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2
• Presentation structure • What is it?
• Industry Global Megatrends • Why it is important
• 5 Megatrends For Unilever • what is comprised of Key
to consider. Player & Competition

Tool Kit
Introduction
introduction

Managerial
Impact & Implementation
GROUP B looking
Forward of the toolkit
• Arena for the future •Implementing the toolkit on
• Managerial implications Unilever ice-cream in Turkey
• End & QA •Turkey Geopolitics analysis
•Toolkit implementation
•Megatrends/PESTER
analysis
GROUP B
 • Greater life expectancy
• Declining birthrates
• Human migration
• Increasing status of woman and
Source: PWC Five Global Shifts Reshaping the World ethic groups.
 Impact

• Energy supply
• Raw materials supply
• Water
• Air emissions
• Market shares
• Shareholders

Source: PWC Five Global Shifts Reshaping the World

Objective
The objective is to create a framework that will help to analyze Unilever
competitive Environment across all countries and products ‘One
Unileverisation’.

Why it is Important?
Implementing the toolkit across all countries, products and business
units will enable Unilever to achieve an understating of Unilever
competitive advantages which will help strategic decision making
process and accordingly and sustain growth at the short and long
terms.
 Arena Map Profit Pool Five/six Forces

Strategic Groups Competitor analysis Key Success Factors

Megatrends/PESTER Scenario Analysis

 On Diagram that answer
- Industries
- Suppliers
Arena Map - Competitor group
- Customer market
- Channels

Profit Pool identifies (What is the level of profitability in an

industry and what determines it?
- The source of profitability
Profit Pool - Value chain steps
- Products/Markets
- Customer Segments
- Distribution channels
Five/Six Forces framework
- Threat of new entrants
Five/Six Forces - Power of buyers
- Power of suppliers
- Threat of substitute
- Existing Competitors
- Complements
 Distinguish Unlevered in their strategic
group by classifying
- Scope (Geographic spectrum, customer Focus,
Strategic Group Product scope).
- Competitive stance (Quality, price, value offering)
- Resource Profile (relative size, vertical integration)
- Outcome of this could be a spider plots, or Value map (Gartner Magic Quadrant

- Define who is your enemy?

Competitor - What is their strategy?
- What is their objectives?
analysis - What assumptions does competitor hold about the industry?
- What is their resource and capabilities?

competitive advantage that enable Unilever to outperform competitor

Key Success - Lock in customer (Full understating of customer needs, strategy…etc.)
- Lock out Competitor (surviving customer
Factors The output of this is the key success factor that answer the above two
questions associated with KPI’s to monitor them
 - Megatrends that has an implications on Unilever
Megatrends/ - Climate change
- Health & wellness
PESTER - Technology Breakthrough
- Shift of global economic
- Demographic and social change
- Managerial impact
The output of this a PESTER analysis

Given the Megatrends and PESTER analysis, a scenario analysis

Scenario –
• when Industry uncertainty is high
Analysis • Competitive uncertainty
• When radically different future are plausible
• Cost surprises has occurred and might occur again
• Geopolitical risks
 Unilever –Ice Cream – Turkey

75M

Source: IHS Country Risk analysis – Economics

 Unilever –Ice Cream – Turkey
Consumer Markets Outlook Emerging Europe / Q4 2016

Source: IHS Country Risk analysis – Economics 18

 Unilever –Ice Cream – Turkey
Chocolate Sugar
Confectionery Confectionery
US$1.39b US$737m

ARENA: REFRESMENTS
Soft Drinks: Ice Cream
US$11.64b US$1.28b

Complements:
Toppings, Waffles, Desserts, Fruits, Cones

Adults
Children
Channels: Customers Suppliers
• Traditional Grocery Customer Markets • Simply the best Competitors • Kalenabel – packaging
Retailers: 53.1% • Frozen Yoghurt • Individualist • Yildiz – 14% firm
• Independent Small • Impulse • Habitual shopper • Has Gida – 4% • Distribution partners
Grocers: 48.7% • Take Home • Shelf Stalker • Gen Mills – 0.3% • Raw materials
• Artisanal • Conformist • Nestle Gida – 0.2%

Support Ecosystem:
Food services, Fast food outlets, restaurants, hotels
 2014 $ Value Market 2019 $ Value Market

Artisanal Artisanal
17% 16%
Impulse Ice
Cream Impulse Ice
38% Cream
40%
The Take-home The Take-
45% home
44%

2014 Million KG Market

38.00
MMKG

100.20
MM KG Impulse Ice Cream -Single Serve
Take-home and Bulk Ice Cream
Artisanal Ice Cream

129.40
MM KG
2014 Population = 77,523,788
Kg / Capita / Year = 3.45 KG !!
 New Entrants

• Unilever – 75.2% share

• High barrier to entry
• Retailers “signed up” to Unilever
• High investments
• Strong brand recognition: Agida
• Low growth in per capita consumption attracting
new entrants

Bargaining Power of Buyers

Bargaining Power of Suppliers Competitors
• Unilever – 75.2% • Main distributors are retailers
• Ice cream market not mature • Yildiz – 14% • Price sensitive
• Yogurt dominates 96% of dairy supply • Has Gida – 4% • High food price inflation
• Gen Mills – 0.3% • Ice cream a seasonal product
• Nestle Gida – 0.2%

SIXTH FORCE Strong

Threat of Substitutes
• Megatrends
• PESTER • High penetration of confectionery Moderate
• Complements • (US$2b)
• Soft drinks
• Low per capita consumption Weak
 Ice Cream and Frozen Desserts
2011 2012 2013 2014 2015 2016
Unilever Group 71.1 71.9 72.6 74 74.8 75.2
Yildiz Holding AS 15.5 15.9 15.7 15 14.4 14.2
Has Gida Sanayii ve Ticaret AS 7.5 5.1 4.6 3.9 3.7 3.6

Artisanal 4.9 4.4 4.3 4.3 4.3 4.3

Others 0.7 0.7 0.7 0.7 0.7 0.7
Private Label 0 1.6 1.7 1.7 1.7 1.5
Nestlé SA 0.1 0.2 0.1 0.2 0.2 -
General Mills Inc 0.2 0.3 0.3 0.3 0.3 0.3
Froneri Ltd - - - - - 0.2

MS %
80

70
Unilever Group
60
Yildiz Holding AS
50 Has Gida Sanayii ve Ticaret AS
Artisanal
40
Others

30 Private Label
Nestlé SA
20
General Mills Inc

10 Froneri Ltd

0
Year
2011 2012 2013 2014 2015 2016
 Unilever Group
(75.2%)
Strategy • High investment
• Create barriers to entry by
“locking in” distributors
• Differentiation and innovation
• New product launches
Objectives • Consolidate market share
• Boost per capita consumption
by promoting off season sales
Assumptions • Ramadan in summer to boost
sales
• Growing young population
who are discerning in their
taste
• Increase in impulse buys
Resources And Capabilities • State of the art manufacturing
plant
• Leader in cold storage
• 200,000 freezers nationwide
Yildiz Holding (14%)
• Compete on impulse ice cream
• Concentrate on distribution via
exclusive deals with
independent small grocers
• Increase market share in
impulse ice cream
• Introduce more fruit flavours
• Strong domestic brand
• Local experience
• Traditional company
• 60,000 freezers nationwide
• Manufacturing plant
Has Gida
(4%)
• Growth outside big cities and
export to Balkan regions
• Increase sales of take-home
products via super and hyper
markets
• Focus on cost
• Strong domestic brand
established in 1984
• Local experienced
• Trusted company
• 40,000 freezers nationwide
• Manufacturing plant
 Increased immigration
(Demographic and social change)

Changing Consumer
Habits

Increase demand for

Demand for “green’
premium products
products

Awareness of impact on environment

Younger population , economically active (Climate Change)
(Urbanisation, Shift in Economic Power) Megatrends

Appetite for diverse

Growing market
products

Awareness of Heath –
smaller portion sizes,
“free from” claims
Technological breathroughs, rise in status
Awareness of health of emerging economies
(Health and Wellness)
 • Spillover from civil war in Syria and security situation in Iraq
• 2.3 million refugees costing the state $6 billion
• Failed military coup in 2016 led to mass purges and strained relations with EU
Political •
•
High-profile terrorist incidents by Islamic State and Kurdish militant groups
Worsening relations with Russia and economic sanctions

• Real GDP is growth 2.9% in 2016

• Real GDP growth expected to reach 4% before the end of the decade
• Credit downgrade in 2016 and high food costs
• Expected inflation of 8.0% in 2016
Economic • Private consumption expected to grow by 2.2% in 2016
• Unemployment to reach 10.6% in 2016
• Minimum wage raised by 30% in 2016 which may result in increased spending
and consumption

• The population reached 77.8 million in 2015 and is expected to reach 88.1 million in
2030
• Turkey will be the youngest country in Western Europe with a median age of 35.8
Social years
• Urban population should increase by 22.7% to total 68.5 million by 2030
• Higher education rate was significantly lower than the Western European average
• Shortage of skilled workers
• From 2010 to 2015, the economically active population rose by 20.6%
 2010 2011 2012 2013 2014 2015

Urban Population (millions) 50.5 51.6 52.6 53.7 54.8 55.8

Urban Population (%) 69.6 70.1 70.5 71 71.5 71.9

Adult Literacy (%) 92.7 94.1 94.9 95.3 95.2 95.0
 • Enhancement of e-government services
• Rising uptake of smartphones and increasing private investment in the fixed
Technological broadband space have made access to the internet easier
• Expenditure on R&D as a percentage of GDP for 2015 was 1.0%
• Incentives exist for firms investing in R&D, such as a 100% deduction

• Turkey’s Aegean and Mediterranean coasts enjoy hot, dry summers and cool, rainy
winters.
• The diversity in the country’s geography means that the climate is equally diverse.
• In major cities, the biggest concerns are air pollution caused by traffic and burning
Environment fuel and water pollution caused by industrial waste.
• Regulations issued permitting mining operations to start without waiting for
environmental impact analysis

• 2016 Index of Economic Freedom ranking was in the bottom three regionally
• Equal treatment is given to all foreign investors to attract FDI
• Foreigners face no restrictions on investment except for minor restrictions in the
real estate sector
• Tax incentives offered related to value-added tax, custom duties and R&D
Regulatory • From 2015 to 2016, low tourism-related spending and sanctions by Russia have led
to decreased money in the economy and hence tougher access to credit
• In May 2016, the benchmark interest rate was cut from 10.0% to 9.5% to facilitate
access to credit
 Premium brands
• Short term strain
• Turkey sovereign rating downgrade
• Increased inflation
• Decreased disposable income
• Turkey Freezer market sales increased
190% in a decade - $ 2.2 B /Year
Distribution Channels
• Urban population to increase by
22.7% by 2030
• Increase in supermarkets and
hypermarkets
• Infrastructure spend in cities
• USLP to reach base of Turkey
pyramid

Uncertainty in Business Legislative Changes

• Increased terrorism threat
• Increased immigration
• Security risks
• Increased tax incentives for R&D and
FDI
• Labour protection
• Increased protectionist policies