Political factors are basically how the government intervenes in the economy. Specifically, political factors have areas including tax policylabour lawenvironmental lawtrade restrictionstariffsand political stability. Political factors may also include goods and services which the government aims to provide or be provided merit goods and those that the government does not want to be provided demerit goods or merit bads. Furthermore, governments have a high impact on the healtheducationand infrastructure of a nation.
In the case of Unilever, these external factors vary significantly, considering the international scope of the business.
Nonetheless, the company must focus on maximizing business performance.
While the company faces threats in its remote or macro-environment, growth is achievable by focusing on product innovation, among other approaches.
Political stability of most countries opportunity Political issues in the European Union threat Growing free trade relations opportunity The political stability of most countries presents opportunity for Unilever to grow in these markets. Nonetheless, the company has opportunity for global growth based on the expanding free trade relations, especially those involving developing countries.
However, the same external factor is a threat in terms of increasing costs, considering that the company has many manufacturing facilities located in developing regions. Nonetheless, Unilever can expect business growth, as these countries grow in terms of consumer goods market size and value.
For example, China presents major growth opportunity for the company. Moreover, the economic stability of developed countries cushions the business from risks in other markets, while facilitating gradual but steady growth.
In addition, rising environmentalist behaviors present an opportunity for the company to attract more consumers by improving its environmental impact. For example, Unilever can minimize its energy consumption by adopting new and more energy-efficient technologies.
Also, the company can grow through higher sales based on improving incomes among female consumers worldwide. For example, new business processing equipment can enhance inventory monitoring to support supply chain and distribution efficiencies Read: However, the same technological external factor is a threat because it increases the competitiveness of other firms, including small ones in local markets.
Nonetheless, the decreasing cost of transportation leads to lower operating costs, which contribute to business growth. Still, the decreasing cost of transportation is a threat because it contributes to the competitiveness of other firms. Rising interest in business environmentalism opportunity Increasing business efforts on sustainability opportunity Increasing complexity of environmental programs opportunity The rising interest in business environmentalism is an opportunity for Unilever to improve its environmental programs to attract consumers concerned about the environment.
In relation, the company can enhance its sustainability programs to strengthen its competitiveness against other firms in the consumer goods industry.
For example, the strategy must consider product innovation and internal business processes to further reduce business environmental impact. Such external factor is an opportunity for the company to improve its competitive advantage through corporate responsibility. Legal Factors Facing Unilever Unilever must satisfy regulations to minimize barriers to its consumer goods business.
Unilever must satisfy the issues based on the following legal external factors: For example, new patent laws in developing countries help reduce patent-related issues Unilever experiences in its remote or macro-environment.
Furthermore, stronger consumer rights laws create an opportunity for the company to improve its customer-service quality, along with product quality standards. Unilever can take this factor as an opportunity to improve its food products.
It is also recommended that the company must improve its sustainability programs to address opportunities regarding business sustainability. For example, local companies can increase their competitive advantage by automating their production processes.
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Since, Hindustan Unilever Limited is the present market leader, let us look into its micro economic environment. Marketing micro environment refers to all the internal factors close to the company that have a direct impact on its strategy and its ability to serve its customers.
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