BE553 Principles of International Marketing Sample
Introduction
International marketing analysis of multinational companies is an essential factor within organisations. Due to COVID-19, global companies have faced major negative impacts in business developments and international trades. In this account, development of strategies for including transformation within organisations for regaining the sales and revenue growth of organisations in post pandemic situations is included in this study.
Thus this study focuses on the impact of the COVID-19 within Unilever and that’s regarding determination of strategies for mitigating issues of COVID-19 within this organisation. Internal and external factors of this company are also described in this context for developing effective transformation for gaining profits in the international market.
Company Background
Unilever is a multinational company of Britain in the consumer goods industry. This organisation was founded in 1929 from the merger of Margarine Unie and Lever Brothers. This company has the products of three major categories such as beauty and personal care, food and refreshments and home care. This organisation launches approximately 400 over brands in the global market. This organisation also launches products of its own brands.
This organisation has achieved a turnover of 51 billion in 2021 (Unilever, 2021). This organisation has faced major issues in the time of COVID-19. Customer growth of this company has faced a certain back fall because of the sudden reduction in average household income within UK. This organisation further has faced problems of reduction in sales and revenue growth and thus reduction in brand position in the global market.
Impact of COVID-19 outbreak in this company
Unilever has several impacts on COVID-19. In the opinion of Redziuk (2021), unstable economic conditions of countries have developed major problems within companies. Similarly, UK also had poor economic conditions at the time of COVID-19. From the report, it is found that GDP growth of this country was -9.8% in 2020 (World Bank, 2020).
On the other hand, inflation growth of this country was 0.85% in 2020 (Statista, 2020). These economic conditions have reduced average household income in this country. Therefore customers often prefer to purchase only the daily usage or essential products. As a result, a major customer reduction has happened in Unilever. Other than this, Unilever also has faced problems in international trade barriers as due to lockdown imposition; international contacts have been restricted in UK.
In relation to this, this organisation has experienced approximately 35% of loss because of the lack of importing and exporting. Effective supply chain disruptions also have been developed in that time in this company due to the transport barriers and lack of suppliers. Furthermore, excessive internal costs have also been introduced within Unilever due to the rules and regulations of UK Government.
UK Government has included the modified business regulations like daily sanitisation and COVID testing of employees on a rapid basis. Besides that, due to unstable economic conditions, Governmental authorities of UK have failed in investing research and development regarding expenses to organisations. On the basis of this, Unilever has faced failure in developing new products. Some major products also have been eliminated in that time due to lack of budget.
Impact of COVID-19 in industry in consumer goods sector and other contemporary organisations
Consumer goods sector of UK has been affected by the major issues due to COVID-19. As developed by Santos et al. (2021), due to COVID-19, companies’ industries often have struggled with its decreasing revenue growth and also by modification of customer demands.
In this account, different companies of consumer goods which have only physical stores have suffered from closure in business for an uncertain time due to lockdown imposition. On the other hand, companies of this industry also have faced issues regarding lack of customer interaction.
As consumer goods manufacturing industry launches products by focusing on the customers’ preferences majorly henceforth in this time by not being able to determine demands of customers. Thus a high amount of decrements in industrial revenue growth and market value develop in consumer goods industry of UK.
Other than this, contemporary companies of Unilever for instance Aisin, Canon Europe and Specssaver have faced major financial loss in the time of COVID-19. As per the example of Aisin, there has been observed the reduction of 250,000 in the 4 Quarter of 2020 (Aisin, 2021). Besides that, this company also has experienced a loss of 80,000 customers in this time.
Thus this company has been forced to eliminate some effective products of this company due to COVID-19. Furthermore, as per the context of Canon Europe, this organisation has faced major problems by initiating online business because of COVID-19. Workplaces have demanded major changes in working patterns and other styles for developing digital transformation which have created barriers in conducting sustainable business operations.
As a result, this organisation has experienced major financial decrements due to these barriers. Taking these into account, consumer goods manufacturing sector and other contemporary organisations of Unilever also have been affected by COVID-19.
External factors that drive the transformation
There are different types of external factors which influence a company in developing international markets and internalised strategies at the time of expansion. As regards by Witt (2019), political, economic, socio-cultural, technological, legal and environmental factors are the major external factors which are taken into consideration of a country at the time of expansion by a global company.
Political stability is the major factor of a country which can influence a company in expanding in this company. Political stability often helps organisations in developing its organisation within all over the country without facing any type of political turmoil (Reuber et al. 2018). On the other hand, proper political constitution of a country can develop sufficient jurisdiction and a court system which prevents companies from developing any legal complications.
Other than this, similarly in case of political instability and worst political constitution, companies cannot be able to develop proper business expansion within countries. Therefore, Unilever often takes the internationalised strategies by developing its subsidiary in a politically stable country for developing its international market. Unilever has gained these benefits by implementing USA, Australia and France.
Besides that, there are two major factors in country economics such as GDP growth and inflation growth. A country which has increments in GDP growth and decrements in inflation growth has proper economic stability (Mudambi et al. 2018). In relation to this, Unilever often targets to enter in those countries.
As increment of GDP and decrease of inflation develop increases average household income of country people. In this account, organisations can develop desired sales and revenue growth within the new country at the very beginning of development.
On the other side, comparatively economically poor countries have a reduction of average household income of people as a result companies can develop its business significantly in new countries. In compliance to this, Unilever often implements the internalised strategy of entering economically strong countries for gaining major benefits.
Unilever has achieved this type of competitive advantage by expanding to China, Japan and Germany as in the recent time of COVID-19, maximum countries have faced economic fall except for these countries. Other than this, by expanding Bulgaria and North Korea, this organisation has faced major economic drawbacks.
Socio-cultural factors of a country include population, customer behaviour and average income of it. As stated by Santangelo and Meyer (2017), population of a country often helps a company in developing a wide range of customer base within this country. This develops a high rate of financial benefit within organisations.
Henceforth Unilever often chooses high populated countries and most populated regions for developing its subsidiary. This organisation further assesses the customer behaviour within a country for entering within a country. If customer focuses on the quality rather than the price then the profitability of Unilever can enhance.
Furthermore, tastes of customers rapidly change in the majority of countries which create barriers in launching products by determining recent trends of customers. Consequently, customer dissatisfaction can develop in this company by expanding diverse customer preferences.
Average household income of people also is considered by Unilever of a country for developing proper cost strategy for gaining competitive advantages. Thus this organisation has gained benefits by expanding India and Spain.
Technological factors of Unilever include technology orientation and acceptance level of countries. As influenced by Xie and Li (2018), recent innovative technological inventions in countries and investments of the Government on research and development department of organisations are needed to be examined by companies before developing subsidiaries in a country.
In case of technology acceptance and orientation level of a country, technological readiness often is taken into account for determining (Cuervo-Cazurra et al. 2018). Apart from that, rapid technology inventions and sufficient Government investments on research and development depicts the technological advancements of this country which develops major advantages within organisations especially in the recent time of COVID-19. Henceforth Unilever majorly develops its subsidiary in technologically advanced countries.
Finally legal and environmental factors often develop a high rate of sustainability within organisations. As described by Hamilton and Webster (2018), adequate legislation of a country often develops significant business within companies by maintaining legal rules and regulations properly.
For example, in case of UK, there are different kinds of legislation related to business in this country. Therefore, in this country, Unilever is able to operate independently as well as comfortably. In addition, environmental aspect of a country has a minor impact on companies as environmental threats of the country often develop several disruptions in work within workplaces. In this context, Unilever needs to assess the legal and environmental stability level of a country as an international strategy before developing its subsidiary in a country.
Internal factors that drive the transformation
Internal factors which are taken into account by the majority of companies of a country for expanding its business within this country. As asserted by Arslan and Roudaki (2019), employee behaviour and culture, business structure, possible internal risk factors and organisational culture are the major concerned factors of organisations which are assessed by these before developing subsidiaries in a country.
Employee behaviour and culture are the most vital internal factors that are considered by Unilever before developing a subsidiary. As employees are the main base of a company henceforth development of appropriate behaviour within organisations are needed within workplaces for enhancing their quality of work and job satisfaction.
Unilever often examines this within a country for gaining an extended range of employee management ability in this new country. As asserted by Cletus et al. (2018), inappropriate behaviour of employees often develops several conflicts and confusion within workplaces. As a result, major disruptions are established within global organisations. On the other hand, involvement of employees having different cultural belongings often develops disagreements of opinions within employees due to the different beliefs, thoughts and skills.
Thus lack of communication due to language barriers and conflicts develop within organisations. Therefore, Unilever gains major benefits by considering this factor as the internal factors within a country.
Different types of risk such as supply chain related problems and currency exchange related risks can be considered within countries by companies for determining the impact and likelihood of these risks before developing subsidiaries. Unilever often considers these for calculating its profitability within a new country.
This organisation thus can be able to develop significant effectiveness within this country by developing proper business return at the very first time of expansion. Sustainable supply chain often helps organisations in gaining delivery and distributing products to customers. On the other hand, smooth currency exchange within subsidiaries within new countries brings steady cash flow within workplaces. Therefore, Unilever is able to develop proper business within new country.
Issues of Unilever which it has faced at the time of international business expansion in COVID-19
Unilever has faced several problems in developing proper internationalised strategies by deciding some international market growth in the time of COVID-19. At first, due to the worst condition of global economy, gaining proper investments for developing subsidiaries has faced difficulties in this organisation.
On the other hand, international business expansion and followed by implementing effective internationalism strategies of Unilever also has suffered from the socio-cultural factors of countries as due to the reduction of household income of country people, people of majority country have been preferring only daily usage and essential products which has reduced the profitability of this company. Finally, due to the transport unavailability within countries often develop a huge level of problems in supply chain barriers have been experienced by Unilever in gaining significant profits from its international market.
Recommendations and conclusions
Unilever needs to develop effective recommendations for mitigating the problems which it has been suffering due to the impact of COVID-19. As opined by Seid (2018), involving foreign investments is the major recommended strategy for organisations which have problems in the economy due to the worst condition of country.
For example, Unilever needs to take help from its other foreign countries which are economically strong. As a result, this organisation can develop proper business expansion within a new country and thereby can enhance its international market by implementing this as its internationalised strategy.
Furthermore, this organisation also can develop the strategy of launching products by determining the most recent trends and demands of customers and also requires developing Surveys of customers on a rapid basis for determining these.
In this account, this organisation can get competitive advantage by developing the products of customers’ preferences on a global basis. For example, if Indian people prefer food items and people of USA prefer home appliances, then this company can distribute accordingly by using this strategy.
Other than this, as influenced by Kumar (2018), organisations also can develop the strategy of arranging online interaction with customers for determining their preferences in Pandemic time. Therefore, this can help Unilever in ensuring the demands of customers within global environments.
Besides that, Unilever can take the strategy of involving personal transports and using regional or local suppliers in different places for avoiding supply chain disruption related problems. Thus this organisation can regain its sustainable business growth in international market by involving this strategy.
From these discussions, this study can conclude that in Unilever, there is a huge amount of adverse COVID-19 impact observed in 2020. This organisation has faced major issues regarding the worst economic impact of UK, international export and import problems in global environments, supply chain barriers and internal cost increments due to COVID-19 new rules and regulations.
From the analysis of customer goods industry of UK, it is found that this industry also has faced severe financial loss. On the other hand, from the analysis of external factors which are assessed at the time of global expansion within Unilever are political, economic, socio-cultural, technological, legal and environmental factors of country.
Apart from that, in case of internal factors, employee behaviour and attitude, supply chain and currency exchange related risks are majorly considered by this company. This organisation has faced problems of lack of investments, deficiency in customer’s preference determinations and supply chain disruptions at the time of COVID-19 in handling international markets and developing global expansions. This report has discovered that this organisation can mitigate these issues by involving foreign investments, including online customer interactions on a rapid basis and utilising local and regional suppliers.
Reference list
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