Less is More Case Study - Turn Potential Threats Into Opportunities - Management Assignment Help

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Case application 1 - Less is more
 
Successful strategic management requires that organisations and managers can turn potential threats into opportunities. And that’s what Unilever is planning to do as it deals with water scarcity. Water scarcity is fast becoming a critical issue for people, communities and organisations around the world. Consumer demand for water has doubled between 1950 and 2015 and is expected to double again by 2030. By that time, 4 billion people around the world will be living in water-stressed regions. Dealing with water scarcity forces consumers to make tradeoffs about the ways they use their time, energy and, yes, water. For example, in developing countries where water isn’t available in the home, women must be the ‘water managers’ for their households and spend time collecting, storing and rationing water. These responsibilities affect their health and safety, their wellbeing, and their opportunities for education and employment.
 
New challenges = new opportunities
 
For Unilever, water scarcity is a critical issue because it will directly affect the company’s sustainability. As a global manufacturing company. Unilever produces home care, personal care, food and drink, and water-purifying products used by over 2.5 billion consumers every day. These product categories use over 90 per cent of the water consumed in the home. So, water scarcity could, on the one hand, limit the use of Unilever’s products. But rather than see this as a threat to the company’s future, Unilever has set itself three new goals: (1) develop innovative new products that help consumers in water-scarce regions; (2) reduce water usage in the company’s own operations and supply chains; and (3) foster social change around the infrastructure for, and availability and use of, domestic water.
In pursuit of its first goal, the company has set itself the target of halving the water used by consumers of Unilever products by 2020 by accelerating innovative development of new products that use domestic water more effectively. In the US, for example, domestic water usage averages 550 litres per day (compared to 90 litres a day in China) so the company has focused on developing new products that reduce water usage for showering, in the garden and in the kitchen. To achieve its second goal, Unilever is mapping out the water and climate risks in its supply chains, which will help the company understand more precisely where and how water scarcity could affect its operations. It is also working with agricultural suppliers to help them improve their irrigation equipment and techniques so that they use water more efficiently in crop production. Unilever has also focused on improving water efficiency in its manufacturing operations and factories, through creating community stewardship programs in key factory locations. To achieve its third goal, Unilever is working with national governments to support the systemic change needed to achieve more sustainable water supplies. This includes investments in water infrastructure, changes to water pricing, and the use of water metering to improve the quality and quantity of water supplies.
 
Some of Unilever’s plans have already begun to pay off. By 2015, the water usage of Unilever factories was 19 million fewer cubic metres than it had been in 2008, which equates to saving 2.5 litres of water for every person on the planet. By 2016, the company’s water impact per consumer use of its products was 7 per cent lower than it had been in 2010. By 2017, Unilever had produced hand-washing detergents that used half as much water for rinsing clothes as other products. It had also successfully build a Hygiene Centre in a slum area of Mumbai, in India, which provided safe drinking water and laundry facilities for over 1500 people as a pay-per-use service by recirculating water used for bathing, hand washing and laundry to flush toilets.

 

Questions

  • How might Unilever use benchmarking to evaluate its performance in achieving its goals?

  • What are the positive lessons here for management, with an eye on the external environment of their company?

  • Conclusion 

  • How might Unilever use benchmarking to evaluate its performance in achieving its goals?
  • What are the positive lessons here for management, with an eye on the external environment of their company?
  • Which strategic options is Unilever pursuing?
  • What types of plans is Unilever using to deal with water scarcity?

 

 

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