Portfolio Overview of Unilever and P&G Essay

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There were a number of reasons why Unilever and P&G were harmonizing their brand portfolio as outlined below: • The concentration of resources on a smaller portfolio of global power brands decreased the complexity in the portfolio as well as costs. For example, Elida Gibbs, a Unilever personal care company, had reduced its brand portfolio in Brazil from 20 to 7 in 5 years, and in the same period had increased revenues by 50% and margins by 100% (Arnold 6). • The reduction of the number of stock-keeping units (SKUs) that had to be handled would result in production savings as well as savings from more concentrated marketing support. • There was a significant pressure from big European retailers that were consolidating. The top 5 grocery…show more content…
Just like competitors, they realized that savings could come not only from economies of scale in production but also by eliminating fixed set-up costs involved in switching to a different variant of existing products. However, Henkel had long been committed to a strategy of strong local brands, reflecting both a commitment to market responsiveness, and the organizational legacy resulting from a history of internationalization by acquisition. Henkel recognized that it had to be careful not to destroy consumer value of their products for the sake of gaining operational efficiency due to international standardization. “Any moves toward integration would have to balance against strong forces for localization, both at the consumer level, and within Henkel’s subsidiaries, given their distinct heritage” (Arnold 7). Back in 1992 Henkel’s management decided to create a series of initiatives to increase international coordination. These initiatives emerged because Henkel started to see itself more and more as a global organization and they were aware of regional integrations, especially in Europe. The major focus of this initiatives was to reduce this complexity Henkel's product portfolio. The general idea was to move towards standardized brands but taking into account the value of those brands with long heritage so that they wouldn’t destroy them. 3. What brand strategy should Henkel follow in Italy and Spain. Specifically,

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