Abstract
Plastic waste pollution has become one of the major ecological problems today. This essay explores the strategic action taken by Unilever, a consumer goods giant, against the consumer goods industry’s growing environmental and social concerns. Using Porter’s Five Forces Framework and PESTEL framework as a lens, the essay will find out how strategies like material reduction, alternative packaging, and stakeholder engagement effectively reduce plastic footprint, which leads to clear proof of Unilever’s efficacy. Following the discussion, the paper illustrates the frameworks’ dra
Introduction
Plastic packaging is an inevitable part of today’s life. However, the rapid increase in plastic waste is a serious concern, making manufacturers worldwide rethink their strategies. Enterprises have shifted into another gear for re-analyzing their packaging processes to solve this urgent problem. This paper looks at the example of the giant multinational company Unilever in the consumer goods sector, which has made big strides in cutting down on plastic waste. By utilizing key models from strategic management, this essay will investigate how some strategic choices, notably material reduction, innovation, and stakeholder engagement, significantly decrease the environmental burden by Unilever. Nevertheless, plastic reduction decisions allow Unilever to gain the respect of consumers and strengthen its position in the market.
Literature Review
Strategic theoretical framework and Uinelivers’ strategic choices and actions toward reduction of plastic waste
Porters’ Five Forces
Michael Porter’s Five Forces framework offers a powerful tool for scrutinizing the competitive dynamics in a sector that frequently drives companies to strive for sustainable business practices. In plastic waste reduction, three of Porter’s forces become particularly relevant: the threat of new entrants, the bargaining power of buyers, and the threat of substitutes.
Threat of new entrants: New firms with novel, superior, and more sustainable packaging solutions bring a potential for disruptive innovation. This forces existing firms to improve their ways of doing business. Based on Mattia et al. (2020), firms in industries lacking environmental competency, such as plastic packaging, are more prone to shift with the times to sustainable practices if the incoming ones pose competition by offering more eco-friendly alternatives. Through this threat, companies like Unilever, which are the market leaders, have to emphasize plastic reduction, so they won’t lag behind and are non-attractive.
Bargaining Power of Buyers: Now, consumers take environmental responsibility as important as when deciding to buy products. Boz et al. (2019) found that customers are inclined toward a high-paying tendency toward sustainable packaging. This new behavior pattern of the consumer enhances the negotiation strength of the buyer, which is evident in making companies even smaller, and to reply to eco-conscious customers, they are forced to cut down the use of plastic. For instance, Unilever’s consumer education programs, such as reduce, reuse, and recycle with its support of recycled content packaging, are the company’s direct responsiveness to this rising consumer feedback.
The threat of substitutes and the creation of sustainable alternative materials to plastic packaging presents a crucial risk. Ibrahim et al. (2022) assert that the existence and accessibility of alternative packaging products compellingly thrust the companies to research and find other types of packaging that are fresh for them to compete and stay current. This is to avoid being substituted by their competition that has something better. Leveraging bio-based alternatives by Unilever is one of the strategic responses to the pickle of substitutes for bio-based brands.
PESTEL Framework
Political and Environmental: Environmental regulations and customer concerns are two main drivers that force organizations to replace as much plastic with renewable foundations as possible. Unilever achieves this by ensuring a high percentage of recycled plastic content and lesser plastic usage (Unilever, 2024). In this way, their sustainability demonstrates leadership in environmental responsibility, which synchronizes with the stricter regulations and consumer expectations. This preventive way allows them to evade more serious sanctions or a bad reputation afterward.
Socially, Debnath et al. (2023) indicate that social awareness towards waste plastic has been another major contributor to propel companies towards sustainable practices. Unilever has used this awareness through consumer education campaigns and the promotion of responsible consumption. Through this action of consumer participation in plastic waste, Unilever has managed to increase awareness and make those accountable for the problem as the customers subsequently form a deep loyalty to the company’s brand.
Technologically, Sustainable innovations in recycling and bioplastics provide a future source of remedies to plastic issues (Maitlo et al., 2021). The Unilever Company has been the leading force in innovation, highlighting alternative methods such as investment in research developments for new packaging materials and designs (Unilever, 2024). Unilever has confirmed its green efforts by becoming an innovative corporation and switching to virgin plastic as less and less of its packaging.
Economically; economic factors like changing crude oil prices often offer an advantage in favor of virgin material instead of recycled plastic (Maitlo et al., 2021). Despite the confining conditions, Unilever has attained its goals by focusing its plastic waste reduction efforts on cost-effectiveness and efficiency. Via value chain and manufacturing operations optimization, Unilever remains highly competitive when it comes to minimizing the costs of recycled materials adoption, thus making sustainable practices an economically viable part of the business plan.
Legal: Perkumienė et al. (2023) points out that while laws, such as regulations governing recycling plants and waste management procedures, are regionally specific, they remain a hurdle to organizations with global operations. Unilever has managed to get through impairments by working in cooperation with local entities and interested parties and ensuring that its operations follow the laws and regulations of the industry (Unilever, 2022). Through the preemptive application of legal matters, Unilever reduced the chances of disagreement in its corporate development and enhanced its reputation as a responsible corporate citizen.
Findings and limitations
Porter’s five forces theory implies that the nature of market forces might be shaping green programs, procedures, and ethics into the main business operation. ‘New Entrants’ with innovative packaging solutions and ‘eco-friendly’ consumers increase their power and put established companies in an uncomfortable position (like Unilever), forcing them to adapt. This results in the decline of plastics and the search for alternatives that are not only ecologically friendly but also affordable. The point to be emphasized is that this market-led transformation creates a win-win situation not only for Unilever but also for the whole industry, steering it in a more sustainable direction.
Besides, today’s consumers prioritize environmental responsibility in their purchase choices, which are ever-increasing; thus, companies must adjust their operations to their products to create an eco-friendly environment. Boz’s work (2019) proves that premium consumers are ready and willing to pay for eco-friendly packaging. Unilever’s response is developed, aimed towards consumer awareness that leads to proper consumption and recycled content packaging. Given that the company meets the customers’ needs and promotes the spirit of being part of the solution, Unilever strengthens its brand loyalty and fosters a sense of common responsibility.
As discussed by Ibrahim et al. (2022), the possibility of substitutes points to the necessity of constantly improving products. In this vein, Unilever’s investment in research and development for bio-based alternatives would significantly contribute. The point here is that the company gains superiority over rivals by using new materials before competitors. Because of this situation, sustainability becomes a focused topic in the market.
By PESTEL framework analysis, Unilever’s strategy reveals how these external factors affect the company. Tough environmental standards and the growing public query regarding plastic burning require a changeover from non-renewable to renewable and recycled materials. Unilever’s prioritizing of high recycled plastic content and reduced usage of non-recyclable plastic materials exemplifies leadership in the conservation of the environment. The main point here is that such a proactive approach reduces the chance of sanctions and reputation harm and gives the company a chance to stand out as a leader in sustainability.
Limitations
Porter’s Five Forces theory is very sensitive to dynamic market developments. Nevertheless, the only fact is that sustainable packaging is developing at a very swift pace. New technologies, consumer tastes, and regulations are frequently introduced along with those. The model fails to explain the above changes, which occur over time. As a result, it causes a drop in its effectiveness in predicting competition and strategic requirements in the next time run.
Economic elements such as continuous changes in the manufacturing cost of crude oil (PESTEL – Economic) can make recycled plastic more costly than virgin one. While Unilever is very keen on cost-effective and efficient plastic reduction (as mentioned in the PESTEL analysis), balancing economic viability and environmental sustainability is a challenge that must be addressed. For companies like Unilever to remain competitive, they need to be able to optimize their production process in every step of the value chain and find cost-effective, sustainable solutions to sustain their business in the long run.
Another weakness is the existence of a complicated global legal framework. The recycling infrastructure and waste management laws are different in different geographical regions, which complicates the international business environment for companies like Unilever. It becomes a rigorous task to preserve uniformity with the constantly changing regulatory ecosystem, and the need to keep updated with changes can be costly regarding resources.
Future considerations
Successful measures for plastic reduction usually depend on the cooperation of many stakeholders, including governments, NGOs, recycling plants, and waste management authorities. When these organizations pool their resources, they can create the foundations for recycling services and promote a recycling culture by educating consumers. While Porter’s Five Forces doesn’t take these collaborative work into account, it is worth considering.
In addition, the challenges of plastic waste reduction differ greatly, either in different regions or in the same region, depending on the cause of the study. Legally binding rules, recycling mechanisms, and consumer choices vary from one country to another. The strategy must be flexible and be able to cope with these regional peculiarities. Porter’s Five Forces, which is industry-focused, may find it difficult to comprehend these underlying dynamics.
Conclusion
Although plastic packaging has become an irreplaceable element of our daily lives, its environmental footprint is strongly increasing. The strategic measures shared by Unilever Company for the decrease in plastic waste indicate the company’s devotion to environmental safety and competitiveness in the market sphere. Through using Porter’s Five Forces and PESTEL models, amongst other strategic management models, Unilever has managed to overcome the barriers of the plastic waste problem, which the organization was a party to. This study reveals that factors of competition, like the threat of new entrants, the bargaining power of buyers, and also existing substitutes, have impacted Unilever’s strategic decisions. Along with resource abuse reduction, innovation, and stakeholder engagement, the company can have a lower environmental impact while at the same time boosting its brand image and consumer attachment. Therefore, firms that feel the call to emulate Unilever’s achievement in addressing the plastics issue should consider that the key points of setting clear sustainability targets, introducing new technologies, and collaborating with community partners are to achieve a more sustainable world.
References
Boz, Z., Korhonen, V., & Koelsch Sand, C. (2019). Consumer considerations for the implementation of sustainable packaging: A review. Sustainability, 12(6), 2192. https://doi.org/10.3390/su12062192
Debnath, B., Bari, A. B. M. M., Ali, S. M., Ahmed, T., Ali, I., & Kabir, G. (2022). Modeling the barriers to sustainable waste management in the plastic-manufacturing industry: An emerging economy perspective. Sustainability Analytics and Modeling, 3, 100017. https://doi.org/10.1016/j.samod.2023.100017
Ibrahim, I. D., Hamam, Y., Sadiku, E. R., Ndambuki, J. M., Kupolati, W. K., Jamiru, T., Eze, A. A., & Snyman, J. (2022). Need for sustainable packaging: An overview. Polymers, 14(20). https://doi.org/10.3390/polym14204430
Maitlo, G., Ali, I., Maitlo, H. A., Ali, S., Unar, I. N., Ahmad, M. B., Bhutto, D. K., Karmani, R. K., Naich, S. U., Sajjad, R. U., Ali, S., & Afridi, M. N. (2021). Plastic waste recycling, applications, and future prospects for a sustainable environment. Sustainability, 14(18), 11637. https://doi.org/10.3390/su141811637
Perkumienė, D., Atalay, A., Safaa, L., & Grigienė, J. (2023). Sustainable waste management for clean and safe environments in the recreation and tourism sector: A case study of Lithuania, Turkey and Morocco. Recycling, 8(4), 56. https://doi.org/10.3390/recycling8040056
Unilever (2022). Delivering sustainable business performance: Unilever Caribbean Limited Annual Report and Accounts 2022. https://www.unilever-caribbean.com/files/526f6129-193f-4716-9771-e7abf92087ea/unilever-caribbean-limited-annual-report-2022-w7huod.pdf
Unilever (2024). Why we need a global treaty to end plastic pollution. https://www.unilever.com/news/news-search/2024/why-we-need-a-global-treaty-to-end-plastic-pollution/
Unilever (2024). Innovating boldly for people and planet. https://www.unilever.com/brands/innovation/
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