Unilever 2007 Annual Report Download - page 10

8Unilever Annual Report and Accounts 2007
Report of the Directors continued
About Unilever continued
Two category teams – Foods and Home and Personal Care – are
responsible for the development of category and brand strategies,
the development of brand communication, and the delivery of
relevant innovation. Categories also lead the strategic direction of
the supply chain and are accountable for long-term value creation
in the business, as measured by longer-term market share
development, category growth, innovation metrics and brand
health.
Building on the success of the One Unilever programme, Foods
and Home and Personal Care will be brought together in 2008
in a single category structure.
Five functional teams – Finance, HR, IT, Communications and
Legal – are responsible for providing value-adding business
partnering, strategic support and competitive services to the whole
business. They are each organised around the same basic principles
of business partners, shared services and expertise teams.
Since 2005, the One Unilever programme has streamlined
our business by creating a single operating company for each
country – combining previously separate Foods and Home and
Personal Care operating units into a One Unilever company – and
by creating and outsourcing shared services centres for the back
office operations of our Finance, HR and IT functions. In 2007, we
announced new plans to accelerate change including the creation
of multi-country organisations (MCOs) – clusters of countries with
a single centralised management and shared functions – and
further simplification of our regional supply chains.
Operating environment
We have a wide and diverse set of competitors in our categories.
Many competitors also operate on an international scale, while
others have a narrower regional or local focus.
Competition is a normal part of business. We aim to compete
and provide added value to our consumers, customers and
shareholders in three ways:
• by continually developing new and improved products that
address relevant consumer needs and aspirations;
• by rolling out innovations and brand concepts across our
businesses around the world; and
• by striving to lower the cost of our sourcing, manufacturing
and distribution processes while ensuring the quality of our
products.
Our businesses have established strong leadership positions –
typically number 1 or number 2 – in the markets in which we are
operating. In Foods, we hold the global number 1 position in
savoury and dressings, spreads, tea-based beverages and ice
cream. In home care, we hold the global number 2 position in
laundry, with a number 1 position in many developing and
emerging markets. In personal care, we hold the global number 1
position in mass skin care and deodorants, and the number 2
position in hair care. In oral care and household care, our strategy
is focused on strong regional and local leadership positions in
selected makets in Europe, Asia and Latin America.
Unilever’s products are generally sold through our own sales force
as well as through independent brokers, agents and distributors
to chain, wholesale, co-operative and independent grocery
accounts, food service distributors and institutions. Products are
physically distributed through a network of distribution centres,
satellite warehouses, company-operated and public storage
facilities, depots and other facilities.
We sell our products in over 150 countries around the world. In
many countries we manufacture the products that we sell, while
we also export products to countries where we do not have
manufacturing operations. The chosen manufacturing network is
generally determined by an optimised regional sourcing strategy
which takes account of requirements for innovation, quality,
service, cost and flexibility.
Certain of our businesses, such as ice cream, are subject to
significant seasonal fluctuations in sales. However, Unilever
operates globally in many different markets and product
categories. No individual element of seasonality is likely to be
material to the results of the Group as a whole.
Transactions with related parties are conducted in accordance
with agreed transfer pricing policies and include sales to joint
ventures and associates. Other than those disclosed in this report,
there were no related party transactions that were material to the
Group or to the related parties concerned that are required to be
reported in 2007 or the two preceding years.
For more information about related party transactions please refer
also to note 30 on page 120.
Resources
Our brands
We have a strong and well differentiated portfolio of global and
regional brands, which are positioned to meet the needs and
aspirations of our consumers across a variety of price points,
segments and channels, allowing us to compete effectively in our
key categories and countries.
Twelve of our brands have global turnover in excess of €1 billion.
These are Knorr, Hellmann’s, Lipton, Becel/Flora (Healthy Heart),
Rama/Blue Band (Family Goodness), Wall’s/Algida (Heart brand),
Omo, Surf, Dove, Lux, Rexona (including Sure and Degree) and
Sunsilk (including Seda and Sedal).
We manage our brands under the following four category
headings: savoury, dressings and spreads; ice cream and
beverages; personal care; and home care.
Savoury, dressings and spreads includes soups, bouillons, sauces,
snacks, mayonnaise, salad dressings, olive oil, margarines, spreads
and cooking products such as liquid margarines, and some frozen
foods. Our key brands here are Knorr, Hellmann’s, Becel/Flora
(Healthy Heart), Rama/Blue Band (Family Goodness),Calvé, Wish-
Bone, Amora, Ragú and Bertolli.
Ice cream and beverages includes ice cream sold under the
international Heart brand, including Cornetto, Magnum,Carte
d’Or and Solero, Wall’s, Kibon, Algida and Ola. Our portfolio also
includes Ben & Jerry’s, Breyers, Klondike and Popsicle. This
category also includes tea-based beverages, where our principal
brands are Lipton, Brooke Bond and PG Tips. This group also
includes weight management products, principally Slim•Fast, and
nutritionally enhanced products sold in developing markets,
including Annapurna and AdeS/Adez.