How Will Royal Doulton Fit Into The Brand

Portfolio of Waterford Wedgwood?

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Multi-Disciplinary Design

Royal Doulton have become part of the Waterford Wedgwood Group after almost 3 years of negotiations.

“The enlarged group will have outstanding people and enhanced competitiveness on the ceramic marketplace”

Hamish Grossart, Royal Doulton

Royal Doulton must find its place within Waterford Wedgwood’s already immense portfolio of brands.

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Multi-Disciplinary DesignIntroduction

Ceramics and Tableware Industry newspapers

journals

magazines

internet

observation

Interiors Fair – NEC

Ambiente - Frankfurt

Identify Key Issues - shape, colour, heritage, price, lifestyle, outsourcing, added value, corporate identity

Identify Company and Formulate Question - Royal Doulton and their integration with Waterford Wedgwood

Interview

corporate identity

hierarchy

brand portfolios

assess websites

evaluate POS material

look at corporate literature

research corporate identity

source news articles about issue

produce SWOT analysis of both companies

Suggest appropriate action with evidence

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Multi-Disciplinary DesignMethodology

Royal Doulton

And Wedgwood

International manufacturers

British retail competitors

Customers

Economy

Staffordshire

UK Ceramics Industry

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Multi-Disciplinary DesignKey Issues – External Influences

Company Takeover

StaffFactory Closures

Sub-brands

Royal Doulton

And Wedgwood

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Multi-Disciplinary DesignKey Issues – Internal Influences

• Changing lifestyles

• Necessity

• Rise in households

• Replacements

• Economy

• Fashion

• Celebrity endorsements

• Ethnic cooking

• Wedding lists

• Seasonality

• Gifts

• Age

• Collectors’

• E-commerce

• Moving home

• Tourism

With over 250,000 marriages taking place each year, Wedgwood attributes as much as 40% of its UK sales to the Wedding List sector.

China and Earthenware – UK – May 2004, www.mintel.com

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Multi-Disciplinary DesignKey Issues – Driving Forces

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Multi-Disciplinary Design

• Royal Doulton is one of the worlds oldest and easily recognisable chinaware companies.

• An established product base focused on luxury ceramic tableware, giftware and collectables.

• Parent company to 4 major ceramics brands – Minton, Royal Doulton, Royal Albert and the Royal Doulton International Collectors Club.

• Recently moved from in-house UK manufacturing to sourcing and overseas production, mainly in Indonesia.

• Operating in over 80 different markets, generating a global business.

• Selling through department stores, concessions, company outlets, Internet, mail order and collectors clubs.

“You could say it’s a tradition of innovation, with a rich heritage to draw upon.”

www.royaldoultoncompany.com

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Multi-Disciplinary DesignCorporate Profile

The Brand

Integrity

Relationship with the customer

Quality of the product

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Multi-Disciplinary DesignValues

Though competitive pressures remain, Royal Doulton’s current strategy is to:

• develop the group’s brands to a market leading position

• gain market share through more competitive pricing

• utilise better design and ranging

• improve sales channel management

• improve customer service

• improve distribution

• launch the e-tailing site in North America and eventually other territories

• be in a string competitive position

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Multi-Disciplinary DesignOutlook

Strengths Weaknesses Opportunities Threatsestablished brand currently £20m in debt build on current debt may increase

customer basequality products long period of decline build on good sales may continue to

in sales reputation declinevariety of lines to suit major reduction in appeal to new younger some collectors may be

product ranges customers unable to completelow production costs less flexible due to more money to spend over production of some due to outsourcing outsourcing elsewhere product linesefficient staff understaffed keep overheads down staff may be over-

stretchedclear vision for the future head in the right need for constant

direction assessmentworldwide consumer expand into new high competition markets territoriesnew e-tailing business no UK factories left expand into new no longer seen as an

markets English company

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Multi-Disciplinary DesignSWOT Analysis

Waterford Wedgwood

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Multi-Disciplinary Design

• Waterford Wedgwood is one of the worlds leading designers, manufacturers and marketers of branded luxury lifestyle products.

• Primarily producing high-quality crystal, ceramics and premium cookware.

•Two-thirds of products are manufactured at manufacturing facilities in Ireland (crystal), the UK (ceramics) and Germany (porcelain).

• The remaining third is outsourced to contract manufacturers in Germany and other European countries and Asia.

• Products are sold through a multi-channel distribution network – department and speciality store groups, concessions, flagship stores, company outlets, Internet and mail order.

“Our brands have a long history of excellence.”

www.waterfordwedgwood.com

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Multi-Disciplinary DesignCorporate Profile

To provide high standards of quality and service

To develop relationships based on mutual respect

To work together with both outsource and licensed suppliers to achieve high standards

To be a good corporate citizen and to recognise obligations to society and the environment

(appendix 9)

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Multi-Disciplinary DesignValues

Waterford Wedgwood plan to create their own destiny with a strategy for the future and Plan for Growth, these include:

• simplifying the business by focusing on more productive lines and reducing the number of actively available products

• continuing to invest in the company’s brands

• staying at the forefront of global competition

• continuing to launch innovative new products that meet consumers’ demands

• expanding the groups position in the luxury lifestyle market

• reducing working capital by a reduction in inventory

• increasing marketing spend in order to drive revenue growth

• increasing factory utilisation

• strengthening management (appendix 9-13)

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Multi-Disciplinary DesignOutlook

Strengths Weaknesses Opportunities Threatsrich heritage currently £320m in debt build on current debt may increase

customer basequality products long period of decline build on good sales may continue to

in sales reputation declinelarge portfolio of brands major reduction in something for some brands may get

product ranges everyone overlookedlarge investment in new higher costs due to UK advances in new less money to spend in production technology production product lines other areasreducing amount of keep overheads down staff may be over- staff stretchedclear vision for the futurelarge number of goals head in the right need for constant

direction assessmentworldwide consumer expanding into new high competition markets territoriesselling through duty free few UK factories left expand into new all factories may be outlets markets closed

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Multi-Disciplinary DesignSWOT Analysis

Company History

• Waterford Wedgwood has a longer historical background

• Both have made major contributions to the ceramics industry through new discoveries and design

Corporate Profile

• Both companies are market leaders with a variety of brands within the luxury lifestyle product market

• Waterford Wedgwood comprises of a larger brand portfolio

• Royal Doulton has moved the majority of its productions overseas while Waterford Wedgwood continue to use in-house production facilities

• Both companies enjoy worldwide success

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Multi-Disciplinary DesignComparison

Values

• Both companies hold like values

• They are dedicated to quality

• Each company prides itself on creating and enjoying good relationships with their customers

• Both groups hold respect and integrity as core business values

• Each is dedicated to their brands essence

Brand Structure

• Waterford Wedgwood and Royal Doulton are both parent companies to a variety of brands

• Royal Doulton’s brands are of UK origin while Waterford Wedgwood is more international

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Multi-Disciplinary DesignComparison

Finances

• Both companies are in large amounts of debt, Waterford Wedgwood’s debt is considerably larger but the group has more assets

• Each company has realised the severity of their debt and are consciously making adjustments in order to reduce costs

• Royal Doulton and Waterford Wedgwood have experienced falling sales

Company Structure

• Both companies have embarked on a major re-structuring programme, with Royal Doulton more than halving their workforce and Waterford Wedgwood making smaller adjustments

• Royal Doulton have streamlined their entire staff from management down to production staff, though Waterford Wedgwood have only made cuts to production staff

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Multi-Disciplinary DesignComparison

Outlook

• Both companies are dedicated to developing their brand portfolio

• Each has realised the importance of strengthening management

• Both groups wish to emphasize and expand upon their current leading positions within the market

• Royal Doulton seek to improve their customer service and distribution

• Waterford Wedgwood wish to continue to reduce fixed cost spending

Supply Chain

• Both companies operate in the ceramics market but Waterford Wedgwood also produce other products such as crystal and cookware

• Royal Doulton has recently launched an e-tailing business in order to compete with such competitors as Next and IKEA

• Both companies distribute through like channels

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Multi-Disciplinary DesignComparison

• Royal Doulton will gain from Waterford Wedgwood’s longer history and experience

• allow their new parent company to assist in raising their corporate profile and perhaps bring some of its manufacturing facilities back to the UK to re-establish itself as an English brand without drastically increasing the fixed production costs

• Waterford Wedgwood should move some production facilities overseas

• both groups uphold similar values this should mean a minimal amount of problems for Royal Doulton in their integration into Waterford Wedgwood

• Royal Doulton is to remain branded as such and little will be changed due to the Waterford Wedgwood takeover, the brands will not change

• Royal Doulton will benefit from Waterford Wedgwood’s international background, leading them to expand further into new markets alongside their new parent company.

• Royal Doulton will be supported by Waterford Wedgwood and the revenue from the takeover should be used to enhance the business and reduce the current debt

• Waterford Wedgwood will benefit by taking on board some of Royal Doulton’s cost reducing ideas

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Multi-Disciplinary DesignConclusions and Recommendations

• Re-structuring of Royal Doulton has been a major success and Waterford Wedgwood would do well to utilise their experience of this and follow suit.

• Waterford Wedgwood will be able to assist Royal Doulton in their plans to expand the business into new markets

• Royal Doulton can use their experience of e-tailing to allow Waterford Wedgwood to expand into the lower priced markets

Each of the companies has a positive outlook for the future, with ambitions of similar aims. By helping each other they will achieve this through the points listed above. It can be concluded that the integration should be a simple process but due to their long histories it will not be possible for them to change over night. The adjustment period should see each of the companies exploring the others assets and using them to their best advantage.

Summary

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Multi-Disciplinary DesignConclusions and Recommendations