August, 2009 – Business Strategy, Strategic Management Article
Polman wants to increase the speed of decision-making in the sprawling company, which is known for its cautious culture. “Thirty-Day Action Plans” introduced under his reign, for example, are designed to make executives act quickly to fix problems with individual products. – The Wall Street Journal, August 2009.
New Business Strategy at Unilever – drive volume with lower prices and aggressive marketing spending
Unilever’s mission statement reads “add vitality to life”. For now, the Anglo-Dutch consumer goods giant has added vitality to its own operations with “Thirty-Day Action Plans”. These plans introduced by Mr. Paul Polman, the new chief executive of Unilever were intended to make executives take quick action to fix problems with individual products. Paul Polman in fact reversed the strategy of his predecessor.
Polman took over the company in January 2009. He was the first CEO who was not promoted form the internal ranks. He spent most of his career at Procter & Gamble Co. His first job at Unilever was to fire up dwindling sales volumes at Unilever. Earlier last year, Mr. Patrick Cescau, former CEO had increased prices to counter recession. However, this drove sales down as consumers stopped buying Unilever’s products. Polman initiated a different strategy. He wanted to drive volume with lower prices and aggressive marketing spending. In the past few years, Unilever had already cut down on its massive portfolio of brands. The company now wanted to concentrate its efforts at innovation on a smaller number of bigger brands. With the new idea of “30-day plans”, a plan was meant for each product innovation or attempt at troubleshooting. If the plan did not yield results after a month, it was very likely to be discarded.
How does Unilever’s “Thirty-Day Action Plans” work?
In South Africa, Unilever’s laundry detergent sales had dipped. On analysis, company executives found that the product was under threat with competition from a cheap local brand. Unilever executives immediately framed an action plan to counter the threat. The company very quickly introduced a cheaper version of its Surf detergent with fewer features. This plan worked as the brand proved very popular.
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Keywords: Unilever, Thirty-Day Action Plans, Paul Polman, Patrick Cescau, Consumer Goods Giant
Get more information on Unilever’s strategies, decision-making, marketing, brand management, innovation, acquisition strategies, corporate culture and human resource management in this book: Renewing Unilever: Transformation and Tradition