Unilever 2012 Annual Report Download - page 40

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Unilever Annual Report and Accounts 2012 Report of the Directors About Unilever
ABOUT UNILEVER GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION
Descrpton of rsk What we are dong to manage the rsk
ompetton
The activities of our competitors may adversely impact Our strategy focuses on investing in markets and segments
our business. which we identify as attractive because we have already built,
or are confident that we can build, competitive advantage.
Unilever operates globally in competitive markets where other
local, regional and global companies are targeting the same We continue to monitor developments in our markets across
consumer base. the world and to direct our resources accordingly to respond
to competitive threats and opportunities.
Our retail customers frequently compete with us through private
label offerings.
Industry consolidation amongst our direct competitors and in
the retail trade can bring about significant shifts in the competitive
landscape. Increased competition and actions by competitors
or customers could lead to downward pressure on prices and/or
a decline in Unilever’s market share in the affected category,
which could adversely affect Unilever’s results and hinder its
growth potential.
Portfolo Management
Unilever’s strategic investment choices will determine the Our Compass strategy and our business plans are designed to
long-term growth and profits of our business. ensure that resources are prioritised towards those categories
and markets having the greatest long term potential for Unilever.
Unilever’s growth and profitability are determined by our portfolio
of categories, geographies and channels and how these evolve Our acquisition activity is driven by our portfolio strategy with
over time. If Unilever does not make optimal strategic investment a clear, defined evaluation process.
decisions then opportunities for growth and improved margin
could be missed.
Sustanablty
The success of our business depends on finding sustainable The Unilever Sustainable Living Plan sets clear long-term
solutions to support long-term growth. commitments for health and well-being, environmental impact and
enhancing livelihoods. These are underpinned by specific targets in
Unilever’s vision to double the size of our business while reducing areas such as sustainable sourcing, water usage, waste generation
our environmental footprint and increasing our positive social and disposal and greenhouse gas emissions. These targets are
impact will require more sustainable ways of doing business. This being integrated into Unilever’s day-to-day business operations.
means reducing our environmental footprint while increasing the
positive social benefits of Unilever’s activities. We are dependent The Unilever Sustainable Development Group, comprising five
on the efforts of partners and various certification bodies to external specialists in corporate responsibility and sustainability,
achieve our sustainability goals. There can be no assurance that monitors the execution of this strategy.
sustainable business solutions will be developed and failure to do
so could limit Unilever’s growth and profit potential and damage Progress towards the Unilever Sustainable Living Plan is monitored
our corporate reputation. by the Unilever Leadership Executive and the Boards.
ustomer Relatonshps
Successful customer relationships are vital to our business and We build and maintain trading relationships across a broad
continued growth. spectrum of channels ranging from centrally managed
multinational customers through to small traders accessed
Maintaining strong relationships with our customers is necessary via distributors in many developing countries.
for our brands to be well presented to our consumers and
available for purchase at all times. We develop joint business plans with all our key customers that
include detailed investment plans and customer service objectives
The strength of our customer relationships also affects our ability and we regularly monitor progress.
to obtain pricing and secure favourable trade terms. Unilever may
not be able to maintain strong relationships with customers and We have developed capabilities for customer sales and outlet
failure to do so could negatively impact the terms of business with design which enable us to find new ways to improve customer
the affected customers and reduce the availability of our products performance and enhance our customer relationships.
to consumers.
People
A skilled workforce is essential for the continued success Resource committees have been established and implemented
of our business. throughout our business. These committees have responsibility
for identifying future skills and capability needs, developing career
Our ability to attract, develop and retain the right number of paths and identifying the key talent and leaders of the future.
appropriately qualified people is critical if we are to compete
and grow effectively. We have an integrated management development process which
includes regular performance reviews underpinned by a common
set of leadership behaviours, skills and competencies.