UNILEVER - VIETNAM BRANCH - FINAL EXAM by cultural cross

Question 4: Which is the organizational culture in your chosen company?

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QUESTION 2: HOW DO THIS/THESE CULTURES AFFECT THE PRODUCT/SERVICE SALES OF YOUR CHOSEN COMPANY?

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ABOUT UNILEVER

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âssss

QUESTION 5

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WHICH STAGE OF MULTICULTURAL MANAGEMENT UNILEVER IN? WHY?

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COMPANY ORIENTATION

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QUESTION 7. WHAT IS THE NEGOTIATION TYPE IN YOUR CHOSEN COMPANY? WHICH TACTICS ARE USED IN NEGOTIATION?

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Negotiation Types:

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Unilever Viet Nam has 2 material suppliers

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POWER DISTANCE INDEX

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Negotiation Tactics:

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Unilever Vietnam

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is characterized strong emphasis on hierarchy so it has both family culture and Eiffel Tower Culture in its culture

Low Individualism Index and High Femininity Ratio.

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Unilever’s brands has its own designed-for-local promotion/ advertisement towards the community especially women and children.

QUESTION 6

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COMMUNICATION BARRIERS AND SOLUTIONS FOR EFFECTIVE COMMUNICATION

Eiffel Tower Culture

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Vì một Việt Nam khoẻ mạnh hơn với Lifebouy.

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250,000 discussions on Fanpage, level of market penetration increase much.

COMMUNICATION BARRIERS

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Family Culture

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International Supplier: Integrative Negotiations

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Domestic Supplier: Distributive Negotiations

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Mọi trẻ em đều có quyền - OMO.

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Omo is positioned based on exploring children's experiences and development. The campaign helps Unilever acquires > 70% in market shares for years.

LANGUAGE BARRIERS

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Ways of motivating and rewarding

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INDIVIDUALISM

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People use Vietnamese in daily communication, an uncommon language and a dialect language

THE UNCERTAINTY AVOIDANCE

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Five levels of hierarchy

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Create and claim value:

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more scope for discounts and more flexibility in the timing of payments

Low Uncertainty Avoidance Index.

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Vietnamese encourages the new creation/experiences.

All employees have the right to join in the process of performance evaluation

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Helps employees develop their skills, knowledge and experiences

Group-cooperative benefit:

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getting the consistent price and quality for a long time and stable imports

QUESTION 1: WHICH CULTURE AFFECTS IN UNILEVER ?

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UNILEVER VIETNAM

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Overlapping interests:

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building up trust over time and sharing of information, forecasts, knowledge and customers between parties.

Performance evaluation is not a one-year plan or project

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Relationship:

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all foreign suppliers have long-term worldwide business relationship with Unilever

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Creates good conditions for all employees and managers assess the overall performance

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Unilever always innovates their product.

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Easily attracts Vietnamese consumers, increase sales volume.

Design appropriate long-term strategies.

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Unilever is forced to spend money on hiring interpreters

Outcome: win-win

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GENERAL INFORMATION

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Translating documents into Vietnamese poses some risks of misunderstanding

MASCULINITY AND FEMININITY

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Unilever used to decrease up to 50% price in Vietnamese market to gain brand awareness and market share.

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LONG-TERM ORIENTATION

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A British-Dutch transitional consumer goods company

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In negotiations, the Vietnamese do not go directly to the main issues & take a long time to conclude

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Annoying Western counterparts

UK

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Quite low (35) -> less hierarchical
=> must maintain a balance between its global decentralized policy and centralized policy in Vietnam

Location:

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Unilever Vietnam choose a place for negotiation not only base on distance but also partner’s taste

Criticism and conflict resolution

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Timing:

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spending a great deal of time in trying to influence people informally and seeking to negotiate with them formally.

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The breakdown of international negotiations

Buyer-seller relationship:

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long-term – involving regular purchases based on established agreements.

Set up a specialized unit in the Human Resource Department

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Receive comments and complaints from employees at all levels of the organization

Product Strategy: Unilever Vietnam focuses on Product Localization.

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PERCEPTION BARRIERS

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Clarify all stages in the working process

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Ideas and suggestions to superiors are welcome

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Superiors in Unilever always try to create a comfortable atmosphere for subordinates when working with employees

Developing relationship with customers as a key factor

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Negotiate with customer for customized plan to win in market place (promotion negotiation, off-location, visibility booking in store...)

Building up customer’s trust

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With the reputation of the product, reasonable price policy and promotion activities to support sales from the company, retailers fully trust in Unilever products

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To add vitality to life AND meet customers’ need

VIETNAM

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High (70) -> high hierarchical structure

Relationships between employees

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Unilever Vietnam culture combines Western and Vietnamese culture

At Unilever each role at each level of the hierarchy

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Described rated for its difficulty, complexity, and responsibility and has a salary attached to it

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Make sustainable living and best long-term way

PHASE IV

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GLOBAL CORPORATIONS (evidence as follows)

UNILEVER VIETNAM

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Top manager focus on strategy not involve in daily operation. Superiors try to create a comfortable atmosphere

Apply international standards for products sold in VN, hire local employees.

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Get quality products with reasonable price.

Ways of changing

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Errors in advertising

Unilever have a line with the existing complicated rules and procedures in the company

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Decentralized structure (before)

Acquire famous local brands by repurchasing them.

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Claim maximum value:

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deal a minimum price

UK

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HIigh (89)-> focus for individual development.

Individual-selfish benefit:

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to localize raw materials for reducing production cost => suppliers accept a lower interest rate than when selling to other companies

VIETNAM

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Low (20) -> a collectivistic society.

Create products that are only for Vietnamese market.

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Sunsilk Bo Ket, Wall's Green Bean Ice Cream, Da Jasmine Tea.

Ways of thinking and learning

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Misunderstand the meaning & cause the consumers to lose trust in Unilever’s products

Divergent interests:

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(supplier) flexible price, medium quality >< high quality standard, low price (Unilever)

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Coordinated the activities of national subsidiaries within their region

Short-term relationship:

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constantly searching for new suppliers due to their prices are not suitable.

Outcome: win-lose

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UNILEVER VIETNAM

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Working in team -> maximize productivity . Provides individuals comforts for employees . Assigning and organizing both work and training in groups. Ensuring benefits and salary -> maintain a balance.

Example

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Primary Orientation

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Strategy

What type of cultural challenges does your chosen company face when it attempts to market its products worldwide/regional/local ?

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NON-VERBAL COMMUNICATION

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Growth rate

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50-60% market share in Vietnamese market for individual and family –care products

Mastered Efficiency

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Through technology and innovation in its internal business processes.

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Global integration and national responsiveness

Focused on performance and quality

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Unilever’s organizational culture instills high performance.

Create price competition

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Producing in-differentiable products (identical), top - high quality in large amounts

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integrated & interdependent network of subsidiaries all over the world

UK

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lower than Vietnam
-> make it ideal for Vietnamese people to adapt to the Unilever

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Get the least-possible-cost products to all customers (whether low income or not)

Charter capital of 55 million USD

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VIETNAM

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High (51) -> more accepting
=> very important index

Global integration, national responsiveness

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Direct eye contact → impolite & disrespectful to the speaker

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Financial capacity is also shown in the promotio, brand advertising

Build competitive advantage & public acceptance

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introducing new products satisfying consumer’s specific needs and preferences

UNILEVER VIETNAM

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An ideal location for setting up a new business

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Orders are conveyed from top to bottom as prescribed

Attitudes toward people

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Unilever consider employee like family

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Set up many policies to take care of employees

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Unilever are not only concerned with their employees at work, but also interested in their employees

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‟ family life and usually do their best to provide social support”

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Functional departments are responsible for advising the whole system

Attitude toward authority

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Competitive Strategy

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“We have local roots with global scale”

Employees felt better with the authoritative leadership

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UK

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High (66) -> personal growth more than the growth of the society

Help them have a straight-forward orientation

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Led to better performance and productivity

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Guide for their work which then

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Crossing your arms or crossing your legs → unwillingness to speak to others

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Same competitive strategy approach in all country markets (still with responsiveness to local conditions)

Managers

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Growth rate: 25-40%/year.

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Distribution, Products, Promotion, Price, People strategy

Look after employees

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Make results-based approaches to manage the business

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Sell much the same products everywhere ( make adaptation to local countries where needed to accommodate local countries preferences)

Drive performance high.

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5 factories, more than 2000 employees, 350 large distributors & 150000 retail stores.

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Built a professional indigenous staff and regularly focuses on employee training programs

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Creates a friendly, open and sympathetic environment among employees

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Build global brands through strong global character brands: Dove, Sunsilk, Rexona,....

Relationships between employees

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Unilever Vietnam culture combines Western and Vietnamese culture

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-Vietnam - polychronic culture → delays in work and time

Rewarded the First Class Labor Medal for outstanding achievements in business and great contribution to the socio economic development of the country in April 2010.

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VIETNAM

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High in the Femininity index -> cares a lots for society

Power-oriented

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Building on its long-established local roots in developing countries (Vietnam)

What will it need to do to respond to these cultural challenges?

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NEITHERLANDS

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Higher than Vietnam

Established in 1995

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Importance of world business

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Dominant

A combination of three companies.

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Taking on some tasks at the same time

UNILEVER VIETNAM

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No discrimination gender. Maintain harmony and avoid conflicts. Balance the gender.

Lever Vietnam Joint Venture

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Reducing the effectiveness of each task when compared to performing one task at a time

Unilever Bestfoods

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Product/Service

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Mass-customized
Product and process engineering

Elida P/S Company

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Vietnam is a country rich in traditions and history

Founded on 2/9/1929

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Asian women in general and Vietnamese women in particular tend to be more discreet than Western ones

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Educational differences

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the Dutch margarine producer Margarine

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Language differences

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UK

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Low (35) -> similar to Vietnam

the British soapmaker Lever Brothers

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Vietnamese like new things

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Co-headquartered in London (England) & Rotterdam (Netherlands)

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VIETNAM

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30 -> has a relaxed attitude regarding work

Mission: “To add vitality to life”

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SOLUTIONS FOR EFFECTIVE COMMUNICATION

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We meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life.

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UNILEVER VIETNAM

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Creative ideas and suggestions still are strongly welcome.

Own over 400 brands

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turnover in 2019 $58,218 (million of US $)

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Main product lines

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Arouse national pride and historical values, avoid distorting history

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Improve feedback system

Food

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Energy drink

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Ice cream & beverages

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More than 400 products launched in Vietnam with characteristics customized for Vietnamese people.

Cleaning agents

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Beauty

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Marketing team should pay attention to this to not lead to mistakes when advertising

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Personal care products

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Impersonal (reports, budgets, and plans)

Train human resources to meet demands of professional knowledge, foreign languages and soft skills, HR incentive policy

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Personal (face-to-face meeting, telephone conversation, email)

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A combination of natural herbal (locust, green tea,..) in shampoo -> create product & meet Vietnamese tastes.

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Help headquarters monitor and control affiliate performance as well as set goals and standards

Hire interpreters, learn about the differences in Vietnamese language of gestures

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Products must always be constantly changing to attract more and more customers

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Provide language training, especially English and Dutch courses

Carry out advertising campaigns for company brands to raise brand awareness

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Most important decisions

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Made by senior managers at the highest levels of the organization

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Help readers (managers, vice presidents) understand well their letters, reports or email messages.

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Provide cultural training

Each level is divided into several sublevels that have their own role

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Its presence in 190 countries

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Understand Vietnam’s culture & develop cultural sensitivity

Techology

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Instantly and extensively shared

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Tolerate cultural differences

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Top managers focus mainly on strategy planning

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Delivered modern technology to all its factories, part-producing units and the majority of its distributors

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A clean and green working environment-the waste treating system installed in its factories - considered the best in Vietnam

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Transferring technology in the form of mixing, filling and packing assets to produce international quality formulations

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R&D/ Sales

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Very high

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Launching about 40-50 new products every year

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Consolidating its R&D activities into a number of larger sites located in its key markets

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More than 6,000 scientists, engineers, chefs and technicians work in Unilever's R&D centres around the globe

Profit Margin

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Hight, yet immediately decreasing

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Total sales of UNILEVER have increased in the recent years

Competitors

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Significant (few)

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Profit in the early period and started to slow down in recent years

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Procter & Gamble (P&G), Nestlé, Kraft Foods, Mars Incorporated, Reckitt Benckiser và Henkel

Market

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Largest, Global

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Nearly 25,000 people use a Unilever product every second in virtually every country in the world; these products are bought from 11 million stores, run by 150,000 customers.

Production Location

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Import & Export

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Import main materials for cosmetics (Vietnamese partners can’t produce)

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Export finished goods to target market

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In Vietnam: 5 factories at Ha Noi, Cu Chi, Thu Duc, Bien Hoa Industrial Park

Exports

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Exports and Imports

Export

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significantly increased, up to 250%, target market: Asia and Australia

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Technology (39%)

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Structure

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Global Alliances
Hierachy
Coodinated
Decentralized

Tall organizational structure pyramid hỉeachy

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Decentralized structure

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Partnership with 76 raw material suppliers, 54 packaging suppliers 16 third party SMes in Vietnam

Perspective

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Global/ Munticentric

Cultural Sensitivity

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Critically important

With whom

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Empolyees and Clients

Level

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Executives

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Interaction within firm (employees from everywwhere all the world) and between firm with its external environment (clients, suppliers from everywhere all the workd)

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Need to understand differences in culture, communication, language, working style, life styles,...

Strategy assumptiom

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"Many good ways"

Strategy

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Global

based on regional business groups -> include a number of divisions focusing on a specified category of products

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Recruited local managers to run local organizations

Managers are no longer allowed to match product offerings and marketing strategy to local tastes and preferences.

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Employees' idea and opinions are welcome

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Allow managers to match product offerings and market strategy to local tastes and preferences.

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recruited local managers to run local organizations

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Branches/ subsidiaries in each major market are responsible for production, marketing, sales and distribution of product in the market.