Blue ocean at henkel - business strategy

1. Blue Ocean Strategy
at Henkel
Dara Maisarah 29113135
Christian Hamonangan 29113035
Irsyad Ahmadi 29113072
Angga Ranggana 29113489

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. PROBLEM
• Growth of
market has
slow down
MARKET
• raw material
price
increase
FINANCIAL
CRISIS
• Competitor
in adhesive
technology
decrease
their price
COMPETITOR

4. What Henkel should do?
Create long term
strategy for adhesive
technology

5. Analyze external
environment and
internal
environment
Analyze
Blue
Ocean
Strategy
SOLUTION

6. External Environment
General Environment
Industry Environment
Competitor Environment

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.  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. 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. Competitor Environment
 UHU
Adhesive segment for household and offices
 PCI
Have strong position, market leader for tiler
segment
 Mapei
Acquired several local company

11. Internal Environment
TANGIBLE RESOURCES INTANGIBLE

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. 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. 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. 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. 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. 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. 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. Recommendation
Entry into developing countries
to increase market share
Target market to high-end
community
Product innovation (All in one)

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