Mgt4023 : Business Management And Assessment Answers
Use Strategic groups tool in order to select the principal competitors of your company.
Answer:
Introduction:
Unilever is arguably one of the world’s most renowned brands that manufacture a variety of consumer products. As a multinational, the corporation notably enjoys massive advantages associated with its presence in various countries around the world. These advantages include the fact that it can move its production or design of new products from one region to another with ease. Among the principal competitors of this firm are Procter and Gamble (P&G) and Nestle. Both are multinationals that enjoy a worldwide presence. A group strategic tool that can be used to select the competitors of Unilever while it launches its new product is Porter’s diamond model with an emphasis provided of its strategic positioning demonstrated in a price table.
Analysis of the Principal Competitors
Business organizations continuously embrace strategies that not only help them survive in the competitive business environment but also record increased financial returns. In this regard, Unilever faces extreme competition from firms, such as the Procter and Gamble and Nestle Companies’ based on their respective strengths and competitive advantage. Therefore, it is imperative to ascertain how Porter’s diamond applies to Unilever compared to the identified principal competitors.
One of the strengths showcased by these three firms is that they are all multinationals operating in many countries worldwide. As showcased in Porter’s diamond model, one of the factors that favor these firms is the factor conditions. The factor conditions include the workforce that will help in productivity aspects of a firm (Riasi, 2016). Under this condition, it is possible to see that these firms have a reliable, skilled workforce in their home countries that make them produce superior products that can sell in any part of the world. With high-quality products, they can gain a competitive edge when it comes to marketing their products.
Another Porter’s Diamond factor that favors them is the demand conditions. Under the demand conditions, it is possible to see that aspects like the consumption rate will boost the sales of a given product (Davies and Ellis, 2013). These three firms are located in countries with a high population meaning that there is a high demand for their products, making it possible for them to expand internationally. The high demand in their home countries makes it possible for them to have high sales volume s that can make them expand into other countries with ease. However, what separates these firms is that they all have segmented their clients as some customers have just become loyal to a particular firm due to the quality products that they feel the firm manufactures.
The government is another aspect of the Porter’s Diamond Model that plays a significant role in analyzing the effectiveness of Unilever’s competitors. According to Porter, the government plays a facilitative role in the growth and expansion of industries (Herciu, 2013). Some governments put obstacles in the way of expansion of industries through aspects like high taxations, a lot of bureaucracy and other regulations that hinder multinationals from entering a given country (Jhamb, 2016). Looking at the competitors of Unilever, it is possible to see that they are not yet established in Spain. However, Unilever has the upper hand over them since it even has got other partner firms that it is working with while in Spain. These partner firms are Vizcaya and Aranjuez, and they prove crucial in supporting Unilever in its new product launch in the Spanish market. Therefore, this means that the government of Spain inevitably facilitates the growth and expansion of Unilever in Spain an aspect that is not present among the P&G and Nestle companies.
Chance is another aspect of the Porter’s Diamond model that may help firms to grow and expand (Porter, n.d). Chance talks about luck that may favor some industries while at the same time disadvantaging others (Fainshmidt, Smith, and Judge, 2016). In this respect, it is evident that Unilever’s chance in Spain has come due to the goodwill that it enjoys from the government, the ready market that is willing to use her products and the international image that it has created for itself. As such, this means that all these aspects make it possible for Unilever to enter Spain with no negativity being associated with the company. That is why its new product launch is going to receive goodwill from the Spanish market due to other contributing factors that appear to favor the company.
A table with the price of the new product that can show the advantage that Unilever will enjoy is shown below.
|
Firm |
Price |
Quality |
Packaging |
Availability |
|
Unilever |
€2.99 |
Premium |
Disposable material |
Major Spanish towns |
|
Procter and Gamble |
- |
- |
- |
- |
|
Nestle |
- |
- |
- |
- |
Conclusions and Recommendations
Conclusively, it is apparent that the use of the Porter’s Diamond Model as the strategic group tools to analyze the success of Unilever launching the new product showcases that the company is moving in the right direction. Many factors appear to favor Unilever compared to her fiercest competitors, namely; P&G and Nestle. Among the recommendations that can be directed to this firm involves the adoption production diversification strategy and building increased strategic alliances working with other interested parties purposed to heighten its business performance.
References:
Davies, H. and P.D. Ellis (2013) Porter’s ‘Competitive Advantage of Nations: Time for a final judgment? Journal of Management Studies. 37(8), pp. 1189-1213.
Fainshmidt, S, Smith, A., and Judge, W.Q. (2016) National competitiveness and Porter's diamond Model: The role of MNE penetration and governance quality. Global Strategy Journal. 6(2), pp. 56-63.
Herciu, M. (2013) Measuring international competitiveness of Romania by using Porter's Diamond and revealed comparative advantage. Procedia Economics and Finance. 6 (2), pp. 273-279.
Jhamb, P. (2016) An application of Porter's diamond framework: A case of sports goods cluster at Jalandhar. Pacific Business Review International. 8(8), pp. 141-148.
Porter, M.E. (n.d) The competitive advantage of nations. Available from https://hbr.org/1990/03/the-competitive-advantage-of-nations [Accessed 20 October 2018]
Riasi, A. (2016) Competitive advantages of shadow banking industry: An analysis using Porter’s diamond model. Business Management and Strategy. 6(2), pp. 15-27.
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