CASE STUDY: UNILEVER

The below case study is a direct extract from the official Unilever website. Read through the extract and answer the questions that follow:

We$$ve been pioneers, innovators and future$-$makers for over $120$ years. The success we$$ve achieved means that, today, $2\mathrm{.}5$ billion people will use our products to feel good, look good and get more out of life. Our brands give us a unique opportunity to create positive change, grow our business, and achieve our purpose of making sustainable living commonplace.

An overview of Unilever:

$2\mathrm{.}5$ billion people use our products each day

$400+$ Unilever brands are used by consumers worldwide

$190$ Countries in which our brands are sold

$155,000$ Unilever people deliver our success

$52$ billion $($Approximately $1$ Trillion Rands$)$ Our turnover in $2019$

What Unilever does

We make products that people love $$ and that makes a difference.

$$ Nutritious foods.

$$ Household care essentials.

$$ Indulgent ice creams.

$$ Refreshing teas.

$$ Luxurious shampoos.

$$ Affordable, disease$-$combating soaps... and many more.

Alan Jope, CEO, Unilever states:

$$We make around $400$ much$-$loved brands. Shoppers buy them in more than $190$ countries. That means you$$ll find at least one of our products in seven out of ten households on the planet. And we want every one of those products to make a positive impact on the lives of the people who buy them. I intend to build further on Unilever$$s century$-$old commitment to responsible business. It is not about putting purpose ahead of profits, it is a purpose that drives profits.$$

Many of Unilever's brands are familiar favourites all over the world.

Lipton, Knorr, Dove, Rexona, Hellmann$$s$,$ Omo $$ these are just some of the $12$ Unilever brands with an annual turnover of more than $1$ billion $($Approximately $20$ billion Rands$).$

At the same time, we make popular local brands. Brooke Bond in India. Brilhante in Brazil. Suave in the Americas. These local brands meet the specific needs of consumers in the markets where they are sold. We use insight and innovation to make sure these brands perform for consumers. And we make sure that our brands take action on the issues that consumers care about.

Why do we do it

We want our business to flourish, and we know that our success depends on others flourishing around us$.$ That's why our purpose is to make sustainable living commonplace, and why sustainable, long$-$term growth is at the heart of our business model.

Unilever's Sustainable Living Report; three big goals:

$$ Helping more than a billion people to improve their health and wellbeing.

$$ Halving the environmental footprint of our products.

$$ Sourcing $100\%$ of our agricultural raw materials sustainably and enhancing the livelihoods of people across our value chain.

Delivering long$-$term growth

Unilever has grown dividends by an average of $8\%$ per year over the last $38$ years, with no reductions. From $2014$ to $2019$ we delivered average underlying sales growth of $3\mathrm{.}3\%$ per year.

We operate through three divisions. In $2019$:

$$ Beauty & Personal Care generated a turnover of $21\mathrm{.}9$ billion $($Approximately $438$ billion Rands$),$ accounting for $42\%$ of our turnover and $52\%$ of operating profit

$$ Foods & Refreshment generated a turnover of $19\mathrm{.}3$ billion $($Approximately $386$ billion Rands$),$ accounting for $37\%$ of our turnover and $32\%$ of operating profit

$$ Home Care generated a turnover of $10\mathrm{.}8$ billion $($Approximately $216$ billion Rands$),$ accounting for $21\%$ of our turnover and $16\%$ of operating profit

Purpose$-$led, Future$-$fit

The world doesn$$t stand still $$ and neither do we$.$ Not only do we embrace change, but we also seek to make it$.$ That applies to our brands $$ which achieve positive change through their purpose and value chains. It also applies to our business $$ which we are making future$-$fit, faster and more flexible.

Our $155,000$ employees in more than $100$ countries are key to our success. They deliver our growth strategy and represent our purpose in action. Their insight and innovation drive us to anticipate and act on the trends shaping our industry and our world.

Together, we$$re redefining the future of work $$ more diverse, more inclusive, highly skilled and high$-$performing. And as a company, we$$re redefining the way business is done. That$$s how we'll make sustainable living commonplace.

Source: Adapted from Unilever.com, $(2020)$

Questions

$1.$ Based on your review of Unilever's supply chain from the above case study, discuss which functional areas would appear in their supply chain. Substantiate your answer using references from the above case study.

$(30$ Marks$)$

$2.$ Identify and describe each of the buyer$-$supplier relationships and determine which one is most likely used by Unilever. Substantiate your answer using perceptions created from the above case study.

$(30$ Marks$)$

$3.$ Describe and discuss the various techniques that you believe Unilever uses to develop and manage its supply chain relationships.

$(30$ Marks$)$