Unilever is the one of the largest FMCG Company in the world, headquartered in the UK. Mentioned firm has large product lines and operate in almost majority of the nations of the world. In the present research work, global issues like economic, political and environmental are discussed in respect to Unilever and ways in which trends related to these issues have an impact on mentioned firm business operations. In the middle part of the report, strategies that Unilever adopt in response to these issues are discussed briefly. Thereafter, recommendation section is prepared where actions are recommended that need to be taken by the business firm. At the end, the conclusion is formed considering entire research work.
Unilever is operating globally and due to this reason worldwide economic conditions also affect its business. Mentioned firm earns 60% of its revenue from the emerging markets. Emerging markets include nations like Brazil, Russia, India, China, South Africa, Mexico, Turkey, Indonesia, Nigeria, etc. Economic conditions of these nations also affect Unilever business revenue. Unilever in a press release in the year 2019 clearly stated that it will not be able to meet its sales target in the mentioned year. Currently, Unilever products are sold in 190 nations of the world (Osei. and et.al, 2016). Firmly believed that slowdown in the South and South East Asia is the main reason behind decline in sales. In the past, there was high growth in the South Asia and South East Asia, but now slowdown is observed across the entire region. In nations like India and Pakistan import decline by 15% to 20%. India, which is large and most important market for Unilever observe a decline in domestic demand. Reduction in the industrial production and tensions in the financial market are some of the reasons due to which slowdown is observed in the South and South East Asia.
There are many nations across the world that has higher debt to GDP ratio. Below list of some nations is given.
On the basis of the above discussion, it is concluded that the economic environment has a significant impact on the business firms like Unilever which operate globally. Currently, global economic conditions are not good and there are many nations where debt to GDP ratio is very high. There are many nations, especially emerging markets where the slowdown is observed in economic activities. These markets cover 60% of company revenue. Hence, the firm needs to adopt a cost cutting strategy in its business and need to lower down supply chain cost in the business and develop a localized supply chain in the EU. Political polarization also creates a lot of problems for the firms and these risks are out of control. Hence, Unilever need to keep close eye on the political environment of the nations where it operates so that actions can be taken on time to prevent loss in the business. Natural calamities also negatively affect firm supply chain and due to this reason firm must already identify alternative ways so that the supply chain can be prevented from disruption.
Books and Journals
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