PRINCIPLES AND CONCEPTS OF BUSINESS STRATEGY Assignment task 1
STRATEGIC MANAGEMENT REPORT
PREPARED BY: STRATEGIC MANAGEMENT TEAM
PREPARED FOR: CHIEF EXECUTIVE OFFICER
ORGANISATION: UNILEVER PLC
1. Introduction
Unilever PLC is a British based consumer goods company that owns over 400brands in
beauty, personal care, home care and food, e.g. dove, Knorr, domestos etc.
Unilever PLC is listed in the United Kingdom and is a member of the FTSE 100 index.
The purpose of this report is for the strategic management team to comprehensively analyse
the strategic planning process and its critical role in maintaining long term competitiveness.
Unilever is an organisation that operates in a global landscape defined by rapid innovation
and volatile consumer demands thus creating a need to continuously evolve its strategic
framework to sustain market leadership.
The report serves as a foundational guide for the SMT to understand how structured planning
allows Unilever to anticipate and navigate likely future outcomes in an increasingly complex
environment.
To achieve this, the following will be discussed in detail:
The concept of business strategy: Defining what strategy means within the context of a
global fast moving consumer goods leader.
Levels of business strategy: how the decisions made at corporate level shape the goals and
functions of operational strategies.
Elements of a strategic framework: Outlining the vision, mission and objectives of the
organisation.
Strategy development process: how the organisation allocates its resources while
considering its business model.
Types of business strategies: identifying the strategic models Unilever employs to achieve
growth.
Elements of a strategic management process: Detailing the mechanisms for implementing,
monitoring, and adapting strategies to ensure they translate into operational success.
Key organisational theories that relate to business strategy: Applying key management
theories that underpin Unilever’s strategic choices and organizational structure.
By integrating these elements, this report will demonstrate how Unilever currently manages
its competitive position and how it can leverage strategic planning to improve its future
performance and resilience in a rapidly changing market.
2. THE CONCEPT OF BUSINESS STRATEGY
Business strategy refers to the systematic planning done by organisations. It guides its future
by identifying opportunities and risks. Business strategy can be used to drive performance,
support financial performance and reduce risks by helping an organisation adapt to market
trends thus enabling effective competition.
For Unilever, the company uses its strategy to look at global trends, such as shifting toward
sustainable packaging and health-conscious eating. The strategy revolves around sustainable
living thus appealing to the modern, eco-conscious consumer. The company has also shifted
its focus to power brands like dove, to create a competitive advantage by concentrating
resources on products that give a high return on investment.
3. LEVELS OF BUSINESS STRATEGY
Effective strategic management involves coordination and alignment across the various levels
of strategy to achieve an organisation’s long-term goals and competitive advantage.
Unilever is executing a multi-year strategic transformation plan known as Growth Action
Plan 2030. This strategy was made to address the slow volume growth by simplifying the
company’s portfolio and only focusing on its most profitable assets.
"Unilever has narrowed its strategic focus to 30 'Power Brands' which currently account for
approximately 75% of the group's total turnover (Unilever PLC, 2024).
Unilever’s corporate strategy dictates that marketing and investment resources should be
directed towards brands that bring the most turnover to drive market share gains. (Barney
1991)
This includes sale of their non-core assets. "By divesting its Foods division to McCormick for
$15.7 billion, Unilever has transitioned into a specialized Home and Personal Care (HPC)
entity, a move intended to unlock value and reduce operational complexity (Unilever Press
Office, 2026)."
The company has moved away from complex matrix structures to five business groups being,
beauty and wellness, personal care, home care, nutrition and ice cream. Each group has its
own profit and loss responsibly enabling faster decision making.
Unilever’s operational strategy is focused on digitising every aspect of the value chain to
increase speed and accuracy. This is done by implementing advanced algorithms to predict
consumer buying patterns, ensuring that the right amount of product is on the shelves at the
right time.
Unilever has strategically placed distribution centres to reduce transportation costs and
carbon emissions. The company meets its sustainability goals by ensuring that its key
agricultural crops are sourced from deforestation areas.
At marketing level, Unilever has moved towards digital marketing and commerce, to target
specific consumers with personalised advertisements.
4. Elements of strategic framework
This is the way in which an organisation defines its purpose. They provide a long-term view
of the organisations underlying strategy, while guiding and monitoring performance in the
short term.
In the case of Unilever, its purpose is to be a global leader in sustainable business. This
approach builds trust with consumers while reducing risk associated with climate change and
resource scarcity.
Unilever’s mission is to make sustainable living a common place (Unilever plc 2025). This
ensures that product innovation and market expansion are linked to social and environmental
value.
With Unilever, the objective is to increase sales to prove that the company can increase its
market share despite fast moving consumer demands. By measuring sales, the strategic
management team knows when to adjust its business level strategies.
The objectives provide clear targets for functional managers, like using virgin plastics and
having net zero emissions across their entire value chain.
Internal analysis allows the strategic management team to evaluate the organisations internal
capabilities against the external market environment. In the case of Unilever, the company
focuses on their power brands which have high consumer trust, making them superior in their
categories. The use of artificial intelligence by Unilever to speed up product development
ensures that the company stays ahead of innovation trends. Its sustainable living brands create
a competitive advantage among eco-conscious consumers. However, some of its weaknesses
include low profit margins in some categories and bureaucratic layers that slow down
decision making process due to Unilever operating in many countries.
External analysis helps the organisation anticipate market shifts and understand its position
against its rivals. With Unilever, the growth of digital commerce creates an opportunity to
bypass traditional retail limitations. There is growth in demand for science backed products,
creating an opportunity to cater to health-conscious consumers. However rising inflation and
fluctuating commodity prices put pressure on gross margin. This forces price increase which
can alienate consumers.
For the strategic management team, the SWOT framework is a diagnostic tool that highlights
external and internal factors, allowing the team to make objective decisions regarding which
business units to expand or divest.
5. Strategy development process
This is when an organisation decides how it will allocate its resources to get maximum
impact to achieve its objectives.
Before a strategy can be developed, the strategic management team conducts an audit of
external and internal environments. The external environment is analysed to find out global
trends and new artificial intelligence innovations, while the internal environment is analysed
to assess core competencies and resource gaps.
With Unilever, these assessments have led to the development of the Growth Action Plan and
the reaffirmation of their core purpose to make sustainable living a commonplace. Unilever
has also set quantifiable targets like, Underlying Sales Growth target from 4% to 6%
(Unilever 2026)
Implementation is where the plan is translated into operational reality. Unilever has moved to
five business groups; this ensures that the people running beauty and wellness are not the
same people running homecare. It has allowed for faster and more specialised decision
making. (Governance of Unilever 2026)
Unilever has also directed capital towards 30 power brands that account for 75% of their
turnover, by doing this Unilever has achieved superiority in product quality and advertising.
(Unilever annual report 2025)
Performance measurement ensures that resource allocation translates into financial health and
market dominance. Under the Growth Action Plan, financial KPIs are used, the underlying
sales growth is used to measure sales while excluding the impact of acquisitions, disposals
and currency fluctuations. The brand and marketing investment has led to their products
being unmissable to consumers.
[Link] of business strategies
There are certain methods a company uses to grow their business and increase sales and
profit. These methods are chosen looking at the financial position of the organisation,
competition or government regulation. An organisation can implement a growth strategy,
generic strategy or a differentiation strategy.
To remain competitive, a business must decide if it is sticking to what it knows or venturing
into the unknown. Unilever is currently doing both by, increasing Brand & Marketing
Investment (BMI) to steal market share from smaller rivals. In 2025, they increased digital
advertisement spend by 15% to ensure their 30 Power Brands stay at the top of mind for
consumers in the US and India (Unilever Annual Report, 2025).
Unilever utilizes a Differentiation Strategy to maintain its competitive edge against rivals.
Rather than competing on price, it leverages R&D to justify premium price points for its 30
Power Brands, which account for 75% of turnover (Unilever, 2026).
Unilever has strategically divested its assets to focus on high margin producing brands. The
separation of the Ice Cream unit into a standalone entity removed high-complexity cold-chain
logistics from the core balance sheet (Unilever News, 2025).
By combining its Foods unit with McCormick, Unilever secured a $15.7 billion cash
injection while retaining a 65% stake in the resulting flavour powerhouse (Unilever, 2026)
By becoming smaller, exiting Foods and Ice Cream, they have become more profitable, more
focused, and have more cash to spend on their most successful brands. (Teece, D. J 2007)
[Link] of a strategic management process
Strategic management is the integrative process of aligning an organization’s internal
capabilities with the external environment to secure a sustainable competitive advantage
(Porter, 1985). It involves the continuous cycle of environmental scanning, formulation,
implementation, and evaluation to ensure that corporate actions are not merely reactive but
are driven by a long-term vision of value creation (Unilever, 2026).
At Unilever, this process is currently operationalized through the Growth Action Plan (GAP),
a disciplined framework designed to shift the company from a broad, fragmented
conglomerate to a performance-led organisation in Beauty and Personal Care.
Implementation is achieved by ruthlessly concentrating resources, specifically Brand &
Marketing Investment (BMI) into 30 Power Brands that generate 75% of turnover, while
simultaneously demerging non-core assets like the Ice Cream division to reduce operational
complexity.
By aligning its organizational structure into five category-focused Business Groups, Unilever
ensures that strategic intent is translated into local execution across its Top 24 Markets, using
gross margin expansion as the primary financial engine to fund continuous innovation and
market share growth in these areas.
Organizational culture and leadership at Unilever have undergone a fundamental change to
support the implementation of the Growth Action Plan (GAP). The company has transitioned
to a high-accountability, category-led structure. This leadership shift is characterized by a
focus on operational excellence, where decision-making is decentralized to five specialized
Business Groups
Unilever has moved away from a broad social-purpose mandate to a strategy of Unmissable
Superiority. This cultural realignment emphasizes speed, simplification, and disciplined
resource allocation, ensuring that the organization is aligned with the primary strategic goal
of volume-led growth and gross margin expansion (Annual Report, 2025; Schumacher,
2025).
8. Key organisational theories related to business strategy
The importance of key organisational theories in business strategy is in their ability to
provide rationale in corporate decisions or actions. The primary purpose of applying these
theories is to reduce risk and ensure internal consistency.
At the core of Unilever’s Growth Action Plan (GAP) is the Resource-Based View (RBV),
which suggests that sustainable competitive advantage is achieved when an organisation
controls resources that are Valuable, Rare, Inimitable, and Non-substitutable (Porter, 1985).
Unilever has operationalized this by concentrating capital into its 30 Power Brands (e.g.,
Dove, Vaseline, and Helmann’s). By disproportionately funding these assets, Unilever is
leveraging its most resources to drive volume-led growth and premiumization (Unilever,
2026).
While Michael Porter’s (1985) seminal framework suggests that organizations must commit
to either Cost Leadership or Differentiation to avoid the strategic paralysis, Unilever PLC
exemplifies a successful Hybrid Strategy. By operationalizing a dual-focus model, Unilever
achieves Differentiation through its "Unmissable Superiority" initiative by leveraging R&D
to command premium pricing while simultaneously securing Cost Leadership through an
aggressive Productivity Programme. This hybrid allows Unilever to exploit economies of
scale across its global supply chain to fund brand equity, effectively decoupling the
traditional trade-off between margin expansion and market share growth (Porter, 1985;
Unilever, 2026).
Finally, Unilever’s transition to a category-led organizational structure reflects Contingency
Theory, which suggests that the optimal structure is contingent upon the specific challenges
of the external environment. Recognizing that the previous matrix structure was too slow for
a high-inflation, digital-first market, leadership implemented five Business Groups with profit
and loss accountability. This structural adaptation ensures that decision-making is specialized
and accelerated, directly supporting the company's operational success (Schumacher, 2025;
Unilever, 2024).
9. The plan on how to remain competitive in the future
Planning for future competitiveness necessitates a departure from traditional, linear strategy
toward a model of continuous change. As demonstrated by Unilever’s 2024-2026
transformation, futureproofing involves the integration of strategic foresight. By utilizing AI-
driven supply chain analytics and pruning the portfolio to focus on high-margin, Unilever
ensures it remains at the forefront of the FMCG industry. Ultimately, future competitiveness
is secured by a company's ability to maintain strategic alignment ensuring that its internal
resources and organizational structure are constantly evolving to meet the uncertainties of an
increasingly volatile global environment (Teece, 2007; Unilever, 2026).
10. Conclusion
In conclusion, the strategic management of Unilever PLC between 2024 and 2026
emphasises the critical importance of strategic planning as an essential pillar for
organizational survival and competitive dominance. By understanding the concept and levels
of business strategy, implementing strategic frameworks, pursuing a structured strategy
development process, and drawing on key organisational theories, Unilever can achieve
competitive dominance while planning for future outcomes. The strategic management team
aligns strategy with organisational objectives and purpose ensuring that Unilever delivers on
its promises to relevant stakeholders.
References
[Link], H. I. (1957). 'Strategies for Diversification', Harvard Business Review.
[Link], J.B (1991) firm resources and sustained competitive advantage.
[Link], M.E. (1985) Competitive Advantage: Creating and Sustaining Superior
Performance. New York: Free Press.
[Link], D.J. (2007) 'Explicating dynamic capabilities: the nature and micro foundations of
(sustainable) enterprise performance.
[Link], H. (2025) Unilever Leadership Update: From Purpose to Performance.
London: Unilever PLC.
[Link] PLC (2024) Strategic Focus: The 30 Power Brands. London: Unilever PLC.
[Link] PLC (2025) Annual Report and Accounts 2024. London: Unilever PLC.
[Link] PLC (2026) Growth Action Plan 2030: Strategic Planning Report. London:
Unilever PLC.