INTRODUCTION

COMPANY HISTORY AND OVERVIEW

At the beginning of the Company's history, we meet a 28 year-old merchant who was interested in science - Fritz Henkel. On September 26, 1876 he together with his two sons, Fritz Henkel Jr. and Dr. Hugo Henkel founded the company Henkel & Cie in Aachen and marketed its first product, a universal detergent based on silicate.

Henkel – A Brand like a Friend – This claim underlines our promise to make people’s lives easier, better and more beautiful with our brands and technologies. Henkel which is headquartered in Düsseldorf / Germany counts among the most internationally aligned German-based companies in the global marketplace. People in approximately 125 countries around the world trust in brands and technologies from Henkel.

Henkel is organized into three globally operating business sectors:

1) Laundry & Home Care Laundry & Home Care has always played an important role for Henkel. The Company’s success story started with a product from this business sector. In the markets of relevance, Laundry & Home Care business sector enjoys leading positions on a worldwide scale.

2) Cosmetics / Toiletries Henkel's cosmetic division is one of the largest of its kind in the world and its brand-name products business is continuously expanding. The cosmetic products are available in 150 countries worldwide.

3) Adhesives Technologies Henkel is the world market leader in adhesives, sealants and surface treatments for consumers, craftsmen and industrial applications. It offers a multitude of applications to satisfy the needs of different target groups – consumers as well as craftsmen and industrial businesses.

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MISSION STATEMENT

"To position the company as a brand customers and consumers can trust and to make people's lives easier, better and more beautiful with our products and technologies".

SLOGAN Henkel – A Brand like a Friend

ANALYSIS

The mission statement of Henkel has the basic characteristics such as Brevity – it is very easy for anyone to understand and also remember.

The statement is also flexible. It can accommodate changes at any point of time if needed.

But on the other hand Henkel's mission statement is not distinct. Similar statements have been previously formulated by other companies as well. For example: - Unilever's mission statement "To add Vitality to life. To meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life."

It also does not clearly define the products and technologies it offers It's strategy is very general and unclear from the statement.

OBJECTIVES Through its business activities and products the maon focus of Henkel is on:

The efficient utilization of energy resources, and hence climate protection. Resource conservation and environmental protection through transfer and

implementation of latest production technologies. Continuous improvement of the performance and value-based corporate

culture. Clear focus on improving leadership skills of employees and increased

emphasis on discussion of codes A safe and healthy environment for the employees, neighbours, customers

and consumers The efficient utilization of available raw materials and the avoidance of

waste and Social progress for the employees, customers, and all countries in which

Henkel operates.

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VALUES AND CULTURE

VISIONHenkel is a leader with brands and technologies that make people's lives easier, better and more beautiful.

VALUES

Values are the basic unstated beliefs of the people working in an organization.

The values of the people of Henkel are stated below. They are: -

- customer driven- develop superior brands and technologies- aspire to excellence in quality- strive for innovation- embrace change- are successful because of the employees- are committed to shareholder value- are dedicated to sustainability and corporate social  responsibility - communicate openly and actively- preserve the tradition of an open family company

STRATEGY

Strategy is a course of action to achieve an objective.

The Company's human resources strategy focuses on attracting the best junior managers, offering them attractive career perspectives and actively developing their skills.

← Henkel's growth strategy is to drive growth through innovation and strong brand, expand the world market position from a strong European and North American base and develop new acquisitions and growth potentials in all regions of the world.

To achieve the objective of profitability, the company follows the strategy of expansion and further strengthening of core businesses.

STRATEGIC SCOPE

Henkel serves the laundry, home care and beauty needs of the people of all age groups. The main target groups of the company are laundries, hospitals, parlors and households.

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STAKEHOLDERS

Key stakeholders of Henkel include employees, shareholders, customers, consumers, suppliers, neighbors, government authorities, politicians, associations, non-governmental organizations (NGOs), scientists, and the general public.

BUSINESS ACTIVITY

It is a secondary sector organization. Henkel comes under chemical industry. It consumes large quantities of energies and requires factories and machinery to produce its products. HENKEL has a product range comprising of detergents, household cleaners, cosmetics, toiletries, adhesives and industrial chemicals.

Laundry and home care- laundry detergents (Persil, ver nel and dac), dish washing products (pril, purex and mas), fabric softeners (lance, abaya), floor and carpet care products, glass cleaners, insecticides for household applications, kitchen cleaners and scouring agents.

Cosmetics/toiletries- soaps (fa and pure & natural), dental care and oral hygiene products, shampoos and conditioners (schauma, pure & natural and gliss kur), skin care products (dial, abeer and right guard), hair colorants and shower gels.

Adhesives technologies- sealants (LF600, OSI and SISTA), glue sticks, glue rollers ( pritt, pattex and loifol), adhesive tapes, waterproofing products, flooring adhesives, wallpaper pastes coatings, surface treatment products, industrial cleaning agents, soldering pastes, lubricants and wood glues.

TYPE OF COMPANY:

It is a private sector firm owned by the Henkel family. Their shareholders are their own family members. Thus, it is a private limited company.

Henkel is a multi national corporation (MNC). It has production sites in 52 countries including Mexico, Guatemala, Italy, India, USA, Spain and France. Its headquarters' are in Germany (Düsseldorf).

More than 125 countries all over the world have access to Henkel products and technologies.

BUSSINESS FUNCTIONS

The business functions at Henkel are divided into three arenas each having distinct departments and functions:

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BUSINESS ARENA:

Marketing Department- This department is responsible for marketing research, setting targets of market share for new products, promotion and discounts.

Accounting Department- The main functions of this department are it maintains records of sales, balance sheets, sales returns and record of damaged products.

Human Resources Department-Looks after the giving of incentives, vacations, recruitment, booking hotels and rooms for meetings, insurance and cost reimbursement

CHEMICAL ARENA:

Product/technologies development Department- Develops new products and works on improving formulae.

Research and Analysis Department- Does research for sustainable products, evaluation of new products and analyzing product lifecycle and safety.

TECHNICAL ARENA: 

Production Department-Looks into the number of products produced, quality control, costing of products and production and packaging of products.

Energy Management Department-maintain efficient use of energy resources and minimize the use of resources and maximize productivity.

Environmental Protection and Safety Department-ensures occupational health and safety of employees, train them in safety, environment and health matters and arrange projects to help the destitute.

SIZE MEASURING

NUMBER OF EMPLOYEES

Henkel has 53,107 employees in total (not including trainees, working students and interns)

768 employees are top managers and 9,200 employees hold other managing posts.

The average number of employees engaged in research, product development and application engineering at Henkel worldwide is around 2,700.

SALES TURNOVER

In 2008, the total sales turnover was 13.075 billion euros.

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MARKET SHARE

Henkel has been active in the field of detergents and household cleaning products for over 100 years. It has been one of the pioneers in the world. People in 125 countries around the world trust in brands and technologies from Henkel. And that makes Henkel one of the most internationally aligned companies in Germany. The Henkel group holds the largest share of the German detergent market.

Considering the above data we can say that Henkel is a large firm

TYPE OF PRODUCTS

Henkel produces consumer goods. These are final products such as detergents, shampoos, soaps, etc. which can directly be used by the consumers.

FACTORS OF PRODUCTION

Henkel which is involved in the production of FMCG's (fast moving consumer goods):

has factories and office building on physical land .It also uses natural resources like shea oil, argan oil, etc. in some of its products.

Employs skilled labour for production, sales, marketing and maintaining accounts.

Raises finance and uses it to purchase modern machinery, tools, equipments and technology – capital

The shareholders which mainly are the Henkel family take the risk of bringing the operation together, employing directors, managers and other staff to ensure the success of the enterprise.

CULTURE

The culture followed in Henkel is Corporate Culture (Role Culture).We can say so as there are well established rules and regulations to be followed by all the employees. Individuals are expected to do their work to the full and not over step the boundaries.

Basic under lying beliefs are customer orientation, environmental protection, sustainable development and societal welfare.

Overt beliefs include the slogan 'From beginning to end Henkel A brand like a friend'.

Visible Artifacts- the superiors and subordinates interact informally with each other, there is no particular dress code except for some meetings and the trophies and certificates given to employees are displayed in their respective offices.

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PEST ANALYSIS

POLITICAL FACTORS:

Saudi Arabia has very stable political environment. There is no democratic system in Saudi Arabia and no political parties or national elections. So business has stable policy and everything is settled.

The economic philosophy of the Saudi Arabian royal family has not changed but the economic role of the government has grown tremendously. The Saudi rulers wanted to improve the economic conditions of the country's citizens while retaining the society's Islamic values.

In Saudi Arabia the income taxes for Saudis and expatriate employees working in the kingdom is abolished. Saudi law requires that all foreign and Saudi companies pay a particular tax on profits earned in the country.

There are trade restriction which are stated as follows:

Testing

Standard

License

Certificate

Proper documentation

ECONOMIC FACTORS:

In K.S.A the interest rate is continuously increasing which affects their business. And they face a lot of difficulties.

The fluctuation in price cause many problems. As there is no stable rate so their average sales income decreases.

As this is foreign business so they also face difficulty in exchange rates of currency. Their business gets adversely affected when they import or export raw materials.

As the economic growth of K.S.A is booming so overall planning is changed and they have good investment opportunities which is beneficial for the company.

SOCIOCULTURAL FACTORS:

The dominant religion in K.S.A is Islam. A mixture of Islamic and Arab culture prevails.

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As Muslims are against western companies Henkel faced problems in setting its reputation.

They also find difficulty in marketing as Saudi culture does not allow Saudi women to come on media. So they were unable to show the public what they wanted to.

Next thing is that they had to adapt to the Arabic language, therefore they had to hire specialist for marketing in Arabic.

Saudi people have much leisure time for shopping and trying out new products so this proved beneficial for Henkel company. The last but not the least point is that the Saudi population knows their rights as a

consumer. So Henkel company has to maintain its standard.

TECHNOLOGICAL FACTORS:

In K.S.A, HENKEL company could avail good and advanced technology as well as cheap skilled labor. This results in low production cost but better quality standard.

Henkel company could also provide the facility of Toll free numbers to get connected with their customers at all times.

Since Saudi Arabia is a developing country technology is growing at a very fast speed. So Henkel is highly automated due to which it is able to meet its consumer's demand.

SWOT ANALYSIS

STRENGHTS:

Large capital Good labor

Wide range of products

Good repute in customers

Expertise

Quality products

WEAKNESS:

No access to cheap resources Chemical industry (face criticism from pressure groups)

High cost

Respond slowly to problems

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Large firm- weak in some areas due to huge span of control

OPPORTUNITIES:

Developing marketing Removal of barriers

Expand product range

Competitors slow to adapt changes

Web marketing

THREATS:

Competitors' new product Price wars

Changing customer tastes

Political instability

Religious factor

CONCLUSION

Henkel has been active in the field of detergents and household cleaning products for over 100 years now. It has been recognized as a chemical industry leader with its outstanding environmental policy communication process. Henkel's performance in sustainability and corporate social responsibility impressed external experts. It occupied the second place in sustainability ranking of the companies in Germany.

Henkel is looking forward to maximize the shareholder value along with sustainable development and social responsibility in view.

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Project work: ANALYSIS OF HENKEL

Date: 14 Feb, 2009

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Prepared by Durdana Samreen

Anum RasheedJoodat JabeenSamina Fazal

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