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Business Strategy of
Unilever (Lipton)
$ Jan. 22, 2016 % 38,932 views

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! Business Strategy of Unilever (Lipton)

1. Final Project Course: Business Strategy & Policy
2. Learning Objectives Introduction History of Lipton (Unilever)
Vision, Mission, Strategies, Objectives Analysis Matching
Stage EFE Matrix IFE Matrix SWOT Matrix BCG Matrix
Advantages/Disadvantages of alternative Strategies
Recommended Strategies & Long term objectives
Recommended Annual objectives & Polices Strategy Review &
Evaluation Conclusion
3. Unilever’s Vision Existing To create a better future every day.
We help people feel good, look good and get more out of life with
brands and services that are good for them and good for others
New To be the paramount across the whole globe to become the
part of each and every moment of life by bringing sustainability in
growth, novelty in products and services; from food, beverages
to home & personal care.
4. Unilever’s Mission Existing To meet the everyday needs of all
consumers everywhere for nutrition hygiene and personal care
through branded products and services that delivers the best
quality and value. New To provide a better future to our planet by
working on social responsibility and protecting our environment in
our every segment ranging from food, beverages to home and
personal care products and services.
5. History of Lipton Tea Established in 1893 as Thomas J
Lipton Co Acquired by Unilever in the year 1972. Launched in
Pakistan in 1948 Leading tea brand in the world More than 11
major varieties of Lipton in Pakistan
6. Brands
7. PRODUC T • Lipton Yellow label • Lipton mega danne •
Lipton green tea • Lipton flavored tea • Lipton iced tea • Lipton
tea bags PRICE • PREMIUM PRICING STRATEGY: to encourage
favorable perceptions among buyers • VALUE BASED PRICING
STRATEGY: value for the customer and not production cost
PLACE • All across Pakistan • Urban/Rural Areas • e.g. HKB,
Hyperstar, small retail stores PROMOTI ON • Advertisemen t (TV,
Newspaper, Magazines, Billboards, POS etc) • Sales Promotions
(Lucky draws, discounts) • Internet Marketing • Sponsorships •
Co-Branding 4Ps
8. PRODUCTS GEOGRAPHICA L BEHAVIORA L PSYCHOGR
APHIC DEMOGRA PHIC Yellow Label All major cities Active
enthusiasts A+, A/B+, B 15 years & above M/F Green tea All
major cities Health conscious A+, A 20 to 40 years M/F Iced tea -
---- Cool Kids Youngsters A+, A 10 to 32 years M/F Flavored tea
All major cities Flavor cravers A+, A/B+ 10 to 32 years M/F Tea
bags All major cities Non-Burger lovers A+, A 15 years & above
M/F Legends: A+ UPPER CLASS A UPPER –MIDDLE CLASS B+
MIDDLE CLASS B MIDDLE-LOWER CLASS Segmentation
9. Rivalry (High) Power of Suppliers (High) Threat of Substitutes
(High) Power of Buyers (Moderate) Barriers to entry (High) Porter
Analysis
10. LIPTON TAPAL Brook Bond PSYCHO- ANALYSIS Health
caring Adventurous Active Young Vibrant Energetic Focuses on
aroma and taste Establishes strong family bonds Rich taste and
flavor Unique aroma Good packaging Good advertising Brand
visibility TARGET MARKET All age group except children Upper
and middle social class Urban Areas All age group except
children All social classes Urban as well as rural area people All
age group except children Also rural area people All social
classes Urban as well as rural area people MARKET POSITIONIN
G High quality Premium price Strong Aroma Excellent taste
Adventurous Rich taste and flavor 1-1 competitor of Lipton
Strong aroma and Rich taste and flavor Unique aroma Good
packaging Good advertising Competitor Analysis
11. LIPTON TAPAL Brook Bond PRICE High priced focusing on
middle and elite class Medium Price Medium Price STRATEGIE S
Market development Product Development Cost leadership
Economies of scale Low cost strategy Product development
Market development Forward integration strategy RND
STRATEGY Differentiation Innovation Innovation They have less
focus on RND as compared to the other two SNOW AND MILES
TYPOLOGI ES Prospector As it is innovative, growth oriented,
searches for new markets and new growth opportunities,
Analyzer Tapal maintains its current markets and current
customer satisfaction with Defender Brooke bond protects
current markets and maintains even Competitor Analysis
12. 43% 41% 8% 6% 2% Sales Lipton Tapal Vital Tea Tetley
Others Market Share
13. T H R E AT S High prices Smuggling of loose tea Substitutes
Rise in International tea prices Tapal’s indh & Baluchistan Market
share O P P O R T U N I T I E S Reducing costs Producing Out of
Home Advertisement Signing contracts with Commercial sectors
Reduction in Import duty W E A K N E S S E S High prices
Distribution Network Out-of-Home (OOH) Advertising S T R E N
G T H S Quality Management Brand Recognition Brand Image
Financial Position Customer Loyalty Quality and Variety
Distribution and Advertising
14. Matching Stage EFE Matrix
15. Key External Factors Weight Rating Weighte d Score
Opportunities 1 Reducing costs: Instead of importing from other
countries, it is preferable to import from India and Srilanka at
cheaper cost 0.08 4 0.32 2 Producing: Set up farms for
cultivation instead of importing, which further reduces input costs
0.11 2 0.22 3 Out of Home advertisement can be used to
enhance sales in Sindh and Baluchistan 0.09 1 0.09 4 Have
opportunity to sign contracts with commercial sector i.e.
universities, restaurants ,offices etc. 0.09 3 0.27 5 reduction in
tariff and custom( import duty reduced from 10% to 5%, sales tax
17% to 6%) in the recent of 2015 gives great opportunity of
increasing sales 0.14 4 0.56 Total Weight 0.51 Threats 6 Threats
of New Entrants: Due to cheaper tea imports from Sri Lanka and
India, new players are likely to enter the industry. 0.09 4 0.36 7
Smuggling: Increased smuggling of loose tea at cheaper rates.
0.08 3 0.24 8 Substitutes: Better quality and taste of juices and
soft drinks 0.08 4 0.32 9 Rise in International tea prices: Due to
popularity tea prices have been increased internationally. 0.05 3
0.15 10 People thinking is changing about tea usage 0.07 4 0.28
11 High Market share of Loose tea and Tapal in Sindh and
Baluchistan 0.06 1 0.06 12 Long summer season affect the sale
of tea 0.06 3 0.18 Total Weight 0.49 Total Weight of
Opportunities and Threats 1 3.05
16. IFE Matrix
17. Key Internal Factors Weight Rating Weighted Score Strengths
1 Experience and Quality Management: Excels its commitment to
matching the quality of Lipton tea with excellent manufacturing
practice. 0.1 4 0.4 2 Brand Recognition: Lipton is a strong brand
name, has strong dominance in the market and maximum
shareholding overall and 54% market share 0.08 4 0.32 3
Customer Preferences: Lipton focuses on its target audience,
keeping in mind the taste and preference of market segment.
0.09 3 0.27 4 Financial Position: Lipton has gained great profit
throughout its run and still continues to do so through
International exports. 0.1 3 0.3 5 Customer Loyalty: Most loyal
customers of Lipton prefer using Yellow Label because it has a
sense of trust and commitment in terms of taste. 0.1 3 0.3
Advertisement : It has strong advertising campaigns focusing on
health and inspiration 0.04 4 0.16 6 Diversification: It has an
integrated production process and is highly innovative. 0.07 3
0.21 7 Distribution : It has a strong distribution network in Punjab
with respect to others provinces of Pakistan 0.09 4 0.36 8
Packaging: Attractive packaging as well as gifts i.e. Lipton printed
caps, cups, shirts etc. 0.05 3 0.15 9 Out-of- Home (OOH)
Advertising 0.05 2 0.1 10 It has a strong advertising campaigns
focusing on health and inspiration 0.04 3 0.12 Total Weight 0.81
Weaknesses 10 High prices: Since it is a market leader and offers
a premium brand, it sets the price in the market and charges high
price. 0.04 2 0.08 11 Some products like Green tea and flavored
tea needs more promotional campaigns. 0.05 3 0.15 12
Distribution: Distribution network is relatively weaker in
NWFP,Sindh and Baluchistan as consumers there still prefer local
teas over branded ones. 0.1 1 0.1 Total Weight 0.19
18. SWOT Matrix
19. Strengths 1. Experience and Quality Management: Excels its
commitment to matching the quality of Lipton tea with excellent
manufacturing practice. 2. Brand Recognition: Lipton is a strong
brand name, has strong dominance in the market and maximum
shareholding overall and 54% market share 3. Customer
Preferences: Lipton focuses on its target audience, keeping in
mind the taste and preference of market segmentation 4.
Financial Position: Lipton has gained great profit throughout its
run and still continues to do so through International exports. 5.
Customer Loyalty: Most loyal customers of Lipton prefer using
Yellow Label because it has a sense of trust and commitment in
terms of taste. 6. Diversification: It has an integrated production
process and is highly innovative. 7. Distribution: It has a strong
distribution network in Punjab with respect to others provinces of
Pakistan 8. Packaging: Attractive packaging as well as gifts i.e.
Lipton printed caps, cups, shirts etc. 9. Out-of- Home (OOH)
Advertising 10. It has a strong advertising campaigns focusing on
health and inspiration Opportunities 1. Reducing costs: Instead of
importing from other countries, it is preferable to import from
India and Srilanka at cheaper cost 1. Producing: Set up farms for
cultivation instead of importing, which further reduces input costs
1. Out of Home advertisement can be used to enhance sales in
Sindh and Baluchistan 1. Have opportunity to sign contracts with
commercial sector i.e. universities, restaurants, offices etc. 1.
Reduction in tariffs and custom (import duty reduced from 10%
to 5%, sales tax 17% to 6%) in the recent of 2015 gives great
opportunity of increasing sales. SO (S4-O1) Financial position can
be increased by importing raw material at low cost from India and
Srilanka (S7-O4) Lipton has strong distribution network and
advertisement through which it can expand Sindh and
Baluchistan market (S7-06) By increasing the distribution
network, multiple restaurants, universities and commercial sector
to gain further market share. (S10-O4) Lipton has strong
advertisement network through which it can expand Sindh and
Baluchistan market (Strength-Opportunities)
20. (Weakness-Opportunities) Weaknesses 1. High prices: Since
it is a market leader and offers a premium brand, it sets the price
in the market and charges high price. 1. High prices: Since it is a
market leader and offers a premium brand, it sets the price in the
market and charges high price. 1. Distribution: Distribution
network is relatively weaker in NWFP, Sindh and Baluchistan as
consumers there still prefer local tea over branded ones.
Opportunities 1. Reducing costs: Instead of importing from other
countries, it is preferable to import from India and Srilanka at
cheaper cost 1. Producing: Set up farms for cultivation instead of
importing, which further reduces input costs 1. Out of Home
advertisement can be used to enhance sales in Sindh and
Baluchistan 1. Have opportunity to sign contracts with
commercial sector i.e. universities, restaurants, offices etc. 1.
Reduction in tariffs and custom (import duty reduced from 10%
to 5%, sales tax 17% to 6%) in the recent of 2015 gives WO
(W2-04) Lipton’s distribution network is weaker in some of the
provinces by improving their distribution networks it can expand
market share in NWFP, Sindh and Baluchistan. (W1-O2) Lipton
can gain more profit margins by starting in home production as in
Pakistan some farmers started their own cultivation of tea. (W2-
O4) Green tea is highly demanded in these days and by doing
out of home advertisement it can gain more market share from
this segment.
21. (Strengths-Threats) 1. Experience and Quality Management:
Excels its commitment to matching the quality of Lipton tea with
excellent manufacturing practice. 2. Brand Recognition: Lipton is
a strong brand name, has strong dominance in the market and
maximum shareholding overall and 54% market share 3.
Customer Preferences: Lipton focuses on its target audience,
keeping in mind the taste and preference of market segmentation
4. Financial Position: Lipton has gained great profit throughout its
run and still continues to do so through International exports. 5.
Customer Loyalty: Most loyal customers of Lipton prefer using
Yellow Label because it has a sense of trust and commitment in
terms of taste. 6. Diversification: It has an integrated production
process and is highly innovative. 7. Distribution: It has a strong
distribution network in Punjab with respect to others provinces of
Pakistan 8. Packaging: Attractive packaging as well as gifts i.e.
Lipton printed caps, cups, shirts etc. 9. Out-of- Home (OOH)
Advertising 10. It has a strong advertising campaigns focusing on
health and inspiration Strengths Threats 1. Threats of New
Entrants: Due to cheaper tea imports from Sri Lanka and India,
new players are likely to enter the industry. 2. Smuggling:
Increased smuggling of loose tea at cheaper rates. 3.
Substitutes: Better quality and taste of juices and soft drinks 4.
Rise in International tea prices: Due to popularity tea prices have
been increased internationally. 5. People thinking is changing
about tea usage 6. High Market share of loose tea and Tapal in
Sindh and Baluchistan 7. Long summer season affect the sale of
tea ST S1-T1 Lipton caters this threat by maintaining strong
brand name , image and brand loyalty S6-T3 With its diverse
product lines, it can overcome this threat by offering iced tea and
flavor tea. S10-T5 Although people preferences about tea are
changing but Lipton is working in its Ads to change consumer
psychology (S7-T6-T7) By creating strong distribution network,
Lipton can capture market share of Tapal and loose tea
22. (Weaknesses-Threats) Weaknesses 1. High prices: Since it is
a market leader and offers a premium brand, it sets the price in
the market and charges high price. 1. Some products like Green
tea and flavored tea needs more promotional campaigns. WT
(W2-T3), (W2-T6) By overcoming the promotional weaknesses of
flavored tea Lipton can compete with its substitutes (W1-T1) By
slightly reducing their tea prices or providing good offers threat of
new players in the market can be minimized that might influence
their market share. 1. Distribution: Distribution network is
relatively weaker in NWFP, Sindh and Baluchistan as consumers
there still prefer local teas over branded ones. Threats 1. Threats
of New Entrants: Due to cheaper tea imports from Sri Lanka and
India, new players are likely to enter the industry. 2. Smuggling:
Increased smuggling of loose tea at cheaper rates. 3.
Substitutes: Better quality and taste of juices and soft drinks 4.
Rise in International tea prices: Due to popularity tea prices have
been increased internationally. 5. People thinking is changing
about tea usage 6. High Market share of loose tea and Tapal in
Sindh and Baluchistan 7. Long summer season affect the sale of
tea
23. BCG Matrix
24. Advantages Farmers started cultivation of tea in their farms
in Pakistan. This will safe cost of imports Large demand can be
met Disadvantages Required High investment in farming plants
Quality factor can be affected Strategy : (In Home Production
Strategy) Advantages & Disadvantages of Alternative Strategies
25. Market Development Strategy for Flavored & iced tea:
Advantages Increase in sales in summer Increase the usage
of Iced Tea Disadvantages Increase Advertisement Cost
Increase Distribution Cost Marketing Penetration strategy (other
than Punjab): Advantages Get market share in other provinces
too. Cobranding with sugar, milk and biscuits will increase its
sale Disadvantages Increase Cost of Promotion
StrategiesStrategies
26. Iced Tea Join venture with PepsiCo: Advantages Lipton can
use Pepsi Distributors Disadvantages Collaboration between
the department can be affected due to conflicts Strategies
Market Penetration of Tea Dust against Tapal: Advantages
Capture market of strong tea users Disadvantages Lipton
yellow label usage can be affected
27. Product Development of Lipton Darjeeling: Advantages Can
capture the market of Baluchistan Disadvantages No as such
Strategies Lipton Mixture Tea: Advantages: Lipton mix tea can
give an advantage over other competitors.
28. Recommended Long Term Objectives: Capture tea market
of Sindh( Market Penetration) Own Tea Production Plant in
Pakistan( Backward integration) Change consumer preferences
about tea Lipton Iced tea revival (Joint venture with PepsiCo.)
Signing MOU’s with as much commercial sector, restaurants and
universities. Recommended Strategies: Improve distribution of
tea in Sindh Improve advertisement & promotional campaigns
according to the need of Sindh consumers Increase sales of
Lipton Iced tea Increase sales of Green tea Co-branding: with
milk and candy biscuit, free sugar etc. Recommended Strategies
& Long Term Objectives
29. Intense distribution Different promotion strategies to cater
different markets. Lipton yellow label should reduce its prices in
order to become a more affordable brand Lipton yellow label
should increase the use of tea vending machines to all the major
cities in Pakistan. Lipton should introduce its internationally
recognized ice tea in Pakistan first on an experimental basis
Annual Objectives
30. Actual Strategies Recommended Strategies Not working on
new product with Tapal Working on new strong Lipton brand in
Pakistan Minimum advertisement & sales for Lipton Iced Tea
Enhance advertisement & sales of Lipton Iced Tea Minimum
advertisement for Lipton Green Tea Enhance advertisement of
Lipton Green Tea Minimum distribution of Lipton Green Tea
Increase distribution of Lipton Green Tea Comparison of
Recommendations to Actual Strategies
31. Strategies Cost (Rs) Annual Objectives Cost (Rs) Distribution
of tea in Sindh 10 Million Own Tea production in Pakistan 20
Million Advertisement & promotional campaigns 2.5 Million
Capture Tea market of Sindh 7 Million Contract with Retailers in
Sindh 7 Million Joint venture with PepsiCo 15 Million Contract
with Distributor in Sindh 5 Million Signing MOU’s with restaurants
& Universities 14 Million Co-branding with milk & candy biscuit
etc. 6 Million Change consumer preference about tea in Sindh,
NWFP and Baluchistan 12 Million Cost of Specific Strategies and
Annual objectives
32. Cost of Farming Initial Four Year Investment per Acre
Rs.170,000/- Production Per Acre 1200 kg Area of Cultivation
Mansahra and Swat Cost of fertilizers Rs.12000/- Cost of
weeding 3210 Cost of tipping 1575 Overhead Cost 5000 Total
Cost Rs.200,000/acre/ann um Total Sales: 60 Million per annum
Other Costs: Lipton Mixture Tea Products 60 Grams 120 Grams
Sachets Production 25% 25% 50% Kg 200,000 50,000 50,000
33. Recommended Strategies Implementation Expected Results
Improve distribution of tea in Sindh Signing contracts with as
many distributors as possible Market share will be captured in
Sindh market Improve advertisement & promotional campaigns
for Sindh consumers Sponsorships, TV ads & bill board
advertisements. It helps to increase sales in Sindh Increase sales
of Lipton Iced tea Door to door sales & point of sales in stores
Overcome substitute Increase sales of Green tea Promotional
campaigns for creating awareness of green tea Increase in
awareness of green tea in overall market Co-branding: with milk
and candy biscuit, free sugar etc. New packaging design and
offerings Usage rate will be increased Implementation & Expected
results for recommended strategies
34. Desired Situation: 50 % market share Lipton share of
Pakistan by launching new “Lipton Mixture Tea” according to the
strong taste required of consumers in competition of Tapal
Current Situation: 85% of Upper and Middle Class is captured
by Lipton. Lipton has high share in Punjab. Lipton Tea
Advertisement is lacking attraction 95% of Lower Middle and
Lower Class is captured by Tapal. Tapal has high share in Sindh
% Baluchistan Tapal is successfully attracting the market with
its TVC
35. Company Strategy To double the size of the business whilst
reducing environmental footprint and increasing positive social
impact Unilever aims to expand its business more by doubling
its sales. Supporting Policies Increase distribution and
advertisement Launch new Lipton Mixture brands Bring
prices of products close to the competitors Support cultural
activities in the country Recommended Polices
36. Divisional Objective Lipton market penetration in Sindh and
Baluchistan Increasing rare and expensive raw material
Collaboration with our employees Supporting Policies: Strong
relationship with distributors and retailers. Training to farmers
about tea plantation Financial support to the farmers Con’t
37. Production Department Objective Most consolidated
packaging and less wastage Supporting Policies: Less water
usage Reduction in Greenhouse Gases Con’t
38. Inspect the core bases of a firm’s strategy Contrast
between the expected and the actual results Take corrective
actions if required Strategy Review & Evaluation
39. Conclusion Pakistani tea industry is concentrated with
Lipton Further growth and development Establishment of
stronger brands through their innovative and superior products
40. Thank You

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