Unilever's Strategies in China
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Case Code: BSTR131 Case Length: 13 Pages Period: 1986 - 2004 Pub Date: 2004 Teaching Note: Not Available |
Price: Rs.400 Organization: Unilever Industry: FMCG Countries: China Themes: - |
Abstract Case Intro 1 Case Intro 2 Excerpts
"In five to 10 years, there is going to be a Unilever China which will be seen by most Chinese as a Chinese business with strong international connections."
- Niall FitzGerald, Unilever Chairman, in 1999.
"It also demonstrates our commitment to Shanghai and China. We plan to put more intellectual capital to Shanghai. China is and will continue to be Unilever's most important market."
- Unilever China Chairman, Alan Brown, on the development of global research laboratory at Shanghai in China, in 2001.
Introduction
In 2002, European FMCG major, Unilever Plc. (Unilever), established its global procurement unit in Shanghai, China. Niall Fitzgerald, Unilever Chairman, said the establishment of the global processing centre would increase opportunities for Chinese raw material providers to compete in the international market, and would help in the development of Unilever's global businesses. Chiefly, the global processing center would bolster the presence of the world's leading consumer product manufacturer in China, an important and growing economy. But Unilever in China has, in the past, gone through periods of turmoil and turbulence. Established in the country in 1920s, the company had to face the wrath of the Chinese Civil war and the subsequent Communist movement which supported the public ownership of all means of production. When the market finally opened up after decades of closure to foreign companies, Unilever reestablished itself in China in 1986 through strategic tie-ups with local companies.
However, the joint venture route that the company adopted backfired, and Unilever found itself losing out to its American counterpart, Procter and Gamble. In late 1990s and early 2000s, the company entered into a restructuring and consolidation mode to reorganize and strengthen its position in China. The company management recognized the vast opportunities that the Chinese market offered, and adopted well-planned strategic means to exploit these to their fullest. Among the steps the company took during its restructuring efforts were plans to get listed on the Chinese stock market, consolidation of its various units into one holding company, replacement of expatriates with local employees and localization of a number of products.
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