Published by MBA Skool Team, Last Updated: November 10, 2019
PESTLE Analysis of Unilever analyses the brand on its business tactics. Unilever PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand.
PESTLE analysis is a framework which is imperative for companies such as Unilever, as it helps to understand market dynamics & improve its business continuously. PESTLE analysis is also referred to as PESTEL analysis.
The political factors in the Unilever PESTLE Analysis can be explained as follows:
Unilever has a huge product portfolio with the company mainly working in the following divisions: Beauty & Personal Care, Food & refreshment, Home Care and Water purifier. Most of the revenues which it generates are from the Fast Moving Consumer goods. So, Unilever needs to abide by the regulations set by the Food and Drug Administration. Also, in foreign nations, where it is set up, it needs to abide by its laws. One of the major political factors which will hit Unilever hardly is the stance of present U.S.A. government. The Trump government might come up with new regulations i.e. introducing stricter trade reforms which will make foreign companies lives difficult. Being a European company, Unilever is likely to face the consequences if these regulations came into implementation. Also, a strong government in the centre is a good signal for the corporate as it will then become easier to introduce corporate friendly reforms without much of a resistance from the opposition.
Below are the economic factors in the PESTLE Analysis of Unilever:
For a company like Unilever which deals mainly in FMCG; the state of economy is of prime importance.
The more booming the economy is; more are its profits and revenues. There is a high chance for growth in developing countries like India and China. But there are some risks attached to it. While on the other hand developed countries provide an easy way out. Employment is also an important economic factor in deciding the company’s prospects in a nation. If there is large number of unemployed people, then it can help Unilever in reducing the costs. But, also, it can mean that there will be a lesser number of people in the market to buy your products.
Following are the social factors impacting Unilever PESTLE Analysis:
Having a presence in more than 100 nations, Unilever has to launch products and market them in a way which appeals to the social demographics. Unilever is aware of this which is supported by the fact that most of its advertisements come in various languages. For example: The Lifebuoy Soap’s advertisement in India came in different languages like Hindi, Telugu, Tamil and Malayalam. Also, there lies a huge scope in its beauty & care division. It is one of the most unsaid desires of everyone of any age to look beautiful and today with the given technology; companies are able to produce premium products. So, better positioning and target segmentation is required particularly for this sector.
The technological factors in the PESTLE Analysis of Unilever are mentioned below:
Unilever needs to keep a pace with the technology in order to sustain in the market or stay ahead of others in the race. Constant improvements in the operating processes are required in order to increase the efficiency and decrease the costs. Sufficient number of resources should be put into the R&D division so that new products can be launched which can further help Unilever to capture the market space. Having a setup facility with automated operations can also help Unilever in saving the time.
This also means that Unilever can produce more number of products in the same time.
Following are the legal factors in the Unilever PESTLE Analysis:
Unilever has a big product portfolio with more than 400 brands, so Unilever needs to take care of many laws and regulations. But, Unilever needs to protect its patents as well. Fraudulent companies often make use of some other company’s patents as their selling points and also to create confusion in people’s mind. So, to avoid that a strong legal department is required that is vigilant and capable of taking proper action. Also, your customers should be well informed about the legalities and the processes. This creates a trust in customer’s mind and hence the company gains customer’s loyalty.
In the Unilever PESTLE Analysis, the environmental elements affecting its business are as below:
Unilever has been successfully able to project itself as an environmental friendly company and has also been able to live up to its word. Unilever is working towards UN Sustainability goals which will further enhance its image and business.
The company is dedicated towards its goal of achieving 100% plastic packaging to be reusable. Also, Unilever needs to devise ways or technologies to reduce the amount of plastic used for a unit packaging. This can dramatically reduce the carbon footprint of the company as well as its customers.
To conclude, the above Unilever PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.
This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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