|
|
|
The
comparison of the U.K. food company (Unilever) and Taiwan food company (President
Enterprises) Preface: This project will compare and contrast the U.K. food company (Unilever) and
Taiwan food company (President Enterprises) from an international perspective. This
project will be divided into six large sections; company introduction, company history,
analysis of brand, analysis of investment strategies, analysis of global spread and
conclusion. My research is based on secondary data with collected through internet.
(Unilever Website http://www.unilever.com
; President Enterprises Website http://www.pec.com.tw
) A.
Company Introduction: 1.
Unilever: “Today, Unilever – the Anglo-Dutch consumer goods business – is one of the largest companies in the world with sales (1998) of over $45 billion. Unilever is a complex business, with a corporate centre that has offices in London in the UK and Rotterdam in the Netherlands. Employing nearly 270,000 people, Unilever sells over 1800 brands through 300 subsidiary companies in 88 countries world-wide with products on sale in a further 70.” (Unilever Website http://www.unilever.com ) Unilever’s main product areas are foods and home & personal care products, including frozen foods, ice cream, tea beverage, yellow fats, detergents and shampoo. 2.
President Enterprises: President
Enterprises is the largest food company in Taiwan with sales revenues (1998) of about
$1.16 billion. President Enterprises’ commitment to diversification has built the
company into a conglomerate comprising about sixty subsidiary companies and international
joint ventures with operations ranging from food to recreation, finance, trade, real
estate, investments, construction, supermarkets and retail sales. Though consolidating
these operations and combining their strengths, President Enterprises is poised for
continuous growth as a truly international conglomerate. B.
Company History: 1.
Unilever: “The reasons behind the creation of Unilever in 1929, when it was created by the merger of Margarine Unie and Lever Brothers, were sound commercial ones. Margarine Unie of the Netherlands and Lever Brothers Limited of the UK competed for supplies of oils and fats which they put to different uses, but they were both in the business of supplying goods for household needs.” (Unilever Website http://www.unilever.com ) Both
the founding companies were European businesses. Margarine Unie’s strengths were in
mainland Europe, Lever Brothers’ in the United Kingdom. At the time of
Unilever’s creation, it already had an international presence, especially in Africa
through William Lever’s plantations and trading activities, but also in the US and
Asia. However, Unilever’s origins stretch backs much further than the formation of the company in 1929. Many of the attributes which have helped the business to grow in strength and size have their roots in the foresight and abilities of the founders and of other entrepreneurs whose businesses have since become part of Unilever. 2.
President Enterprises: President
Enterprises was established in Taiwan’s ancient capital of Tainan on 1st July 1967.
In 31 years President Enterprises capital has grown from $0.00008 billion to $1.16
billion. The number of employees has increased from an initial 82 to 6,200 at present and
its scope of business has expanded from a single-product enterprise to a range of general
products for everyday living. C.
Analysis of Brands: 1. Unilever: A world-wide strategy for the core categories is combined with custody of the so-called ‘Unilever brands’ - those brand names, which are present across several regions, whose central strategic co-ordination will add significant value. The companies are still free to innovate when developing brands to suit their particular market place. “As a global business specialising in local, as well as internationally recognised, brands Unilever has many thousands of different brands names. Many other brand names which were launched more than 50 years ago - some originated by Unilever and some acquired - are still going strong today: Lux, Lipton, Lifebuoy, Pond’s, Pepsodent, Wall’s, Q Tips, Pears, Ragu, Omo, Gorton’s, Le Sancy, Faberge and Royco. Many other brands have become strong sellers over the last 30 years: Magnum, Impulse, Timotei, Peperami, Dove, Jif, Axe, Organics and Mentadent.” (Unilever Website http://www.unilever.com All these brands have been carefully nurtured through the years, along with a whole host of more local brands that are popular in certain markets. 2.
President Enterprises: President Enterprises began with flour manufacturing, in thirty-one years President Enterprises has gradually expanded to include animal feed, edible oils, instant noodles, frozen foods, soy sauce, beverages and other products related to daily use. Although President Enterprises sells over 1000 products, most of products used “company name combined with individual product names” or “company name”. D. Analysis of Investment Strategies: 1. Unilever: Unilever had also embarked on a much more aggressive acquisition programme, buying up some 80 companies between 1984 and 1988. Profitability in core areas increased and the more aggressive acquisition policy brought such valuable new prizes as the Brooke Bond Group in 1984 and Chesebrough-Pond’s in the US in 1987. The latter purchase strengthened Unilever’s position in personal products both in the US and world-wide. The move was augmented in the late 1980s by the acquisition of the Faberge/Elizabeth Arden and Calvin Klein fragrance businesses. Unilever now had a firm base in the prestige sectors where margins and growth rates continued to be attractive. These major acquisitions were matched by a large number of smaller purchases which opened up new national markets, strengthened existing businesses, filled gaps in product portfolios or provided a platform for expansion into new product areas. The investments were spread across the more mature markets of North America and Europe and all major growth markets world-wide. Investment levels in the developing and emerging markets now accounts for one-third of all total Unilever investment. This has already led to sharp growth in sales and operating profit. Sales have trebled in the last ten years with profit growth only slightly slower. In the next decade developing and emerging markets are expected to contribute nearly 50% of Unilever's sales. 2.
President Enterprises: President Enterprises seldom used the way of merging. On the contrary, they usually used the way of joint stock. Because of cooperating with foreign companies, they can easily get the benefit of technology from foreign companies. At the same time, they can effectively enter target markets. E. Analysis of Global Spread: 1. Unilever: Developing and emerging markets will be a key source of growth for Unilever. The majority of the world growth in the next 25 years will be in the developing and emerging markets. By the early part of the next century the developing worlds share of world output will overtake that of the developed world. It is this factor that creates major opportunities for Unilever. “The five sub-regions for focused attention and investment have been defined as: Southern South America Central and Eastern Europe India Mainland ChinaSouth East Asia Unilever has aggressively entered other countries which look attractive, such as mainland China. Unilever re-entered the country in 1986 and has sales of $400million.” (Unilever Website http://www.unilever.com 2.
President Enterprises: In recent years the world political and economical situation has changed rapidly. Regional economics have gradually coalesced. This situation has had a great impact on the commerce of each nation. A plan has been determined based on real trade relationships in the rapidly developing economics Asia-Pacific region. The plan calls for uniting the vast financial and business power of the Chinese in mainland China and South East Asia, which, together with the advantages of geography, language, culture and trade, will create a business opportunity of limitless potential. Therefore how to concentrate on the transformation of President Enterprise’s business structure and assume responsibility as a bridge between advanced nations and developing nations will be both the key opportunity and test for President Enterprises. F. Conclusion: 1. It is quite clear that Unilever strategies of brands use “individual brand name”. In contrast, the most products of President Enterprises use “company name combined with individual product names” or “company name”. The main advantages of using “individual brand name” are that success or failure of products are unaffected the company’s reputation. However, nurturing one successful brand must heavily invested in advertising. On the other hand, the disadvantage of using the “company name combined with individual product names” is that it ruins the company’s reputation when products are bad for the quality. 2. The common place between Unilever and President Enterprises is that both of them focus on mainland China as their main emerging market. The advantage of President Enterprises, which comes from Taiwan, is that Taiwan and mainland China have profound cultural background, such as the same race and language. The reason of advantage is that President Enterprises could be easier to understand mainland China the local marketing environment than Unilever. 3. For food manufacturers, the main task after producing is how to sell the products out. President Enterprises own its marketing channel subsidiary companies, for example Taiwan 7-11 (convenience store) cooperating with the American Southland Ice Company and Taiwan Carrefour (supermarket) cooperating with Frances the Carrefour group. According to the merit of marketing channel, the new products of President Enterprises can be bought immediately by customers. The other advantage of marketing channel is that President Enterprises can directly find out what is the most popular product for customers from POS (point of sell) system. According to information of the POS system to amend marketing way and developing new products. However, Unilever does not have this kind of marketing channel subsidiary companies. Therefore, the products of Unilever are sold by the marketing channel, which belongs to other companies and have to compete with other companies. Bibliography: Unilever Website http://www.unilever.com and President Enterprises Website http://www.pec.com.tw |