The new structure is intended to improve regional focus and create more flexibility by separating corporate strategic leadership from operational execution.
Gone is Unilever's three-man chief executive body, known as the Special Committee, and the product-coordination structure that many considered cumbersome. In its place: a seven-man Executive Committee to provide strategic leadership and insure that corporate strengths in technology, brands, human resources and finance are exploited.
The Executive Committee, effective Sept. 1, will include Unilever NV Chairman Morris Tabaksblat; incoming Unilever PLC Chairman Niall Fitzgerald, who authored the restructuring; plus food, home and personal care directors, a financial and a personnel director.
14 BUSINESS GROUPS
The second shoe will drop next January when 14 business groups will be set up, combining a category and regional focus; each will have its own president.
"The changes reflect the need to create operating structures which will be suitable for a business environment in which the balance of economic opportunity between different parts of the world is shifting rapidly," said outgoing Unilever PLC Chairman Sir Michael Perry.
In its wake, Unilever is expected to pick up the pace of strategic acquisitions. The marketer is buying Helene Curtis Industries and is said to be interested in Clorox Co. and parts of Dial Corp. as well as Quaker Oats Co.'s Celeste pizza (see story on Page 35).
SOME BRANDS MAY BE SOLD
Industry analysts and consultants also expect Unilever to take a close look at either discontinuing or selling second-tier brands and/or brands that are not a good strategic fit, such as European cosmetics maker Rimmel-Chicogo, sold last week to Joh. A Benckiser GmbH.
"The question is, with their placing so much emphasis on personal care in North America, what happens to household," said one consultant close to Unilever.
Unilever's past structure is often cited as one reason the company has lost ground to P&G in some key categories despite its much larger size-$55 billion in annual sales vs. $33 billion for P&G.
"They have been one of the larger unfocused companies," said PaineWebber analyst Andrew Shore. "It's time they recognized size as one of their strengths, especially against P&G."
AGENCY REALIGNMENT POSSIBLE
With more clearly focused category alignment, agency realignment could follow in certain categories, some observers believe, though a Unilever spokesman said no decision has been made on that.
A decision on the Ragu Foods account, in review for some time now, is expected in two weeks. Incumbent J. Walter Thompson USA, Ammirati Puris Lintas and Ogilvy & Mather, all New York, are competing.
McCann-Erickson is Unilever's other core worldwide agency. Unilever spends $5.6 billion on advertising annually.