Unilever structure big restructuring after the five business units

On January 25th Unilever, a consumer-goods giant, unveiled a new organisational overhaul. The new structure will be divided into five business units - Beauty & Health, Personal Care, home Care, Nutrition and Ice cream.

The core purpose, Unilever says, is to move from the existing matrix to an operating model that improves agility, category focus and accountability, thereby improving performance. The new structure will also be simpler and more focused on category business. With the restructuring, each division will be responsible for its global strategy, growth and profits.

Under the new business structure, Unilever's business operations department Jiang Wei's five business units provide technical, systems and process support. And a streamlined Unilever Enterprise Centre will continue to shape the group's overall strategy.

Along with the restructuring of its business structure, Unilever also announced a series of personnel changes. Earlier, Unilever also came out of the news of big layoffs. Bloomberg reported that Unilever plans to cut 15 percent of its senior management positions in an effort to speed up decision-making. On January 25th Unilever said it would cut 1,500 jobs, including 5% of junior managers. It is the biggest layoff by Unilever chief executive Alan Jope since he took over three years ago.

Alan Jope, Unilever's chief executive, said the new organisational model had been developed over the past year to continue improving performance. "Moving to five categories-focused business structures will allow us to be more responsive to consumer and channel trends, with clear accountability for achieving goals." Growth remains our top priority, and these changes will support our pursuit of that goal."

As one of Unilever's most important markets, the Chinese market has also undergone many changes in recent years.

In terms of The introduction of new brands, Unilever's plant-based meat brand "The Vegetarian Butcher" officially entered the Chinese market in December 2020, and initially cooperated with Burger King to launch "Real fragrant plant-based Whoosh". Later, in April 2021, six new products meeting the needs of Chinese food were released again at the B end. In May 2020, ATCHA, Unilever's Japanese high-end skin care brand, opened its Tmall International overseas flagship store, officially entering the Chinese mainland market with the cross-border e-commerce model.

In terms of investment, Unilever has also accelerated its business layout in China. Unilever announced on January 22 that its new ice cream factory in Taicang, Jiangsu Province, has officially opened. In June 2020, Unilever announced that it would spend 100 million euros (about 720 million yuan) to expand and upgrade the Unilever Taicang production base, which is also the company's largest investment in China in nearly 10 years.

By introducing more new brands and accelerating investment in the supply chain, it is clear that Unilever wants to compete with the new consumer brands emerging in the Chinese market. The new brand can bring more freshness to consumers and refresh their cognition of Unilever, a consumer goods giant; The supply chain is the core of FMCG competition, new consumer brands are mostly started by the OEM model, and the advantages of the supply chain are not enough to compete with these giants, which may also be the reason why Unilever has increased investment in the supply chain.

How the adjustment of this structure will affect Unilever's business performance in the Chinese market is not yet enough to judge, but it is foreseeable that in 2022, the competition between consumer goods giants and new consumer brands will be more intense in the consumer segments represented by these structures.