Essay
Question 1. Why and how did Unilever change its management strategy in Europe?
Compare and contrast Unilever’s former multinational approach to strategy with the new ‘One Unilever’ strategy.
Initially European integration was connected with a number of difficulties that Unilever never expected to face.
The issue can easily be explained by the fact that Unilever treated European market as a single one. It happened because Unilever had the experience of operating only within the local (national) market.
The need for the change of management and strategy was obvious as the company needed to acquire knowledge of the product at the regional market. It is absolute true that ‘in case of regional, local goods or services, connected with existing area, it is difficult to say about distribution to new markets, because they are produced from local raw materials and are associated with local sources’ (Hernik 2007).
At the level of the regional market Unilever could not substitute strong local corporate identities and brands that easily. And even more, sometimes some of the companies that produced, distributed or sold Unilever products never used the name of Unilever (Jones and Miskel, 2005).
In order to implement new management strategy of its operation in Europe, Unilever worked out a new business model.
There was a new position of 'World Coordinator ' introduced.
That was the person responsible for the development of new brands with the perspective possibility of selling it worldwide.
However, this innovation did not have any positive effect on the overall performance as the advice and recommendations of the world coordinator were often ignored or neglected.
At this point Unilever undertook another attempt of structural change.
In order to make national managers less resistible, more open-minded and more cooperative with the head division, Unilever reconsidered its way of creating a truly international business within the global market.
Each of the main product divisions was organized in a highly complex structure represented by managers at the global, regional and country levels.
Each division started operating under its own country and product management and regulated its own daily routine.
In comparison with Unilever's former multinational approach to strategy, 'One Unilever' strategy let the company eliminate possible duplication and share innovation.
Question 2. What challenges and opportunities does Frederik face?
Unilever is said to have diverse and still relatively autonomous operations all over Europe.
Key to efficiency was the reduction of operations duplication based in different countries. It was necessary to reorganize regional offices. And, truly speaking, regional - specific organization change turned out to be quite a challenge.
Frederik faces the work overload and feels unable to deal with the new responsibilities. He is made to work with completely new brands, different customer segments, new pricing, promotion and marketing strategies.
Besides he turns out to lead the managers working within the whole Nordic region. Thus, he has to undertake some of the HR department responsibilities as he is expected to become responsible for development and promotion of the junior staff.
It is really hard for Frederik to realize what he should start with and how to get the job done in the proper way.
If to speak about opportunities I would name the only one, the possibility for career growth and personal professional skills development.
Question 3. Being as creative as you can, design a change management strategy that addresses these challenges. Your strategy should offer practical solutions to help Unilever’s managers, like Frederik, put the strategy into practice.
In my opinion, to sustain product growth and not to discourage the members of managerial team, Unilever is better not to force the changes to take immediate action.
Once it is decided to be made, the certain mechanisms are to be worked out.
Thus, for instance, I mean that various regional departments could start working on some particular changes and share their experiences with the representatives of other offices.
Besides, each manager whose spectrum of responsibilities has become wider should be given some certain period of time to get adapted to new work conditions step by step.
Question 4. What alternative options would you recommend, in line with the objective of ‘how to secure economies of scale without losing local market knowledge’? What does one need to know about the different European locations and cultures to make sound decisions in this context?
I do believe that if the company is interested in its own prosperous future, it need to strive for balance. In this case it is essential to evaluate its own capabilities and weight and possible of strategies to be implemented.
Unilever is better not to forget and not to ignore the necessity to understand local customers’ needs and expectations, to continuously work with the market, tax and other legal issues.
It is possible to make use of globalization benefits only with the help of keeping the sight of individual markets.
References
Hernik, J. (2007). Promotion of a new local brand – a role of information. Economic Science for Rural Development, Jelgava 2007, pp. 130-137. Retrieved from https://www.academia.edu/3834710/Promotion_of_new_local_brand
Jones, G. and Miskell, P.M. (2005). European integration and corporate restructuring: the strategy of Unilever, c.1957 to c.1990. Economic History Review, vol.58, no.1, pp.113-39.
