Assignment Cover Sheet

Student name: Florian Eutert

Student number: 2900555

Faculty: BUSINESS

Course: BAMO STAGE 3

Subject: Operations & Project Management

Study Mode: Full time X Part-time

Lecturer Name: Martin Murphy

Assignment Title: Mission and Strategy of STILL GmbH

No. of pages: 11

Disk included? Yes No x

Additional Information:

(ie. number of pieces submitted, size of assignment, A2, A3 etc)

Date due: 26/11/2015

Date submitted: 25/11/2015

Plagiarism disclaimer:

I understand that plagiarism is a serious offence and have read and understood the college policy on plagiarism. I also understand that I may receive a mark of zero if I have not identified and properly attributed sources which have been used, referred to, or have in any way influenced the preparation of this assignment, or if I have knowingly allowed others to plagiarise my work in this way.

I hereby certify that this assignment is my own work; based on my personal study and/or research, and that I have acknowledged all material and sources used in its preparation. I also certify that the assignment has not previously been submitted for assessment and that I have not copied in part or whole or otherwise plagiarised the work of anyone else, including other students.

Signed & dated: 25/11/2015

Please note: Students MUST retain a hard / soft copy of ALL assignments as well

as a receipt issued and signed by a member of Faculty as proof of submission.

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Table of contents Introduction ................................................................................................................................ 3

Mission and Strategy .................................................................................................................. 4

A worldwide mission ................................................................................................................. 4

The company’s strategy ......................................................................................................... 5

Improving the product range .................................................................................................. 6

Supporting Marketing and Sales ............................................................................................ 7

Operations strategy ..................................................................................................................... 8

STILL as an international company ....................................................................................... 8

Business objectives ................................................................................................................ 9

Conclusion .................................................................................................................................. 9

References ................................................................................................................................ 11

Index of tables

Figure 1 Intralogistics concept (STILL company presentation, 2014) ...................................... 4

Figure 2 Market of forklift trucks (Still-zero-emission.de, 2015) .............................................. 5

Figure 3 Comparison of TCO in the market (Still-zero-emission.de, 2015) .............................. 6

Figure 4 Accerleration with "Blue-Q" (STILL company presentation, 2015) ........................... 7

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Introduction

Mission is defined as a statement that states a long-time goal of company. Brown, Bessant and

Lamming (2005, p. 15) defined mission as a goal which should not only provide the company’s

strategy for the following years, but should also provide all stakeholders with a clear picture of

the company’s products and services. They call it a “service concept”. To reach this goal, they

name three points the service concept has to provide information about. The first one is the

operation, which should show how the product or the service will be delivered. The second one

is the experience, which is the adventure the customer has while using the product or the service.

And the last point is the outcome, which means the result that the customer will receive at the

end.

To reach this mission and the service concept, the company has to provide a strategy. Strategy

could be defined as “[…] the total pattern of the decisions and actions that influence the long-

term direction of the business.” (Slack, Chambers and Johnston, 2007, p. 63) It is also very

important that the strategy always follows the mission. To ensure that, the management should

from time to time verify whether strategy and mission still fit together. Chase, Jacobs and

Aquilano (2004, p. 24) developed three main components of operating the strategy: “[…]

operations effectiveness, customer management, and product innovation.”

Regarding to these theoretic definitions of mission and strategy, this assignment will identify

and asses the strategy of a multinational company. In following there will be an introduction

into the company and its product and service range. Afterwards there will be an explanation

and evaluation of the mission and strategy. The company that was chosen, is the STILL GmbH.

The STILL GmbH is one of the leading companies in the market of intralogistics and forklift

trucks. Founded in 1920 by Hans Still, they today employ over 6000 people just in Europe.

Their headquarters is in a business-centre in Hamburg. This is the location of the management,

the marketing and the sales department, but also the production side and the service department.

STILL is selling its products all over the world. STILL is part of the KION group, which is

largest Provider of intralogistics products in Europe and the second largest in the world, behind

Toyota. (MODERN special report, 2015)

In the past four years, STILL was continuously growing. They improved their turnover from

approximately € 1.7bn in 2013 up to nearly € 1.9bn in 2014. With the growing turnover, the

number of employees also increased. In 2014 they employed approximately 8000 people

worldwide. (Still.de, 2014) (Still company presentation, 2014)

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Mission and Strategy

The company’s slogan is “first in intralogistics”. “Intralogistics concept is defined as a

combination of organization, controlling, execution, and optimization of the in-house material

and information flow […].” (Azevedo 2013, p. 232) STILL wants to become the world’s largest

company not only for forklift trucks, but also for intralogistics. In the company’s view this

means to offer a complete concept of forklift trucks, warehouse- and storage-systems, and the

suitable software, client-consulting and service. They have a huge range of different products

and services. The following figure shows, how they divide their product range into the four

topics transport, systems, service and finance:

Figure 1 Intralogistics concept (STILL company presentation, 2014)

A worldwide mission

In addition to their slogan, STILL also has a global mission, which highly presented in all

marketing channels. The “Mission – Zero Emission” is the company’s step towards more

environmental responsible future. Regarding to their marketing, their mission is to sell more

electric forklift trucks and while doing so, to reduce their environmental footprint. The market

of forklift trucks is like the market for cars influenced by the changed thinking about

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combustion engines. Electric engine and hydrogen engines are getting more and more

important.

Since 2009 in Western Europe the number of sold electric forklift trucks is higher than the

number of diesel and LPG trucks. The following figure shows how many forklift trucks were

sold in Western and Eastern Europe from 2004 until 2013:

Figure 2 Market of forklift trucks (Still-zero-emission.de, 2015)

Electric forklift trucks already have been demanded for a long time. The use of forklift trucks

with combustion engines is highly unrecommendable or even prohibited in closed storehouses.

But the idea of STILL’s mission is not only to sell more electric forklift trucks in general, but

to force the customer’s social responsibility and to order electric forklift trucks as well for the

outside use.

The company’s strategy

To come back to the earlier definitions of strategy and mission, it could be said that the “Mission

– Zero Emission” is not a mission as it is defined above. The mission standing behind this

marketing statement is to become the world’s largest provider for electric forklift trucks. That

is the long-time goal the company wants to reach. To reach this goal they initiated the strategy

to appeal on the customer’s social and environmental awareness. (Klug and Tipke, 2014)

This mission is one part of STILL’s plan to become the world’s largest provider for

intralogistics solutions. But the slogan “first in intralogistics” not directly stats that STILL want

to become global market leader. They more want to become the customer’s first choice for a

request of new forklift trucks. They do not initiate that they want the most customers and highest

turnover. They want to increase their brand awareness. (Still.de, n.d.)

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But the best known brand is not good enough if the products cannot honour the pledge. To

provide this, STILL also developed a number of innovations regarding engines and electric

system to be able to sell a high quality product. They place their selves in the market as one of

the quality leader. This also causes the problem of higher prices than some competitors. And in

the market for forklift trucks the price is a very susceptible, because for a lot of the purchasing

agents is the price the most important. The following figure shows the total cost of ownership

(TCO) of a diesel and an electric forklift truck from STILL and the best competitor:

Figure 3 Comparison of TCO in the market (Still-zero-emission.de, 2015)

It could be seen that both forklift trucks from STILL after two are cheaper than the best

competitor regarding to the total cost of ownership.

Improving the product range

STILL is producing forklift trucks with combustion, gas and electric engines. To support its

mission, STILL dos not just want to increase the number of electric forklift trucks but they also

developed a number of environmentally sound products.

They developed improved engines for their diesel forklift trucks. They introduced new Diesel-

Hybrid-Engines that save, depending on the model, up to 17% of its fuel compared to an older

engine. But the biggest advantage compared to older engines is the decreased amount of

emissions (CO2, HC and NO2). The new diesel-hybrid engines eject up to 97% less emissions.

In addition they save the power which is released while braking and reuse it for the next

approach. This also saves all in all a lot of energy. (STILL company presentation, 2015)

To solve the problem of the battery life, STILL introduced a system to their electric forklift

trucks that allows to easily change the battery from one side with a hand lift truck. The problem

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was that the batteries only last one working shift and a high number of clients work in two or

three working shifts. (STILL company presentation, 2015)

Another innovation they introduced is the “Blue-Q”-Button. This button can be ordered by the

clients, but it is not integrated by default. This button leads the engine to accelerate a little bit

more slowly in the upper speed sector. This saves energy and leads to batteries lasting longer.

Figure 4 Accerleration with "Blue-Q" (STILL company presentation, 2015)

Supporting Marketing and Sales

The mission is highly represented in all marketing channels. The company is mainly using

events, trade fairs, the website and social media channels for their marketing. In all these

channels the “Mission – Zero Emission” is been presented and solicited. They introduced an

own internet website only for this topic. On this website all information about the mission and

its components is provided. It is possible to read a lot about all the developments and the savings

and advantages they have. They also present certificates and case studies about clients using

electric forklifts. The whole website as well as the mission tries to appeal on the prospect’s

environmental and social sense of responsibility. (Still-zero-emission.de, n.d.)

The company is also very active in social media. A lot of national subsidiaries in different

countries use own facebook pages and youtube channels. They use it to improve their networks

and their scope. They introduce new products and services and upload videos from product

introductions, events and trade fairs. (Still International, 2013)

The main marketing and sales channel is the personal contact. STILL is well known for its very

curious events. If they launch a new product or present their products on a trade fair, they always

do in a kind of musical with actors, singers and their products and they also try to involve the

people. These events and shows are in some kind evocative to American product launches. They

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try to impress the prospects and to enlarge their brand as the first brand in the market of

intralogistics solutions. (Still International, 2013)

This concept works worldwide. STILL has 21 international branches, 277 dealers and more

than 2,200 service centres. They launch and sell their products all over the world. The main

website has an own layout for all 21 subsidiaries and the website for the “Mission – Zero

Emission” is available in 12 languages. (Still.de and Still-zero-emission.de, n.d.) In addition to

Hamburg, STILL has four other production sides in Geisa and Reutlingen (GER), Luzarra

(ITA) and Sao Paolo (BRA). With a look at the subsidiaries, it is getting clear where STILL its

main market has. Europe, Russia and Brazil are the main market for STILL. In all other

countries they only have dealers and service centres and no production sides. (Still company

presentation, 2014)

Operations strategy

The operations strategy can be divided into four different strategies: global, transnational,

international and multidomestic. The international strategy is defined by its local

responsiveness and the export of the products from the home country. It works with licensing

and small change in existing operations. The multidomestic strategy is defined by its

international use of the domestic organisation’s model. These strategy is normally driven with

local franchises, subsidiaries or joint ventures. The global strategy is defined by its high

centralization and standardization. In this strategy it is using economies of scale to improve

internationally. The transnational strategy is defined by its professionality and organisation.

Companies with this strategy can use all operations strategies such as differentiation, low cost

and response in their global market. They are often market leaders. (Heizer and Render, 2004,

pp. 44-46)

STILL as an international company

STILL was founded in Hamburg and their headquarters is still there. They began national and

grew up with the time in a continuous way. With their headquarters in Hamburg, one of the

biggest cities in Germany, they had a noble basement. Germany is one of the leading countries

for developing, engineering and exporting. Hamburg is also a good basement to ship the goods

globally.

They explored new markets in different countries all over the world. The strategy is always the

same: STILL starts with contracts partners and local dealers. If the turnover is growing, they

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build up own to a service centre, subsidiaries and hire local sales representatives. Brazil may

be the best example of a growing market. While the economy is growing fast in Brazil the

Brazilian turnover of STILL is also increasing. So they decided to build up another production

side in Sao Paolo to reduce the costs of shipping and to have better local responsiveness. (Klug

and Tipke, 2014)

Regarding to the four defined operation strategies and STILL’s strategy, STILL could be

defined as a company with an international operations strategy. Although they also have some

characteristics of a multidomestic company, the key strategy is produce locally to achieve high

quality and support this with local subsidiaries and dealers to provide high local responsiveness.

Business objectives

Regarding to their strategy and to measure its effectiveness, STILL could use a number of

business objectives. In figures, the Kion Group earns 73.9% of its turnover outside of Germany.

The turnover of electric forklift trucks increased about 13.3% regarding to the previous year.

The exact turnover of STILL and its segments is not published. (KION Group, 2015) Other

business ratios are the number of sold electric forklift trucks, the yearly turnover with electric

forklift trucks or the market value of STILL compared to whole market of electric forklift

trucks. These could be used to define the business objectives.

Even more difficult to measure is the mission of being the customer’s first choice in

intralogistics. Typical business ratios are the customer’s satisfaction, the number of negotiated

leads or the number of recurrent customers. A possible business objective could be that STILL

wants 80% of recurrent customers or 90% of customer satisfaction.

Conclusion

To summarize it, the mission of a company is a long-term goal that should be defined with

using a clear business objective. The strategy supported by the clearly defined goals and the

needed projects are building the basement for a successful achievement of the objectives and

thereby the strategy.

According to STILL GmbH, there should be pointed out that they have to mission. The

“Mission: Zero Emission” which could be mainly interpreted as the mission to become the

world’s largest provider of electric forklift trucks. This is also one of the main strategies to

achieve their main mission: to become the customer’s first choice for intralogistics solutions

worldwide.

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The medium-term goal could be defined with the business objective to become the company

with the world’s largest turnover in the market of electric forklift trucks. The strategy is to set

a huge marketing campaign and to appeal on the customer’s social and environmental

responsibility. An example of a project could be the curious show for the market launch of two

new forklift trucks. (STILL International, 2013)

If they reach this mission, they also reached one goal in the long-term mission of STILL and

the Kion Group. This could be defined with a business objective like to measure up with the

market leader’s EBIT (earnings before interest and taxes) until 2020. The strategy is to first

improve in the market of electric forklift trucks and thereby to increase their global image with

this mission.

To sum it up, it could be said that the mission, to become the world largest provider of electric

fork lift trucks could also just be seen as a strategy of the mission to become the customer’s

first choice for intralogistics solutions worldwide.

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References

Azevedo, A., 2013. Advances in sustainable and competitive manufacturing systems. Cham:

Springer.

Brown, S., Bessant, J. and Lamming, R., 2005. Strategic operations management. Oxford:

Butterworth-Heinemann.

Chase, R., Aquilano, N. and Jacobs, F., 2004. Operations management for competitive

advantage. Boston, Mass.: McGraw-Hill/Irwin.

Kion Group, 2015. KION GROUP AG Annual Report 2014 - STILL segment. [online]

Reports.kiongroup.com. Available from:

http://reports.kiongroup.com/2014/ar/management-report/financial-position-and-

financial-performance/business-situation-and-financial-performance/still-segment.html

[Accessed 22 Nov. 2015].

Klug, M. and Tipke, J., 2014. Still marketing seminar. Still GmbH: Hamburg.

MODERN special report, 2015. 2015 top 20 lift truck suppliers. [online] Modern special

report. Available from:

http://www.supplychain247.com/images/pdfs/2015_top_20_lift_truck_suppliers_fullscre

en.pdf [Accessed 18 Nov. 2015].

Render, B. and Heizer, J., 2004. Principles of operations management. Upper Saddle River,

N.J.: Pearson/Prentice Hall.

Slack, N., Chambers, S. and Johnston, R., 2007. Operations management. 5th ed. New York:

Prentice Hall/Financial Times.

Still International, 2013. Launches the forklift trucks RX 70-40/50 and RX 70-60/80. [video]

Available from: https://www.youtube.com/watch?v=m73ad7UZTAM [Accessed 20

Nov. 2015].

Still.de, n.d. History of STILL GmbH. [online] Available from:

http://www.still.de/chronik.0.30.html [Accessed 23 Nov. 2015].

Still-zero-emission.de, n.d. Zero Emission STILL Deutschland. [online] Available from:

http://www.still-zero-emission.de/26084.0.30.html?&id=26084&L=30 [Accessed 23

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Nov. 2015].

Still GmbH, 2014. STILL GmbH company presentation. [PowerPoint Presentation] Hamburg.