Agenda History BDF today Agenda n n n

Agenda History BDF today Agenda n n n Introduction History of Beiersdorf today Strategic Analysis Conclusions Recommendations & Implications Strategic Analysis Summary Recommendations Group B 7

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 Summary Recommendations 2/2 • 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” 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 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 C 4 ~ 35% • Main competitors tend to concentrate the Industry through acquisitions • SMEs proliferation targeting to niche markets • Private brands increasing importance during recessions Recommendations

Agenda History BDF today Strategic Analysis Summary Recommendations Value Chain Primary Value Chain Activities Inbound Operation Outboun d Logistics s Sourcing Producing Packin g Market & Sales Handling & Delivering Services Servicin g Procurement, Technology Development, Human Resource, Infrastructure Firm Support Activities Greatest impact on reliability Greatest influence through brands

Agenda History BDF today Strategic Analysis Summary Recommendations Value Chain (Primary Value Chain Activities) n In-Out bound logistics 1. 2. n Operations 1. 2. n internal and external integration standardized internal procedures 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) n Procurement 1. n Technology Development 1. n a company-wide uniform product supply 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 n n n Fundamental risk management policy Policy of strong brands Truly international business with strong growth strategy Weaknesses n n n Opportunities n n n 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 n n n Geopolitical situation has negative effect on world economies Private label products Minimal growth in 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 n n Structure n n n SCM: e-procurement, production, logistics Multinational to Transnational structure Balance between centralized strategy and decentralized entrepreneurship Structure n 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 n

Agenda History BDF today Strategic Analysis Summary Recommendations 4+2 Formula for Success Culture n n n Tools: e-procurement, my. SAP PLM, . . . Cincinatti: America´s best plant Profitability below average ? Structure n Culture Execution n „Success has many faces. Over 18, 000 in fact. “ Fixed salary + variable performance + bonus European Dialogue = EWC Strategy n

Agenda History BDF today Strategic Analysis Summary Recommendations 4+2 Formula for Success Innovation n Mergers & Acquisitions n Innovation M&A Structure n Several acquisitions since 1990 Enlarge geographical scope CEO R. Kunisch: „. . . focus on organic growth. . “ Culture n Execution n 1998, Visage Q 10: Sales +85%, market up Elastoplast Spray Bandage + Elastoplast Silver. Healing™ tesa Holospot®: store info in tape Strategy n

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 Summary: Beiersdorf AG Historically consistent strategy n Porter´s 5 forces: Industry Rivalry n Porter´s Value Chain: Marketing & Sales n SWOT: Risk Management „Babies“+“Men“ n 4+2: Innovation Strength Branding n - poor profitability (< average)

Agenda History BDF today Strategic Analysis Summary Recommendations + Implications n n n n 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 BDF today Strategic Analysis Summary Questions ? Recommendations