Agenda
History
BDF
today
Agenda
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
Introduction
History of Beiersdorf
Beiersdorf today
Strategic Analysis
Conclusions
Recommendations
& Implications
Strategic
Analysis
Summary
Recommendations
Group B7
Agenda
History
BDF
today
Strategic
Analysis
Summary
The History of BDF
1880’s
1890’s
1900’s
Recommendations
1/2
1910’s
1920’s
1930’s
1910’s
Agenda
History
BDF
today
Strategic
Analysis
Summary
The History of BDF
1940’s
1950’s
1960’s
Recommendations
2/2
1970’s
1980’s
1990’s
Agenda
BDF
today
History
Strategic
Analysis
Summary
Recommendations
BDF Today
1/2
More than 18.000 employees worldwide in …
3 main activities
Cosmed
68% of
sales
Medical
16% of
sales
Tesa
16% of
sales
Agenda
History
BDF
today
Strategic
Analysis
BDF Today
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”
Summary
Recommendations
2/2
• HQ
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
15%
75%
Agenda
History
BDF
today
Strategic
Analysis
Summary
Recommendations
Porter’s 5 Forces Cosmetics Industry
Threats of
Substitutes
Bargaining
Power of
Suppliers
Rivalry
Barriers to Entry
Bargaining
Power of
Buyers
Agenda
History
BDF
today
Strategic
Analysis
Summary
Recommendations
Porter’s 5 Forces Cosmetics Industry
Threats of
Substitutes
Bargaining
Power of
Suppliers
Rivalry
Barriers to Entry
Bargaining
Power of
Buyers
Agenda
History
BDF
today
Strategic
Analysis
Summary
Porter’s 5 Forces Cosmetics Industry
Threats of Substitutes
• Low demand of “organic” and natural
products
Recommendations
Agenda
History
BDF
today
Strategic
Analysis
Summary
Porter’s 5 Forces Cosmetics Industry
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
Recommendations
Agenda
History
BDF
today
Strategic
Analysis
Summary
Porter’s 5 Forces Cosmetics Industry
Barriers to Entry
• Large investments in brand building and R&D
• However , threat of entrance of
Dermatologists / private brands
SMEs products in a niche target
• Government restrictions
Recommendations
Agenda
History
BDF
today
Strategic
Analysis
Summary
Porter’s 5 Forces Cosmetics Industry
Bargaining Power of
Suppliers
• Manufacturers pressure for
high quality and low cost
• Integration
• e-Procurement
• Increasingly attractive supply
alternative to SMEs
Recommendations
Agenda
History
BDF
today
Strategic
Analysis
Summary
Porter’s 5 Forces Cosmetics Industry
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
Recommendations
Agenda
BDF
today
History
Strategic
Analysis
Recommendations
Summary
Value Chain
Primary Value Chain Activities
Inbound
Logistics
Sourcing
Operation
Producing
Outbound
Logistics
Packing
Market &
Sales
Handling &
Delivering
Services
Servicing
Procurement, Technology Development, Human Resource,
Firm Infrastructure
Support Activities
Greatest impact
on reliability
Greatest influence
through brands
Agenda
History
BDF
today
Strategic
Analysis
Summary
Recommendations
Value Chain (Primary Value Chain Activities)
In-Out bound logistics

1.
2.
internal and external integration
standardized internal procedures
Operations

1.
2.
the automated batch plant
the standardized factory control system
Marketing and Sales

1.
2.
the demand of the local market
core international and regional brand
Agenda
History
BDF
today
Strategic
Analysis
Summary
Recommendations
Value Chain (Support Activities)
Procurement

1.
a company-wide uniform product supply
Technology Development

1.
integrated system by using standardized processes across
Europe
Human Resources Management

1.
a certain degree of autonomy
Agenda
History
BDF
today
Strategic
Analysis
Summary
Recommendations
SWOT Analysis
Strengths

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Fundamental risk management policy
Policy of strong brands
Truly international business with
strong growth strategy
Weaknesses
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Opportunities
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Growth rates „Babies“ & „Men“
Expansion in emerging markets
Ageing of baby-boom generation
Marginal presence in N-America
Business heavily focussed around
Western Europe
Success primarly based on NIVEA
Threats
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Geopolitical situation has negative
effect on world economies
Private label products
Minimal growth in main market
Agenda
History
BDF
today
Strategic
Analysis
Summary
Recommendations
4+2 Formula for Success
Structure
Culture
Execution
Strategy
Innovation M&A
Agenda
History
BDF
today
Strategic
Analysis
Summary
Recommendations
4+2 Formula for Success
Strategy
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Structure
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SCM: e-procurement, production, logistics
Multinational to Transnational structure
Balance between centralized strategy
and decentralized entrepreneurship
Structure
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R&D as basis for Innovation + organic growth
Growth in 3 dimensions: new product categories,
new countries and market share growth
Umbrella brand + leverage potential synergies
„Think global, act local“ strategy
Strategy

Agenda
History
BDF
today
Strategic
Analysis
Summary
Recommendations
4+2 Formula for Success
Culture
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Tools: e-procurement, mySAP PLM,...
Cincinatti: America´s best plant
Profitability below average ?
Structure

Culture
Execution
Execution

„Success has many faces. Over 18,000 in fact.“
Fixed salary + variable performance + bonus
European Dialogue = EWC
Strategy

Agenda
History
BDF
today
Strategic
Analysis
Summary
Recommendations
4+2 Formula for Success
Innovation

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
Mergers & Acquisitions

Innovation M&A
Structure

Several acquisitions since 1990
Enlarge geographical scope
CEO R. Kunisch:
„...focus on organic growth..“
Culture

Execution

1998,Visage Q10: Sales +85%, market up
Elastoplast Spray Bandage + Elastoplast SilverHealing™
tesa Holospot®: store info in tape
Strategy

Agenda
History
BDF
today
Strategic
Analysis
Summary
Recommendations
4+2 Formula for Success
Structure
Culture
Execution
Strategy
M&A
Agenda
History
BDF
today
Strategic
Analysis
Summary
Recommendations
Summary: Beiersdorf AG

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Historically consistent strategy
Porter´s 5 forces:
Industry Rivalry
Porter´s Value Chain:
Marketing & Sales
SWOT:
Risk Management
„Babies“+“Men“
4+2:
Innovation Strength
Branding
- poor profitability (< average)
Agenda
History
BDF
today
Strategic
Analysis
Summary
Recommendations
Recommendations + Implications

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Improve profitability
„Think global, act local“
„bottom of the pyramid“
„fight brand“ strategy
Investment in SME
Use network of affiliates
Focus on emerging markets
+ US
better cost position
transnational structure
low price, low volume unit
fewer private brands
trade up existing brands
widespread e-Commerce
larger growth and less
dependency on W-Europe
Agenda
History
Questions
BDF
today
Strategic
Analysis
Summary
Recommendations