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Introduction of Pestle Analysis Of Unilever Company Including Porter's Five Forces Assessment
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In this study, Unilever has been analysed which is located in the UK and operates in the business field of foods and household requirements. This study also analysed the concerned company by using the tools called PESTLE and Porter's five force analysis. Along with this, the identification of the business sector and its purposes has been evaluated.
PESTLE Analysis of Uniliver UK
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PESTEL
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Factors
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Outcomes
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Political
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? The targeted inflation of the UK is 2% (Gov.uk, 2022)
? Political stability reduced to 4.5% (Gov.uk, 2022)
? Foreign trade target lowered by 25% (Gov.uk, 2022)
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Threat
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Economical
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? GDP Growth rate increased by 4.6% (Gov.uk, 2022)
? The inflation rate was reduced by 2.5% (Gov.uk, 2022)
? Rate of unemployment reduced to 4.5% (Gov.uk, 2022)
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Opportunity
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Social
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? The population growth rate is at 5% (Gov.uk, 2022)
? Gender discrimination was reduced by12% (Gov.uk, 2022)
? More cultural barriers are found
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Opportunity
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Technical
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? Public investment in the technology has been increased by13% (Gov.uk, 2022)
? Technology awareness has been enhanced.
? Ranked 12 in the world innovative index (Gov.uk, 2022)
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Opportunity
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Environmental
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? Waste generation increased by 24% (Gov.uk, 2022)
? NO2 pollution increased by 14% (Gov.uk, 2022)
? Pressure from the environmental activities has been increased
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Threat
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Legislative
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? No consolidated law for the protecting MNCs
? Gender discrimination in the workplace increased by17% (Gov.uk, 2022)
? Employment and health laws are outdated and did not reform
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Threat
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Figure: PESTEL Analysis
(Source: Self-Developed)
The political situation of the UK poses a threat to Unilever. On the other hand, the environmental and legislative area of the UK also poses threats to Unilever. This company is also getting huge opportunities in economical, social and technological areas. Therefore, these parameters impact the global operation of Unilever in both positive and negative ways depending on the PESTEL situation of the foreign countries.
Porter’s Five Forces
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The threat of new entrants
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Bargaining power of suppliers
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Bargaining power of buyers
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The threat of substitute products or services
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Rivalry among existing competitors
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? Government protection (Unilever.com, 2022)
? Better quality of the product
? Discount practices by the competitors
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? The opportunity cost of the supplier has been reduced (Unilever.com, 2022)
? Bargaining power has been increased
? Opportunity from the new competitors (Unilever.com, 2022)
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? The opportunity cost of the buyers has been decreased (Unilever.com, 2022)
? Production with enhanced values which reduced the bargaining power of the buyers
? More focus of the customer's relationship
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? Lower rate of innovation
? Limitations in designing new products (Unilever.com, 2022)
? Supply-demand mismatch due to limited inventories
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? Best market practices (Unilever.com, 2022)
? Adoption of new data technology for the market strategies
? Enhanced customer loyalty
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Table: Porter’s Five Forces
(Source: Self-Developed)
Porter’s Five Forces
(Source: Self-Developed)
By analysing Porter's Five Forces and organisational theory, Unilever faces threats from the new entrants due to government protections, quality products and discount practices from those companies (Gereffi, 2010). The bargaining power of the suppliers has been enhanced due to a reduction in the opportunity cost of the enhanced bargaining power and opportunity from the new entrants to the suppliers. This company has been identified as the company operating in the business sector such as foods and household requirements.
Conclusion
In this study, a PESTEL analysis of the UK has been adopted for the evaluation of the concerned company; Unilever. Here, the political, environmental and legislative area is a threat to the company, whereas, this company has opportunities in the economic, technological and social areas. In Porter's five force analysis, various areas have been analysed such as the threat from the new and existing entrants, the bargaining power of the suppliers and buyers, and the threat of substitution.
Reference
Journals
Gereffi, G., 2010. The global economy: organization, governance, and development.
Website
Gov.uk, 2022. Welcome to GOV.UK. Available at: https://www.gov.uk [Accessed on 18/4/2022]
Unilever.com, 2022. Unilever Global: Making sustainable living commonplace. Available at: https://www.unilever.com [Accessed on 18/4/2022]
