1. UNIQUE STRATEGIES: KEY FACTOR FOR MNCS;
COMPARATIVE DISCUSSION ON STRATEGIES BY UNILEVER AND P&G.
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2. Contents
Executive summary ................................................................................................................ 4
1.0 Objective and Scope ......................................................................................................... 5
2.0 Introduction...................................................................................................................... 5
3.0 Literature survey .............................................................................................................. 6
3.1 Understand Foreign Direct Investment and outsourcing ............................................. 6
3.2 Creating successful long term growth .......................................................................... 6
3.3 Globalisation not just economically but “socially” as well ........................................... 6
4.0 Industry Overview ............................................................................................................ 7
Indian scenario ............................................................................................................ 8
5.0 Data and empirical analysis .............................................................................................. 9
5.1 Unilever ............................................................................................................................ 9
5.1.1 Introduction ............................................................................................................... 9
5.1.2 New business model .................................................................................................. 9
5.1.3. Brands and innovation............................................................................................ 11
5.1.4 Market presence and place ..................................................................................... 12
5.1.5 Standardisation and adaptation .............................................................................. 13
5.1.6 Transaction exposure .............................................................................................. 14
5.1.7 Changing production strategies .............................................................................. 15
5.2 Procter & Gamble (P&G) ................................................................................................ 16
5.2.1 Introduction ............................................................................................................. 16
5.2.2 Manufacturing operations ....................................................................................... 16
5.2.3 Key Customers ......................................................................................................... 17
5.2.4 Organisation ............................................................................................................ 17
5.2.5 The strength in structure-........................................................................................ 17
5.2.6 Brands and innovation............................................................................................. 19
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3. 5.2.7 Market presence and place ..................................................................................... 20
5.2.8 Standardisation and adaptation .............................................................................. 21
6.0 Comparative Analysis ..................................................................................................... 23
7.0 Indian scenario .............................................................................................................. 27
8.0 Key Findings .................................................................................................................... 29
9.0 Recommendations ......................................................................................................... 30
9.1 Unilever....................................................................................................................... 30
9.2 P&G ............................................................................................................................. 31
Works Cited .......................................................................................................................... 33
Appendix .............................................................................................................................. 35
List Of Figures
Figure 1: A new business model of Unilever ........................................................................... 10
Figure 2: Operating profit by various products ....................................................................... 11
Figure 3: Unilever Brands......................................................................................................... 12
Figure 4: Profit by region ......................................................................................................... 13
Figure 5: Staff Cost ................................................................................................................... 13
Figure 6: Various brand names of same ice-cream Wall’s....................................................... 14
Figure 7: Organisational structure P&G ................................................................................... 18
Figure 8: 2012 Net sales by business segment ........................................................................ 19
Figure 9: P&G brands ............................................................................................................... 19
Figure 10: 2012 Net sales by geographic region and by market maturity .............................. 21
Figure 11: Turnover since 2009 to 2011 Unilever vs P&G ....................................................... 24
Figure 12: Profit Before Tax For HUL (Figures are in Crores)................................................... 28
Figure 13: Profit Before Tax For PGHH and GIL (Figures are in Crores) ................................... 28
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4. Executive summary
This project is about strategies and various practices by MNCs. The comparative study has
been carried out between Unilever and P&G. This shows the need of transformation not in
terms of products and innovations but also in terms of organisational structure. Brand
innovation is very important for any FMCG company. More the product line, better the
chances for sustainable growth in market. This also allows going in various markets with
their needs. More market present over the world is very necessary to use scale of economy.
But the growth in market should be balanced one. P&G admits that they have focused more
on home market (US) than foreign market which hampering their growth now. While
Unilever which is equally good in home market (Europe) and foreign market, they may catch
P&G in next 5 year as per Unilever’s CEO.
Brand’s merger and acquisition have major effect on growth pattern. Unilever’s acquisition
and disposal pattern is very aggressive. P&G has got a lot from Gillette merger. While doing
business ethics are very important for sustainable growth. Both companies were caught
doing unethical practices.
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5. 1.0 Objective and Scope
This research project will underline the importance of unique strategies by companies. The
Unilever and P&G are two main companies in world FMCG sector. Their actions directly
affects FMCG sector worldwide. This project will talk about their growth and give
recommendations for their future.
This is very important to study in order to clear the concepts of marketing. Pattern of
market
presence,
mergers
and
acquisitions,
brand
innovations,
and
standardisation/adaption etc. is covered in the studies.
This study is also important as a giant P&G is slowing down its growth while Unilever is
growing with more speed than P&G. This may change the world FMCG face in near future.
2.0 Introduction
Business environment is changing continuously over the years. Especially in past few
decades, business environment has changed tremendously because of globalisation,
financial liberalisation, development in technology, increase in mergers and acquisitions,
rising of Euro as a single currency in Europe as well as crisis like recession. All these and
many more factors affect the business and its activities over the world. The advancement
about the monetary conditions in Asia, changes in fiscal policies, aid packages by Japan,
lowered interest rates, expansion of liquidity in market, have given a helping hands to many
businesses (Trade and Development Report, 2006). These issues affect the company’s
strategy, structural management and development all over the world. The companies
operating in different sectors show different impacts.
“From market-place results that I've both caused and witnessed first-hand, one thing is
certain - your failure to act may be your competitor's gain!”
– Phil Barden, Decode Marketing
All the multinational companies operating worldwide are needed to make their strategies to
ensure constant growth to sustain in the global market. Most theories suggest that when a
firm invests in a foreign market, it gets advantage over the domestic competitor, but there
are many issues to be considered before investing in foreign market. The companies like
Unilever, P&G are the companies which are now leading in their FMCG sectors. Project will
focus on various aspects of business strategies by these two companies.
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6. 3.0 Literature survey
3.1 Understand Foreign Direct Investment and outsourcing
When multinational companies operate worldwide, the FDI is a key to become a leader in
the market. By tapping the factor advantages in specific countries and exploiting
competitive advantage, company may achieve to lower cost of production. E.g. FDI of US
companies like Apple in China helps to manufacture same product at lower cost (Koltler P.,
Keller K.). But it is not necessary to have FDI in every case, the Host Country may have
options like joint ventures, technology licensing, and outsourcing, etc. E.g. Countries like
India got benefitted by the outsourcing of IT sector jobs. So a company is able to lower the
production cost and at the same time new employment is created in other country (Grover
A., 2005).
3.2 Creating successful long term growth
The unique new products can create entirely new market. E.g. the new digital camera
market wiped out the old film camera market. At same time improvement and revision of
existing products is also necessary. To become a global leader or to remain at top position,
trends in marketing practices are important to be discovered. Supplier partnering, Customer
partnering, Benchmarking are the example of such trends. Also various Mergers and
Acquisitions help company to jump into leadership role. E.g. After acquiring Corus, Tata
Steel immerged as a new global leader (Koltler P., Keller K.). HP and Compaq merger was
done for the long run goals of company.
3.3 Globalisation not just economically but “socially” as well
Many organisations now are going with the globalised market, use economy of scale as an
advantage to develop their business worldwide. But this is not just only aspect when
companies thinking about going global, there is social factor as well. No one likes to get
affected by foreigner in their home country. While doing business it is very necessary to
think about what as an organisation they can provide something to the society. CSR
activities are very famous practices by these MNCs to create a good image in the foreign
country.
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7. 
Anti-Americanism
America is a superpower; this is a reason why many developing and even developed
countries have Anti-Americanism attitude. This is a challenge for American firms like P&G. In
this case creating a very good brand image is become necessary perhaps more important
than marketing a product (Bhagwati, 2007).
4.0 Industry Overview
Fast Moving Consumer Goods (FMCG) goods are all consumable items (other than
groceries/pulses) that one needs to buy at regular intervals. These are items which are used
daily, and so have a quick rate of consumption, and a high return. FMCG can broadly be
categorized into three segments which are:
1. Household items as soaps, detergents, household accessories, etc,
2. Personal care items as shampoos, toothpaste, shaving products, etc
3. Food and Beverages as snacks, processed foods, tea, coffee, edible oils, soft drinks
etc.
Global leaders in the FMCG segment are Nestlé, ITC, Reckitt Benckiser, Unilever, Procter &
Gamble, Coca-Cola, Carlsberg, Kleenex, General Mills, Pepsi, Gillette etc.
The FMCG industry changes fast and is constantly evolving. It's fair to say there is never a
dull moment in FMCG. From the pace at which goods leave the shelves to the rate of
product innovation and career progression, things move quickly. And it doesn't end there.
The brands themselves are changing just as quickly. 40% of brands on the top 100 list
twenty years ago have already been replaced by new names today.
FMCG companies can beat the recession. This is an industry that has proved itself very
resilient to recession – with the majority of companies in the sector weathering the financial
storm in a way that very few others have managed. Why? Well, consumers will always need
to buy the products created by FMCG companies. They may not buy big items like
refrigerators or cars in a recession, but floors still need to be cleaned, clothes need to be
laundered and aches and pains still need to be soothed (Purohit, 2012).
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8. 
Indian scenario
The burgeoning middle class Indian population, as well as the rural sector, present a huge
potential for this sector. The FMCG sector in India is at present, the fourth largest sector
with a total market size in excess of USD 13 billion as of 2012. This sector is expected to
grow to a USD 33 billion industry by 2015 and to a whooping USD 100 billion by the year
2025.
This sector is characterized by strong MNC presence and a well-established distribution
network. In India the easy availability of raw materials as well as cheap labour makes it an
ideal destination for this sector. There is also intense competition between the organised
and unorganised segments and the fight to keep operational costs low.

Factors that will drive growth in this sector:

Increasing rate of urbanization, expected to see major growth in coming years.

Rise in disposable incomes, resulting in premium brands having faster growth and
deeper penetration.

Innovative and stronger channels of distribution to the rural segment, leading to
deeper penetration into this segment.

Increase in rural non-agricultural income and benefits from government welfare
programmes.

Indian retail sector is open up for Foreign Direct Investments in both single brand
and multi brand retailing.
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9. 5.0 Data and empirical analysis
Theories discussed so far are about the challenges faced by the multinational companies
and their necessary strategies. Project will discuss about how Unilever and P&G is working
in practices.
5.1 Unilever
5.1.1 Introduction
Two parent companies in the Unilever Group are Unilever N.V. and Unilever PLC. Unilever
N.V. is a public limited company registered in the Netherlands. Unilever PLC is also a public
limited company which is registered in both England and Wales. Both the companies
present their consolidated accounts and compositely form single economic entity. Their
further subsidiaries are present in every country, which are also listed in that respective
country’s local stock exchange. E.g. Unilever India is listed in National Stock Exchange at
Mumbai, India. After introduction of Euro, it is adopted as a base currency by the company.
Before that they used Pounds Sterling as their base currency for making consolidated
accounts (Unilever-Annual Report, 2005).
Unilever operates in FMCG (fast moving consumer goods) sector. They have diverse range of
brands which are operating internationally and some in limited regional focus only. The Top
20 brands represents around 70% of sales. Some of the Unilever’s global brands are as
follows.
Aviance, Axe/Lynx, , Flora/Becel, Lipton, Rexona/Sure, Sunsilk, Toni & Guy, Ben & Jerry's,
Hellmann's, Dove, Omo/Surf, Lux/Radox, Heartbrand, Knorr, etc. (Annual Report 2006,pg
30)
5.1.2 New business model
A traditional model of company would see development in-house in the company’s core
categories. As the open innovation is necessary, there has been a revision of this traditional
view at Unilever. The company is not remained just a British anymore, its truly global
company. So the old British presence is removed by company and started getting maximum
ethnicity employees. In old model Unilever had not made the categories in which they want
go aggressively, in new model they made it very clear.
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10. Unilever made a new business model which clearly indicates that they are focusing on their
disciplined execution of clearly defined growth strategy with the help of aligned
organisation.
Clear growth
strategies
Aligned
orginisation
Disciplined
execution
Figure 1: A new business model of Unilever
(Source:Unilever growth strategy)
(i) Organisation reforms
According to the annual reports, Unilever is working with dual management structure which
is constantly under reformation since 2000. Unilever claims that it is one of the most
culturally diverse companies. It has 24 different nationalities’ managers who form the top
level management. They are making the corporate governance stronger with the “One
Unilever” programme. They are reducing management layers to make decisions faster and
cope up company’s strategy in changing environment (Unilever-Annual Report, 2006).
(ii) Clearly defined growth priorities
According to growth strategy mentioned in the annual reports, Unilever set their priorities
as follows
a. Deodorants, Skin, Hair
b. Ice cream, Tea
c. Vitality within food
d. D&E : Foods, Home care
The pattern of profit making from various products gives compliment to their priority list.
They are making most of their profit from Personal care and Food.
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11. Figure 2: Operating profit by various products
(Source: Unilever_charts_2002-2011)
Strategies by any company and priorities are dependent on their most profit making
categories of total production. Their biggest rival P&G get its profit from beauty and
personal care, baby care, and home care products. But compared to Unilever, P&G is weak
in foods category. So Unilever wants to utilise its dominance in foods sector over the rival
and at the same time give higher priority to personal care to overtake market of the rival.
Rivals like P&G are making their progress with leveraging on their strong value of domestic
brands which they are taking worldwide. But Unilever is sticking to more adaptation in order
to provide every market a different product according to the local needs. E.g. Production
processes of Sunsilk shampoo are same in every country but raw material they use in
countries like Brazil is bit different to adopt with local conditions and also cheaper than one
in developed regions like UK. While entering into new market, Unilever has implemented
regional adaptation policy.
5.1.3. Brands and innovation
In the sector of FMCG, to remain on top, a company must beat its competitors in sales.
Therefore, it is necessary to make the product according to the customers’ needs. But their
needs are very complex. Unilever considers its product as hero and brand it to make a
better portfolio than the rivals. They test their products against the rivals’. They find out the
difference- why customer is buying other product, and make changes accordingly in their
product. Unilever believes in first mover’s advantage in market, so the company wants to
introduce unique product in the market before anyone does. This has allowed them to make
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12. bigger profits and better customer base. E.g. Rexona for women deodorant with
motionsense technology, unique fresh test of Lipton tea because of freshly picked tea
leaves’ extract and preservation method. In 2012 company started with new range of
products for Men which making very good profits. E.g. Dove Men+ care, Toni & Guy, Axe
hair.
Figure 3: Unilever Brands
(Source: Annual Report Unilever 2012)
The Company wants to focus on their core competency which is innovation. Unilever
decided to go for outsourcing of its production processes. They outsourced administrations,
monitoring and manufacturing to low wage countries. But they made it very clear that
research and development is their top priority. Even though company is working with
partner companies from more than one decade, they still follow strict monitoring of quality
of product to ensure their standards.
5.1.4 Market presence and place
Unilever is exploring new market every year to make new customer base. Their strategies
are different in different countries. They are continuing with the acquisitions of local
companies. Global brand name, unique product with local channels who can distribute
product more efficiently- is perfect mix to sell products in FMCG sector. E.g. In India it is very
difficult to reach to all people because of larger population. The program named “Perfect
Store” helps Unilever to reach more number of small shops. Also these shops are getting
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13. more standardised than before which helps to attract customers. The chart below shows
that the percentage of total profit comes almost equal from every region. This is the result
of their strategy of market place and presence. When compared with P&G, we can clearly
observe that P&G has its half revenue from America and only 16% from Asia. Unilever has
equal share from different region because of its decision of acquiring regional brands. This
has allowed them to have bigger market than rivals in Asia and Middle-east.
Figure 4: Profit by region
(Source: Unilever_charts_2002-2011)
5.1.5 Standardisation and adaptation
Figure 5: Staff Cost
(Source: Unilever_charts_2002-2011)
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14. Unilever is following the method of standardisation in its production process. Though the
production processes are standardised by the company, the company did not standardise
their products. This have allowed them to buy and manufacture products at global level and
cut down their staff cost. This allows them to get more turnovers per employee. This can be
clearly seen by the graph below. This strategy allowed them to lower down the
manufacturing cost. Also it became simpler to control it centrally.
Unilever has worldwide ice-cream business with brand name “Walls” and the company has
also acquired local established brands like Ola or Algida in China. This helped them to
increase customers as they can operate with both international as well as regional brands.
This is because the company is studying the consumer behaviour closely and realised that
some regions are likely to buy products with local names only.
Figure 6: Various brand names of same ice-cream Wall’s
This strategy of theirs is defined in their annual report as “Leadership for Growth Profile
strategy”. With this, the company is emphasising on making revenue from multi-local
regions by having economy of scale globally. This is different from rival P&G as it uses same
brand names worldwide such as Pantene, Head and Shoulders, Pert Plus and Pampers.
5.1.6 Transaction exposure
Due to changing economic as well as political environment, it’s very difficult to maintain the
prices fixed as raw material prices also changes. Since the last decade the company has
successfully reduced the amount of payables and receivables, which is nothing but the
reduction in the amount of transaction exposure. Some techniques are used by the
14

15. company to manage transaction exposure. For raw material and commodities, the company
purchases forward contracts while they have future contracts to hedge against future price
moments. About long term debts, the company has fixed interest rates, also have
straightforward derivative financial instruments like interest rate swaps (Wallace, William,
n.d.).
5.1.7 Changing production strategies
Unilever is changing their ways of advertising and marketing with various changes in their
promotional activities, pricing, and packaging activities. To cope up with large regional
demand in Africa and Asia they are now more into low cost production with cheaper raw
materials. P&G has failed to provide such low cost products in many developing countries.
For international market, to make sure that Unilever grow with more profitability and
sustain in competition in long run, they adopted a proactive approach (Wallace, William,
n.d.). E.g. Cheaper products like low range of Sunsilk has been introduced in Brazil.
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16. 5.2 Procter & Gamble (P&G)
5.2.1 Introduction
The Procter & Gamble Company also known as P&G, is an American multinational consumer
goods company headquartered in downtown Cincinnati, Ohio, USA. Its products include pet
foods, cleaning agents and personal care products. Prior to the sale of Pringles to Kellogg
Company, its product line included foods and beverages.
In 2012, P&G recorded $83.68 billion dollars in sales. Fortune magazine awarded P&G a top
spot on its list of "Global Top Companies for Leaders", and ranked the company at fifth place
of the "World's Most Admired Companies" list. Chief Executive Magazine named P&G the
best overall company for leadership development in its list of the "40 Best Companies for
Leaders."
26 of P&G's brands have more than a billion dollars in net annual sales, according to the
2011 Annual Report and P&G Corporate Newsroom.
Most of these brands—including Bounty, Crest and Tide—are global products available on
several continents. Procter & Gamble products are available in North America, Latin
America, Europe, the Middle East, Africa, Asia, Australia and New Zealand.
5.2.2 Manufacturing operations
Manufacturing operations are based in the following regions:

United States

Europe

Canada

China (31 wholly owned factories) and other parts of

Philippines

Mexico

Africa

Latin America

Australia
16
Asia

17. 5.2.3 Key Customers
P&G customers include mass merchandisers, grocery stores, membership club stores, drug
stores and high-frequency stores. Sales to Wal-Mart Stores, Inc. and its affiliates represent
approximately 14%, 15% and 16% of our total revenue in 2012, 2011 and 2010, respectively.
No other customer represents more than 10% of our net sales. Our top ten customers
account for approximately 31% of our total unit volume in 2012, and 32% of our total unit
volume in 2011 and 2010.
5.2.4 Organisation
P&G business model relies on the continued growth and success of existing brands and
products, as well as the creation of new products. The markets and industry segments in
which P&G offer their products are highly competitive. P&G products are sold in more than
180 countries around the world primarily through mass merchandisers, grocery stores,
membership club stores, drug stores, department stores, salons and in high-frequency
stores, the neighbourhood stores which serve many consumers in developing markets. P&G
work collaboratively with our customers to improve the in-store presence of our products
and win the "first moment of truth" - when a consumer is shopping in the store. P&G must
also win the "second moment of truth" - when a consumer uses the product, evaluates how
well it met his or her expectations and decides whether it was a good value. P&G believe
they must continue to provide new, innovative products and branding to the consumer in
order to grow their business. Research and product development activities, designed to
enable sustained organic growth, continued to carry a high priority during the past fiscal
year. While many of the benefits from these efforts will not be realized until future years,
they believe these activities demonstrate their commitment to future growth.
5.2.5 The strength in structureP&G’s organization structure an important part of their capability to grow. It combines the
global scale benefits of a $83 billion global company with a local focus to win with
consumers and retail customers in each country where P&G products are sold.
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18. Figure 7: Organisational structure P&G
P&G’s structure has removed many of the traditional overlaps and inefficiencies that exist in
many large companies.

Global Business Units (GBUs) focus solely on consumers, brands and competitors
around the world. They are responsible for the innovation pipeline, profitability and
shareholder returns from their businesses.

Market Development Organizations (MDOs) are charged with knowing consumers
and retailers in each market where P&G competes and integrating the innovations
flowing from the GBUs into business plans that work in each country.

Global Business Services (GBS) utilizes P&G talent and expert partners to provide
best-in-class business support services at the lowest possible costs to leverage P&G’s
scale for a winning advantage.

Lean Corporate Functions ensure on going functional innovation and capability
improvement.
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19. CategoriesP&G have divided their products in
segments as
Beauty

Grooming

Health Care

Fabric Care & Home Care

Baby Care & Family Care.
As the chart below shows that maximum of
their business is from Fabric Care & Home
Figure 8: 2012 Net sales by business segment
Care.
Figure 9: P&G brands
5.2.6 Brands and innovation
P&G have their C+D program which is very unique from others.

What is Connect + Develop?
It's P&G’s version of open innovation: the practice of tapping externally developed
intellectual property to accelerate internal innovation and sharing our internally developed
assets and know-how to help others outside the Company.
Historically, P&G relied on internal capabilities and those of a network of trusted suppliers
to invent, develop and deliver new products and services to the market. P&G did not
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20. actively seek to connect with potential external partners. Similarly, the P&G products,
technologies and know-how they developed were used almost solely for the manufacture
and sale of P&G's own products. Beyond this, they seldom licensed them to other
companies.
Times have changed, and the world is more connected. In the areas in which P&G do
business, there are millions of scientists, engineers and other companies globally. Why not
collaborate with them? P&G now embrace open innovation, and we call our approach
"Connect + Develop."
Today, open innovation at P&G works both ways — inbound and outbound — and
encompasses everything from trademarks to packaging, marketing models to engineering,
and business services to design. It's so much more than technology.

How Does It Work?
Connect+Develop is a P&G innovation strategy. The idea of partnering externally to
accelerate innovation is applied across the Company and around the world in all our work
and with all our brands.
Within P&G, we have a global team dedicated to empowering C+D, searching for
innovations, working with prospective partners and shepherding breakthrough innovations
through the Company and into market. That dedicated team is called Global Business
Development.
5.2.7 Market presence and place
The charts below show that P&G have their majority market in developed countries. Only
38% of total revenue is from developing countries. The main focus of P&G is on their
developed country market. As being an American firm, company get maximum revenue
from North America. The chart shows clearly that P&G have more effective market in
America and Europe than any other geographical region that they operate.
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21. Figure 10: 2012 Net sales by geographic region and by market maturity
5.2.8 Standardisation and adaptation
Global Standardization Strategy is the strategy P&G is pursuing now. Initially, when they first
entered foreign markets, the P&G strategy was International Strategy. Procter and Gamble
identified the increasing globalisation of business and resultantly altered their business
strategy and structure in order to maximise exposure in more countries in order to: remain
competitive internationally, benefit from economies of scale; and to maximise revenues,
profits, share price and return on invested capital. To facilitate the implementation of their
global strategy CEO, Lafley, changed the structure from a “Global Product Structure”, which
is often associated with a standardisation strategy and implemented a “Transnational”
global strategy, and implemented a hybrid organisational structure that considered the
geographical dispersion of multiple marketplaces, respective specialisation for particular
brands and specialisations and economies of scale in particular value creating functions.
Since all the activities of production and marketing happen only in a few places, this strategy
becomes inefficiently when the need of a quickly response is increasing.
Some markets have emerged as an excellent case study for company on these international
standardisation strategies. Take an example of Diaper case in China. When Procter &
Gamble set out to sell Pampers in China more than a decade ago, it faced a daunting
marketing challenge: P&G didn't just have to persuade parents that its diapers were the
best. It had to persuade many of them that they needed diapers at all. The disposable
diaper — a throwaway commodity in the West — just wasn't part of the cultural norm in the
Chinese nursery. Babies wore cloth diapers, or in many cases, no diaper at all. And that, says
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22. Bruce Brown, who's in charge of P&G's $2 billion R&D budget, is why China presented —
and still presents — such a huge opportunity.
Today, after years of exhaustive research and plenty of missteps, Pampers is the No. 1selling diaper in China and the company, in many ways, is just getting started there. The
diaper market in China is booming.
When P&G first launched Pampers in China in 1998, the effort flopped. Instead of
developing a unique product for the market, P&G made a lower-quality version of U.S. and
European diapers, wrongly assuming that parents would buy them if they were cheap
enough.
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23. 6.0 Comparative Analysis
The main comparative difference between these two companies is their Key Segment. We
can clearly observe that Unilever is mainly with Foods and Personal Care while P&G is
leading with Fabric & Home Care. Unilever get about 80% of total revenue from Personal
Care and Foods while P&G get about 60% of revenue from Beauty and Fabric & Home Care.
Unilever have generated profit almost equally from all their geographic regions, while P&G
is more effective with its American and European market. About 60% of total revenue of
P&G is from North America and Western Europe only.
If the origins of companies have taken into consideration then this project can say that
American way of taking advantage of scale production have good impact and efficient but
does not give guarantee in every market region. British way of market adaption is more
likely to attract customers equally from every region. This can also be extended to their
largest retail operators Walmart (American) and Tesco (British). The major part of revenue
generation for P&G is Walmart support, so as Walmart is not doing well in many developing
countries and also not even operating in many countries as a restriction by government on
foreign investment. This will definitely hamper P&G’s revenue.
 P&G admits errors and slows expansion:
Procter & Gamble vowed to halt its expansion into new markets and focus on the biggest
emerging economies as it cut earnings and revenue forecasts and acknowledged it had
overstretched.
Bob McDonald, chief executive for the past three years, admitted the company had made
errors and should have produced better results.
“We will continue to expand our developing market portfolio, but we will do it on a more
balanced pace,”
-Bob McDonald, chief executive
The strategic shift sets P&G apart from peers such as Colgate-Palmolive and Unilever, which
continue trying to expand aggressively, albeit as smaller businesses in relative terms. P&G,
the world’s biggest consumer’s goods maker by sales, will tighten its focus on the 10 most
important emerging markets and not enter any new ones, while trying to revive growth in
its US home, where it has lost market share.
23

24. From the charts below, it can be observed that Unilever have managed to grow revenue by
10 million dollars but P&G couldn’t. This supports the view of their chief executive.
(P&G, 2012)
90
80
81.1
77.56
75.29
70
62.55
58.33
60
52.47
50
Unilever (in Million $)
40
P&G (in Million $)
30
20
10
0
2009
2010
2011
Figure 11: Turnover since 2009 to 2011 Unilever vs P&G
(Source- Annual Reports of Unilever and P&G)

Unilever CEO Expects to Catch P&G in Five Years
Unilever's CEO Paul Polman admitted that his company had grown "too little" over the past
10 to 15 years, but said he expects it to catch up with rivals such as Procter & Gamble (PG)
within the next four or five years.
Unilever closed 2010 with over $58 billion in sales while P&G's revenues were a little under
$80 billion. Even with a conservative growth rate of 4%, P&G's revenues by 2015 can be
expected to be over $97 billion. So "catching up with P&G" by 2015 translates into Unilever
growing at almost 11% year-on-year over the next five years.
Unilever aims to generate 70% of its sales from emerging markets like India and China.
While this is an admirable goal, successful growth pushes into emerging markets are difficult
to achieve -- and often not very profitable. (Trifs, 2011)
24

25. 
Unilever and Procter & Gamble fined £280m for price fixing
Both the companies are growing over a time but what about doing the business in right
way? Both have failed to do business ethically in European region. Unilever and Procter &
Gamble have been hit with fines totalling €315.2m (£281m) for fixing the price of washing
powder in eight European countries.
The European Commission imposed the penalties April 2012 after finding that the consumer
goods groups had colluded over prices for more than three years. P&G must hand over
€211.2m, while Unilever will pay €104m. Both fines were reduced because the companies
co-operated with the investigation and agreed to settle. (Wearden)

Unilever, P&G War Over Which Is Most Ethical
Bill Gates recently mentioned Unilever as a top-of-mind example of a company involved in
sustainability efforts in a CNBC interview from the World Economic Forum in Davos,
Switzerland.
"We are seeing, particularly with the new generation of young business people and young
marketers, that they are only attracted to companies that fit with their own value set"
-Kevin Havelock, president of Unilever U.S.
P&G's Pur has one of the most elaborate cause-marketing efforts -- a $20 million program
that aims to purify 2 billion liters of water in Africa and save 10,000 lives by 2012. It's clear
that ethical marketing really can make a difference in people's lives. For example, since
P&G's Pantene launched its Beautiful Lengths program in 2006 to solicit locks of hair to be
woven into wigs for women receiving cancer treatments, it has gotten enough donations to
make 3,000 wigs. Compare that to the 2,000 wigs created over 10 years by the previously
existing charity in the space, Locks of Love.
"Once there, a company or a brand that has a social responsibility position or a sustainability
position will then have an edge over other brands."
-Mr. Havelock, Unilever
It is very clear that both the companies want to have a good image in the market so as to
utilise it as a competitive advantage over the other. The P&G’s campaign during Olympics
25

26. 2012 called “P&G- Mom” had created a very good impact over the European market. (Neff,
2008)

Brands, mergers and acquisitions
"I'd love to buy more global brands. The climate for acquisitions is good, the climate for
mergers is good,"
- P&G CEO Bob McDonald (2010)
One reason for McDonald's interest in global brands is it can be an easy route to extend its
current business. For example, P&G bought Ambi Pur, an air freshener brand, from Sara Lee
Corp. this year. As a result, P&G was able to expand its Febreze line of air freshener
products, growing its penetration from 15 to 85 countries.
The most stunning in recent years was the company's purchase of Gillette for $57 billion in
2005. The acquisition brought P&G such well-known brands as Braun, Duracell and Oral-B,
as well as Gillette's signature razor line. Executives at the companies said they believe they'll
both be able to grow faster together than separately, with P&G opening doors for Gillette in
markets such as China and Japan while Gillette bringing P&G some product segments that
are growing faster than the company's overall current portfolio of products. Because of
expectations from the deal, P&G raised the annual revenue growth outlook to 5 to 7%,
rather than its earlier target of 4 to 6% (Barry Silverstein, 2010).
P&G was mainly into women cosmetics and Gillette was in men grooming. The merger
between Procter & Gamble and Gillette comes with the obvious chemistry of male and
female product lines, but the two companies also share a culture of innovation and a history
of cooperation, according to Wharton faculty and industry analysts. (Appendix-1)
Due to various reasons it is very difficult for organisation to entre in food market in foreign
country (Appendix- 4). Unilever gets its majority of revenue from food section. It was very
necessary for them to get that Food sector open in maximum countries. The Ben & Jerry
merger with Unilever helped them a lot. The market power of Unilever is undeniable.
Unilever South Africa employs directly or indirectly almost 1% of the country’s workforce.
Unilever Vietnam contributes 1% of the gross domestic product (GDP) of the country.
26

27. Unilever’s acquisition list is very big (Appendix- 3) and allowed them to penetrate into
foreign markets very efficiently.
7.0 Indian scenario
P&G is working with two business entities in India.

Procter & Gamble Hygiene and Health Care Limited (PGHH)

Gillette India Limited (GIL)
“India remains a high priority market for Procter & Gamble (P&G) and the consumer
products major has set itself the objective of maintaining a number one or number two
position in every functional category”
- Espirito Santo Securities Research
According to a report by Espirito Santo Securities, P&G wants to localise production as also
have vertical portfolio across tiers. P&G is still catching up in terms of increasing the
distribution network and new capacity addition demonstrates long-term commitment of the
firm.
Unilever is working as Hindustan Unilever India (HUL) in India.
“Unilever is investing highly in fast-growing emerging markets like India”
-British Prime Minister David Cameron
Unilever has used the visit of British Prime Minister David Cameron to its Hindustan Unilever
business in Mumbai to announce that it is investing €50 million to set up its first Asian
aerosol deodorant manufacturing facility in Khamgaon, Maharashtra.
Prime Minister David Cameron said: "It’s great to be visiting Unilever’s Indian Headquarters
today - more than 120 years since Sunlight soap, one of Unilever’s earliest products, was first
exported from Britain to India. Unilever is a shining example of how a business with British
roots can succeed in India and beyond and I’m delighted to hear they’re expanding further investing over £40 million in a new manufacturing plant in Khamgaon to service the
emerging Indian and South Asian markets." (Unilever Press release, 2013)
Though P&G is ahead of Unilever in world market, Indian scenario tells different story.
27

28. 25000
22800
20285
20000
18220
15000
HUL
10000
5000
0
2010
2011
2012
Figure 12: Profit Before Tax For HUL (Figures are in Crores)
(Source- HUL Annual Report)
250
233
233.6
212.76
200
178.7
150
133.97
116.97
PGHH
GIL
100
50
0
2010
2011
2012
Figure 13: Profit Before Tax For PGHH and GIL (Figures are in Crores)
(Source- PGHH Annual Report, GIL Annual Report)
28

29. 8.0 Key Findings
P&G has very strong home market (US Market) which company can leverage for foreign
market investment. Unilever preferred to go with more local adaptation than P&G. P&G is
very aggressive in terms of their R&D activities where Unilever need to focus.
One of the key success factors for P&G in comparison to Unilever is their market research
undertakings and consumer understanding. Instead of focusing their products on a lowgrowth market such as the food sector, they analysed key trends and market needs and
decided to establish themselves in high-growth markets. Such decisions were aided by
thorough market research planning and identifying areas for improvement and
differentiation. Organisational reforms by both the companies are nothing but effect of
highly changing global market and its requirements.
Unilever managed to penetrate in most of the developing countries because of their brand
merger and acquisition plan. The list in Appendix 3 is very big which shows degree of
aggressiveness.
P&G got major push by merger with Gillette. It has helped them to increase their product
line horizontally (Male & Female grooming, Detergents, Soap, etc). Also Gillette has very
good business in developing countries, which helped P&G to establish themselves outside
America and Europe.
Though Unilever is proudly saying that they are very ethical while doing business, both
Unilever and P&G were caught in Europe for price fixing of Detergent products.
If Indian scenario is taken into consideration then “P&G + Gillette” is not even close to
Unilever’s market. Unilever has very strong rout in Indian Market. CSR activities by HUL are
also very famous.
29

30. 9.0 Recommendations
This comparison clearly shows P&G is a leader in the world industry revenue and size wise.
Unilever can learn from P&G and further develop itself as a leader. The way both companies
operating now, it is very clear that Unilever have clear chance to be leader, if P&G not act
differently.
Taking into consideration the analysis provided, Global Strategy Advisors believe that there
is considerable opportunity for Unilever to strengthen its profitability and sustainability.
9.1 Unilever

Products
More scale production (economy of scale) necessary. More vertical integration will help a
lot. Male grooming is new sector for improvement, as Gillette not growing as per
expectations. Unilever is getting main revenue from its Food sector. If Unilever want to
catch up with P&G then they have to concentrate on their Home care products and
Cosmetics as well.

Market
Unilever is getting its revenue almost equally from all regions. Most of developing markets is
covered by Unilever, but need higher market share in China because P&G is having very
strong position in China. The consumer market of US and Europe is very big. Competitors
like P&G is having higher market in US and Europe. Unilever need to think about investing
more in those regions and be more aggressive.

R&D
Unilever need to matchup with P&G’s aggressive R&D activities. Unilever being a traditional
company was totally depending on company’s internal innovation only. But in recent years
they have realised the importance of open innovations so as to be more competitive with
competitors.

Ethics
HUL is known for their good business, CSR activities. But they are caught once in Europe for
price fixing. This should not happen again in future. Especially country like India, where
30

31. people are very religious and sensitive company must do business ethically. Otherwise it will
be very hard to regain trust if they lose it by some unethical practices.

Indian market
Strong Indian market gives pleasurable relief to Unilever. World market should learn from
Unilever’s innovative marketing strategies in India, that how to stay unaffected in any
situation. British prime minister in his recent visits to India has underlined the importance of
Indian market for company like Unilever. Big emerging consumer market in developing
countries is very important. Company may recover their loss (due to recession in developed
countries) in these markets.
9.2 P&G

Products
Should continue with scale production but adaption to local market is necessary. There is
possibility that some countries may refuse to use products because they have some
emotions attached to it. Male grooming is new sector needs more focus as Gillette not
growing as per expectations.

Market
Most of developing markets are not covered effectively, but need more market share and
effective penetration in India and other countries, like in China. Till date, P&G don’t have
manufacturing unit in India. Here they are making a big mistake. P&G is leveraging their US
market status to enter into new market. They must give something different to the new
market rather than just cheap or worldwide famous brands. More CSR activities in
developing countries may increase consumer’s awareness about company.

R&D
Need to continue with open innovation, C+D program (Connect + Develop). Also need to do
R&D for localisation of product. The main reason behind success of P&G is its aggressive
innovation practices. They keep their innovations open to all. They not just depend on their
internal innovation and R&D, but they want to get new ideas from anyone from world.
31

32. 
Ethics
Company was caught while doing unethical practices. This should not happen in future.
Corporate sustainability is very important. Especially country like India, where people are
very religious and sensitive company must do business ethically. Otherwise it will be very
hard to regain trust if they lose it by some unethical practices.

Indian market
P&G and Gillette have very small market capitalisation in India than Unilever. To stop
Unilever form growing faster than them, P&G should concentrate on Indian market. In
recent news, CEO of P&G Bob McDonald has said that, they want to invest in Indian market.
This allows them to recover losses from other part of the world. This shows the importance
of Indian market.
32

33. References
Barry Silverstein, 2010, P&G Goes Shopping for Brands, viewed 25 feb 2013,
<http://www.brandchannel.com/home/post/2010/09/07/PG-Shopping-for-Brands.aspx >
Bhagwati, Jagdish, 2007, In defence Of Globalisation, Oxford University Press.
Geoffrey Jones, 2002, Unilever—A Case Study , Viewed 24 May
2012,<http://hbswk.hbs.edu/item/3212.html>
Grover A., 2005, Outsourcing Versus Foreign Direct Investment:A Welfare Analysis, viewed
12 May 2012, <http://www.cdedse.org/pdf/work140.pdf>
MacDonnel F, 2007, Online Advertising Case Study: Unilever, Unilever Shows That Online
Advertising Does Boost Key Brand Metrics
Neff, J. (2008, March 2). Advertising Age. Retrieved Feb 18, 2013, from
http://adage.com/article/news/unilever-p-g-war-ethical/125460/
P&G, U. a. (2012). Unilever and P&G.
Purohit, 2012, FMCG Sector, Viewed 28 Feb 2013,
<http://info.shine.com/Article/FMCG/FMCG-industry-overview/4261/cid780.aspx>
Strategies for market entry, n.d., viewed 4 June 2012,
<http://www.oxbridgewriters.com/essays/marketing/strategies-for-market-entryexpansion.php>
Trifs. (2011, June 21). Daily Finance. Retrieved Feb 19, 2013, from
http://www.dailyfinance.com/2011/06/21/unilever-ceo-expects-to-catch-pandg-infive-years/
The Career Innovation Group, 2010, Case Study: Unilever ‘Hot Chilli’
Unilever, < http://www.unilever.com/>
Unilever-Annual Report, 2005, viewed 26 May 2012,
<http://www.unilever.com/investorrelations/annual_reports/archives/#tcm:13-88539>
The HP way, n.d., viewed 4 June 2012, < http://www.hpalumni.org/hp_way.htm>
Unilever-Annual Report, 2006, viewed 26 May 2012,
<http://www.unilever.com/images/ir_06_annual_review_en_tcm13-88516.pdf>
33

34. Unilever-Brands and highlights, 2010, viewed 26 May 2012,
<http://www.unilever.com/images/Brands_and_highlights_AR10_tcm13-259489.pdf>
Unilever growth strategy, viewed 28 May 2012,
<http://www.unilever.com/investorrelations/annual_reports/archives/#tcm:13-88539 >
Unilever Press Release, 2013, Viewed 25 Feb 2013,
<http://www.unilever.com/mediacentre/pressreleases/2013/unileverinvestinginfastgrowin
gemergingmarkets.aspx>
Wearden, G. (n.d.). Retrieved Feb 20 , 2013, from The Guardian:
http://www.guardian.co.uk/business/2011/apr/13/unilever-procter-and-gambleprice-fixing-european-commission
34

35. Appendix

1: P&G + Gillette Growth Abroad
Article from, “Boy Meets Girl: Gillette and P&G Hook up Their Brands”; Published: March 30,
2005.
Because both companies are struggling with slow growth in the consumer products
industry, international expansion is another driver of the merger. P&G has 106 plants in 41
countries and Gillette has 31 plants in 14 nations. J.P. Morgan estimates that the combined
company will generate between $17 billion and $18 billion in sales, or about 20% of total
revenue, from developing markets. "The primary strategic rationale for the deal is the
opportunity to leverage exposure in emerging markets," J.P. Morgan analyst John Faucher
told The Wall Street Journal, adding that Gillette is strong in India and Brazil, while P&G has
strength in Japan and China.
Faucher, like other analysts, questions the price. "While the deal clearly makes P&G bigger,
we are not convinced that being larger is worth $55 billion," he told The Journal. "We also
do not view P&G's track record on acquisitions as stellar, as it has had problems with much
smaller acquisitions in the past, especially in driving top-line growth."
The companies expect to reap $14 billion in cost savings. P&G says the merger will result in
the loss of 6,000 jobs, or about 4% of the combined workforce of 140,000. "They paid a lot
of money, and obviously they can do the numbers," says Hoch. "I do think there are some
cost savings and I think there might be a few synergies on the global front where P&G is
better-established in some countries than Gillette." The biggest beneficiary of the deal
might be investor Warren Buffett, who owns 9% of Gillette. Buffett called the acquisition a
"dream deal."
Meanwhile, the P&G/Gillette merger could put additional pressure on other consumer
products firms, such as Unilever, Nestle, Kimberly-Clark and Colgate-Palmolive, analysts
predict. "P&G has abundantly shown over the last few years [that] when done right, a broad
portfolio offers suppliers opportunities to leverage R&D and technology expertise,
purchasing and pricing power, and new product development," Prudential Equity Group
35

36. analyst Constance Maneaty told The Journal. "We think that if P&G believed there were
benefits to being bigger and more powerful, the writing is on the wall for the rest of the
industry."
According to Reibstein, the merger runs somewhat counter to the recent trend in business
strategy to emphasize internal growth over expansion through acquisition. "It's interesting
because we're in an era now where there's a push for us to get organic growth, and this is
not in that direction," he says. "This is the old way."

2: SWOT analysis of P&G + Gillette
Strengths and Weaknesses
Not only is Gillette a popular brand amongst the consumer but is also parent to many other
reputable and well-known brands such as Braun Oral-B line and Duracell. A strong brand
shows that customers are well aware of the company’s product and have a positive
perception about it Gillette gains a lot from this strength by practicing a premium pricing
strategy for these brands. The strength of these brands can be judged by the fact that
Gillette's razors that are the most expensive in the market dominate it with 34 market share
in United States.
Gillette's product have a reputation of dominating the markets they enter . Examples of
product leadership in the world market in 2003 are Gillette blade and razor portfolio which
had a 72 .5 share Venus female shaving equipment which has a 32 share , Duracell with a 39
share in the alkaline battery category and Oral-B brand increased its leading global share of
the 2005 . Dominating markets in so many categories increases the overall value of the
company and gives it think ahead of surviving competition. The large amount of sales
volume also gives the company economies of scale. Gillette's product portfolio is well
diversified. It product portfolio includes shaving equipment, batteries, oral care and
personal care products. Diversification allows the company to minimize risk of market
slumps
Gillette has recently experienced a turnaround in the form of business process reengineering and re-structuring of the organization and which has ended with a policy of
36

37. continuous processes evaluation and improvement. This turnaround has led to a large
increase in sales along with a reduction in overhead expenses. This has resulted in an
increase in profit margin from 18 .5 in 2002 to 21 .7 in 2003. In the same way Return on
invested capital has also increased from 23 in 2002 to 28 in 2003. Also the liquidity of the
company has become more favourable with an increase of 33 between the two years.
Although Gillette has a well-diversified portfolio most of its profits come from its razors and
blades business (68) which is its primary business. Even with a diversified portfolio this
makes the company highly dependent on its performance in this market. As a global giant
with such high stakes this position is highly risky
Gillette acquired Duracell in 1996. Since then the company has been unable to come up with
any break through innovation for this brand. Most of the market share Gillette has managed
to gain for the new alkaline battery that has been launched after the acquisition is the
market share of Duracell's older copper and black battery. Because of lack of differentiation
Gillette's premium price strategy for Duracell's Ultra has failed. In fact, tough competition
has brought down the prices and reduced the margin of this product. Profit margins roughly
halved between 1999 and 2002 (from 22 in 1999 to 11 in 2002). Reduction of manufacturing
overheads and decreased advertising expenditure has increased the profit margin in the
later years. However, Gillette's competitors Royavac and Energizer still have lower operating
margins.
In 2003, Gillette's major revenues of a whopping 13 were generated through a single
customer which is Wal-Mart Stores. Similar proportion of revenues has been generated
from Wal-Mart in the years before 2003 as well. This situation makes Gillette's revenue
vulnerable to the performance of a single customer just like Gillette's revenues are
vulnerable to the condition of one product market. Gillette should consider building
strategic relationship with other customers to diversify its risk
Opportunities and Threats
Gillette is known for constantly introducing new products in the market with better
technology and performance. Most of the products it has introduced have done well in the
37

38. market have earned a lot of appreciation . An example of its innovation is its CorssAction
Vitalizer which was launched in 2003. The product did not just do well for itself but also
improved its manual brushing business as well. The consumer goods industry is
characterized by the fact that the manufacturers operating within it must consistently
introduce newer and better products to serve customer needs. M3Power, a powered wet
shaving system for men and Passion Pink Venus, the new shaving system for women are
expected to further improve the company's performance in 2004. . Backed by state-of-theart Research and Development facilities, Gillette is in good position to exploit the
opportunity for newer products
As already discussed Duracell is being viewed as a liability and burden on Gillette by critics.
This is because Gillette has yet to show break-through innovation in the batteries product
line like it has shown in other sectors. Another criticism is that its only new product offer has
a market share which is composed mostly of the Duracell's old copper and black battery
market. True , the Ultra has grabbed 13 .5 of the U .S. market so far , and Duracell claims it
generates fat profit margins But most of that market share has been cannibalized from
Copper Black .Thus, Gillette should see this as opportunity for expanding its market share
The large and fast-growing Chinese battery market is good starting point to start. Keeping
this in mind, Gillette has bought a majority ownership in shares in the Fujian Nanping Nanfu
Battery Company, which was the market leader in China at that time. The increased demand
produced by China is likely to create economies of scale for Gillette and hence bring down
the costs
Oral B offers a lot of opportunity for Gillette. It has the distinction of being the only brand
that offers a toothbrush portfolio that extends from manual to high-end power. Gillette can
introduce this product to many international markets as a unique product and hence face
little competition.
Gillette is threatened by two main factors in its shaving product Mach3 One is that of
imitations and the other is of disposable razors. These two factors are consistently putting
pressure on the company's market share. Both imitations and disposables are priced lower
than the Mach3 product and therefore customers may find it attractive to switch to these
38

39. alternatives. Gillette's own disposable razor is competing with Mach3. This is a test of
consumer loyalty. It is yet to be seen how long it takes for consumers to loss interest in the
superior experience offered by Mach3, for a more affordable good enough shavers. .
Therefore, the rapid narrowing of the quality gap between the latest systems and the latest
disposable could have negative implications.
Gillette's strategy so far is to introduce products produced using state-of-art technology and
backed by through research. Thus products introduced by Gillette are of exclusive quality
and have a large amount of Research and Development investment behind them. It is only
fair that the company charges a premium price to recover their expenditure However,
Channel migration and consumer resistance over high prices is putting pressure on Gillette
to cut down the prices of its products. Gillette's pricing power in blades is under pressure on
multiple fronts as consumers migrate to value channels .These pressures are being
compounded by the growing consumer resistance to paying ever-higher prices for razors
and blades.
As an organization with global operations and with a product portfolio diversified into many
markets Gillette has to face a lot of competition. One of its major competitor is Energizer
Holdings which has acquired blade and razor business from Schick's and the Wilkinson
Sword a blade and razor business in some countries from Pfizer. Schick's four blade razor
Quanttro also give competition to Gillette's Sensor, Mach3 and Fusion.
As already mentioned Gillette is facing the toughest competition in the alkaline battery
market against Energizer and Royavac . In the razor and blades market product
differentiation and value added advantages has given Gillette a comfortable edge. However,
lack of differentiation in the battery market has caused a price war between market players.
Source:
<http://www.mightystudents.com/essay/Gillette.Merger.Aquisition.18247#ixzz2M1hiBgXg>
39

40. 
3: Acquisition and Disposal by Unilever
Year wise history of Brand Acquisition and Disposal by Unilever
2013
Skippy
31 January 2013: Unilever completed the sale of its global Skippy business to Hormel Foods,
excluding the portion operated out of China, which remains subject to regulatory approval
and is expected to close later in 2013.
2011
Alberto Culver
10/05/2011: Unilever acquired the Alberto Culver Company.
2010
Sara Lee
6 December 2010: We completed the acquisition of the Sara Lee Personal Care and
European Laundry business for €1.2 billion. Some of the leading brands included in the
transaction are Radox and Duschdas in skin cleansing, Zwitsal and Fissan in baby care, and
Prodent and Zendium in oral care.
EVGA
28 September 2010: Unilever and EVGA announced that we would acquire EVGA’s ice cream
brands and distribution network, enriching our ice cream portfolio in Greece. Brands include
Scandal, Variete and Karabola.
Consumer tomato products in Brazil
24 September 2010: We announced an agreement to sell Unilever’s consumer tomato
products business in Brazil to foods company Cargill for approximately €260 million. The sale
40

41. includes the Pomarola, Tarantella, Elefante, Extratomato and Pomodoro brands, and a
manufacturing facility.
Ampere Life Sciences
16 September 2010: Unilever announced we had entered into a partnership with Silicon
Valley-based Ampere Life Sciences. Under the partnership, we will have access to Ampere’s
Digital Biology technology platform and secure exclusive rights for the development of
innovative consumer products.
Diplom-Is
19 August 2010: We signed an asset purchase agreement with Norwegian dairy group TINE,
to acquire the activities of Diplom-Is ice cream operations in Denmark from 30 September
2010. The transaction included five distribution centres across the Denmark.
Italian Frozen Foods
19 July 2010: Unilever announced the signing of a binding agreement for the sale of our
Italian Frozen Foods business, Findus, for €805 million. The sale includes a factory in
Cisterna, Italy.
Shedd’s Country Crock
18 January 2010: We signed a definitive agreement to sell our Shedd’s Country Crockbranded chilled side-dish business in the US to Hormel Foods Corporation. Ownership of the
Shedd’s Country Crock trademark and its flagship spreads product range remained with
Unilever.
2009
JohnsonDiversey
24 November 2009: We completed the sale of our total interest in JohnsonDiversey, after
reducing our equity from 33% to 4% on 7 October 2009.
41

42. Baltimor Holding ZAO
3 July 2009: We completed the acquisition of the sauces business of Baltimor Holding ZAO,
the leading ketchup business in Russia. The acquisition included ketchup, mayonnaise and
tomato paste brands and a production facility near St Petersburg, strengthening Unilever’s
dressings portfolio in a key country.
Vietnam
23 June 2009: We announced we had invested an undisclosed amount into our subsidiary in
Vietnam. The transaction increased our ownership of the business to 100%. Previously
Vinachem owned a 33% share in the subsidiary.
TIGI
4 April 2009: We completed the acquisition of the global TIGI professional hair product
business and its Advanced Education Academies for €411.5 million, adding a range of
established salon brands to our consumer haircare portfolio. The transaction was first
announced on 26 January 2009.
Napoca
24 February 2009: Unilever agreed to acquire the iconic Romanian ice cream brand Napoca,
as part of our expansion into the country’s ice cream market.
2008
Bertolli olive oil & vinegar business
23 December 2008: We completed the disposal of our Bertolli olive oil and vinegar business
to Grupo SOS, for a consideration of €630 million. The transaction was structured as a
worldwide perpetual licence by Unilever of the Bertolli brand in respect of olive oil and
premium vinegar. The transaction included the sale of the Italian Maya, Dante and San
Giorgio olive oil and seed oil businesses, as well as the factory at Inveruno, Italy.
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43. Edible oil business in Côte d’Ivoire
4 December 2008: We completed the sale of our edible oil business in Côte d’Ivoire,
together with our interests in local oil palm plantations Palmci and PHCI, to SIFCA, the
parent company of an Ivorian agro-industry group, and to a 50:50 joint venture between
two Singapore-based companies, Wilmar International Limited and Olam International
Limited. At the same time we acquired the soap business of Cosmivoire, a subsidiary of
SIFCA.
Komili
31 October 2008: We completed the sale of Komili, our olive oil brand in Turkey, to Ana
Gida, part of the Anadolu Group.
North American Laundry
9 September 2008: We completed the sale of our North American laundry business in the
US, Canada and Puerto Rico to Vestar Capital Partners, a leading global private equity firm,
for a face value of US $1.45 billion. These businesses had a combined turnover in 2007 of
approximately US $1.0 billion.
Lawry’s & Adolph’s branded seasoning blends & marinades
31 July 2008: Unilever completed the sale of our Lawry’s and Adolph’s branded seasoning
blends and marinades business in the US and Canada to McCormick & Company
Incorporated for €410 million. The combined annual turnover of the business is
approximately €100 million.
Inmarko
2 April 2008: We completed the acquisition of Inmarko, the leading Russian ice cream
company. The company had a turnover in 2007 of approximately €115 million.
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44. Boursin
3 January 2008: We completed the sale of the Boursin brand to Le Groupe Bel for €400
million. The turnover of this brand in 2007 was approximately €100 million.
Lipton
With effect from 1 January 2008, Unilever entered into an expanded international
partnership with Pepsico for the marketing and distribution of ready-to-drink tea products
under the Lipton brand.
Source- Unilever Website

4: Local Market For Food
Multinational firms face resistance to expansion into local markets in countries with a strong
sense of nationalism or customer loyalty. In Scandanavian countries, national firms lead
total food sales; in East Asian countries, consumers show strong support for locally owned
and managed companies. In both Korea and Japan, the top four food manufacturing firms
are nationally owned. Unilever’s lackluster ice cream showing in Norway is directly
attributable to Scandanavian buyer avoidance of foreign-owned brands.
In addition to ethical consumerism and nationalism as barriers to entry into local markets,
financial regulations regarding foreign direct investments and national antitrust laws can
serve as impediments to mergers or acquisitions. While liberalization of investment laws in
Latin America have allowed companies like Nestle, Unilever, and Danone to retain leading
food manufacturer statuses, investment laws in Asia are far more restrictive and require
participation by local entities and the use of local raw materials. In the U.S., Nestle’s
takeover of U.S. Hershey was blocked by the State of Pennsylvania under strong pressure
from the local public; in more traditional settings, such mergers may be blocked by the
Federal government if concerns regarding industry concentration attach to the acquisition.
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