Boston Matrix - Refresher Essay Example for Free

Boston Matrix – Refresher Essay According to those two figures and based on some sales figure from Unilever’s marketing department, it is clear that most of its products are in the maturity stage and ‘Cash-Cow’ products except for some new products which are undergoing the introduction stage or growth stage because there are many similar new products which are developed in China and focusing on Chinese consumer. The annual sales figure appear that, in personal care sector, its products have been kept in a slightly increase or decrease lever and tend to grow to a stable maximum level. However, because of in the huge market, the amount of sales normally is significant. This situation, therefore, could be effective for Unilever China run and maintain its business owing to the enormous cashflow. It also contributed to launching Unilever’s sixth Research and Development (R & D) Laboratory in China, 2000 in order to meet the everyday needs of the Chinese consumer and develop more products for the Chinese market. Facing the pressure form not only another large firm ‘P & G’ but also a lot of local booming manufactures, Unilever China has adopted a lot of effective measures in order to compete with them. For instance, frequent products promotion with the purpose of offering more profits to the customers and keeping the lower price. In addition, in order to maintain the awareness of brands, Unilever launches a lot of brilliant advertisements by using many famous pop stars in every season. Commentary on the three underlying systems: Technical, People, Economic (including: Organisational use of Information and Communication Technologies (ICT) A. Technical When I was working in ChinadotCom corporation Shanghai branch, I had had a lot of opportunities of communicating with IT staff of Unilever China. According to the information which I have gained form them, it is clear that if there was no supporting from Information and Communication Technologies (ICT), possibly, all of its business and management would be out of control. ICT plays a significant role of management in lots of successful western firms as well as in Unilever. Thus, when Unilever re-entered China in 1990, it also brought some advanced management systems especially Enterprise resource planning (ERP) software which it had already operated in most of its subsidiaries into Unilever China. Throughout six years’ development, based on original ERP system, Unilever China has been building a brand-new Management Information System (MIS) which is different between the common MIS during current years. This new MIS concentrates in generating and analysing date source which forwards to provide efficient reports rather than the function of information communication. Unilever China has launched a number of separated information systems such as Dealer Management System (DMS), Sales Information System (SIS) and Supplier Management System as well. All of them have integrated with MIS through ERP in order to offer standard data source. Moreover, it has planned to launch a Customer Relationship Management (CRM) system owing to maintain high proportion of royalty among its consumers. As we know, most multinational companies adopt single united globe standard for their IT equipments including hardware and software as well as Unilever. It should be easy and effective for the companies to manage and maintain the whole systems for example, once any engineer of Unilever turns on any PC of Unilever, there would be the same operation system and application software in the PC. However, for Unilever China, this situation could lead to some problems when it would like to merge other companies. It also has cost Unilever China much money and labour to integrate all the different systems which the fourteen joint ventures had been used, when it was carrying out the two revolutions. B. People In a world where technologies and markets are speedily changing, as well as in China, both local knowledge and globe proficiency have been required to deeply understand and meet the complex needs of the 150 million customers who choose Unilever’s products everyday. It is very important, therefore, for Unilever China to make its employees localising as possible as it could. At its beginning stage, Unilever China had employed more one hundred foreign staffs including managers and professionals. Although they had more working experience and good management approaches, there still had been some disadvantages of this state. Firstly, it had led to the high cost of labour because Unilever should pay nearly six times more than employing local people. Secondly, most of foreign staffs, they had not had enough knowledge of Chinese economy environment. This might provide some wrong decisions in both marketing and manufacture areas. Finally, because they had been so proud of their characters and positions, they tended to be difficult to communicate with local people. All in all, thus, Unilever China has modified its mind to reduce the number of foreign staffs and offer more opportunities to local employees. (Unilever China, 2001) In every recent year, Unilever China has sent numbers of its local managers abroad to practise for senior positions in their own countries. Its target of 95 percent local management in China includes five percent of local managers who are also working overseas at any given time. On the other hand, in purpose of reducing the cost of workforce, Unilever China decided to cut down the number of workforce in Shanghai which is in the highest level of working payment in China, and move its manufactures to the lower cost place. C. Economic Inside Unilever China, the significant motive of two revolutions is to decrease their working expenditures and utilise all the business resource efficiently. The production lines of most its products such as shampoo and shower are quite similar including the raw material as well. There had been several same production lines among the fourteen joint ventures, before Unilever China re-structured them. In addition, the waste also happened to the IT departments, administration department and supporting department. Once Unilever China had held a new joint venture, it had had to build an individual business system for it. It seems to be more efficient and having more abilities of competition, when the two revolutions have been accomplished. Furthermore, the changes also facilitate Unilever to concentrate its brands in order to meet the needs of different markets. For instance, in Shanghai which is the huge developed city in China, its key products are in the personal care and wash area including Lux, Dove, Hazeline and Ponds. Due to the changing of Chinese government economy policy, China is going to be more open for the foreign companies. As a result that China has joint World Trade Organisation (WTO), more foeign companies will enter China. Most local manufactures tend to become stronger because they will have more chance to gain the advanced management approaches and learn the business skills by competing with more foreign companies. They also could the big challenge to the Unilever China. Another purpose of its changes, thus, is to maintain its leader position in China. Since these changes, Unilever China becomes more flexibility because it clearly to allocate its business targets to three groups. Every group has its own responsibility of manufacturing and selling particular products. Thus, both of them could be the professional in their own economical environment. Discussion of management activities and approaches (including â€Å"typical† errors) Until this section, it seems that there has been no obvious evidence which could show that Unilever China has made some clear mistakes of management so far. However, there might be no completely perfect result once you have accomplished some changes. In the short-term, we could regard it as more positive than negative but no one could image the future. Also, before the two revolutions happened, there had been some typical management errors which Unilever China had made. Inside most of joint ventures in China, there are two different manager teams: one group of them are assigned straight by foreign companies; another are the people who have already worked in the companies which are going to co-operate with the foreign companies. However, both of them have the responsibilities of managing the new companies which we exactly classify as Chinese-foreign joint ventures in China. Thus, because of different working background in different economics system, these two manager teams provide two different management styles. For the managers who have been worked in Unilever world group for a period of time, because of underlying the western developed management theory, their management approach could be considered as ‘Proactive & Positive’. The management approaches have been argued and developed by a lot of western researchers for a long time. Those effective management approaches, such as ‘team work’, ‘business culture’ and ‘management information system’, have been widely utilised in Unilever. This also could contribute good forecast of marketing and sales, efficient decision making and powerful capability of competition. Those advantages could be clearly embodied in the two revolution of Unilever China. In particular, in order to avoid more waste of resource, Unilever China terminated some business in 2002 in Shanghai and transferred them to the low cost place which was in HeFei. During this process, certainly, it should deal with the loss of re-investment and high risk of changing. Nevertheless, due to some typical management errors which it had made at the beginning of re-entering China, it has had to change its temporal situation. The typical mistakes could be ‘Market Share wars’ and ‘The â€Å"big project†Ã¢â‚¬Ëœ. The evidences of these errors could be discovered by some investigation in its process of growth. For instance, only in a decade, it had constructed fourteen joint ventures in China to take the leader position of Chinese market and compete with ‘P & G’. Following its step, ‘P & G’ China also carried out some measures which might beat its challenge. Finally, that lead to both of these two firms had to reduce their products’ price in order to obtain more market share. Those fourteen joint ventures had caused numerous waste of fix assets, labour and operation cost. Boston Matrix – Refresher. (2017, Aug 20).