UNILEVER TEA (A): REVITALIZING LIPTON’S SUPPLY CHAIN Harvard Case Studies
Overview
Lipton is one of the leading brands of tea across the globe and it was one of the best brands owned by Pepsi and Unilever while having a wide range of profitable marketplace as compared to other companies. The main leading segments of Lipton include leaf and ready-to-drink tea while having a three times greater market share as compared to other companies. However, Unilever was also included in the leading companies of tea in 2007 and has a vertically integrated value chain. The company purchased over 12 percent of the World’s total black tea production and the company successfully achieved a strong and profitable marketplace in both national as well as international markets. However, Unilever is currently the largest tea maker across the globe while having brands that include PG, Brook Bond, and Lipton.
The tea market is one of the most efficient markets in the world and according to several types of research and analysis, it is shown that around 2 billion people are the consumer each day however tea industry produces over 3 billion tea across the globe which indicates that tea has a strong market however the demand of tea is raising per year. The most critical node of the value chain of the tea industry is the location of tea factories closed to the tea plantation however the aim of close to the plantation area is to start initial processes of tea production within 3 to 5 hours of leaves picking. Due to the small number of brokers and substantial variations in demand, quality, and quantity access to information is limited in the market which has various impacts on the supply chain of the industry. So, the sustainable market is very essential for companies to generate the targeted revenue However, Lipton decided to develop the sustainable tea approach. Furthermore, Lipton must take pilot project approaches instead of traditional approaches which enable the company to achieve a sustainable market and strength the marketplace as well as the efficient market position in the industry as compared to the other companies.
Although the tea industry has much more efficient to build a wide and profitable market pace due to certain critical issues the industry shows various instability which affects various companies. In 2005, Lipton was initially facing various critical complications in the market due to which the growth and market of the brand started to reduce however at the same time Liernes, joined the band and started working on revitalizing the brand by using a proprietary planning tool (developed by Unilever, 2005). Through proprietary planning tools and brand innovation, the brand successfully step into the successful and most efficient market place which regulated the marketplace and generate a wide range of customers market across the globe. However via developing various assessment groups of supply managers and executives Lipton successfully regulated its market and supply chain design the integrated brand strategy that helped the company to create a sustainable as well as profitable supply chain. Furthermore, Unilever had a strong marketplace as well as it successfully built a strong track record through market research as well as by constellation with key stakeholders by joining various platforms which include Marine Stewardship Council (MSC) and Sustainable Agriculture Initiative (SAI).
Lipton tea a brand of Unilever successfully managed the initial stages of brand revitalization via tea sourcing through a certification partnership with Rainforest Alliance. Although it was one of the most successful journeys for Unilever to resolve various complications regarding brand revitalization however Unilever’s Lipton tea faced critical challenges in the supply chain and the regulation of the sustainable market in the developing markets across the globe. These issues are would be very critical for the company if the company could not regulate these complications would raise customer volatility that would affect the market growth (Ralf W. Seifert, 2011).
Approaches
Various significant approaches play a vital role in the regulation of the supply chain complications as well as the repositioning of a high-value brand as sustainable. Although there were various approaches that the team of Lipton brand took regarding sustainable tea which was one of the successful approaches to achieving a profitable market by improving the quality of tea. The conversion of the whole brand into certified sustainable tea would have a positive impact on the company. Most customers prefer products that have better sustainability while having the least side effects. The certified tea suitability enhances the quality of tea which help the company to achieve the most profitable customers that enable the company to achieve its target objectives.
Rainforest Alliance Certification approach
The Rainforest Alliance and sustainable certification are the most effective and prominent approaches that regulate the market as well as the supply chain of the company however Rainforest Alliance certification approach is the most successful approach that can retain the customers as well as attract other customers. Furthermore, the certification increase the customer's loyalty towards the company as most of the customers prefer to consume products that are environmentally sustainable as well as environmentally friendly which prevents the market from various complications regarding reduction in sales and loyalty issues.
Technological approaches
Technological approaches are the most influential approaches that enable the company to enhance the supply chain via the development of a productive network. The technological approaches include the development of cloud computing that would significantly improve the supply chain and it would monitor the supply chain activities of the company. Through technological approaches, Lipton company can enhance the supply of products as well as it would maintain the quality of the product as compared to the traditional approaches which mostly consist of manually processing that lead to an increase in the cost of products. However, the technological approaches help the company to build direct communication with their customers that enable the company to ensure the preference of their customers.
Relational approaches
The communication or relational approaches are the most significant and essential tactics that enable the company to manage its performance of the company. As Lipton is facing issues regarding supply chain and as per research analysis the company facing reduced in the sales of black tea consistently which could cause various complications that resist Lipton to achieve their targeted goals. So, to solve these issues a company needs to set up relational approaches that enable the supply chain to develop a sustainable market. By rational approaches, Lipton could build up a strong and unbroken communication with their suppliers and consumers that would enhance the supply of their products across the globe. A strong relationship of communication with suppliers which include growers would ensure the supply of products which would be able to maintain the quality as well as the quantity of the products as well.
Analytical Approaches
The most important approach for supply chain management is the analytical approach which is essential for every company that helps in the prediction of the market as well as indicates where would market is suitable for the company. Lipton has a wide range of markets as well as a brand legacy but the company could not successfully find out the major effective area that resists the company to develop a profitable market. So the company must upgrade the analytical procedures regarding marketing, supply chain as well as sustainability....
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