Unilever Strategies Emerging Economies

How Unilever is affected by the influence of emerging economies on business decisions

Emerging economies possess characteristics that indicate growth, however not enough growth to label it a developed market and as such have significant impacts on business decisions taken up by a company or any business.

Most of the emerging economies Unilever has interacted with constitute market characteristics that determine the course of business decisions. In 2014, the company pursued a sustainable course in the interests of the growing markets as Unilever became first in the Globescan index.

While the company directed operations to the factory sites, the local agility and the host environment became a compelling issue in 2015.

Often business environment as well as organization cultures are crucial elements in the success of a business especially when expanding to new emerging economies whose trade and business policies are still under development.

Unilever further envisions double sizing the businesses while insisting on containing the environmental footprint

While expanding businesses to new economies positively impact a business through opening new opportunities, sustainability of the expansion process is critical in ensuring the healthy growth of the business in the new economies.

(Laszlo and Cescau 2017). However, meeting the positive social impact means a recheck on the growth ambitions while investing in people. The expansion of Unilever towards the emerging economies has attracted more attention.

This attracts more individuals such as employees and market leading to drawbacks such as overpopulation as well as pollution which impact the environment and hinder sustainability.

Reports of Unilever’s performance in the emerging economies point on at the decisions made by the company with regards to sustainability, and the power of market dynamics (Kostova and Marano 2019).

However due to emerging challenges and the interests of multinationals in the emerging markets, Unilever has taken the risk of investing in the emerging markets as it has done in the Gulf region and Saudi Arabia.

Taking into account the various factors that impact emerging markets such as market demand, the performance of the domestic market, Currency market dynamics as well as commodity performance (Kuepper, 2017), Unilever successfully penetrated new economies and established successful footprints.

In South Africa, the company had to comply with issues of employment, wages, training and benefits that were to be enjoyed by the immediate communities (Temprano-García et al. 2018). South African economy placed priorities on skills development, education and contributions towards economic growth by Unilever. The company was forced to revise its strategies while responding to local demands.

Policies and rules in emerging economies that are not fully developed and efficient in managing business ventures are the most impactful factors in being able to set up expansion in these economies. These critically and significantly affect business decisions including whether or not to invest in an emerging economy as well as how widely to expand the business in these economies. Further, these factors impact the various strategies that are applied by businesses in being able to expand in these emerging economies.

Justification

The attention given to the influence emerging economies have on business decisions goes alongside consideration of the market dynamics, the framework and the trend of decision making and the integrated global economies. This is because the emerging economies carry the emerging markets found in the developing countries. Emerging markets are crucial in the expansion of businesses and enabling the growth and development of organizations. They provide new and unconditioned market for businesses enabling a business to be able to condition the market into their structure and way of conducting businesses. They enable the capitalization in product specification enabling the organization to reach a wide market with minimal competition. However these markets come with a wide range of challenges and factors that businesses and organizations ought to be aware of if they are to succeed in the expansion. Further, emerging economies carry the emerging markets found in the developing countries, which are nurturing the growth of the middle class while retaining a significant segment of the poor consumers. Therefore, the topic presents the integrated insights developed from social psychology, behavioural marketing, development economics and the industrial structures and organization while constructing answers in response to decision making and the growing economies. The research is therefore critical in the development of processes, procedures and strategies with which an organization can use to successfully penetrate an emerging market and counter any challenges that may be faced. Given the high level of developments all across the world especially in developing countries with global investment projects such as the China One Belt One Road project that enables increased development of developing countries, exploitation of these emerging economies is crucial in the eventual growth and development of the global economy. The choice of this topic is based on the fact that it picks of the key items that are directly connected to global economic development and the theme.

Literature Review

Emerging markets are mostly located in developing countries and among their most significant feature is their volatility unlike the already developed markets of Europe and the United States (Kuepper, 2017). While they present a viable avenue for business expansion especially for the global multinational corporations such as Unilever they pose risks and challenges that minimize the desire to invest in them by these organizations and companies. Kuepper (2017) points out four major factors affecting these emerging markets including: Developed Market Design, Domestic Economic Performance, Currency Market Dynamics and commodity performance whose knowledge to a company or organization is crucial for avoiding challenges and ensuring successful investments and growth in these emerging economies. In addition, Sharma et al. (2018) insisted on the significance of the emerging markets in the framework of the global economy. This follows a growing interest in making managers understand differences between the emerging markets and consumers. Lastly, Sheth (2011) focused on the analysis and proposal of the influence emerging markets have on the prevailing marketing perspectives, as well as practices. While emerging economies present significant opportunities for further growth and development, already existent economies are crucial in maintaining the company’s operations and performance and therefore a solid organizational performance.

Analytical Framework

Investing and venturing in emerging markets is indeed quite a lucrative as well as risky strategy for businesses and that in itself is enough to critically and significantly influence the business decisions made. According to Laszo and Cescau (2017) emerging economies provide raw and new market free of conditioning to certain products and levels of services, this in addition to new markets which receive products as new outline some of the major benefits of investing in these economies for multinational corporations such as Unilever which are already successful in the developed markets. However regardless, these emerging economies also exhibit a wide range of risks such as whether or not the market will accept and appreciate the products at hand, various policies and standards set in the local market which might not be in tandem with the policies and strategies of the business or organization. Kuepper (2017) further highlights a variety of factors which are crucial for success of organization and businesses in these economies: including Developed Market Design, Domestic Economic Performance and Currency Market Dynamics. Emerging markets eventually are a brilliant way for businesses to not only expand their base of operations and activities but also to be able to diversify their portfolio and understanding the underlying performance and success drivers. Kuepper (2017) emphasizes that despite the benefits, investing in emerging economies impacts a business and the process of decision making in the business. Due to changes in strategy by business investing in these emerging economies including Unilever and other successful multinational businesses other businesses are eventually affected and the decision making and strategizing processes are eventually changed in order to maintain their competitiveness within an evolving and changing market structure. Emerging market holding is therefore an added advantage in ensuring impactful businesses and continued success within a highly competitive global market.

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