A Comparison of Unilever’s and P&G’s Competitive Advantage

  1. Summarize some of the similarities and differences of the Corporate Social Responsibility positions of Unilever and Procter and Gamble.

One of Unilever’s CSR principles is “Crafting Brands for Life” (CB4L), a project of Marc Mathieu, the new Senior Vice President of Marketing. This program had the following objectives: 1) Putting people first, recognizing them as individuals, and not mere consumers; 2) Building “brand love” to identify the people with their brands, not just their product; 3) Unlocking the magic, not just the logic, in their execution (Bartlett, 2016). In order to accomplish this mission, Mathieu conducted a series of workshops for Unilever’s 6,000 marketers and oriented them into linking their brands with USP.

P&G, on the other hand, focused on innovation in order to differentiate brand with competition. This CSR program combines the needs and the possible solutions to problems by conducting research and development (R&D) and knowing what people need and want. Unilever’s “Doing Well by Doing Good” is matched by P&G’s transparency program, or it wants to be known as a company that is governed responsibly and behaves ethically, i.e. it supports good causes and protects the environment. P&G’s employees are treated well and provided the opportunity to improve and perform well in the company (P&G 2016 citizenship report, 2016).

A Comparison of Unilever’s and P&G’s Competitive Advantage
A Comparison of Unilever’s and P&G’s Competitive Advantage

P&G’s “Doing Well by Doing Good” is a cause-oriented marketing. One example of “to do well by doing good” which other organizations practice is when organizations donate to a chosen cause for every purchase made by the customer. P&G has made it an important strategy to define its role in the community and apply social and ethical standards to its business (Vanhamme et al. 259).

  Category   Programs and Policies
Unilever Sustainable Living PlanP&G’s Responsible Governance and Ethical Corporate Behavior
EnvironmentalGHG emission reduction; drop in water use; halve internal footprint;Renewable energy; energy conservation; recycling; commitment to use less water;
Community RelationshipImprove livelihoods of people in community; community partnership; crafting “brand love” to identify people with brands; “brand deep dive” program to involve marketers with the customersHow to be an Ally; My Black is Beautiful (inclusion programs);   Human rights, employee benefits; “Consumer is Boss” program; regular dialogue with NGOs
Supplier Partnership“Partner to win” with supplies to produce sustainable sourcesSupplier diversity; diverse employees; sustainability guidelines for external suppliers
Brand CompetitivenessInnovation to address the stiff competition in the sectorUsed innovation, safety and science-based process for products

Figure 1: Similarities of CSR positions of Unilever and P&G

    Differences in Unilever and P&G’s CSR programs/policies
Category   Unilever   P&G’s
EnvironmentalUnilever aims for 2020 baseline as fulfillment of CSR programsP&G aims for 2010 baseline, meaning most of its CSR policies are already in place;   Diverted 1,565 tons of waste into reusable materials; responsible forestry – paper packing, palm oil, wood pulp supply chains; low energy washing
Community RelationshipSustainable living is available for all; Key inputs – brands, operations, people;   Enhancing livelihood for millions Inclusion efforts – helping P&G women thrive; supporting education for girls and economic opportunities for women; Gender equality: using our voice in advertising and media – “Always #likeagirl” program; bringing out the best in persons with disability (PWD); helps consumer make sustainable choice
Supplier PartnershipFocus on external partnerships (external suppliers)Enhance internal partners (employees and suppliers)

Figure 2: Differences of CSR positions of Unilever and P&G

  1. Are the articles you found about Unilever consistent with the case from Harvard Business Review, supporting that Unilever is true to the philosophy of “Doing Well by Doing Good?” Or the articles present opposing evidence and arguments about Unilever’s practices in relation to social responsibility?

Unilever’s Sustainable Living Plan is well supported by its programs and innovations. One of these programs is the Agricultural Sustainability Initiative, which is well reviewed by Pretty et al. (2008) in their article titled “Multi-year assessment of Unilever’s progress towards agricultural sustainability I: Indicators, methodology and pilot farm results”.Thomas Lingard says that Unilever responded to environmental issues in the 1990s when it saw that governments needed help in addressing the issues that had to be fixed. Unilever was interested in making its business responsible for providing alternative solutions to environmental problems, instead of waiting for the government to provide solutions (224). For example, Unilever saw that fish stocks were depleted in some areas, but political pressures were forbidding the agencies concerned to provide effective solutions. For a simple case of “no fish,” Unilever did not have to wait for the government to work but it set out to partner with World Wide Fund for Nature (WWF) to help establish the marine Stewardship Council, which provided more sustainable patterns of fishing, or an independent way of fishing through sustainable sources (Lingard 224).

It was pointed out at the Global Business Issues that all global businesses must use faster innovation strategies. In the sector of Unilever and P&G, competitiveness is becoming stiffer on an international scale. Consumers want more but are less loyal while environmental pressures are increasing. Unilever reinforces its strategies with R&D as it believes in a balanced research programme, such as exploratory science, where research provides new knowledge from the academe to competitive teams of the company (Smith and Trines 173).

  1. Do you believe that Unilever’s focus on sustainable living provides sustainable competitive advantage for the company? Why or why not?

The Unilever Sustainable Living Plan (USLP) is a transformational strategy (Bartlett, 2016). Its ethical business mission, which is William Lever’s maxim, is “doing well by doing good,” which underlines all other CSR programs. This drives sustainable competitive advantage as it draws people into paying more for the product. It reduces cost and competitors cannot just imitate it (Mizera, 2012). USLP brings the company beyond the jurisdiction of things within the direct control of the business. These are external goals, one of the aims of the development community which the USLP is also focusing on.

The company aims for 40 percent reduction in internal GHG emissions, 31 percent drop in water use, and to halve internal footprint by 2020. In November 2010, Unilever unveiled the USLP, using three goals: 1.) to help a billion people improve their health and well-being; 2.) to halve the environmental footprint of making and using Unilever products; and, 3.) to improve the livelihoods of people in its value chain. USLP, even as a CSR program, was a strategy to trigger growth, cut costs, help customers, and motivate employees. USLP was broken into 50 specific and measurable targets (Bartlett, 2016). Three years into USLP, Unilever sustainably sourced 48% of its agricultural products. In 2013, with 50 specific defined targets, only five were not yet met of its target.

USLP is based on the concept of serving unmet social needs, which is explained in the products Unilever presents to the market, such as soap, toothpaste, spreads, and so forth. The water purifier is a good example of meeting customer’s social needs. USLP’s ultimate aim to address public health issues, and this provides competitive advantage for the company (Bartlett, 2016).

References

Bartlett, Christopher. “Unilever’s new global strategy: Competing through sustainability.”Harvard Business School, 2016, pp. 1-22. Accessed 5 Feb. 2018.

Lingard, Thomas. “Unilever’s Strategic Response to Sustainable Development and its Implications for Public Affairs Professionals.” Journal of Public Affairs, vol. 12, no. 3, 2012, pp. 224-229.

Mizera, Sue.“Sustainability at Unilever: An Interview with Lesley Thorne, Global Sustainability Manager.”Journal of Brand Management, vol. 20, no. 3, 2012, 191-195.

Pretty, J., Smith, G., Goulding, K., Groves, S., Henderson, I., Hine, R…. King, V. “Multi-year assessment of Unilever’s progress towards agricultural sustainability I: Indicators, methodology and pilot farm results.”International Journal of Agricultural Sustainability, vol. 6, no. 1, 2008, pp. 37-62.

P&G 2016 citizenship report. (2016). Retrieved from https://us.pg.com/sustainability/at-a-glance/sustainability-reports.

Smith, P. and E. Trines. “Agricultural Measures for Mitigating Climate Change: Will the Barriers Prevent any Benefits to Developing Countries? IJAS, vol. 4, no. 3, pp. 173-175.

Vanhamme, Joëlle et al. “To Do Well by Doing Good: Improving Corporate Image Through Cause-Related Marketing.” Journal of Business Ethics, vol. 109, no. 3, 2012, pp. 259-274.

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