Book All Semester Assignments at 50% OFF! ORDER NOW

Introduction

Businesses are able to employ Porter's Generic Strategies to solve either of the two fundamental issues that lie at the heart of the strategic choices they have available to them in response to the presence of competition. The first thing that has to be considered is how to select a market for a company and whether or not that market will be lucrative over the course of its existence. The given study will highlight about the application of the strategy on the company Unilever. Unilever Plc is a worldwide firm that is engaged in the production and distribution of consumer goods that are widely employed in day-to-day living. These products include soap, shampoo, detergent, and other personal care items. The business sells a wide variety of products, such as food items, items for beauty and personal care, beverages, products for the house, and even vitamins, minerals, and other dietary supplements (Unilever 2020).

If the company believes that increasing sales may be achieved through the provision of individualized products, then it will implement this strategy. This comprehensive strategy is consistent with the company's stated goals because Unilever is dedicated to enhancing the quality of life of consumers and contributing to the creation of a more sustainable world.

Question 1

The porter’s generic framework of Unilever is as follows:-

Figure 1: Porters Generic Strategy

Unilever employs a generic strategy that is built on a broad differentiation approach in order to achieve a competitive advantage in the market. This comprehensive strategy places the majority of its attention on the qualities that distinguish the items offered by the company from those offered by its rivals. To distinguish one's own goods from those of one's competitors is the objective of differentiation, which can be viewed as a sort of competitive strategy. It is possible to give the impression that a product is one of a kind by the use of a number of different elements, some of which include creative marketing methods, novel product features, enhanced quality and performance, superior service, and innovative technologies (Unilever 2020).

Products for washing the body that is gentle and nourishing, as opposed to abrasive and drying out the skin, is in great demand, and Unilever manufactures items such as Dove Cream Bars to meet this desire. In contrast to the vast majority of soaps, which put more of a focus on their ability to clean than on their capacity to moisturize, the products manufactured by Unilever are competitive while having relatively high price points (Dancaster 2020).

As it encourages a sense of brand loyalty among customers and, as a result, reduces their price sensitivity, the application of differentiation as a strategic strategy within a given firm has the potential to generate returns that are greater than the average. This is because differentiation has the ability to provide returns that exceed the average. According to the findings of previously conducted study, the application of a differentiation strategy is more likely to result in better profitability compared to the utilization of a low cost strategy. This can largely be attributable to the fact that differentiation methods typically establish more efficient entry barriers in the marketplace. It is more likely that an increase in market share will be achieved through the implementation of a low-cost strategy. Although it can be utilized by businesses of any size, the strategy of focus lends itself particularly effectively to the management of smaller organizations (Unilever 2020).

The utilization of a focus strategy can be used to find targets that have a lower susceptibility to substitutes or places where competition is relatively weaker, which enables the attainment of returns on investment that are greater than the average. In other words, a focus strategy can be used to identify targets that have a lower susceptibility to substitutes or areas where competition is relatively weaker. Generally speaking, companies have a tendency to settle on a solitary general method from among the aforementioned possibilities. Despite this, some businesses make it their mission to focus solely on executing any one of the aforementioned general tactics. However, there are some businesses that attempt to follow numerous strategies at the same time by releasing a differentiated product at a lower price. It's possible that these strategies will be successful in the short term, but their viability over the long run is uncertain. It is possible that companies will not be able to successfully achieve either of their goals if they pursue cost leadership and differentiation strategies at the same time. For instance, it is not possible for a corporation to concurrently embrace both a differentiation focus strategy and a cost focus strategy because doing so would be impossible. The process of developing a product that is distinct from others calls for a big investment of capital, which ultimately results in a significant amount of money being spent.

Businesses are able to implement many strategies at the same time, as has been pointed out by a large number of pundits and empirical investigations. There is a wide variety of software and methods available to organizations, allowing them to effectively save costs while simultaneously developing and distributing goods that have their own unique selling propositions.

Unilever's strategic objective, which is rooted in the product differentiation strategy, entails pursuing company growth through focused endeavors in product development. Product development is a key strategic approach employed by companies to create novel goods within established markets. Consequently, Unilever effectively employs this approach to successfully engage customers with its specially designed consumer products. The aforementioned generic strategy of differentiation aligns with the organization's objective and vision statement, which seeks to promote sustainability on a global scale while enhancing the well-being of consumers. As a result, FMCG companies seek to gain a competitive edge by producing goods that possess enhanced attributes of value, including but not limited to product flexibility, product quality, and reliable delivery.

Question 2

There are many advantages and disadvantages of the given model. 

Advantages

A business can avoid being positioned in the midst of the competition by utilizing Porter's strategies. The majority of the time, a firm will try to concentrate on both the pricing and what sets it apart from its competitors, which might lead to confusion. On the other hand, according to Porter's general strategies, you should concentrate on one approach at a time and judge its success based on how effectively it works. It makes it easier for businesses to increase their profits and gain a larger share of the market. The results of these methodologies demonstrate that the differentiation strategy is equally as effective as the cost leadership plan (Maulana, Munawar and Nurjanah, 2019).

In order for a company to get new clients and keep the ones it already has, it needs to discover ways to differentiate itself from the other companies in its industry. As a direct consequence of this, customers will consider the products of the company to be superior to those offered by other companies. The ensuing effect is to elevate the expectations of the customers about value. Because of this, customers wind up concluding that they have no choice but to purchase the goods and services offered by the corporation. One company that perfectly exemplifies this is Apple. By highlighting the fact that their products are superior to those of their competitors, they have successfully built up customer devotion to their brand and created the impression that their products are the only option available.

Disadvantages

Within the realm of strategic management, Porter is responsible for the development of a plethora of concepts and models that have been demonstrated to be useful. Despite this, numerous objections have been raised about this concept.

The process of selecting a strategy presents small businesses with a substantial number of problems. This is due to the possible existence of financial limits, which may hinder their capacity to acquire the necessary resources for the successful implementation of the strategy. Porter stresses how important it is for a company to adhere to a single strategic strategy throughout the entire organization. When put in a real-world context, it is absolutely necessary for businesses to adjust their plans in order to account for changes in the surrounding environment. For instance, it is not possible for a business to simultaneously adopt a focus on lowering costs while also adopting a focus on differentiating itself from competitors. The process of developing a product that stands out from the competition requires a considerable investment of financial resources, which in turn leads to a significant amount of wasted money. This, in turn, runs counter to the goal of a strategy that is focused on reducing costs.

Enterprises still have the potential to deploy a combination of tactics at the same time, as was discovered by a great number of analysts and academic research, respectively. There are many different approaches that companies may use to cut costs while also developing and promoting a product that has distinguishing features and benefits.

Recommendations

According to Porter, one of the best ways to achieve success in a market that is highly competitive is to differentiate oneself from the competition while also maintaining cost leadership. However, a strategy that is based on providing higher quality than the competitors is more likely to result in profitable business than one that is based on providing the lowest prices. It has the potential to make a company the market share leader and, as a consequence of this, the low-price leader as well.

According to the findings of several studies, being unique and offering the most competitive rates are not mutually exclusive. However, Porter asserts that any generic strategy calls for a distinctive mode of thought as well as a unique organizational culture. The problem is that Porter's general ideas cover too much ground, so to speak. The client is not the primary emphasis of the cost leadership strategy; rather, the plan is designed with the firm in mind. However, this weakness is a symptom of a more significant issue (Greckhamer and Gur 2021).

Based on the given principles, it is posited that the implementation of the product differentiation strategy has facilitated Unilever in acquiring enhanced adaptability to produce distinct products that possess more appealing attributes and greater value, thereby enabling the management of market expectations. Therefore, the execution of the newly devised plan for product development will align with Unilever's product differentiation strategy, aiming to establish a competitive advantage within the worldwide consumer products industry. Unilever employs a product differentiation strategy to provide its consumers with distinctive products, which can be leveraged in the company's product development endeavors. In contrast to the differentiation approach, the implementation of a product development strategy has the potential to enable Unilever to achieve its strategic goal of corporate expansion through continuous product innovation. Additionally, the implementation of this technique would enhance the product mix within the marketing mix of Unilever.

Conclusion

Some of Porter's detractors argue that cost leadership and differentiation are not polar opposites but rather different points on the same continuum. In contrast to what he believed, a strategy that emphasizes differentiation can actually result in a significant increase in one's market share. A strategy that places an emphasis on being unique can frequently result in a position that has lower expenses due to factors like as the learning curve, economies of scale and scope, and increased sales. The origins of cost advantage can vary considerably and depend heavily on the organizational structure of the industry. These concerns may include the pursuit of economies of scale, the preservation of proprietary technologies, privileged access to raw materials, and a variety of other pertinent variables. In order to maintain a competitive advantage in their industry, a manufacturer adhering to a low-cost strategy must assiduously seek out and utilize all available sources of cost advantage. If a company is able to acquire and maintain a position of overall cost leadership, it will likely outperform its competitors in the industry if it is able to set prices that are comparable to or near to the average price in the industry. This holds true even if the company is able to set prices that are lower than the industry average.

References

Alhosseiny, H. (2023). How Do Porter’s Business-Level Strategies Affect Competitive Advantage in the Food and Beverage Industries?. Journal of Entrepreneurship Education .

Anwar, M. and Shah, S.Z., 2021. Entrepreneurial orientation and generic competitive strategies for emerging SMEs: Financial and nonfinancial performance perspective. Journal of Public Affairs , 21 (1), p.e2125.

Dancaster, J., 2020. Creating shared value: A qualitative study referencing specific corporate social initiatives implemented by Unilever in South Africa (Doctoral dissertation, The IIE).

Firoz Suleman, M., Rashidirad, M. and Firoz Suleman, S., 2019. The applicability of Porter's generic strategies in pure online firms: A case study approach. Strategic Change , 28 (3), pp.167-176.

Greckhamer, T. and Gur, F.A., 2021. Disentangling combinations and contingencies of generic strategies: A set-theoretic configurational approach. Long Range Planning , 54 (2), p.101951.

Iglesias, O., Mingione, M., Ind, N., & Markovic, S. (2023). How to build a conscientious corporate brand together with business partners: A case study of Unilever. Industrial Marketing Management , 109 , 1-13.

Islami, X., Mustafa, N. and Topuzovska Latkovikj, M., 2020. Linking Porter’s generic strategies to firm performance. Future Business Journal , 6 , pp.1-15.

Knezović, E. and Hamur, A., 2022. Porter’s Business Strategies and Business Performance in SMEs. Entrepreneurial Innovation: Strategy and Competition Aspects , pp.7-23.

Lee, C.H., Hoehn‐Weiss, M.N. and Karim, S., 2021. Competing both ways: How combining Porter's low‐cost and focus strategies hurts firm performance. Strategic Management Journal , 42 (12), pp.2218-2244.

Maulana, Y.S., Munawar, A.H. and Nurjanah, D.S., 2019. Analysis of Porter’s Generic Strategies in Enhancing Competitiveness in Retail Industry (A Survey on Pajajaran Sindangkasih Minimarket, Ciamis). Jurnal Bisnis dan Kewirausahaan , 15 (3), pp.175-184.

Qonita, A., Nurprawito, D., and Puspita, M. Porter’s Generic Strategies: A Case Study of The Transition of Indonesian Conventional Taxi Company to An Online Based.

Raja, S., 2021. The Do-Good Spirit: A Study in Unilever’s Digital Communication of Corporate Social Responsibility (Doctoral dissertation, Rutgers The State University of New Jersey, School of Graduate Studies).

Ruckman, K. and Blettner, D., 2022. What role does generic strategy play in how managers adapt their aspirations in response to performance feedback?. Journal of Strategy and Management , (ahead-of-print).

Subhan, S., Elon, M., Ginting, S., Indradewa, R., and Hamdi, E. 2022. Implementation of QSPM and Porter’s Generic Strategy to Develop Mechanical Testing Laboratory in Indonesia. Budapest International Research and Critics Institute-Journal (BIRCI-Journal) , 5 (3).

Unilever (2020) Available online at https://www.unilever.com/files/92ui5egz/production/372ab0178e9555aa5010f15aed8295af77149fe3.pdf

You Might Also Like:-

Management Case Study Assignment Help

HRM Assignment Sample Online

School of Business Assignment Cover Sheet Answers

Hey MAS, I need Assignment Sample of

Get It Done! Today

Country
Applicable Time Zone is AEST [Sydney, NSW] (GMT+11)
+
  • 1,212,718Orders

  • 4.9/5Rating

  • 5,063Experts

Highlights

  • 21 Step Quality Check
  • 2000+ Ph.D Experts
  • Live Expert Sessions
  • Dedicated App
  • Earn while you Learn with us
  • Confidentiality Agreement
  • Money Back Guarantee
  • Customer Feedback

Just Pay for your Assignment

  • Turnitin Report

    $10.00
  • Proofreading and Editing

    $9.00Per Page
  • Consultation with Expert

    $35.00Per Hour
  • Live Session 1-on-1

    $40.00Per 30 min.
  • Quality Check

    $25.00
  • Total

    Free
  • Let's Start

Get
500 Words Free
on your assignment today

Browse across 1 Million Assignment Samples for Free

Explore All Assignment Samples

Request Callback

My Assignment Services- Whatsapp Get 50% + 20% EXTRAAADiscount on WhatsApp

Get 500 Words FREE