Case 10 - Case Meeting 10 Henkel KGaA Detergents Division...

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Case Meeting 10 Henkel KGaA: Detergents Division – Global Branding Issues in the European market Problem: - Competitive dynamics of P&G and Unilever towards reorganization towards a global brand rather than national subsidiaries. They wanted to concentrate their resources on a smaller portfolio of global power brands and more standardized offerings - However, Henkel has long been committed to a strategy of strong local brands reflecting both a philosophy of market responsiveness and the organizational heritage resulting from a history of internationalization by acquisition. - Moreover, consumer preferences vary in the detergent market widely. Causes for the change are: - Growing internationalization and pressure of retailers who have strong negotiation power in this market due to high market shares. They want to have strong, well supported global brands because of the categorization of the products. - Less barriers due to liberalization and the introduction of the common European currency, the Euro - Cost savings in the manufacturing/production process Opposing forces – the consumer wants local brands and the retailer wants international brands. Attempt of Henkel to review their brand strategy in the Italian and Spanish market because here Henkel’s flagship brand, Persil was not present due to historical reasons. Company Background - Founded in 1876 by Fritz Henkel in Aachen - In 1907 Persil launched the market and rapidly achieved market leadership, which was the reason for Henkel to expand and to broader their production line. - In 1999, Henkel achieved sales of 11.4 billion Euros, of which 73% were earned outside Germany. - Five divisions: o Adhesive, Cosmetics and Toiletries o Detergent and Household Cleaners, which accounted for sales revenues of €2.6billions o Industrial and Institutional Hygiene o Chemical Products - In laundry detergents, Henkel were ranked second in Europe and fourth worldwide
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Case 10 - Case Meeting 10 Henkel KGaA Detergents Division...

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