Agenda Group B7 Introduction History of Beiersdorf Beiersdorf today Strategic Analysis Conclusions Recommendations & Implications History BDF today Strategic

Agenda Group B7 Introduction History of

Beiersdorf Beiersdorf today Strategic Analysis Conclusions Recommendations

& Implications

History BDF today

Strategic Analysis

Summary Recommen-dations

Agenda

The History of BDF 1/2

AgendaBDFtoday

Strategic Analysis


1910’s1930’s1880’s 1890’s 1910’s1900’s 1920’s

History

The History of BDF 2/2

Agenda Summary Recommen-dations

BDF today

1940’s 1950’s 1970’s1960’s 1980’s 1990’s

History Strategic Analysis

BDF Today 1/2

HistoryAgenda Recommen-dations

Strategic Analysis

More than 18.000 employees worldwide in …

3 main activities

Cosmed Medical Tesa

68% of sales

16% of sales

16% of sales

SummaryBDFtoday

BDF Today 2/2

Most renowned companies in Germany 2002 2003 Name 1 1 DaimlerChrysler 2 2 BMW 3 3 Porsche 5 4 Siemens 6 5 Volkswagen 0 6 Puma 4 7 SAP 0 8 Bayer 0 8 Beiersdorf 9 10 Deutsche Bank Source: Financial Times

HistoryAgenda Strategic Analysis

Summary

• HQ still in Hamburg, Germany• subsidiaries in more than 120 countries• 75% of sales in Western Europe• 15% of sales in America• 10% of sales “Rest of the World”

BDFtoday

Recommen-dations

75%

15%

Porter’s 5 Forces Cosmetics Industry

HistoryAgenda Summary Recommen-dations

BDF today

Threats of Substitutes

Bargaining Power of Suppliers

Barriers to Entry

Bargaining Power of Buyers

Rivalry

StrategicAnalysis



BDF today



Barriers to Entry

Bargaining Power of Buyers

Rivalry

StrategicAnalysis



BDF today


• Low demand of “organic” and natural products

StrategicAnalysis



BDF today

Bargaining Power of Buyers• Supermarkets poor performance in skin care vs other mass marketers

• Implementation of EDI solutions

• Recently possibility of e-Commerce and mass customization turning power to consumers – doubts for future

• e-CRM

StrategicAnalysis



BDF today

Barriers to Entry• Large investments in brand building and R&D

• However , threat of entrance ofDermatologists / private brandsSMEs products in a niche target

• Government restrictions

StrategicAnalysis



BDF today


• Manufacturers pressure for high quality and low cost

• Integration

• e-Procurement

• Increasingly attractive supply alternative to SMEs

StrategicAnalysis



BDF today

Rivalry• Industry concentration ratio C4 ~ 35%

• Main competitors tend to concentrate the Industry through acquisitions

• SMEs proliferation targeting to niche markets

• Private brands increasing importance during recessions

StrategicAnalysis

Value Chain

HistoryAgenda BDF today


ProducingSourcing PackingHandling & Delivering

Procurement, Technology Development, Human Resource, Firm Infrastructure

Servicing

Operation OutboundLogistics

InboundLogistics

Market &Sales Services

Greatest impact on reliability

Greatest influence through brands

Primary Value Chain Activities

Support Activities

StrategicAnalysis

Value Chain (Primary Value Chain Activities)

In-Out bound logisticsIn-Out bound logistics1.1. internal and external integrationinternal and external integration

2.2. standardized internal procedures standardized internal procedures



OperationsOperations

1.1. the automated batch plant the automated batch plant

2.2. the standardized factory control systemthe standardized factory control system

Marketing and SalesMarketing and Sales1.1. the demand of the local market the demand of the local market

2.2. core international and regional brandcore international and regional brand

StrategicAnalysis



Value Chain (Support Activities)

ProcurementProcurement1.1. a company-wide uniform product supplya company-wide uniform product supply

Technology DevelopmentTechnology Development1.1. integrated system by using standardized integrated system by using standardized

processes across Europe processes across Europe

Human Resources ManagementHuman Resources Management1.1. a certain degree of autonomy a certain degree of autonomy

StrategicAnalysis

SWOT Analysis

Fundamental risk management policy

Policy of strong brands Truly international business

with strong growth strategy

HistoryAgendaStrategicAnalysis


BDF today

Growth rates „Babies“ & „Men“ Expansion in emerging markets Ageing of baby-boom generation

Geopolitical situation has negative effect on world economies

Private label products Minimal growth in main market

Marginal presence in N-America Business heavily focussed

around Western Europe Success primarly based on

NIVEA

Weaknesses

Threats

Strengths

Opportunities

4+2 Formula for Success



BDF today

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InnovationM&A




BDF today

Strategy R&D as basis for Innovation + organic growthR&D as basis for Innovation + organic growth Growth in 3 dimensions: new product categories, Growth in 3 dimensions: new product categories,

new countries and market share growthnew countries and market share growth Umbrella brand + leverage potential synergiesUmbrella brand + leverage potential synergies „„Think global, act local“ strategyThink global, act local“ strategy

Structure SCM: e-procurement, production, logisticsSCM: e-procurement, production, logistics Multinational to Transnational structureMultinational to Transnational structure Balance between centralized strategy Balance between centralized strategy

and decentralized entrepreneurshipand decentralized entrepreneurshipS

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BDF today

Culture „„Success has many faces. Over 18,000 in Success has many faces. Over 18,000 in

fact.“fact.“ Fixed salary + variable performance + bonusFixed salary + variable performance + bonus European Dialogue = EWCEuropean Dialogue = EWC

Execution Tools: e-procurement, mySAP PLM,...Tools: e-procurement, mySAP PLM,... Cincinatti: America´s best plantCincinatti: America´s best plant Profitability below average ?Profitability below average ?

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BDF today

Innovation 1998,Visage Q10: Sales +85%, market up1998,Visage Q10: Sales +85%, market up ElastoplastElastoplast Spray Bandage + Elastoplast Spray Bandage + Elastoplast

SilverHealing™ SilverHealing™ tesa Holospot®: store info in tapetesa Holospot®: store info in tape

Mergers & Acquisitions Several acquisitions since 1990Several acquisitions since 1990 Enlarge geographical scopeEnlarge geographical scope CEO R. Kunisch: CEO R. Kunisch:

„...focus on organic growth..“„...focus on organic growth..“

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InnovationM&A




BDF today

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InnovationM&A

Summary: Beiersdorf AG

Historically consistent strategyHistorically consistent strategy Porter´s 5 forces: Porter´s 5 forces: Industry RivalryIndustry Rivalry Porter´s Value Chain: Porter´s Value Chain: Marketing & Marketing &

SalesSales SWOT: SWOT: Risk Management Risk Management

„Babies“+“Men“„Babies“+“Men“ 4+2: 4+2: Innovation Strength Innovation Strength

BrandingBranding

-- poor profitability (< poor profitability (< average)average)


BDF today

Strategic Analysis

Recommendations + Implications

Improve profitability better cost position „Think global, act local“ transnational structure „bottom of the pyramid“ low price, low volume unit „fight brand“ strategy fewer private brands Investment in SME trade up existing brands Use network of affiliates widespread e-Commerce Focus on emerging markets larger growth and less

+ US dependency on W-Europe

HistoryAgendaRecommen-

dationsBDF today

Strategic Analysis

Summary

Questions

HistoryAgendaRecommen-

dationsBDF today

Strategic Analysis

Summary

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Documents

Agenda Group B7 Introduction History of Beiersdorf Beiersdorf today Strategic Analysis Conclusions Recommendations & Implications History BDF today Strategic