Does strategy matter? Why or why not?
The demand for Unilever products has increased in the global market, and management is considering devolving its structure by subdividing it into three divisions (“Unilever | Business | The Guardian”, 2018). The divisions will include foods and beverages, which will be headquartered in Rotterdam, Netherlands, while beauty and personal care, as well as home care, will be based in London (“Building the Unilever of the future – Company Announcement – FT.com”, 2018). However, the entity’s lines of supply including suppliers of raw materials and distributors of final products will be shared among the branches. This is a milestone for Unilever which will help in increasing product quality as each division will be in a position to specialize and improve their products and in turn lead to healthy in-house competition thus driving long-term success. Market share and value of shareholders are also expected to increase, as more attention will be focused on improving customer relations and developing products based on their tastes and preference.
To evaluate Unilever’s strategic decision, a benchmark of the activities is carried out through quantitative and qualitative analysis, which measures the expected net profits, earnings per share, the rate of turn over, return on investment, risks, competencies, and skills. This gives direction to the evaluation by determining variables and questions that cover the whole event. Next, the performance of each division will be measured by comparing financial statements, profit and loss accounts and balance sheets prepared on annual basis (Hitt, Ireland, & Hoskisson, 2012). Furthermore, a variance is acquired by comparing standard performance to actual performance and it will then be compared to the set degree of tolerance. If it yields a positive deviation, then the strategy is worth investing in. Consequently, if the results show a negative derivation, management is advised not to implement the proposal but instead focus on the original strategy.