Unilever's Strategies in China

Since its inception in 1923, Unilever has undertaken a number of strategic shifts in the way it conducted its business in China. In the 1980s, the company had sought the guidance of renowned consultants in drawing out its strategic plan for the country. The advice that it received highlighted a few very important socio-economic dynamics that existed in the mainland. Chinese consumers were mostly ignorant about international brands and were not very attracted to these brands. The experts also pointed out that the belief that since China was under a monolithic communist rule it had a homogenous society, was far from the truth. In reality, the various government units often defied central directives and acted independently of each other...

So the company entered into an extensive restructuring programme. The first task was to consolidate the various joint ventures into a unified whole. Unilever hoped to realize greater synergies by consolidating all its partners under one holding company. It expected this consolidation to help to overcome the internal conflicts that the fragmented structure gave rise to and bind the organization towards meeting a common goal. Unilever had to struggle to arrange terms with its seven partners who were unwilling to swap their big stakes for a minority share in the proposed holding company. The company was helped by officials from the Netherlands (one of its home countries) who lobbied Shanghai officials to support the consolidation plan...