Menu

Transforming Reckitt Benckiser Harvard Case Study Help

Home >> Hrm >> Transforming Reckitt Benckiser

Transforming Reckitt Benckiser Case Study Solution and Analysis


Intro

Transforming Reckitt Benckiser Case Study Help is a widely known international brand name in technology industry, founded in 1938 by Lee Byung Chul, in South Korea. Transforming Reckitt Benckiser handle large number of item classifications consisting of Semiconductors, Telecommunications, Digital Media, Digital Appliances and many more other electronic products. Historically, the company's core customers consist of the Original Equipment Manufacturers (OEMs), which used to sell Business products withtheir own brand. Till early 1990s, the core competency of Enterprise depend on its low price offerings than its rivals by producing existing products at economies of scale. Its customer circle includes Original Equipment Manufacturers (OEMs), who used to sell Transforming Reckitt Benckiser Case Study Analysis items with their own brand. Business was not simply understood outside Korea. There were likewise no or little interest in developing the brand internationally. Marketing spending plan was controlled by production department with a prime focus on providing cheap products.During the 1997 Asian Financial Crisis the company nearly got bankrupt, but with the Vision of Chairman Lee it totally turn its fortune around and in 2002 was noted the leading 25 most valuable company worldwide. When Kim was employed as a Chief Marketing Officer in 2000 the business was not even listed. He repositioned Organization as a global brand and informed his divisional supervisors to understand marketing and its significance. Now their goal is to reach the top 10 by 2005.

Issue Declaration

Venture's transition from a product based to a marketing company is not going as efficiently as planned.Overcoming the unwillingness of divisional managers to incorporate marketing efficiently is still a significant difficulty. Developing a consistent brand name identity across the whole world and utilizing marketing methods that best fits the regional culture is no simple job.
Executive Summary
Situational Analysis

Transforming Reckitt Benckiser Case Study Analysis efforts for constructing its trademark name throughout the world was started after introducing the "new management initiative" by Chairman Lee in 1993. The goal was to change Corp from an inexpensive OEM to a high value-added item service provider. To make the vision of Corporation a reality, Chairman Lee designated Yun as a vice chairman in 1997. Yun had a quite clear photo in his mind about how Business can transform from a low end to a high end product provider. He knew that transformation can only be done through placing Venture as a business using high-end products and this could only be done through high level of marketing.

In spite of having a clear vision about how to develop Org brand name, with a possible assistance of its executives, Yun faced a number of marketing obstacles in early years of its efforts.

Among the marketing challenges for Yun was the understandings of executives about the worth of marketing. They thought about marketing and selling as exact same tools and thought that quality items do not needed marketing for increasing sales. As their focus towards marketing was quite low in their previous company practices, and the present marketing requirement was too much high, the space was too broader and to fill this gap with incorrect perceptions about marketing was rather challenging for Yun.

Along with it the item range of the company was increasing with the ripening of brand-new product ideas by the R&D sector of Venture. Yun had a challenge to carry out marketing preparation and to produce marketing budgets for existing as well as for new items from the very start, and this would take a substantial time.

A big shift would be required in present marketing expenditures to develop the Transforming Reckitt Benckiser Case Study Analysis brand name. This would lead to increased marketing expenses for Venture and might disrupt the administration concerning increased expenses, as they were reluctant to marketing expenses formerly and a sudden huge shiftwould make them disturb. This could lead to decreasing executive assistance for international marketing. In this scenario, Yun faces a difficulty for justifying increased marketing expenses by demonstrating the long term value of substantial marketing expenditures.

Internal Analysis
SWOT Analysis
Strengths


Corporation strengths lie in its big product portfolio. Company has biggest number of patents in the industry with overall number of 15499 patents given in US( USP). Large quantity of R&D spending has made it possible for the business to grow its item portfolio at a greater rate than its competitors. Transforming Reckitt Benckiser Case Study Help spent about $13.079 billion on its R&D sector in 2016, which is 7.3% of its total incomes.

Another strength of Transforming Reckitt Benckiser Case Study Analysis is its capability to develop innovative items at a continuous rate. It significant proves for the innovation and item designing of Venture is that the company has gotten many awards for its development and item style.

Unlike Apple and other rivals, Corporation is concentrated on producing devices which can be quickly incorporated with any type of open source Operating System (OS) and software application. This offers Organization an edge over Apple devices.
Porter's 5 Forces Analysis
Business's capability to produce luxury products at low cost of production is likewise one of the major strength of Company as it makes it possible for the business to capture more market by providing quality items with cost control.

Weaknesses

Organization's weaknesses are hidden in the business's dependence on outsourcing software for its devices due to company's inability in establishing software, unlike Sony. Transforming Reckitt Benckiser Case Study Analysis also has low earnings margins as compare to Apple due to big distinction in the costs of Apple and Company with a much lesser difference in quality.

Opportunities

Opportunities for Corporation depend on the growing Mobile phone market and the business's efficiency in the market. It can increase its market share and earnings from cellular phone as the company is quite effective in smart phone market. Corp currently runs in about 80 countries and the company has an opportunity to increase its geographical growth by moving towards more emerging markets outside Asia. Enterprise can move towards acquisitions to acquire patents. It would make it possible for the business to increase its product portfolio with a boost in its wealth.

Threats

The dynamic industry environment of innovation market pose a severe threat on Corporation's survival and require the company to invest much of its incomes share on R&D in order to make it through in the long run. The market saturation in developed countries i.e. saturation of mobile company is likewise a big hazard for the company's development in the presence of strong rivals like Apple.

4 P's of Marketing
Swot Analysis
Product

Company uses quality items and has a rather abundant portfolio which caters to different sectors. LCD and mobile phones are the greatest products of Venture, whereas DRAM is also not far behind in contrast of them.

• LCD/ TELEVISION
• Laptops.
• Cellphone.
• Air conditioner.
• Desktop computer.
• Hard disk drives.
• Washing machines.
• Fridges.
• Cams.
• Microwaves.
• Flash memory.
• DRAM.

Rate.

Transforming Reckitt Benckiser Case Study Analysis utilizes both market competitive and market skimming rates strategies for its wide range of products. In competitive pricing it adjusts the cost according to the competition in order to acquire advantage, whereas, it utilizes market skimming technique where the product has an included worth and by selling a few products it can reach break-even.

Location.

It has one of the best supply chain networks, with retail suppliers, their own sole distributors, E commerce channels like Amazon and so on. All its products are timely provided to the selling place/ delivered to the clients directly in case of online order.

Promo.
Vrio Analysis
It wasn't a widely known company outside of Korea till 1993. However the management initiative taken by their CEO has pushed them to market more effectively outside the borders and now it has entered the league of leading 25 business in the world in simply 9 years. This is an exceptional achievement regardless of the continuous arguments among the supervisors about adopting marketing practices. It uses both offline & online channels of promo to market their items. Paid product ads, social promo and digital ads are utilizes to develop awareness about Corporation products.

Worth Chain Analysis.

It's an analytical framework for identifying company activities that include worth or competitive benefit for the business.

Incoming Logistics.

For its incoming logistics it owns numerous logistics firms as it subsidiaries. It looks after its suppliers and creates an unified relationship with them and even reduced their payment cycles to increase this relationship further which includes worth to their chain network.

Operations.

Enterprise's core competency is its mass making it produces 90% of its items in-house. Divided into 3 different divisions its operations are namely IT & Mobile Communications, Gadget Solutions and Customer Electronic Devices. It is keeping operation centers worldwide to further include worth to its value chain network.

Outbound Logistics.

Its outbound logistics system efficiency is among the primary factors Transforming Reckitt Benckiser Case Study Solution is able to take on Apple. Corp's own Electronic Logitec system plays a major function in the outbound logistics operations. It even carries out the tasks of collection of payment, settling insurance coverage claims, etc. on behalf of Business.

Marketing and Sales.

Drawing in target customer attention towards the product is done through marketing and sales to interact with them the value and competitive advantage the item uses. Transforming Reckitt Benckiser Case Study Analysis marketing spending plan is continually growing given that they started their rearranging internationally and will continue to do so as they are continually wanting to expand and invest in high potential growth markets. The budget plan is invested in events, print and media ads, public relations and so on.

Venture Service. Enterprise put their consumers at the top and continuously make every effort to provide unmatchable customer care standards. As after sales service is ending up being exceptionally essential to keep consumers pleased and engaged, they even conduct surveys through third parties to discover their client's feedback and implement it in the positive method to lower or if possible totally remove their customer concerns. By adding a direct support line to call them 24 hours they have even more increased the added worth of Transforming Reckitt Benckiser Case Study Analysis service.

Division.

Transforming Reckitt Benckiser Case Study Analysis has diversified market division, based upon its arrangement of wide variety of items to a great deal of consumers. Corp target consumer segments can be divided into 3 classifications i.e. Transforming Reckitt Benckiser Case Study Solution IT and Mobile Communications, Company Consumer Electronic Devices and Org Gadget services.

Geographical.

Transforming Reckitt Benckiser Case Study Solution geographic division is based upon two requirements i.e. area and density. Enterprise serves about 80 nations worldwide with its items supplied to Urban in addition to Backwoods of the country. The Company is also growing its worldwide existence and the business's flexibility in locating its plants encourages global growth of Business.

Market.

Organization produces products that can be utilized by both males and women. The target clients for Venture IT and mobile interaction items have an age variety of 18-65 with bulk at a young or newly wed life cycle phase. Apart from it, Corporation Customer Electronics are targeted to a client segment with an age variety of 25-65.

Psychographic.

The psychographic division of Transforming Reckitt Benckiser Case Study Help s based upon the social class and the life style of the consumer. Company target customers on the basis of social class are generally upper middle, middle and working class consumers, as Organization offer products like cell phones very little less expensive i.e. Motorola as well as very little expensive i.e. Apple. It offers quality items to middle level consumers at a somewhat high price than others targeting the same section.

Behavioural.

Transforming Reckitt Benckiser Case Study Help majority target customers have unique behavioural attributes. It has customers with an ambitious, stylish and identified personality with moderate level of commitment towards the brand. Its clients have some degree of shift towards other distinguished brands i.e. Apple. Most of Venture clients desire quality in addition to expense control. They are brought in towards Corporation due to the fact that of its moderate costs with a level of quality.

Quantitative analysis.

Sales of Transforming Reckitt Benckiser Case Study Analysis has actually increased remarkably from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net profit of.48 billion $ to 5.9 billion $. Digital media is the biggest selling category of Company with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales.

Qualitative analysis.

Yes, this choice is based upon the mission of Kim to target the more youthful audience and create a global brand picture of the company. Whereas, the core strength of the business is currently producing but long gone are those days when good items were offering themselves. In the present age marketing is extremely essential and companies can not be successful without it. Kim has currently begun to enhance the marketing activities of Corporation and very soon it will become one of its core strength like producing if not better.

VRIO.

Worth.

Org operates styles, manufactures and sell a large portfolio of consumer electronic devices. It runs in an incredibly competitive environment and has actually effectively placed itself as the maker of quality items. The answer is yes.

Rarity.

As, said earlier that Transforming Reckitt Benckiser Case Study Help runs in a highly competitive environment, which suggests all the companies have similar products. So, the response for rarity is no.

Imitability.

Due to the nature of the industry, it is very easy for rivals to understand the functionality of the items and easily make their own models. Yes, Organization is just behind IBM in registering new patents every year, however the advantage is really short-term in this market.

Company.

Chairman Lee has totally turnaround Organization, from going almost insolvent during the Asian monetary crisis of 1997 to the top 25 company worldwide. Certainly yes there appertains organization in the company and the outcomes promote themselves.

External Ecological Analysis

PESTLE Analysis

Political

Being a multinational brand spread nearly in every country worldwide, majority of the environments like USA, Europe, China etc., are very conductive for its operations. However, it deals with some political pressures in less developed countries where order circumstance is not good. Latin American, African and some Asian countries fall in this category, where political instability do have a result on Transforming Reckitt Benckiser Case Study Help operations.

Economic

Purchasing power of customers is vital for business like Corporation to grow and be successful. Emerging markets like India, middle-eastern countries and so on offer growth opportunities, whereas, due to recession even the customers of industrialized countries suffer badly. For this reason it is extremely crucial for the business to keep an eye on the continuous economic circumstance of the country before getting in the market.

Socio-Cultural

International companies have to face various social and cultural concerns during its operations in a foreign nation. Org has actually also faced lots of concerns however have actually embraced to the regional environments of most of the countries exceptionally well. It has actually customized its items, practices, policies etc. appropriately in order to be successful.

Technological

With an annual expenditure of 2.4 billion dollars in Research study & Advancement, and with constant innovative product launches, Transforming Reckitt Benckiser Case Study Analysis is among the leading innovative business of the world. With a clear mission to be ahead of the rest when it pertains to technological improvements, Org has risen to the no 25 of the top successful business of the world.

Legal

Each nation has their own laws and policies, being a multinational business Venture have to strictly follow those laws in their jurisdictions. Failure to do so, will result in major legal repercussions. So, it has to study or work with a local law professional before beginning its operations in a specific nation.

Environmental

With the rising awareness amongst consumers about the ecological & ethical infractions of companies, Org has to make sure that it follows all the security guidelines. Ecological damages, ethical misbehaviors are not appropriate and in some countries the effects can be very serious. On the other hand it has to do some Corporate Social Responsibility practices to show the residents that it appreciates their environment and individuals.

Porter's 5 Forces

Threat of Alternative

Risk of replacement for Business's each product category is rather considerable. Elements for high threat of replacement for Transforming Reckitt Benckiser Case Study Solution Mobile phone consist of the presence of high number of suppliers and Market saturation in industrialized nations, which make the cost of switching for customers nearly no. Along with it, Enterprise printing options products are threatened by the increasing attraction of consumers towards cloud storage.

Rivalry Amongst Existing Companies:

The rivaly among Company and its close competitors is intense. The major reason behind this is the technique of market saturation in numerous number of item classifications, requiring Company to introduce more innovative functions in existing products and brand-new innovative items to preserve its growth. The major rivals for Transforming Reckitt Benckiser Case Study Analysis samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO etc.

Transforming Reckitt Benckiser Case Study Analysis has a large supply chain consisting of about 2700 providers throughout the world.( Corp Sustainability Report, 2016) Provider's bargaining power for Business is low as Organization runs economies of scale and its orders are of prospective size and worth. These big orders allow Corporation to work out costs with its providers. However, due to incapability of Transforming Reckitt Benckiser Case Study Solution to develop its own software application, it has to outsource its software development to Google, which ends up being a prospective provider of software application for Enterprise, resulting in high bargaining power of Google. Although, in the majority of cases Enterprise has a power to work out costs, but it offer substantial prices to its providers to develop a strong supply chain and to have strong relationships with its providers.

Bargaining Power of Purchasers:

Haggling power of buyers for numerous variety of product categories of Venture is extreme. One of the factor causing the extreme bargaining power is the availability of large number of rivals in nearly each item classification i.e. competitors of Organization Smartphone, with an extremely little differentiation. The high accessibility of suppliers of Mobile phones with minimum differentiation, make the changing cost for buyers practically absolutely no, thus increasing the bargaining power of buyers. Market saturation in most of the product classifications also make the bargaining power of buyers more extreme in for Transforming Reckitt Benckiser Case Study Analysis. In spite of igh bargaining power Company is quite efficient in offering its products at a higher cost than much of its rivals, due to luxury quality item and a reasonable brand image.

Threat of New Entrants:

Hazard of brand-new entrants for Transforming Reckitt Benckiser Case Study Help is quite low. Along with it, requirement of huge expertise and research and development expenditures for survival in the industry also make brand-new entrants unwilling to go into in the market. Market saturation is likewise one of the barrier of entry in innovation industry.

Competitive Analysis

Company's high item diversification offers it differentiation from its competitors. It is among the three leading brands by market share. Unlikely to its close rivals consisting of Sony, Intel and Nokia, who focus bulk on a single item classification with Sony concentrating on consumer electronic devices, Nokia on cellular phone and Intel on chips, Corporation had a huge R&D spending on all of its product classifications which enable the business to make potential earnings from sales of practically all of its items. (See Exhibit) Nevertheless, due to the wide item range the company deals with high variety of competitors.

The business ranks initially in 4 product categories i.e. DRAM Chips, LCD Displays, Big Screen TVs and Microwave ovens, in terms of worldwide market share, amongst 8 different product categories. Corporation was the worldwide leader in producing DRAM, SRAM and NAND flash chips. Although, Organization profits from chips was less than Intel however its earnings from chips was growing much faster than Intel and has actually grown near to the revenue levels of Intel, as given in the case Exhibit 2.

Together with the chips Corporation mobile market was also thriving at a high rate than its competitors i.e. Motorola and Nokia. Company's cell phone's sales development was 51% as compare to Motorola with only 4% and Nokia with absolutely no sales growth. The significant reson behind Venture's high growth despite of higher costs than Nokia and Motorola was the business's high-end quality cell phones.

Business was likewise reaping the benefits from increasing market share of high-end LCDs as given in case Display 3. The significant reason, making the business make it possible for to obtain the opportunity is its mass production at low expense. Sony was the greatest rival for Transforming Reckitt Benckiser Case Study Solution in LCD market, however, it had actually likewise begun joint venture with Enterprise in 2003 for LCD making, lessening the competition for Company.

Porter's Competitive Strategy

Low Expense Leadership method of porter is totally implemented by Venture the method they accomplish economies of scale by reinforcing their core proficiencies of manufacturing. They always bring something new and innovative whether it's a product or a service.

Alternatives

Alternative Solution 1

The Chief Marketing Officer (CMO) of Transforming Reckitt Benckiser Case Study Help would produce a brand-new brand name image by targeting the younger generation of the particular nation. As, specifically mobile phones of Corp are popular amongst the more youthful demographic.

Pros

1. It is the very best technique to construct Customer Life time Value (CLV) by developing a long-lasting relationship with consumers. Develop commitment through providing worth and reap the benefits for long-lasting, as research study has actually revealed it is much cheaper to retain existing consumers than to draw in brand-new ones.
2. Another pro of this option is that word of mouth spread faster among more youthful people and which in turn will generate brand-new consumers for my products.

Cons

1. Old consumers who were connected with Org prior to might not like this new image the business is attempting to depict.
2 It will sustain more expenditures to rearrange some items and it may not even bring success as the patterns alter really quickly amongst the younger group.

Alternative service 2.

It would be done by arranging training workshops during which value of marketing will be taught and numbers will be given. Marketing environment should be created internally initially as real marketing starts inside the corporation.

Pros

1. Its pro will be that all the marketing approach fans will come out and likewise the opposite ones.

Cons

2. Its con can create a very unhealthy environment in the workplace, as individuals frequently resist modification because they fear it.

Recognize the best option

Option is the finest as it clearly has more pros because once a Customer Lifetime Value is built the company will profit from it till that client is alive and has buying power. Plus, our target clients are the younger generation which are bound to live longer than the current aging people. Nonetheless, Enterprise's primary goal is to produce loyalty amongst its customers and make them repurchase it from them and even buy their various products too.

Implementation Strategy

• Targeting more youthful generation through social marketing, developing a relate to them like Pepsi make with music. And set the expectations practical and possible.
• A group consisting of finest marketing and sales experts ought to be put together, and both views must be considered prior to securing the resources needed to carry out the strategy.
• Thorough communication of the plan need to be done as it is extremely important for everyone to be on the exact same page to make it work.
• Jobs and timelines ought to be build and communicated accordingly to each individual responsible.
• The supervisor should use a dashboard which reveals the development of all the tasks which have actually been done or about to be done and by whom.
• The supervisor must keep an eye on and keep a continuous check on the overall and private efficiency.
Since any new pattern or policy may come in due to which all the things currently prepared have to be adjusted, • Everyone must be prepared to adjust midway. It's much better to have contingency plans already prepared.
• At the end of the project the manager need to interact the outcomes and if effective should commemorate with the group.

Budget

The M-net program exposed engaging analysis about the low and high development potential locations and just how much advertising budget must be designated appropriately. This modification the budget allocation of many supervisors and different nations were unhappy and argued but the analysis done by the program was accurate and revealed figures like North America and Russia development possible merited a 35% allotment while they were receiving 45%. Whereas, China and Europe ought to be getting 42% but were instead given 31%. It truly helped to fairly disperse the resources and catch more customers by spending more on ads on the high development capacity regions of the world.
Recommendations
Conclusion

Transforming Reckitt Benckiser Case Study Analysis is a top 25 company in the world now and plans to get ahead of Sony who sits currently at no. 20. Its constant financial investment in R&D and ingenious practices have actually moved them to brand-new heights but for them its' only the start and they want to be among the top 3 brands in the world. They totally turn-around from nearly declaring bankruptcy during the Asian Financial Crisis to a world distinguished brand name, understood for quality and innovation. Their worth chain and their core proficiency their production ability, along-with worldwide brand image building have actually seen their sales go from 16 to 44.6 billion $ from 1997-- 2002. With additional growth in China and other emerging markets those numbers will just increase even more in the future. Their marketing efforts need to be directed towards more youthful market amid the internal arguments about marketing and ought to develop Consumer Life time Value as it will not only give them benefits now but will continue to reap it till the customer lifetime. As the expense of retaining the customer is much cheaper than bring in a brand-new one.