Abstract

This case study is about the Unilever’s ‘Power Brands’ strategy, which was launched in 1999. As part of this strategy, the huge arsenal of 1600 brands of the Unilever was brought down to comparatively more manageable number of 400, which were power brands – more profitable and had good familiarity among consumers. This strategy was launched to increase operational efficiency, to concentrate on the promotional activities on the profitable brands only and to encourage consumers to migrate from smaller brands to the power brands. But because of this strategy, some strong regional brands were also cut off, which led to fall in sales revenue and profit margins of Unilever, especially in emerging markets. In 2005, this ‘Power Brands’ strategy was combined with the organization’s restructuring. Under this new five-year strategy, called as ‘One-Unilever’, the emphasis was on developing and emerging markets, personal care and healthy-living products. These changes made ‘Power Brands’ strategy more effective, which was reflected in the financial results of Unilever.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the issues and challenges in ‘Power Brands’ strategy
• Understand the reasons, why Unilever had to implement this strategy
• Analyze the situations, when “Power Brands’ strategy can be implemented
• Appreciate the importance of local influence in branding decisions
• Understand why the ‘Power Brands’ Strategy failed in the developing and emerging markets in first phase Discuss and debate whether Unilever’s Power Brands strategy is a success or failure Explore ways in which Unilever could have made this branding stra

Keywords

Power Brands Strategy, Growth Strategy, One-Unilever, Restructuring Strategies, Turnaround, Brand Management, Brands and Branding, Focus Strategy, Unilever, Profitability, Mergers, Acquisitions, Operational Efficiency, Developing Markets, Emerging Markets