Presentation by: Borislav Belenov Lindsey Jeske, Mirzohid Muminov Aastha Adhikari Overview Introduction History: Current and Future Growth strategies SWOT Analysis International Challenges Competitor Analysis Industry Analysis Recommendations Beiersdorf AG Mission Statement “We at Beiersdorf understand our consumers and delight them with innovative products for their skin and beauty care needs. This strengthens the trust and appeal that our brands enjoy. Every day. Worldwide.” Introduction Type – Aktiengesellschaft (Incorporated) Headquarters - Hamburg, Germany Key people - Thomas-Bernd Quaas, Chairman of the Management Board Products - Personal Care Products Revenue - Gross Sales $6,756 million (2006) Net income - $508 million (2006) Employees - 16,500 (as of December 31, 2006) Website - www.beiersdorf.com History: Current and Future 1882 - Established in Hamburg Germany and was known as a producer of medical plasters 1893 - Entered International Market 1900 - First patent for Eucerin 1911 - Introduced of NIVEA - first stable water-in-oil emulsifier - NIVEA Crème History: Current and Future 1932 - 50th anniversary, 1,400 workers, business with 34 countries 1933 - Changes in Executive Boards for Political reasons. 1936 - Invention of TESA 1945 - End of WW II; Company Re-Established 1972 - Company became really global – 10000 History: Current and Future 1971 - New Ad Campaign “Only You” 1980 - Beiersdorf reached 1 Billion Deutsche Marks! 2002 - Florena became fully owned by Beiersdorf 2003 – Tchibo Holding AG acquires 44% shares Of Beiersdorf Growth Strategies Market penetration New product development Market development Diversification Growth Strategies: Market penetration Product Price Place Promotion Growth Strategies New product Development: Launch of Nivea Visage Soft Wipes in 1999 Market Development: The UK launch of Nivea deodorant Diversification: Nivea for Men SWOT: Strengths Strong Brands Nivea Brand worth $29 billion Strong, increasing focus on research and development 2006, $118 million on R&D Produce newly and innovative products SWOT: Weaknesses Over-Reliance on Europe L’Oreal and Clarins 46.6% Beiersdorf 72.6% Weak and low inventory turnover Average Industry 5.7 Beiersdorf 2.9 Products Expiration Date Over stock SWOT: Opportunities Pricing pressures from private labels Well established brands at low price Wal-Mart and Costco Beiersdorf need to lower prices Growing popularity of cosmetic surgery Instant, long lasting results Lower demand for Beiersdorfs products SWOT: Threats Demographic Trends in the United Stated 65 and older Beauty enhancing and revitalizing products Growth in men’s toiletries and fragrances Advertising products Single men International Challenges Lawsuit against Nivea International of People, Inc. Non-First Mover Advantage in BRIC countries Pricing pressures of local private firms Acquisition of C-BONS Hair Care Competitor Analysis L’Oreal World Market Share of Companies at the end of 2006 Johnson &Johnson Avon Products, Inc. Beiersdorf AG 3% Others 42% Procter & Gamble 40% 3M Company 3M 4% Johnson & Johnson 6% Avon Products 5% Competitors: L’Oreal Incorporated: 1939 Headquarters: Paris, France Employees: 52,403 Net Income: $2,237 million (2006) Company Type: Public Brands: Lancôme, Maybelline, Garnier, Redken, and Matrix Competitors: Johnson & Johnson Incorporated: 1887 Headquarters: New Brunswick, New Jersey, USA Employees: 116,200 Net Income: $11 billion (2006) Company Type: Public Brands: Band-Aid, Tylenol, JOHNSON'S, Neutrogena, Clean & Clear Competitors: 3M Incorporated: 1902 Headquarters: Two Harbors, Minnesota, USA Employees: 67,000 Net Income: $22.923 billion (2006) Company Type: Public Brands: Nexcare™, Post-it®, Scotch®, Scotch- Brite™, and Scotchgard™ Competitors: Avon Products Incorporated: 1886 Headquarters: New York, New York, USA Employees: 40,300 Net Income: $477.6 million (2006) Company Type: Public Products Lines: Avon Color, Anew and Solutions, Skin-So-Soft and Naturals Industry Analysis Main markets - North America and Europe Size of the industry - 178 billion USD “Economize but spend more on cosmetics” Metro sexuality, Rich and Beautiful lifestyle Decorative Surgery Recommendations Increase returns and inventory turnover Increase marketing for low sales rate products Decrease the over reliance on Europe Strategy for demographic trends in the US Prospective of growth in Men’s personal care sector Clear geographical focus to deal with the price war Thank You For Your Attention!!!