Restructuring Unilever: The 'Path To Growth' Strategy


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Case Details:

Case Code : BSTR095
Case Length : 17 Pages
Period : 2000 - 2003
Organization : Unilever
Pub Date : 2004
Teaching Note :Not Available
Countries : Europe
Industry : FMCG

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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EXCERPTS Contd...

Unilever's Future Prospects

In August 2003, Unilever announced its half-yearly results for the year - sales dropped by 15% and profits fell by 13%. During this time, the company reduced its growth forecasts to 4% from the 5%-6%, it had promised its investors in the early 2003, stating that it was struggling with a more challenging business environment - poor sales in the dietary and food service markets, and the sluggish growth in the retail market on account of slower economic growth, worldwide.

In October 2003, Unilever's share price fell by 7% (to 487 pence) on the London Stock Exchange, immediately after it announced that it was lowering its growth forecasts for its leading brands to below 3% for 2003.

The company attributed this move to the waning popularity of its famous fragrance and dieting products (including Calvin Klein, Eternity, Prestige and Slim-Fast), and the poor performance of its other health and wellness products. This was the second time in 2003, that the company had reduced its growth forecasts for its leading brands.

FitzGerald blamed himself for the fall in the company's share price, after the announcement of reduced growth rates. According to him, the market had misunderstood Unilever's growth forecasts previously as the company had failed to communicate them clearly to its investors...

Exhibits

Exhibit I: Unilever Group Structure

Exhibit II: Timeline of Unilever

Exhibit III: Key Drivers of Value Creation in PBS

Exhibit IV: Unilever - A List of Major Brands (Partial)

Exhibit V: Growth in Unilever's Operating Margin, Sales and Earnings per Share Under PGS

Exhibit VI: Unilever Financials (In € Million)


 

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