1. Agenda Group B7 Introduction History of Beiersdorf Beiersdorf today Strategic Analysis Conclusions Recommendations & Implications History BDF today Strategic Analysis Summary Recommen- dations Agenda

2. The History of BDF 1/2 Agenda BDF today Strategic Analysis Summary Recommen- dations 1910’s 1930’s1880’s1890’s1910’s1900’s1920’s History

3. The History of BDF 2/2 AgendaSummary Recommen- dations BDF today 1940’s1950’s1970’s1960’s1980’s1990’s History Strategic Analysis

4. BDF Today 1/2 HistoryAgenda Recommen- dations Strategic Analysis More than 18.000 employees worldwide in … 3 main activities Cosmed MedicalTesa 68% of sales 16% of sales Summary BDF today

5. BDF Today 2/2 HistoryAgenda Strategic Analysis Summary 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” BDF today Recommen- dations 75% 15%

6. Porter’s 5 Forces Cosmetics Industry HistoryAgendaSummary Recommen- dations BDF today Threats of Substitutes Bargaining Power of Suppliers Barriers to Entry Bargaining Power of Buyers Rivalry Strategic Analysis

7. Porter’s 5 Forces Cosmetics Industry HistoryAgendaSummary Recommen- dations BDF today Threats of Substitutes Bargaining Power of Suppliers Barriers to Entry Bargaining Power of Buyers Rivalry Strategic Analysis

8. Porter’s 5 Forces Cosmetics Industry HistoryAgendaSummary Recommen- dations BDF today Threats of Substitutes Low demand of “organic” and natural products Strategic Analysis

9. Porter’s 5 Forces Cosmetics Industry HistoryAgendaSummary Recommen- dations BDF today 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 Strategic Analysis

10. Porter’s 5 Forces Cosmetics Industry HistoryAgendaSummary Recommen- dations BDF today 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 Strategic Analysis

11. Porter’s 5 Forces Cosmetics Industry HistoryAgendaSummary Recommen- dations BDF today Bargaining Power of Suppliers Manufacturers pressure for high quality and low cost Integration e-Procurement Increasingly attractive supply alternative to SMEs Strategic Analysis

12. Porter’s 5 Forces Cosmetics Industry HistoryAgendaSummary Recommen- dations BDF today 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 Strategic Analysis

13. Value Chain History Agenda BDF today Summary Recommen- dations ProducingSourcingPacking Handling & Delivering Procurement, Technology Development, Human Resource, Firm Infrastructure Servicing Operation Outbound Logistics Inbound Logistics Market & Sales Services Greatest impact on reliability Greatest influence through brands Primary Value Chain Activities Support Activities Strategic Analysis

14. Value Chain (Primary Value Chain Activities) In-Out bound logistics In-Out bound logistics 1. internal and external integration 2. standardized internal procedures History Agenda BDF today Summary Recommen- dations Operations Operations 1. the automated batch plant 2. the standardized factory control system Marketing and Sales Marketing and Sales 1. the demand of the local market 2. core international and regional brand Strategic Analysis

15. History Agenda BDF today Summary Recommen- dations Value Chain (Support Activities) Procurement Procurement 1. a company-wide uniform product supply Technology Development Technology Development 1. integrated system by using standardized processes across Europe Human Resources Management Human Resources Management 1. a certain degree of autonomy Strategic Analysis

16. SWOT Analysis Fundamental risk management policy Policy of strong brands Truly international business with strong growth strategy HistoryAgenda Strategic Analysis Summary Recommen- dations BDF today Growth rates „Babies“ & „Men“ Expansion in emerging markets Ageing of baby-boom generation Geopolitical situation has negative effect on world economies Private label products Minimal growth in main market Marginal presence in N-America Business heavily focussed around Western Europe Success primarly based on NIVEA Weaknesses Threats Strengths Opportunities

17. 4+2 Formula for Success HistoryAgenda Strategic Analysis Summary Recommen- dations BDF today Strategy Execution Culture Structure Innovation M&A

18. 4+2 Formula for Success HistoryAgenda Strategic Analysis Summary Recommen- dations BDF today Strategy R&D as basis for Innovation + organic growth R&D as basis for Innovation + organic growth Growth in 3 dimensions: new product categories, new countries and market share growth Growth in 3 dimensions: new product categories, new countries and market share growth Umbrella brand + leverage potential synergies Umbrella brand + leverage potential synergies „Think global, act local“ strategy „Think global, act local“ strategy Structure SCM: e-procurement, production, logistics SCM: e-procurement, production, logistics Multinational to Transnational structure Multinational to Transnational structure Balance between centralized strategy and decentralized entrepreneurship Balance between centralized strategy and decentralized entrepreneurship Strategy Structure

19. 4+2 Formula for Success HistoryAgenda Strategic Analysis Summary Recommen- dations BDF today Culture „Success has many faces. Over 18,000 in fact.“ „Success has many faces. Over 18,000 in fact.“ Fixed salary + variable performance + bonus Fixed salary + variable performance + bonus European Dialogue = EWC European Dialogue = EWC Execution Tools: e-procurement, mySAP PLM,... Tools: e-procurement, mySAP PLM,... Cincinatti: America´s best plant Cincinatti: America´s best plant Profitability below average ? Profitability below average ? Strategy Execution Culture Structure

20. 4+2 Formula for Success HistoryAgenda Strategic Analysis Summary Recommen- dations BDF today Innovation 1998,Visage Q10: Sales +85%, market up 1998,Visage Q10: Sales +85%, market up Elastoplast  Spray Bandage + Elastoplast  SilverHealing™ Elastoplast  Spray Bandage + Elastoplast  SilverHealing™ tesa Holospot®: store info in tape tesa Holospot®: store info in tape Mergers & Acquisitions Several acquisitions since 1990 Several acquisitions since 1990 Enlarge geographical scope Enlarge geographical scope CEO R. Kunisch: „...focus on organic growth..“ CEO R. Kunisch: „...focus on organic growth..“ Strategy Execution Culture Structure Innovation M&A

21. 4+2 Formula for Success HistoryAgenda Strategic Analysis Summary Recommen- dations BDF today Strategy Execu- tion Culture Structure Innovation M&A

22. Summary: Beiersdorf AG Historically consistent strategy Historically consistent strategy Porter´s 5 forces: Industry Rivalry Porter´s 5 forces: Industry Rivalry Porter´s Value Chain: Marketing & Sales Porter´s Value Chain: Marketing & Sales SWOT: Risk Management „Babies“+“Men“ SWOT: Risk Management „Babies“+“Men“ 4+2: Innovation Strength Branding 4+2: Innovation Strength Branding - poor profitability (< average) HistoryAgenda Summary Recommen- dations BDF today Strategic Analysis

23. Recommendations + Implications Improve profitabilitybetter cost position „Think global, act local“transnational structure „bottom of the pyramid“low price, low volume unit „fight brand“ strategyfewer private brands Investment in SMEtrade up existing brands Use network of affiliateswidespread e-Commerce Focus on emerging markets larger growth and less + USdependency on W-Europe HistoryAgenda Recommen- dations BDF today Strategic Analysis Summary

24. Questions HistoryAgenda Recommen- dations BDF today Strategic Analysis Summary ?