Mau Kemana Unilever Indonesia?

Summary

The video discusses the dramatic decline in Unilever Indonesia's profits, which dropped by 60% over six years, mainly due to increased competition from local brands like Wings and Wardah, and the impact of a boycott. The speaker highlights the inefficiency caused by Unilever's bureaucracy, with decision-making processes hindered by headquarters' strict regulations. The proposed solution is to give Unilever Indonesia more autonomy to foster innovation and compete effectively. The speaker urges for radical changes, stressing that unleashing creativity and flexibility could help the company recover and thrive.

Takeaways

• 😀 Unilever Indonesia's profits have dropped by 60% over the last 6 years, from IDR 9 trillion in 2018 to IDR 3.3 trillion in 2024, highlighting a significant decline in performance.
• 😀 Despite a strong peak in profits in 2018, Unilever's profits in 2024 are at the same level as 2010, showing stagnation over 14 years.
• 😀 The sharp drop in profits is mirrored by a 30% decline in sales over the past 5 years, driven largely by increased competition from local brands.
• 😀 Local competitors like Wings and Wardah have gained market share due to offering similar quality products at lower prices, attracting consumers away from Unilever.
• 😀 Microbrands, especially those using social media marketing, have also cut into Unilever’s market share, leading to stagnant sales and profits.
• 😀 Unilever’s stock price has also dropped by 80% in the last 5 years, causing significant losses for investors who purchased shares during that time.
• 😀 The main cause of Unilever's struggles is their inability to compete effectively with local brands, as their products are seen as too expensive for the quality offered.
• 😀 A secondary factor contributing to Unilever’s poor performance is the impact of a late boycott against their products, which further damaged their sales.
• 😀 To recover, Unilever Indonesia needs to restructure its decision-making processes, giving more autonomy to local teams and reducing bureaucratic delays caused by corporate headquarters in Europe.
• 😀 Granting Unilever Indonesia the freedom to innovate and make quicker decisions without waiting for approval from Europe or Singapore would help them respond more effectively to local market conditions and compete better with local brands like Wings and Wardah.

Q & A

What caused Unilever Indonesia's profits to drop by 60% in the last six years?

The 60% drop in Unilever Indonesia's profits was primarily due to stagnating sales, increased competition from local brands like Wings and Wardah, and a failure to adapt to market changes. The company faced intense competition from these domestic brands, which offered products at lower prices while maintaining quality.

How have local competitors impacted Unilever Indonesia's market position?

Local competitors, such as Wings and Wardah, have strengthened their positions by offering high-quality products at more affordable prices. As a result, many consumers, especially in Indonesia, have shifted their preference to these local brands, leading to a loss in market share for Unilever.

What role did the consumer boycott play in Unilever Indonesia's struggles?

The boycott against Unilever Indonesia had a delayed but significant impact on the company's sales. Many consumers believed the company's products were suitable for a boycott, which further exacerbated the sales decline.

Why is Unilever Indonesia's decision-making process slow?

Unilever Indonesia's decision-making process is slow due to its bureaucratic structure. The company is heavily influenced by its headquarters in Europe, requiring approvals and processes that are lengthy and hinder timely actions. Every major decision needs to pass through multiple layers of approval.

What are the consequences of Unilever Indonesia's bureaucratic challenges?

The bureaucratic challenges result in slow response times to market changes, preventing Unilever Indonesia from making quick and radical decisions. This lack of agility has made it difficult for the company to innovate and respond to local market trends effectively.

What is the proposed solution to help Unilever Indonesia recover and grow?

The proposed solution is for Unilever Indonesia to be granted more autonomy in decision-making. By being able to make faster, more innovative decisions without the need for approval from headquarters in Europe, Unilever could compete more effectively with local brands and adapt to the market.

How could Unilever Indonesia improve its competitive position against local brands?

Unilever Indonesia could improve its competitive position by embracing radical innovations, offering products at more competitive prices, and streamlining its operations to reduce bureaucracy. This would allow them to respond faster to consumer needs and trends in the local market.

What lessons can be learned from Unilever Indonesia's struggles?

One key lesson is that companies need to balance innovation and agility with the ability to adapt to local market conditions. A centralized, bureaucratic structure can limit responsiveness and creativity, ultimately hindering a company's success in fast-moving markets.

How important is autonomy for Unilever Indonesia's recovery?

Autonomy is crucial for Unilever Indonesia’s recovery. By having the freedom to make decisions locally, the company can implement innovative strategies and quickly respond to market demands without waiting for approval from its European headquarters.

What historical examples are mentioned to highlight the dangers of bureaucracy in companies?

The speaker references the downfall of Nokia and Kodak, noting that both companies faced similar issues due to internal bureaucracy. Nokia's slow decision-making processes and Kodak's failure to capitalize on digital photography innovations contributed to their decline.