PAST PRESENT FUTURE SYNDICATE

Heber ManurungEdhita Paradevi

Erik SentosaLea Kusumawati

La Ode M Arief Akbar

Pitra Adhi Pamungkas

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BLUE OCEAN STRATEGY AT

HENKEL

Case Question

• What are the competitive advantages of Henkel?

• How can Henkel build its competitive advantage?

• Explain why the products of Henkel can be considered as having sustainable competitive advantage?

• What are the intangible resources of Henkel?

Case Background

Henkel market has slowed down

Raw material price has increase

Pressure to Henkel margins

One of competitor in adhesive business just about enter with very low price

Henkel should develop a long-term strategy

Company History

1876• Founde

d by Fritz Henkel

1878• Relocated

the company to Dusseldorf

1907• Persil became

the pillar for the company growth

1922• The product

range was extended to adhesive

1950• Henkel

entered the cosmetics market with acquisition of TheraChemie

On 2008, Henkel took over the Adhesives and electronic Materials business from Akzo Nobel, previously owned by National Strach.

Vision

A GLOBAL LEADERIN BRANDS ANDTECHNOLOGIES

Company Value

1. We put our CUSTOMERS at the center of what we do.

2. We value, challenge and reward our PEOPLE.3. We drive excellent sustainable FINANCIAL

performance.4. We are committed to leadership in

SUSTAINABILITY.5. We build our future on our FAMILY business

foundation.

Three Strategic Priorities

Achieve our full

business potential

Focus more on our

customers

WINNINGCULTURE

Strengthen our global

team

Resources

Tangible Resources

Intangible Resources

Tangible Resources

Financial• No data available

Organizational• Each product managers built

on sub-brands with their own marketing strategy

• Sales channel: do it yourself stores, specialist shops, drugstore and food retailing shops

Technological• External Thermal Insulation

Composite System

Physical• Relocated the company to

Dusseldorf to take advantage of logistics & better sales opportunities.

• Took over Adhesive and Electronic Material Business from Akzo Nobel.

Intangible Resources

Human• Preserve the tradition of

an open family company.

Innovation• Produced ‘low dust’ and

‘light weight’ tile adhesive.• Adding new features to

improve the product.

Reputation• Direct contact between

the producer and client for support product enhancement, technical advice, addressing complaint and warranty support.

• Brand Image

Capabilities Resources Rare Valuable Inimitable Nonsubstitua

bleTangible

- Financial ~ ~ ~ ~

- Organizational

√ √ √ √

- Physical √ √ x x

- Technological

~ ~ ~ ~

Intangible

- Innovation √ √ x x

- Human x √ x x

- Reputation √ √ √ √

Core Competencies

Organizational Resources

Reputational Resources

Weakness

Henkel’s Research and Development was laboratory-driven rather than customer-driven.Most women avoided DIY stores completely because the brand image and product description were very technical.

Red Ocean vs. Blue OceanRed Ocean Strategy Blue Ocean Strategy

• Compete in existing market space

• Create uncontested market space

• Beat the competition • Make 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 choices of differentiation of low cost

• Align the whole system of a firm’s activities in pursuit of differentiation and low cost

• Focuses on adapting to external trends as they occur

• Participate in shaping external trends over time