International Business Strategy - Case Study on Unilever
EXECUTIVE SUMMARY Every multi-national corporation has a business strategy that enables it to get ahead of its competitors. Unilever, as one of the global leaders that offers consumer goods including brand name foods, personal-care items and household products and owns an extensive global operation network in almost every country, has also developed its unique set of business strategies. Unilever is strong in making head start in emerging economies and has been making significant contributions to the economic growth in these countries. Emerging economies are developing countries that in general have less compatible infrastructure, in particular, for economic activities to take place effectively and majority of their populations are living in conditions that are below international standards. At present, over 44% of Unilever's sales come from emerging economies and further growth in consumption is expected in near future. This is in fact more than enough to take Unilever somewhere better than being the second largest in the global consumer goods market; nonetheless, as competition intensified, Unilever started losing the hang of it. Since Mr. Patrick Cescau became Unilever's sole Chief Executive in 2005, series of operation reforms were initiated. The strategic evolution under Cescau's management brought Unilever out of its dreadful situation and is regarded as one of
What are some of the problems of WTO mechanisms will pose for national governments?
Question 2: What are some of the problems of WTO mechanisms will pose for national governments? World Trade Organization (WTO) was established in 1995 at the Uruguay Round of General Agreement of Trade and Tariffs (GATT). It was the successor of GATT, and is the only international organization dealing with the global rules of trade between nations. At the year of 2006, WTO has 149 members and is accounted for over 97% of the world trade. As the main objective of WTO is to establish a single global market with uniform rules, the goals of WTO mechanisms are to minimize government interference in the conduct of trade and eliminate the nation-state's capacity to regulate commerce. However, these mechanisms have posed a threat to national governments to certain extent when formulating its own policies and laws. The regulatory system in WTO is quite different from GATT. A new concept - Self Executing Enforcement is introduced, which is never been used in any International Law. Self executing enforcement granted WTO legal personality and the capacity to enforce decisions on signatory countries, even though they cannot reach a unanimous consent. Moreover, WTO is empowered to facilitate further rule-making that binds all members even in the absence of their explicit consent where only two thirds vote of the membership can bind all the members. However, if the country wants to stop
Examine two reasons why a government might wish to control increases in its expenditure
Examine two reasons why a government might wish to control increases in its expenditure Increases in government expenditure will shift the Aggregate Demand (the sum of all demand within an economy) outwards. This is called an expansionary fiscal policy (fiscal meaning relating to government spending), and may be implemented to stimulate an economy if it is in recession. Another type of fiscal policy is called contractionary fiscal policy, and is used to help control demand pull inflation. Demand-pull inflation is the increases in prices at a relatively higher rate than increases in income. This occurs when demand is greater than supply. A government may wish to control increases in its expenditure for a number of reasons, including controlling the extent of government intervention, letting market forces act and to prevent crowding out. The two reasons that I will examine are to keep the tax levels down and to control inflation. Taxes are placed in two categories. First there is direct tax, which is tax levied directly to a person or organization, for example income tax. The second category is indirect taxes, which are taxes placed on goods and services. In Australia, the main indirect tax is the Goods and Services Tax (GST). This is relevant to the governments expenditure plan because of the affect increases or decreases in expenditure will have on the budget, which is a
The aim of this essay is to discuss the relevance of John Keynes to the current macroeconomic situation in the UK.
The aim of this essay is to discuss the relevance of John Keynes to the current macroeconomic situation in the UK. Macroeconomics can be defined as "the study of whole economic systems aggregating over functioning of individual economic units" (Bannock G, 2003: 236). It considers aspects of the economy from a government perspective such as the general price levels in an economy instead of a price level in a single market. John Keynes and economists who share a similar view to his on macroeconomics strongly believe that an economy will frequently settle below full employment. In such a situation aggregate supply will most likely be price elastic and increases in aggregate demand will mainly affect output. Keynes theory suggests government intervention through demand side policies in order to boost aggregate demand and reduce unemployment. However, Keynes theory is opposed by classical economists who believe that an economy will be at full employment and as a result demand side policies implemented by the government with the intent to boost demand will likely lead to an increase in prices and cause inflation. On the contrary to Keynes's recommendation classical economist insist government should implement supply side policies aimed at shifting aggregate supply to the right (Gillespie. A, 2007: 307). The government of any economy will set policies in order to achieve set
Advantages and disadvantages of Globalisation. Need for development.
3rd Problems and Solutions - Globalisation Problem 1. Globalisation and multinationals. First the positive image. Globalisation has two meanings, 1.a good meaning of increasing free trade and capital flows to the 3rd world so they grow and develop and 2. a less pleasant aspect of unfair Globalisation - all the bad aspects in reality where the west imposes high tariffs keeping ldcs out of its rich markets and farm subsidies wrecking 3rd world farmers and the 3rd world. Positive results of globalisation Globalisation is where the world's separate economies become integrated into one as trade grows, capital moves from MDCs to LDCs and labour migrates the opposite way. This comes from the removal of barriers to integration bringing a single world market. The WTO negotiations have brought many trade barriers down, cheaper transport, the internet and telecommunications and the rise of the NICS all are leading to rapid globalisation. We all gain from increased specialization and CA. The 3rd world gains jobs, exports and allocative efficiency as they concentrate on what they are best at producing. Western capital and technology sharply increases their productivity and living standards. Cheap labour "exploitation" leads to an income, and an end to absolute poverty and then higher wages. The open economies that welcomed foreign investment, that focused on exports and created
How successful has the WTO been in achieving it’s objectives?
How successful has the WTO been in achieving it's objectives? / Ben Weland / 13/10/2002 The World Trade Organisation (WTO) was founded in 1995 and resulted from a series of General Agreements on Tariffs and Trade, which started after the Second World War in 1947. The WTO is the first global, constantly operating organisation responsible for the promotion of free trade and the settlement of possible trade disputes through independent disputes panels. A WTO ruling has to be accepted by a member state, otherwise the respective country may face trade sanctions. Major decisions are made on a basis of unanimity in the trade rounds, the most recent one happening in Doha, Quatar. This essay should clarify what the WTO's five main objectives are and to what extent they have been achieved in recent years. Establishing and promoting free global trade is seen by many as the main objective of the WTO. It is the orthodoxy of the time that free trade is the economic policy most economic thinkers believe in, especially because empirical evidence seems to support the argument. Mercantilism, with it's main idea that wealth is finite and should therefore be kept in the country by encouraging exports and stopping imports, has long gone out of fashion. The argument goes that free trade is the way to optimise world output and income levels in the long run. The problem is that it is possible
Discuss the economic effects of a reduction in unemployment
Discuss the economic effects of a reduction in unemployment (18) One of the main government policy objectives is high employment or most of the countries even aim for full employment, which is a term for unemployment at 3%. This is because government acknowledges that employment benefits individuals, government itself and in most cases the whole society, as it can cause a sustainable economic growth and raise people's material standard of living. However, every single country has some degree of unemployment, as it is impossible to avoid, so government uses different policies to reduce as much unemployment as possible. These policies are demand side policy, which is increasing the AD to reduce unemployment and supply side policy which means increasing the AS using different methods and with it increasing the need of the labour. Using these two policies the unemployment will be reduced and the effect of reducing the unemployment is usually beneficial rather than detrimental, but I will discuss both sides in this essay. The most apparent and significant effect of the reduction in unemployment is the gain in output, as more people who are willing and able to work are working and this means that the country will be using the resources more efficiently. This will lead to a higher production in goods and services and increasing the material living standards. We can present this
Current UK economic policies. Government management of the economy is a key political issue and each government sets targets and objectives. These are: stable economic growth, low stable inflation and low unemployment rates.
Government management of the economy is a key political issue and each government sets targets and objectives. These are: stable economic growth, low stable inflation and low unemployment rates. UK government, similarly to all governments around the world, uses different policies to achieve the main objectives listed above. Economic growth can be achieved by using policies in the short and long run. One of the policies that can be used is a monetary policy. In theory, reflationary monetary policy is to reduce interest rates. The lower the interest rates are, the higher economic growth is. What is more, it increases bank lending. People are more likely to borrow money from banks as they feel confident. This is because of the low interest rates and the awareness that they do not have to give back much more than they had lent before. Moreover, reflationary policy lowers value of LSterling because the value of UK currency becomes cheaper in comparison to other currency's. All these factors causes an increase in AD and overall the economic growth. Another short-run policy to increase economic growth to the UK objective level, i.e. 2.25%, is a fiscal policy. A reflationary fiscal policy is used and results in reducing taxes and raising government spending. Reduction in taxes cause that people have more money to consume. As a result they spend more. Government spending increases
Discuss the benefits of economic growth
Discuss the benefits of economic growth Economic growth is simply, in the short run, the rise in real GDP due to rise in aggregate demand: and in the long run an increase in productive capacity (the maximum output that the economy can produce), meaning that the Factors of Production are either more efficiently used or more are discovered or found. Governments tend to try and achieve economic growth as it has many advantages, one of which is higher employment levels, which incidentally should lead to a decrease in unemployment. If more people who are willing and able to work in a country have a job (and therefore earning an income) the GDP of that country will inevitably increase and so if this high employment rate is stable and sustainable, economic growth, in the long run, will occur. Hence, employment figures could be seen as proportional to the GDP of a country. The employed workers are a Factor of Production called the labour force. If there is unemployment, then our Factors of Production are not being used as efficiently as possible and so the point on the Production Possibility Frontier will not be on the frontier itself, indicating that economic growth is not occurring as the productive capacity will not be increasing. However, if low levels of unemployment are sustained consistently, then you are using at least one Factor of Production to its full extent and so the
Discuss the merits of road pricing (25)
Discuss the merits of road pricing (25) 4 L1. Road Pricing - a direct charge for the use of road space Negative externality - these exists where social costs of an activity is greater than the private cost, congestion is an example of a negative externality L2. For example, The London Congestion Charge - a flat rate indirect tax levied on all vehicles entering a designated charging zone between 7 am & 6 pm, Monday-Friday. It was introduced in Feb 2003 at the rate of £5 per day. It was ? to £8 per day in July 2005. In Feb 2007, the charging zone was doubled in size to cover a substantial zone in London. This is an example of hypothecation (a situation where revenue from tax is directly allocated to some other purpose) as most of the new revenue has been used to improve bus services Another example of road pricing is in Singapore you must buy a car permit for 10 years, which costs up to £75,000. L3. Road Pricing is beneficial to an economy as it is a way of internalising the external costs of congestion and makes the polluter pay. The fact that the 'polluter' now has to pay for the negative externalities exerted by the congestion they cause, means that they will be less likely to use their cars as often, to avoid the charge, or use alternative (more economical) means of transport such as the train or tube, or they may simply think twice about using their car if
