
The vision of Lever Brothers Pakistan Limited is driven by is the commitment to excel and we are here to sell aspiration not brand . So, the core vision is integrating and that is Reading adoPreview to excel in every field whatever You're Lever Brothers to provide customer delight and value The Lever Brothers have been able to follow the track set by their vision and to achieve Unlock full access with a free trial. the standards set by their customers.
Download WithLimited Free Trial Mission Statement of Lever Brothers Pakistan Lever Brothers Pakistan Limited will be the foremost consumer company in Pakistan with the dominant position in laundry, personal wash, skin, ice creams and spreads: a leading position in tea, hair, dental and household care and a sustainably profitable position in cooking oil and fats. Sign up to vote on this title
Useful Not useful 1. We will aim at delivering a 15% UVG rate,hence doubling the size of ou business over 5 years and thereby delivering superior value creation.
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4. We shall build on our strong network of distributors to maximize penetration and visibility in existing channels and to develop all new channels relevan to our consumers.
5. We shall establish Unilever’s core brands in Afghanistan, building brand loyalt and strong distribution in the market.
6. To achieve these standards of performance, Lever Brothers Pakistan Limite will develop a strategically focussed organization and will motivate it personnel to use its full potential of creativity and commitment. It will als leverage Unilever’s best practices and maintain the highest standards o operational control.
7. Through its commitment to high levels of care and safety for its employees, it consumers and the environment, Lever Brothers Pakistan Limited will b exemplary and will participate in the dissemination of such practices i Pakistan. Analysis Of Mission Statement Mission Contents
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Organization Philosophy
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People
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Peoples are key to strengths of Lever Brothers Pakistan Limited. The development of their potential is core to Lever Brothers Pakistan Limited business. So they provide extensive attention to developing human resources. Sign up to vote on this title
Customers
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Lever Brothers Pakistan Limited is the customers focus organization. They do delight
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Suppliers are considered the partners of Lever Brothers Pakistan Limited and Lever Brothers Pakistan Limited maintain mutually beneficial relationship with them. Integrity Lever Brothers Pakistan Limited never compromise on integrity management a dhere to high standards in all they do. Environment responsibility Management adhere to all national and Unilever standards to ensure health, safety and protection of the environment in which they live and work. Profit It is considered to be the ultimate measure of Lever Brothers Pakistan Limited’s performance and it is required to maintain and grow their business. Product Market Domain
This factor indicates where they are going to compete. Lever Brothers Pakistan Limited’ You're Reading Preview and this is very clearly stated i field of operations is the consumer products andabusiness their mission statement. Unlock full access with a free trial. Organization Key Value
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It defines that what do they want. They people of organization to be good at or how do they want them to behave and this very clearly stated in mission statement as always sta responsive to change, go for innovation, employee commitment to organizational objectives and mission and creating value for customers. So, if we check the mission statement through this aspect then we can easily state Sign thatup they have to vote onclearly this titlestated what should be the organizational key values and how to reinforce Useful them.Not useful
Critical Success Factor
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Mission statement describes that what are the obligations to different stakeholders i.e. stockholders, employees, suppliers, customers and community at large. Lever Brothers Pakistan Limited’s mission statement contains concerns about all stakeholders. First be foremost consumers and then other stakeholders and describes it as: “Through its commitment to high level of core and safety for its employees, its consumers and environment. Lever Brothers Pakistan Limited will be exemplary and will participate in the dissemination of such practices in Pakistan”. Form And Sources Of Competitive Advantages
Mission statement of Lever Brothers Pakistan Limited completely describes the form an sources of competitive advantage as:
“Competitive advantage will be developed by driving down relentlessly on relative cost positions and outpacing competitor’s in operational efficiency improvements and throug building strong network of distributors and by developing a strategically focused organization and by motivating its personnel to use its full potential of creativity and commitment and by maintaining the higher standards of operational control”.
They are going for unique combination of cost reduction and superior value to customer so they entirely provide the form and source of competitive advantage that what they Reading wanted to achieve and how theyYou're will achieve it. a Preview Scope And Types Of Mission
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Download With Free Trial Are the external dimensions covered? Global
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Yes No Are the internal dimensions covered?
You're Reading a Preview Unlock full Limited access withcovers a free trial. The mission of Lever Brothers Pakistan both the external dimension (product market domain, critical success factors) and internal dimensions (philosophy, organization key values, form and sources of competitive Download With Free Trial advantage, and concern for different stakeholders) so therefore, we can say that the mission statement of Lever Brothers Pakistan Limited is a global mission as according to the following exhibit.
Lever Brothers Pakistan Limited wants to be market leader in consumer products. It enjoys greatest market share as compared to co mpetitors by providing superior quality vote on this products. And customer value is what they value. AndSign thisupistoreflected in title mission statement. The very first 3 points are all customer focused and has Not useful customer Useful provided value as their main focus.
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Does mission statement tell us the values we should adhere to in working 8 of this organization? Does mission statement make it clear what we have to be good at to 10 survive and prosper? Do different parts of mission statement hand together, does it make sense? 10 Is the mission statement short enough so that people can understand it? 10 Is the mission statement well written enough so that people will remember 5 it? Is the mission statement challenging and exiting, will it motivate us? 10 Does the mission statement tell us what we should be doing and what we 5 should not be doing? Total
83
Criteria: 100 = Excellent 50 = Medium 00 = Poor or no mission
The total score indicates that theYou're mission statement of Lever Brothers Pakistan Limited i Reading a Preview approximately near to excellent standards and gives complete help for setting priorities full access with a free trial. guide strategic decision making,Unlock and performance evaluation or in short it fulfills the essential role i.e. to define the business in such a manner which is important in overall Download With Free Trial strategic management. Objectives Of Lever Brothers Pakistan Limited And Attainment Of Objectives Objectives of Lever Brothers Pakistan Limited Sign up to vote on this title
1. Their main objective is to have a double-digit growth and resultant cash flow Useful Not useful will be utilized in improving the productquality and contents to enhanc the value to customer and final users.
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4. They want to be cost efficient i.e. they want to reduce in their cost production, cost of transportation, distribution and packaging cost finally reducing all the human cost to offer a competitive price to custome maintain the high standards of quality.
5. To have a partnership with their suppliers to enable them to provide high qualit low cost material. 6. Have entered and will be aggressively developing new markets. 7. Be exciting to their customers with stream of innovative products. 8. To be no in all their existing markets. Attainment Of Objectives An objective or set of objective to be ideal must be “SMART” i.e.
1. Specific 2. Measurable 3. Attainable 4. Realistic 5. Time frame
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Specific
The objective of Lever Brothers Pakistan Limited are specific not general e.g. they want to be number one i.e. market leader in terms of marketSign share. want to be cost up toThey vote on this title efficient it is specific i.e. they have to reduce their costs without compromising on Useful Not useful quality. They want to have focused strategic thrust i.e. they are to simply reduce nonvaluable slow moving product. So the non-value added products are quite obvious with their sale figure and popularity.
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All of the objectives are attainable. They can be market leader e.g. they are in Lux, Blue Band, Fair & Lovely, Lipton and Supreme. They have portfolio and cash flows to invest in their product categories to achieve their quality standards thereby becoming market leader with their increased share, sales and growth. Thereby getting brand loyalty among their customers. Reliability One has to be at the top so to be number one in its realistic objectives. Other objective e.g. reduction in cost is realistic, you an reduce your cost by focusing on value chain. Cost of inbound and outbound logistics. The objective of launching innovative products is also realistic objective, it comes only from creative ideas and implementation of these innovative ideas comes up from investment. Time Frame All these objectives are to be attained in some specific time period. Attainment Of Objectives
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Lever Brothers Pakistan Limited’s strategy to with attain thetrial. objectives is: Unlock full access a free
1. Maximum coverage of outlets Download With Free Trial 2. Desirable sales volume 3. Display and merchandizing of products 4. Developing quality and want satisfying product.Sign up to vote on this title Useful Not useful
Since every company is formed to accomplish certain objectives. There is no company, which had no goals. So Lever Brothers Pakistan Limited also has targets before it.
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If there are any indication that any item is not good from profit point of view, it will try find out the reasons. Will soon what steps should be taken to overcome these reasons.
Company will introduce different marketing strategies if there are problems in marketing Here I would like to code two very famous examples, 1st of Sunlight soap and Sunlight washing powder of Lever Brothers Pakistan Limited.
Lever Brothers Pakistan Limited initially developed a sense of consumer to use washing powder other than washing soap, consumer switched s a result towards Sunlight washing powder, i.e. popular segment of washing powder and than the market share for Sunlight soap declined with passage of time, now the consumer who realized the convenience of washing powder started using it, but at the same time, as a result marketing strategy of Lever Brothers Pakistan Limited awareness of people, peo ple switched to surf and whee i.e. premium segment detergents. Finally due to the decrease in the market shares and sales volume of Sunlight soap and was light powder Lever Brothers Pakistan Limited management finally decided to stop the production of this very product i.e. it is now obsolete.
Second example is related to the change of brand name of Surf to Surf Excel. The reason behind was introduction of competitor’s brands like Arial by P&G which had brightness features, which caused the people to switch from Surf to Arial, Lever Brothers Pakistan Reading a Preview Limited realized the fact due to You're disturbance in sale volume of Surf and introduced new brand name “Surf Excel” with extra brightness power. Unlock full access with a free trial.
Company also takes into consideration the welfare of the consumer. It takes into mind th Download With Free Trial taste and habits of the customer. They pay much attention on the customers’ complaints It also works for the welfare and interest of Pakistan, as it is an environment friendly organization. Strategic Management At Lever Brothers Pakistan Limited Sign up to vote on this title
Now we will proceed with strategies being pursued by the Lever Brothers Pakistan Useful Not useful Limited at different organizational level. First we will discuss the corporate level strategy.
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The outsourcing the production so that they don’t have to invest heavily in the productio and to reduce the capacity problems, they now going for the third party contracting to produce themselves and now they want them to be restricted to marketing and distribution of products.
Diversification strategy is being pursued by the Lever Brothers Pakistan Limited but the mainly go for related diversification as against unrelated diversification for conglomerates, they are diversified into number of businesses as mentioned earlier but they are all related to consumer products. Through vertical diversification they will be able to eliminate the operational complexity and costs of buying and selling i.e. the transactional costs. Now they mainly wanted to step away from operations and want to focus more on customers.
As means of diversification which are being utilized by the Lever Brothers Pakistan Limited as all the time, been acquisition, neither joint ventures i.e. strategic alliances nor the internal development. Here we can take the example of the acquisition of Brooke Bond and Polka for example which have Brother acquired through a hostile takeover. And to step away from operational complexities now they go for subcontracting with the suppliers and want them to produce for Lever Brothers Pakistan Limited as in case of oi and ghee and soap and with the passage of time will also be implemented in other categories as well. You're Reading a Preview Business Level Strategy
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At business level Lever Brothers Pakistan Limited is adopting a very unique and Download With Free Trial interesting set of strategies. First and foremost strategy they want to follow is the cost leadership. They wanted to control cost as much as possible and want to reduce cost by every mean. First cost efficiency is achieved through outsourcing operations and stop producing themselves and go for cost efficient subcontracting. Sign up to vote on this title
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Second they want to achieve cost efficiency through responsive and cost efficient supply chain, want to be in touch with suppliers all the time and for that they have connected
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To get customer connectivity they do the market research to check the trends of their customers. The do pre-launch, post-launch research, e.g. their did before and after lunching while antidandruff Sunsilk. The response was quite encouraging. Hence basically customer and market research and customer feedback, free samples distribution before and after launching new product / brand/ variant is aiming their basic strategy to implement and achieve the customer connectivity and to fulfill their customer demand.
Here Lever Brothers Pakistan Limited has used the strategy of product development i.e. by modifying and improving their Sunsilk it into Sunsilk antidandruff (white), they have increased their sales. They are applying “Market and Development Strategy” as well in which by introducing present product (Sunsilk) into a new demographic area i.e. dandru conscious market segment with the launch of only new variant i.e. Sunsilk antidandruff white. They have added conditioner in it as initially the conditioner was missing in all shampoos of Sunsilk. While it is available in competing brands of P&G. Other than these two strategies another very important strategy is being followed by tge Lever Brothers Pakistan Limited i.e. focusing on core brands or want to have a very focused on brand portfolio in which they wanted to get rid of the slow moving brands like in Surf you will get number of further variants like Surf Ultra, Surf Micro, Power Surf etc. and in Sunsilk number of variants, Black, Green, Pink, etc. to name a few and how they have curtailed all these slow moving brands like focusing attention to Surf You're a Preview Excel only and in case of Sunsilk BlackReading and White (antidandruff) and discarding slow moving items like Sunsilk Pink Unlock and Green etc. full access with a free trial.
So, to avoid cannibalization effect now instead of number of brands to flood in the Download With Free Trial market only few better and improved brands, cash generating and more focused towards customers. Operational Level Strategy
At operational level, Lever Brothers Pakistan LimitedSign has up always tedtitle the strategy o to voteadop on this TQM only never went for CPR i.e. they have not come up with a new brand in last few Useful Not useful years. Only the improvements or new variants in existing brands o r using the same old brand name to introduce a new product like Lifebuoy Shampoo or Fair & Lovely Soap. So it can easily be said that they believe more in adopting changes rather generative one
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Now as against the objectives, if we go through all the strategies being mentioned earlie then we can see that all strategies are true reflection of the objectives being targeted by Lever Brothers Pakistan Limited. As an objective of consumer connectivity, responsive supply chain getting on line computer network with suppliers and more stronger R&D department and the objective of cost efficiency is supported by the vertical diversificatio in an sense that how they are outsourcing production and going for sub contracting with their suppliers and having more responsive and cost effective supply chain and to achiev growth more focused strategy in case of reduction of brands, etc. So these strategies are true measures to achieve those objectives. But other than objectives there is some other criterion which each strategy has to fulfill to be of any worth and that criteria is as follows: its basically three types of evaluation criterion i.e.
1. Suitability 2. Acceptability 3. Feasibility Suitability
Suitability is a broad assessment of whether the strategy addresses the circumstances in You're Reading a Preview which the organization is operating. For example, the extent to which the strategy would fit with the future trends / changes in the environment or how the strategy might exploit Unlock full access with a free trial. the core competencies of the organization. Now if we evaluate the strategy of Lever Brothers Pakistan Limited on these factors With that whether the strategies fit with its existing Download Free Trial circumstances would able to compete with the future trends like the strategy of cost reduction and focused brands and outsourcing production and consumer connectivity an more responsive value chain. All these strategies are not only suitable to the present condition but are prerequisite for future success as well i.e. by outsourcing production more focus towards customer needs and wants would be provided and it would help Lever Brothers Pakistan Limited to achieve even higher Signcustomer up to vote satisfaction on this title level and market share and not only that lowering the cost would only be Not beneficial Useful useful for Lever not Brothers Pakistan Limited but for consumers as well i.e. now they would receive better quality at relatively lower cost and Lever Brothers Pakistan Limited would be able to
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Acceptability of strategy is concerned with the expected performance outcomes such as the returns and risk if the strategies are implemented and the extent to which it would in line with the expectations of the stakeholders.
In case of returns, its pretty much assured that returns would definitely be enhanced whe the cost would decrease and strategies would result in better quality products. But the elements of risk is there which could be quite significant in the case of subcontracting, whether the suppliers would be able to meet the quality standards or not. And as we inquired it from the branch manager of Lever Brothers Pakistan Limited, he said, that we have very strong quality control system and moreover we are entering into strategic partnership with our suppliers so to maintain quality is in their favor too and they would be beneficial from the better quality as well and it would not increase the cost in case of maintaining control over the suppliers as its partnership more as compared to only placing and receiving order we will work for mutual benefits and complete harmony which we already have.
As far as the stakeholders are concerned first and foremost effect would be on the employees as the production is out-sourced so they would definitely feared the unemployment but they said that we will arrange it with our suppliers and will try to accommodate them as much as possible and in case of shareholders, they would receive benefits of this strategy and would receive higher returns on their investments and they Reading Preview would be able to maximize theirYou're earnings and inaother stakeholders suppliers would n play more important role by entering into strategic partnership with the organization. Unlock full access with a free trial. Consumers receive more attention now and would get more satisfaction as more and more products would be developed on the basis of the targets being set by the consumer Download With Free Trial So after analyzing these factors it can easily be said that strategies being pursued by Lever Brothers Pakistan Limited has higher returns and lesser risks and more benevolen to stakeholders as well. Feasibility Sign up to vote on this title
Feasibility is concerned with whether the strategy could be made to work in practice or Useful Not useful not. And its more concerned with the assessment of practicalities of resourcing and strategic capabilities i.e. quantitative assessment, which is beyond the scope of this report, so, as an overview, all strategies seems feasible and some of them has already
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All these factors seems work in favor of Lever Brothers Pakistan Limited after analyzing the strategies of Lever Brothers Pakistan Limited.
Structural Analysis Organizational structure and management of Lever Brothers Pakistan Limited
Lever Brothers Pakistan Limited restructure the organization after the merger with Brooke Bond Pakistan Limited. The chairman is the executive officer of Lever Brothers Pakistan Limited. He leads the seven members management committee, which is the top of decision making. The management is responsible for corporate strategy of Lever Brothers Pakistan Limited and for initiating policies and overall planning as well as thei general management duties. Management committee members are each responsible for specific function. Reporting to the management committee members are departmental heads who are responsible for advising the management committee for planning and implementation of policies for ensuring that targets are reached. The committee includes
Mr. Lain Strachan Sangster (Chairman & Chief Executive) You're Reading a Preview
Mr. Mashkoor Alam (Vice Chairman)
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Mr. Mujib-ur-Rehman (Technical & Logistics Director) Download With Free Trial
Mr. Perwaiz Hassan Khan (Director Personnel) Mr. J. A. Lee (Director Sales)
Mr. A. D. Bandaranayake (Director Commercial)
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Useful Mr. N. I. Khockhar (Business Unit manager ODF) Mr. Clive David Welland (Director Food Business)
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Mr. Mujib-ur-Rehman Mr. Perwaiz Hassan Khan Mr. J. A. Lee Mr. Clive David Welland Mr. Dr. A. D. Bandaranayake Mr. S. N. Patel Mr. M. Asadullah Sheikh Mr. Abdul GhaniBachani Mr. Azim Azmat Osman
As we can notice that the management of the company is composed of a mix of international and Pakistanis business professionalists. The management of the company You're Reading Preview in many other organizations i.e includes Syed Babar Ali as director, who is alsoainvolved Packages and other industries. It includes in its board meetings one member from each Unlock full access with a free trial. province i.e. Punjab, Sindh, NWFP and Baluchistan. The top management of the company is fully professional specially marketing department which is headed b y Mr. Downloadin With Trial Jeff Lee who have world wide experience thisFree field.
Hierarchy Branch structure
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All over Pakistan 6 branches of Lever Brothers Pakistan Limited are working. Its head office is located in Karachi at Avari Towers. The chairman and management committee
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We cannot say that the structure of Lever Brothers Pakistan Limited is an ideal or exact functional structure as in functional structure CEO is in direct supervision of each primary activity but Lever Brothers Pakistan Limited have also included layers of vice chairman and very important management committee as described earlier. This structure maximizes the basic advantage of functional structure that the CEO is in charge and wel informed about each primary activity and minimizes the basic disadvantage of functiona structure that an organization become larger or more diverse, then CEO, senior management can be over burdened with everyday operational issues, which is true in the case of Lever Brothers Pakistan Limited and to offset this disadvantage they have create additional layer of management committee which is responsible of coordination between CEO and chairman, vice chairman, and the functional directors to take a strategic perspective on problems. So, Lever Brothers Pakistan Limited has a n ideal structure to oversee the whole organization and to control the operations of the organization which i turn create problems as of very slow decision making process and very centralized too.
To continue with structure analysis discussion, now let’s turn our discussion to five basi forces, which determines an organization’s structure i.e.
1. Threat of new entrants 2. Threat of substitutes
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3. Buyer power
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4. Supplier power
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5. Competitive rivalry. Threat Of New Entrants
Sign up an to vote on this title like Lever This potential threat always exist in every organization. But organization Useful you useful Brothers Pakistan Limited this threat is very minimum need a giant to because Not compete with another giant like Lever Brothers Pakistan Limited and in a relatively sma market like Pakistan, they are enjoying the highest market shares in most of their produc
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category they have brands targeted at almost each and every segment of the market so they don’t face the buyers power as such but still “customer is king” and they do have to pay a lot of attention to buyers being a consumer product company. Supplier Power Suppliers don’t exert any power over Lever Brothers Pakistan Limited rather Lever Brothers Pakistan Limited provides buyer’s power in this case, no body would like to loose a buyer like Lever Brothers Pakistan Limited so, they don’t face any significant supplier power. Competitive Rivalry
Competition is intense but not cut throat competition a nd all of them avoid frontal assau or direct attack. So, situation of healthy competition exist. Competitive rivalry would be discussed more in detail in the section “competitor analysis”. Structure Types In Multinational Companies
The growth in the size and importance of multinational business warrants some special mention, since the structural implications can be significant. In deciding the structure of You'reorReading Preview multinational critical aspect or factor issue is athe extent to which local independence and responsiveness take precedence global On the basis of these Unlockover full access withcoordination. a free trial. factors there are generally four types of multinational structures, such as:
Download With Free Trial In all the four structures, Unilever has assumed the structure of transnational corporation in which they have developed structure, which attempts to combine the local responsiveness of the international subsidiary with the advantages available from coordination found in global product companies. The key is that they wanted to create a integrated network of interdependent resources and competencies, in which: Sign up to vote on this title
1. Each national unit operates independently,but is asource of ideas Useful Not useful capabilities for the whole corporation.
2. The corporate center manages a global network by first establishing the role o
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contrast US companies with a large domestic market tended to favor “international divisions” and now they face two challenges:
1. The issue of local autonomy.
2. Barriers between their separate strategic views of the domestic and internationa
business.
Unilever has well coped with these challenges by adopting the transnational corporation structure.
Value Chain Analysis Of Lever Brothers Pakistan Limited
This method for accessing strengths and weaknesses divides the business into number of linked activities that may each produce value for the customer. “Customer value” is a function of factors that usually fall into one of three broad categories those that differentiate the product, those that lower its costs, or those that allow the organization to respond to customer needs more quickly.
You're Reading a Preview The value chain frame work helps analyze the contribution of individual ac tivities in a business to the overall level of customer valuewith theafirm produces and ultimately to its Unlock full access free trial. financial performance. If each part of the business produces value, the firm should be able to change more and/or incurDownload lower costs either which will lead to higher profit With FreeofTrial margins. The value chain analysis frame work of Lever Brothers Pakistan Limited appears as follows and is basically seeking cost leadership as their source competitive advantage. Explanation Of Value Chain
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Lever Brothers Pakistan Limited is basically focusing on cost leadership in branded shampoos market. For their raw material procurement they have opted “outsourcing”
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8 lanes = 8 reels 1 r eel = 1 ton or 1000 kg of shampoo in quantity It’s cutting and packaging is completed as final step. Packaging material is typically not available around factory area. Lever Brothers Pakistan Limited has to purchase all packaging material from Packages Limited Lahore. Hence both primary and secondary packaging material comes from Packages Limited Lahore. Primary packaging material includes bottles and sache packaging while that of secondary material includes the cartons. After packaging of shampoo bottles and sache passes through distributor to retailer. Outbound logistics start from here on demand of 6 depots of Lever Brothers Pakistan Limited, the lot is packed and delivered to the wholesaler. Now we will discuss that how each individual activity of value chain (both primary and supporting activity contributes towards the maximization of profits to deliver value to final customer. Supportive Activities Firm Infrastructure
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Lever Brothers Pakistan LimitedDownload has a wellWith established infrastructure. They have Free Trial knowledgeable expert top management and middle management who have expertise in the consumer goods fields. Moreover they have some arrangements with hair exports to furnish their product knowledge. They have a very good and effective management information system, which not only shares the information within the organization i.e. Lever SignBrothers up to votePakistan on this titleLimited but also with their suppliers and wholesalers as well. This and gives them Usefultheirtime Not useful saves real-time information.
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to be very late as their decisions are centralized and are in hands of parent company and the implementation is also very slow. This problem of absence of conditioner was identified by marketing research people very earlier and was communicated to productio department as well but a implication and action has been taken after a very long time when problems of sales become visible. We can say this is due to long term approach to strategy formation and implementation of Lever Brothers Pakistan Limited. Hence infrastructure contributes as a supporting activity for providing value to the customers and on some aspects e.g. centralized decision making and late implementation it proves to be a weak support. Human Resource Management
Human resource management is the one of the most important supporting pillar of the value chain and it is useful for its analysis. A firm’s higher technological and financial resources cannot do any thing for the betterment of company unless these two an d rest o the resources are handled by the good appropriate human resources. We can surely say that Lever Brothers Pakistan Limited has a skilled, qualified, expe rt, communicative management and officers staff. They have both formal and informal network of communication in their organization to complete the tasks and target efficiently and effectively. Hence we can say that there is You'reBrothers Reading Pakistan a PreviewLimited staff’s department. healthy type of network among Lever Unlock full access with a free trial.
Lever Brothers Pakistan Limited offers the training programmes and arranges seminars for further skill development and career development purposes of its brand managers, Download With Free Trial marketing managers, research and development managers, and other staff, which enhances their efficiency to support the primary activities of value chain of shampoo product line of Lever Brothers Pakistan Limited. Due to necessary training, healthy pay scales, balanced empowerment, informal and formal combination of communication network the job satisfaction ofthis each Sign up to vote on titleand every employee is very high. Which reduces the employees turnover to minimal. All of them Useful Not useful contribute a lot and positively for the support of value chain primary activities i.e. procurement manager putting his efforts for the purchase of high and right quality making inbound logistics.
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But here we would like to add that one thing is missing as a support of value chain i.e. good relations of Lever Brothers Pakistan Limited marketing and sales manager with their retailer and distributors. Due to this retailer give preference to the competitor’s brands of shampoos e.g. P&G. Hence Lever Brothers Pakistan Limited is providing training and job satisfaction to its human resources in turn there is low employee turnove and they support value chain except good relationship and incentive to retailers which is of primary importance. Technological Development
By technological development as a supportive activity we mean that how much organization is bringing further improvements in its products and p roduct development. Lever Brothers Pakistan Limited mainly through its R&D department has recently brought a major improvement in its Sunsilk shampoo i.e. launch of antidandruff white shampoo. Hence this very element has also been supportive in value chain of Sunsilk an Lifebuoy shampoo. But still Lever Brothers Pakistan Limited are laggards in bringing this improvement. Procurement
Procurement especially of raw material contents and packaging material is critical to the You're Reading a Preview product and ultimately to the organization’s success. Lever Brothers Pakistan Limited purchases its most of the contents of shampoo from foreign countries like America, Unlock full access with a free trial. Europe and Far East. The procurement system of Lever Brothers Pakistan Limited is mostly globally centralized and is long term as well. For purchase of local raw material Download With Free Trial Lever Brothers Pakistan Limited is outsourcing with its suppliers. They have get very good long term relationship with their suppliers of local raw material as well. Hence the get the quantity discounts and manage lead time as well. Primary Activities Of Value Chain Of Lever Brothers Pakistan Limited Sign up to vote on this title
Inbound Logistics Of Value Chain Of Lever Brothers Pakistan Limited Useful Not useful
1. Lever Brothers Pakistan Limited is focusing on the outsourcing for the purchas
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1. Lever Brothers Pakistan Limited has been in shampoo product line since 1984 Within these 16 years they have got experience. Experience effect ha raised efficiency, they have very old operations and product method a there has been no major turn around in production methods of its shampoo
2. Lever Brothers Pakistan Limited has a factory at Rahim Yar Khan in which the produce different products array with shampoo, capacity of this plant ha been designed in such a way that in current demand they get the economie of scale very easily which reduces cost of manufacturing of Sunsilk an Lifebuoy on this basis they offer lower prices as compared to P&G.
3. Since Lever Brothers Pakistan Limited’s buying is centralized same is the cas with production and operations methods as well. Rahim Yar Khan has t follow the predefined production process given by parent head office o Lever Brothers Pakistan Limited. Hence production process of both Sunsil and Lifebuoy is reliable i.e. there is no fluctuation. This element give reliability to final consumer. Out Bound Logistics
1. Final product of shampoo of Lever Brothers Pakistan Limited is shipped to its You're Reading a Preview depots via truck on the demand of these depots. Whole Sellers have to ad value themselves. They thiswith cost Unlockbear full access a freeof trial.transportation. Hence Lev Brothers Pakistan Limited has suppliers and Whole Sellers power over it wholesalers and gives cost cutting edge. Download With Free Trial
2. Lever Brothers Pakistan Limited covers all the retail and shopping outlets o Pakistan. Lever Brothers Pakistan Limited ensures availability and visibilit of its shampoos as each and every large store, medium size stores, smal shops. 100% coverage of outlet is the major strength of Lever Brother Sign up to vote on this title Pakistan Limited. Useful Not useful Marketing And Sales
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P&G’s shampoos as compared to Lever Brothers Pakistan Limited’s Sunsilk and Lifebuoy. 3. Lever Brothers Pakistan Limited has never offered any major incentive, discount or prize scheme to retailers on its shampoos which the retailers often demand. Retailers think that prize incentives with product or any other prize scheme offered to retailers or consumer etc enhance sales. Lever Brothers Pakistan Limited has never paid any head to it. Services
Lever Brothers Pakistan Limited has good “service” in terms they offer free samples for the relaunch of Sunsilk, which helps as a primary activity. A Transition In Value Chain
Lever Brothers Pakistan Limited is now focusing as extended value chain i.e. they are outsourcing with their suppliers and subcontracting with them to ensure reliability of raw material.
Before this supplier’s outsourcing they already have connected with their customers wit You're their strong R&D Department. But oneReading of thing ainPreview which they lag’s in they have centralized long term strategy, formulated on system Unlock full access with a freeand trial.implementation of results of R&D Department research based on customer connection in very late.
Download With Free Trial Hence all the above individual activities (i.e. primary and supportive activities) contribu to enhance customer values and ultimately improves firm’s financial performance.
Lever Brothers Pakistan Limited becomes able to incur lower costs which leads to highe profit margins. Sign up to vote on this title
SWOT Analysis
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providing products total income groups i.e. providing quality with econom as well e.g. Wheel washing powder, Breeze beauty soap, Taza Chai, etc.
3. Lever Brothers Pakistan Limited is the oldest company operating in Pakista which gives him a commanding position is Pakistan to certain extent.
4. Lever Brothers Pakistan Limited enjoys the services of highly professiona management in the area of sales, marketing, technical and production.
5. Lever Brothers Pakistan Limited has such a strong goodwill in the market tha some of its brand names has become the generic names for those product such as Surf for detergents and Dalda for ghee.
6. Lever Brothers Pakistan Limited is the largest producer of consumer products i Pakistan and has strong brands in every field such as Close Up, Dalda, Sur Lifebuoy, Lux, etc.
7. Lever Brothers Pakistan Limited having the biggest shares in tea market havin the biggest brand Lipton and Brooke Bond.
8. They are market leader in ice cream business of Polka i.e. horizontal integratio with hostile takeover they have captured their competitors thereby reducin competition. 9. The company has the assets of more than 5 billion. So, it can invest furthe Reading a Preview product innovation andYou're development. Unlockdistribution full access with network a free trial. then any its competition. 10. It has the largest and efficient
11. Lever Brothers Pakistan Limited is the only company in Pakistan which has it Download With Free Trial own corner research department.
12. The company is very strong financially. 13. The company is working for almost 50 years in Pakistan. That’s why it ha many advantages. Which other do not have. They have know how of th market. They understand the market very well. Similarly during this perio Sign up to votenetwork on this title all over th they have developed a very organized distribution Useful ofproducts, Not useful which giv range country. Another advantage is there wide them a position to monopolize the retailer’s shop. It is estimated that ove more than 30% of a retailer’s shop items are by this single company.
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4. Emphasizing only few products while ignoring others which could give them potential market shares e.g. beverages section.
5. Lever Brothers Pakistan Limited go for long term strategies for all their produc categories which prove to be a weakness with change in the circumstance and taste, trends of people Opportunities
1. With the help of further advertising their non competing brands can increas their market share i.e. market penetration strategy. People will definitely g for these products as Lever Brothers Pakistan Limited has a sound image i people’s mind. Whatever the brand is being sold is mostly on the basis o brand loyalty. 2. They have capital to invest they can explore new product categories e.g. in foo and beverages they can develop new products like Rafhan has launche custard, jelly, kheer mix, rasmalai mix, etc. through it again will broade their product categories and will make their operations complex but thi could be avoided with “sub contracting” i.e. strategic partnership with the suppliers. These products can prove a “cash cows” as customer in Pakista a Preview always welcome foodYou're itemsReading especially they will welcome due to bran image of Blue Band and Dalda ghee in food category and due to Lipton an Unlock full access with a free trial. Supreme in beverages category. 3. Lever Brothers Pakistan Limited relaunches most of its products with sam Download With Free Trial name or little change in the name e.g. Surf Micro to Surf Extra, ,then t Surf Ultra and then to Surf Excel, with little change of name and littl changes in its formula. If Lever Brothers Pakistan Limited launch products with in prevailing product categories, with entirely new name an new formula then they can capture new market shares as it will gain captur Sign up to vote on this title the attention of its target market more as compared to existing one. Thoug Useful Not useful cost apparently it will increase the advertising but it will be compensate with exciting sales as you have to advertise more even in case of relaunc of products with little change in names and formulas. So why not to go fo
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1. P&G is giving very serious threats to Lever Brothers Pakistan Limited in th business of detergents and personal wash and shampoos.
2. No of local companies producing detergents and market them at very low price which is a threat to Surf.
3. In the case of ghee and oil business Habib is giving very tough competition t Lever Brothers Pakistan Limited by introducing its variety of products.
4. Treat is promoting Bodyguard very much and trying to produce a competition i the carbolic soap market. 5. Increasing inflation in the country, persistently reducing the purchasing powe of the people and dropping people from high price products to low pric products e.g. the detergents and providing fuel to the expansion unorganized sector.
6. Increased import duties are also adding to the prices of the products and i Pakistan which is a very price for all the firms not only Lever Brother Pakistan Limited who are using imported raw material. 7. Threats of new entrants are also present. As ICI is a potential threat in detergen industry, because they are already involved in chemical business providing raw material for detergent production to different manufacturin You're Reading a Preview companies like Lever Brothers Pakistan Limited and Colgate Palmolive. PEST Analysis
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Download With Free Trialfactors affecting different PEST analysis is used to assess that what environmental organization and which of them are more important and how they affect the organization It is indicator of political, economical, social and technological influences on organization. Political & Legal Factors
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ac cording to them that political As far as the Lever Brothers Pakistan Limited concerns instability have do affect but not particularly Lever Brothers Pakistan Limited same as affects any other organization around and specially they are in consumer products Useful
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Economical Factors
Economical factors affect Lever Brothers Pakistan Limited in the same way as it affect any other organization like current economic situation in Pakistan and inflation has reduced consumer’s disposable income too, which in turn has reduced the purchasing power of consumer but affect is same for every organization and according to them Lev Brothers Pakistan Limited have edge that they have targeted all possible segments through their vast product category i.e. the width and length too. So one way or other they find way to cover it up. Capital Markets
In other economic factors like “interest rates” and “inflation” has affected the borrowing ability of organization but Lever Brothers Pakistan Limited stayed unaffected as a company having business in billions and when in need of financing no single bank can fulfill the need, they have to make a consortium to finance Lever Brothers Pakistan Limited and with very good credit standing and very low risk definitely they get the lowest or justified interest rate as well. Socio-Cultural Factors
Reading a Preview In socio-cultural factors, factors You're like lifestyle changes and level of education affects an organization. In case of change Unlock in lifestyle, thewith world full access a freehas trial.converted into global town now and people have readily access to every sort of information and they are becoming more quality conscious. Now more concerned towards environmental issues now and demand Download With Free Trial more social responsibility on the part of organizations now. To cope up with all these factors now Lever Brothers Pakistan Limited which always maintained the quality standards needs to work towards other social factors like social responsibility and environmental concerns like P&G did in its Arial campaign and image of a society responsible organization. Technological Factors
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In technological factors comes R&D first and foremost that how much an organization
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Our problem statement is regarding the shampoo segment of Lever Brothers Pakistan Limited. They have managed such a deep and broad product category and manage to do so well that some of their brand name has become the generic names for that particular product but this is not the story with Sunsilk and recently launched Lifebuoy Shampoo. Our problem statement is that what are the causes, which kept Lever Brothers Pakistan Limited away from market leader position in shampoo market. Problems
Whenever we look for the problems of company its problems can be bifurcated into two broader categories.
1. Internal problems 2. External problems Internal problems
These problems are normally faced by organization due to elements, factors and weaknesses which are present inside or which are existing internally in the organization e.g. problems due to organizational policies, culture, structure, information sharing You're Reading a Preview networks, organizational strategies or even employees, they can be positive force and th problem child as a source of internal as well. Unlockproblem full access with a free trial.
1. Company’s management rely on longWith term strategies which they receive read Download Free Trial made from their parent company, head office as a modus operandi. An hence a strategy or a policy approval, formulated and implemented 50 year back becomes obsolete and discard in prevailing scenario and changin environment e.g. in their advertising campaigns of Sunsilk shampoo the only use “Nabila” as their celebrity (Hair Expert) and they have never trie Sign up to vote on this title any other sports or film media celebrity for the promotion of their produc Useful Not useful which their competitors use extensively. Here in this field they lag behin due to their long term strategy even in field of advertising given by the parent head office.
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3. Management team of Lever Brothers Pakistan Limited normally arrang excessive operational meeting, they have less emphasis on the strateg implementation part as compared to strategy formulation and planning.
4. All the decisions regarding product planning, development, distribution an even targets of the branches are centralized and are in hands of central sale office of Lever Brothers Pakistan Limited. They don’t believe in MBO (Management by objectives). Branches are given inflexible targets of sale – though data on these branch managers negotiate this figure but it takes to long.
5. Due to heavy capital investment in their brands Lever Brothers Pakistan Limite is unable to observe their slow moving brands which create a cost burden.
6. Since removing old/discarded brand is very expensive due to expensive installe machinery, technology and capital investment, launching new brand is als very expensive for Lever Brothers Pakistan Limited due to the same reason As to launch a new brand complete research and development setup i required which is inflexible and can not be re-utilized for another bran along with its consumer market is heavily flooded with products, there i very low probability that market will absorb new brands. You're Reading a Preview
7. Whenever Lever Brothers Pakistan Limited launch any product they first launc Unlock full access success” with a free trial. it in India if product proves a “big they try it in Pakistan which i not a good strategy due to cultural difference and religious differences.
Download Trial 8. Lever Brothers Pakistan Limited hasWith veryFree poor relationships with their dealer and retailers. They are far away form their competitors like P&G, in case o retailer relationship. Their brand manager makes very rare visits to th retailers to know their problems, very little discounts are offered by Leve Brothers Pakistan Limited to their retailers. No prize scheme and incentiv Sign of up toLever vote on this title is given to dealers, retailers, wholesalers Brothers Pakis Useful Not useful Limited. Even Lever Brothers PakistanLimited brand manager nev bargain on the proper and prominent shelf space of their shampoos (Sunsil and Lifebuoy).
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settle in new branch and to understand new setup of branch and new deale network. This affects the branch operations and performance. External problems
Lever Brothers Pakistan Limited is not facing any prominent external problem as alread analyzed in PEST analysis.
Introduction Of Sunsilk And Lifebuoy Sunsilk Shampoo Lever Brothers Pakistan Limited stepped into shampoo business in 1984 with Sunsilk initially with only two variants:
1. Sunsilk (egg shampoo) 2. Sunsilk (shikaki shampoo)
You're Reading a Preview This was the first branded shampoo in Pakistani market then they launched another Unlock For full access with a free trial. shampoo named as “Clinic” in 1985. the reason that no other competitor was there i the market their sales figures was high in start, but as shampoo market started to develop and imported shampoo and otherDownload competitors entered into the market their sales started With Free Trial declining so they re-launched it as “Clinic Plus”. Due to their poor marketing in 90s Clinic Plus faced big failure. The sales of Clinic Plus was not up to the expectations of the company and they abandoned the production of Clinic Plus. They have recently launched the brand with the new name and new formula (as they claim) named as “Clini All Clear” dandruff shampoo. Sign up to vote on this title
Company re-launched Sunsilk shampoo with following variants inuseful 1998: Useful five Not
Sunsilk Black for dull hair
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Shoulder), Bio Amla & other imported shampoos as these shampoos got more shelf spac in the retail outlets.
Lever Brothers Pakistan Limited again re-launched the Sunsilk at the end of 1999 with 1 different variants with new name of fruitamines. Now the focus was on different kind of hair i.e. how many variation of Sunsilk are there with aspect of ingredients and contents. Then they reduced their frutamines Sunsilk to six variants. Now with launch of White Sunsilk they have seven variants of Sunsilk. Lifebuoy Shampoo
Lever Brothers Pakistan Limited also tried to encash its another very popular brand nam Lifebuoy soap which was popular among lower income segment. They launched Lifebuoy shampoo using this brand name in 1998. Initially it was successful according t the retailers every one was asking about it and asked for retailers opinion as well. Bu t it flopped badly because it was mainly targeted towards lower and middle income segmen and Lever Brothers Pakistan Limited wanted this segment to switch from bath soap to shampoo and wanted to develop shampoo market in this segment as w ell. But this class did not switched to Lifebuoy shampoo because they were in habit of using soap for washing their hair, more over they did not find any thing unique and new about the shampoo. Other than being liquid. So, they again returned to Lifebuoy soap. You're Reading a Preview Unlock full access with a free trial.
SWOT Analysis Of Shampoo Product Line Strengths
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1. Lever Brothers Pakistan Limited has a good name as a market leader consumer products this image always help its shampoo product lin Customer are brand loyal and of shampoo product line. 2. People have favorable opinions about Sunsilk that its contents do not includ any harmful chemicals which could damage their Sign up tohair. vote on this title Useful brand Not useful generally 3. First trial image of user are positive and they are loyal.
4. Sunsilk and Lifebuoy shampoos users believe that it is economical. Due to cos leadership strategy of Lever Brothers Pakistan Limited in shampoo produc
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2. Advertisement of Sunsilk does not promote the product very well rather it celebrity like “Nabila” is promoted. They don’t switch their celebrity a they have to follow long term promotion and advertising designed by thei head office as Elida (France) has always used beauty expert as th celebrity.
3. They focus on only females in their advertisement and they have ignored thei bigger segment of males. 4. Lever Brothers Pakistan Limited does not pay any attention on the incentive and discounts given to the distributors and retailers. 5. Sales manager, brand manager and sales representatives do not conduct an personal visits to the retail stores which gives them dissatisfaction. 6. Lever Brothers Pakistan Limited does not pay any attention to the shelf spac given to the Sunsilk in the retail stores. The store manager of “Range” tol us that the brand manager of Lever Brothers has never been visited the store and they even never bothered about their shelf space. 7. Due to very huge number of variants in Sunsilk, Lever Brothers Pakist Limited fined it very difficult to focus on particular variants and it create confusion among customers as well and increased complexity of operation to a large extent and created cannibalization You're Reading a Preview effect. Though recently the have reduced their variants of Sunsilk from 12 to 6 and then launche Unlock full access with a free trial. another one Sunsilk white. Still it needs further reduction. Opportunities
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1. Due strong company image and strong distribution network if they promot
their products through incentives, bonuses, allowances and discounts to th
retailers they can get better shelf space in the display stores of retailer especially in shampoo product line.
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2. Lever Brothers Pakistan Limited has very strong resear Useful and Not useful resourceful department. They can conduct through their personnel in all over Pakista
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the new shampoo with new name and new formula because of this the well be better able to attract target market. Threats
1. All new and existing and important shampoo and branded soaps, which ar
used, as shampoos are the threats for the shampoo product line of Leve
Brothers Pakistan Limited especially Sunsilk. Since people are not tha
much price sensitive in case of shampoo but they have more concern abou the ingredients, formula and quality of their shampoo.
2. Competitors of Lever Brothers Pakistan Limited like P&G have very stron relations with retailers and distributors which is greater threat to Sunsilk. The detail of discounts offered by P&G re as followed: Order in Rs.
Discount in %
Below 50,000 Above 50,000
2-3% 5-6%
While Lever Brothers Pakistan Limited offers even less than the above stated discounts on Sunsilk and Lifebuoy shampoos. You're Reading a Preview Unlock full access with a free trial.
Competitors’ Analysis
Download With Free Trial The major competitors of Sunsilk can be categorized in two ways (all percentages have been provided by Lever Brothers Pakistan Limited:
1. Direct competitors 75% 2. Indirect competitors 25%
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Direct Competitors
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*All the percentages have been provided by LBPL. Sr. No.
1 2 3 4 5
Shampoo
Percentage
Bio Amla Head & Shoulder Pentene Pert Plus Sunsilk
10 20 35 25 10
Bio Amla Normally young girls and women want lengthy hair and try to avoid split edges of hair they prefer Bio Amla. This is a shampoo which has the largest number of liters sales in Pakistan. Only lower middle and middle group people are using Bio Amla. Head & Shoulder
20% shampoo users are using Head & Shoulder as they are dandruff conscious people. 99% of the people are influenced by the advertisement of Head & Shoulder on daily use to get rid of dandruff and more over they re getting the promised results. They have targeted both males and females due to which they have got more number of shares in market. You're Reading a Preview Pentene
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Free Trial Pentene is the strongest hair careDownload product ofWith P&G both formula and advertisement wise. As already explained they are giving top incentive to retailers and distributors. P&G sale staff pay more visits to their retailers and stores to check the shelf space of their shampoo. Thus due to these efforts they are getting 35% of market share. Pert Plus
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Useful useful Not This shampoo is almost getting 25% of market sharesand it is also a very strong brand P&G. P&G has targeted on young busy people who want stylish hair within five minute So the need of separate conditioner is also committed.
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1. Pentene of P&G 2. Sunsilk of Lever Brothers Pakistan Limited Pentene Of P&G
According to the retailers like Range & Prince Store and other small shop keepers, normally place four order in a month i.e. the shelf space is refilled 04 times in a month o every week due to the increased sales of Pentene. It reflects the highest turnover o f Pentene. Sunsilk Of Lever Brothers Pakistan Limited
On the other hand only one order is normally placed in month by retailers due to the low demand by consumers. Hence the shelf space of Sunsilk is refilled 12 times in a year or once in a month. We can say that ratio for order placement is 1:4 for Sunsilk and Penten respectively. In other words 75% of the orders are of Pentene and only 25% of the order are secured by Sunsilk if we compare only these two. Indirect Competitors
Indirect competitors include:
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Imported shampoos 40% Branded soaps 35%
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Unbranded shampoos and soaps 25% Imported Shampoos
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Not useful and variety Useful innovators Higher income segment is very quality conscious. They are major seekers. They change their shampoo more often than any other segment. They are mostl influenced by advertisement and word of mouth or on the basis of the consultation of
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5. Vidal Sasoon 6. Temi Tei 40% of the indirect competition is provided by these imported shampoos. Branded Soaps These soaps include:
1. Lifebuoy (Lever Brothers Pakistan Limited) 2. Safeguard (P&G) 3. Bodyguard (Treet) 4. Johnson & Johnson (J&J) mainly targeted on kids These soaps account for 35% of indirect competition. Unbranded Shampoos & Soaps You're Reading a Preview
Unlock full access a free trial. used by lower income They are unbranded shampoos and soaps and with are normally segment. These unbranded soaps and shampoos provide a major competition to Lifebuo Download Free Trial shampoo for which Lever Brothers PakistanWith Limited focuses on low income segment. Lifebuoy soap is also providing indirect competition to Lifebuoy shampoo, as users of Lifebuoy soap have not shifted to Lifebuoy shampoo.
These unbranded soaps and shampoos account for 25% of indirect competition. Strengths And Weaknesses Of Competitors
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For this purpose or major competitor of concern are P&G and their shampoos like Pentene, Head & Shoulder and Pert Plus are providing major competition to Sunsilk and
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on their sales, quantity discounts on large sales, moreover they launch pric schemes continuously for their retailers. Lever Brothers Pakistan Limite have this very healthy strategy i.e. relationship with retailers. 4. P&G provides transportation facilities to its distributors and retailers whic attract these distributors and retailers to buy the P&G’s shampoo compared to Lever Brothers Pakistan Limited’s one.
5. P&G’s management bargain and stresses more on its prominent shelf space wit their retailers. In return of all above incentive not only retailers give a goo shelf space but also promote P&G’s products. 6. P&G fills its shelf space four times a months due to its high demand o shampoos. While Lever Brothers Pakistan Limited’s shampoos order ar placed once in a month due to low demand by retailers. Hence high sale volume is an other strength of P&G’s. Weaknesses
1. People have perception that P&G’s shampoo (e.g. Pentene) has harmfu chemical, it causes fall of hair. It is a weaknesses of P&G people think tha it softens the hair and gives silky touch but it causes the hair fall.
2. Though there is not too much big difference of price of Sunsilk and Pentene bu You're Reading a Preview people perceive that Pentene and P&G’s shampoo are of high prices. Due t this they face competition from Lever Brothers Pakistan Limited. But now Unlock full access with a free trial. they have overcome this element by price reduction i.e. from Rs. 120 to R 99 i.e. just one rupee below the retail price of Sunsilk (retail price o Download With Free Trial Sunsilk family size bottle is Rs. 100).
Existing Strategies Of Sunsilk
SignBrothers up to votePakistan on this title The strategy rather group of strategies adopted by Lever Limited for Sunsilk are as follows: Useful Not useful
Four main groups of strategies are available to us i.e.
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followed is diversification which they are know about to follow through launching complete hair care package i.e. not only shampoo but conditioners and hair dyes and sprays as well. And in this strategy an other group of sub-strategies being followed is 4P’s. Product Strategy For product continuous improvement strategy is being adopted i.e. continuously launching different variants in Sunsilk. Previously launched 12 variants than reduced to variants, and now launched another variant i.e. Sunsilk White antidandruff. Pricing Strategy
Lever Brothers Pakistan Limited have been using mediocre price strategy i.e. neither too high nor too low i.e. lower than P&G but higher than Bio Amla Shampoo. Due to cost focused strategies they are able to provide customers with low prices as to retain their target market which is mainly the middle class. Promotion Strategy
In case of promotion, due to restriction from parent company and Elida Hair Institute they are bounded to follow celebrity beautician focused promotional campaigns (Nabila and entirely focusing the female segment for Sunsilk Shampoo. Placing Strategy Distribution strategy is not different other than any product same distribution strategies adopted for complete product line. No separate customized strategy adopted for You're Reading or a Preview Sunsilk. Suggested Strategies
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From about mentioned for group of strategies considering the weakness inherited in thos Download With Free Trial strategies and problems faces by Lever Brothers Pakistan Limited, we would recommend product development strategy instead of market development. And now implication of this strategy over four P’s. Product Strategies They should launch a new product with completely new brand name instead of matured Sign up to vote on this title rather declining brand name and excuse for not launching a new brand. Hence as being useful of which Usefulfor the Not very expensive is no excuse for a company having portfolio financing backs have to make a consortium. Pricing Strategies
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retailer for the promotion of Sunsilk. So, developmental beneficial relationship with the retailers along with wholesalers.
Existing Strategies Of Lifebuoy
Since Lever Brothers Pakistan Limited has launched a new product of Lifebuoy shampo on the basis of its existing product Lifebuoy soap. Lever Brothers Pakistan Limited has tried to encash it generic brand hence cash cow Lifebuoy soap in a new form Lifebuoy shampoo. So Lever Brothers Pakistan Limited is following related diversification strateg in Lifebuoy shampoo. Within this group of strategies I its 4-P’s. Product Strategy In case of Lifebuoy shampoo they have made a related diversification in Lifebuoy soap. Pricing Strategy The are following cost leadership in Lifebuoy shampoo. Their focus is on low income group which is already loyal to Lifebuoy soap due to its low prices. Hence brand name and brand loyalty has been focused. Place (Distribution) Strategy Extensive distribution of Lifebuoy shampoo (family sized bottle, medium to small size sache pack) has been ensured onYou're all retail outletsa of Pakistan with 100% coverage. Reading Preview Promotion Strategy
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Lifebuoy shampoo for the promotion of Lever Brothers Pakistan Limited has focused on lower income segment (due to its low prices) and has used Shehzad Roy as their With Free Trial celebrity. There is no such heavyDownload advertisement in case of promotion of Lifebuoy shampoo. Suggested Strategies Market Penetration Lever Brothers Pakistan Limited should use market penetration strategy in case of Sign up to vote on this title Lifebuoy shampoo. They should enhance their advertisement and should boost their Useful efforts. Not useful market share of Lifebuoy shampoo with enhanc ed marketing Implementation Their focus for promotion on celebrity is only on Shahzad Roy for lower class which is
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