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Blue ocean at henkel - business strategy

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Blue ocean at henkel - business strategy

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Blue ocean at henkel - business strategy

  1. 1. Blue Ocean Strategy at Henkel Dara Maisarah 29113135 Christian Hamonangan 29113035 Irsyad Ahmadi 29113072 Angga Ranggana 29113489
  2. 2. Overview FOUNDED • By Fritz Henkel in 1876 HEADQU ARTERS • Dusseldorf, Germany VISION • A Global Leader in Brands and Technology BUSINESS AREA • Laundry & Home Care • Adhesive Technologies • Beauty Care
  3. 3. PROBLEM • Growth of market has slow down MARKET • raw material price increase FINANCIAL CRISIS • Competitor in adhesive technology decrease their price COMPETITOR
  4. 4. What Henkel should do? Create long term strategy for adhesive technology
  5. 5. Analyze external environment and internal environment Analyze Blue Ocean Strategy SOLUTION
  6. 6. External Environment General Environment Industry Environment Competitor Environment
  7. 7. General Environment  Demographic Segment Low birth rate  Economic Segment Gasoline and raw material has increased  Political Segment Tax incentive from East Germany Government  Sociocultural Segment Age limit of doing DYI product just 50 years Women preferred models and concrete samples
  8. 8.  Technological Segment Use technology for R&D product  Global Segment Reunion of East Germany and West Germany  Physical Segment Producing environment friendly product Continue
  9. 9. Industry Environment  Threat of New Entrant High barrier for new entrant  Bargaining Power of Supplier A few number of supplier, make supplier have strong position  Bargaining Power of Buyer It's price sensitive  Threat of Substitute Product A large number of product differentiation  Rivalry Among Competing of Firms Many company in this industry try to reduce cost to give lowest price to customer
  10. 10. Competitor Environment  UHU Adhesive segment for household and offices  PCI Have strong position, market leader for tiler segment  Mapei Acquired several local company
  11. 11. Internal Environment TANGIBLE RESOURCES INTANGIBLE
  12. 12. Tangible Resources Valuable Rare Costly-to-imitate Non-substitutable Financial: 1. Sales increase 2. EBIT increase Yes Yes No No Organizational: 1. Sub-brands build their own marketing strategy 2. Sales channel : do it yourself stores, specialist shop, drugstores and food retailing shops Yes Yes Yes Yes Physical: 1. Henkel relocated his company to Diisseldorf by the Rhine 2. Henkel took over the Adhesives and Electronic Materials business from Akzo Nobel Yes Yes No No Technological: 1. External Thermal Insulation Composite Systems 2. Product Information Yes No No No
  13. 13. Intangible Resources Valuable Rare Costly-to-imitate Non-substitutable Human: High frequency in Product innovation Yes Yes Yes No Innovation: 1. Produced ‘low dust ‘ and ‘light weight’ tile adhesive 2. Adding new features to improve the product Yes Yes Difficult Difficult Reputation: 1. Direct contact between the producer and client for support product enhancement, technical advise, addressing complaint and warranty support 2. Brand image Yes Yes Yes Yes
  14. 14. Value Chain • Primary Activities – Service • Installation • Repair – Marketing and sales • Product,pricing,advertising, promotion and distribution • Channels to market • Convenience • Communication – Outbound logistics • Distribution expansion • Picking • Delivery • Shipment – Operations • Packaging • Conversion • Maintenance – Inbound logistics • Material handling • Warehousing
  15. 15. Value Chain • Support Activities – Firm Infrastructure • Finance • Accounting • General management – Human Resource Management • Recruiting,hiring,training, developing employee – Technological Development • Resource and development • Process equipment • Product innovation – Procurement • Purchasing raw material • Supplies
  16. 16. Strenght - High innovation product - Offer many product lines - Huge distribution channel - Each product has own marketing manager Weakness - Too Product Oriented Opportunity -German Market Saturated, enter to other countries - Craftsmen is driven consumer’s buying decision Threat - High energy and raw material price - Many competitors with low prices
  17. 17. Red Ocean Strategy vs Blue Ocean Strategy Red Ocean Strategy Blue Ocean Strategy Compete in existing market space Create uncontested market space Beat the competition Market the competition irrelevant Exploit existing demand Create and capture untapped demand Make the value cost trade off Break the value cost trade off Align the whole system of a firm’s activities with its strategic choice of differentiation or low cost Align the whole system of a firm’s activities in persuit of differentiation and low cost Focuses on adapting to external trends as they occur Participate in shaping external trends over time
  18. 18. ELIMINATE a number of sub-brands in adhesive technology REDUCE harmful chemical CREATE eco-friendly safe product , DIY segments easy to use for women RAISE the innovation of product, marketing strategy
  19. 19. Recommendation Entry into developing countries to increase market share Target market to high-end community Product innovation (All in one)
  20. 20. Lesson Learned Market demand is an important factor in making business strategy Action of competitors is also a reference in determining a strategy To create Blue Ocean Strategy we should first analyze external factor and internal factor

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