Restructuring Unilever: The 'Path To Growth' Strategy

Though the parent companies operated as separate legal entities (with separate stock exchange listings), they functioned as a single business, with a single set of financials and a common board of directors (See Exhibit I for the group's structure). Unilever was formed in 1930 when a Dutch margarine company, Margarine Unie, and a British soap company, Lever Brothers merged (See Exhibit II for a brief timeline of Unilever).

While, Margarine Unie had been formed by merging many margarine companies during the 1920s and was a leading global player in the business, Lever Brothers was a name worth reckoning with in the worldwide soap market and had soap factories across the world.

This was because of the post-war boom in the demand for consumer goods, the growing popularity of margarine and personal care products, and the new detergent technologies. During the 1960s and 1970s, Unilever rapidly expanded its operations through vertical and horizontal integration, emerging as a diversified conglomerate by the early 1980s.

Diversification into different businesses was prompted in one way or the other by the existing business lines. For instance, oilseeds crushed for use in the margarine and soap businesses, yielded a by-product called 'cattle cake,' and this led the company into the animal feeds business.