Beiersdorf company overview Essay Example

York, Paris, and Sidney. Despite disruptions caused by the world wars, Troplowitz laid the groundwork for Beiersdorf's global presence. Presently, Beiersdorf sells its products worldwide via over 90 affiliates, distribution channels and license partners. The company generates 70% of its sales outside Germany.

Beiersdorf's philosophy is to improve people's lives and well-being on a daily basis.

Beiersdorf's success is credited to the harmonious relationship between its brands and people. The company focuses on continuously developing and supporting certain global brands. Its operations consistently revolve around individuals, including both consumers and the dedicated, experienced workforce. With a workforce of over 17,500 employees worldwide, Beiersdorf thrives.

Beiersdorf owns 11 different brands, including NIVEA, 8x4, atrix, Eucerin, Labello, la prairie, JUVENA, FUTURO, tesa, Hansaplast, and Elastoplast.

The defining characteristics of Beiersdorf's brands include reliable quality, high consumer benefits, and reasonable prices. The company continuously strives to enhance and expand these brands and their product lines.

4) Research and Development

Research and development is of great importance to Beiersdorf as they focus on continuously developing their brands in the fields of cosmetics/personal care, wound care/health, and adhesives technology. In 2001, the company allocated 2% of its sales (92 million euro) towards R + D.

The personal care industry utilizes cutting-edge techniques to create advanced technologies for high-performance active cosmetics. These technologies include new plaster production methods, which are used to develop innovative consumer goods products. Additionally, tesa AG prioritizes the efficient handling of solvent-free adhesives and coating processes.

Beiersdorf emphasizes two main principles: the conservation of the environment and the promotion of maximum safety for its employees. These principles are incorporated into all aspects of the company's operations. The company's environmental and safety strategy is divided into

three stages: product development, production process, and environmentally sound waste management.

6) Indicators
Beiersdorf's products are distributed globally through over 90 affiliates, distribution partners, and license partners. These products are sold in nearly every country, with 70% of sales occurring outside of Germany.

According to the annual report of Beiersdorf in 2001, the group sales in million Euro and the group profit after tax in million Euro have experienced significant growth. The sales have shown a continuous increase from 1999 to 2001,
amounting to a growth rate of 24.85%. Similarly, the group profits after tax have also seen a remarkable surge, growing by 62%. This indicates that the group has achieved substantial overall growth during this period.

After providing a brief overview of Beiersdorf, our main focus will be on the company's internationalization process, analyzing its behavior as a global player.

Beiersdorf, a multinational corporation, has a widespread presence globally in nearly every country, with 70% of its sales happening outside Germany. The company demonstrates its global reach by generating 9.3% of its total turnover in France. Beiersdorf's internationalization strategy revolves around the growth of specific global brands. By investing in these powerful consumer brands and continuously enhancing their products, the company can provide dependable quality items at reasonable prices, thereby establishing trust with consumers.

Beiersdorf places consumers as its primary focus in their business, as mentioned in the company's mission statement. Their objective is to improve people's well-being and add a daily dose of happiness to their lives.

Beiersdorf believes that in order for a brand to achieve global success, it must also be successful at the local level. This means that Beiersdorf focuses on meeting the specific needs of

people in each region, ensuring that their brands thrive locally. The strength and success of Beiersdorf's brands on a global scale come from their strength at a local level. In essence, while Beiersdorf brands enjoy worldwide success, the group maintains a consumer-focused approach that allows them to customize their products to meet regional needs and adapt to different countries. Beiersdorf aims to understand and respect diverse cultures around the world, and this strategic approach has led to its accomplishments.

Beiersdorf, headquartered in Hamburg, Germany, implements an internationalization strategy to achieve its objective of creating global brands that address local needs. The company operates through 100 affiliates worldwide, encompassing departments like production, marketing, sales, and research and development. One noteworthy example is Beiersdorf's substantial manufacturing presence in Thailand – the second largest in Asia. With a workforce of 180 employees and a production capacity surpassing 62,000 tons, this base not only manages administrative duties but also oversees and supports production across the Indo-Chinese peninsula.

Beiersdorf's internationalization strategy is centered around its head office in Hamburg, which sets a globally oriented marketing strategy based on uniform international rules. The affiliates then adapt and implement this global marketing strategy locally to meet regional requirements. This approach ensures that Beiersdorf's messages effectively reach their target audience and are comprehensible worldwide.

Due to the uniqueness of Beiersdorf's approach in developing global brands like NIVEA, different countries perceive these brands as their own. For example, French people regard NIVEA as a French brand, while Italians believe it is an Italian brand. This phenomenon has contributed to the worldwide success of Beiersdorf.

The subsidiaries have a considerable level of autonomy and decision-making power. The

German headquarters do not centralize control, allowing subsidiaries to tailor products and communication campaigns to meet local needs. Subsidiaries are organized based on category management with dedicated managers overseeing different product categories such as NIVEA Beaute, NIVEA Visage, Labello, NIVEA Sun, etc.

Beiersdorf is a transnational group, which means it thinks globally but acts locally and is not a global group.

The international expansion of Beiersdorf is carried out in two main ways. The first approach involves a gradual expansion into new countries. Typically, when entering a new market, Beiersdorf starts by introducing a few of its popular NIVEA products, particularly the creams. This is followed by the introduction of more NIVEA products, then the launch of LABELLO products and other offerings from different brands. This gradual expansion strategy allows Beiersdorf to introduce its various brands and products into new markets over time.

The group's strategy includes two aspects. One of them is making investments in individual countries, which was demonstrated in 2001 when they built a state-of-the-art cosmetics factory in Poznan, Poland. This investment required a capital expenditure of 22 million Euros and displayed the group's significant dedication to Poland.

After establishing the transnational nature of Beiersdorf, it is important to analyze the relationships within the group.

Thanks to the Intranet, there is constant communication between the German head office and the affiliates. The company also promotes internationalization by encouraging a high turnover of employees between the affiliates, resulting in a 30% increase in transfers in 2001. This leads to an exchange of experience and knowledge among employees, ultimately strengthening Beiersdorf's position as an international organization.

The internationalisation strategy of Beiersdorf is focused on two dimensions: entering new countries

and penetrating new market segments.

When the group decides to expand into new countries, it chooses to enter a foreign market with the intention of selling its products.

Beiersdorf takes a systematic approach to entering new market segments by expanding gradually in countries where it has already established a presence, leveraging its strengths. The company aims to make informed decisions at the appropriate time and location. One example of this strategy is the introduction of various NIVEA product categories in a sequential manner, starting with NIVEA Cri??me and then expanding to NIVEA Bath care, and so on. Thus, Beiersdorf employs a step-by-step approach to entering new markets, as previously observed.

Sometimes, Beiersdorf acquires companies to reinforce its market position. In France, it purchased Onagrine and Nobacter, allowing it to enter the pharmaceutical market. Additionally, the acquisition of the plaster brand Elastoplast aided Beiersdorf in utilizing the acquired company's expertise and establishing itself as a worldwide leader in the plaster market.

Beiersdorf's strategy is demonstrated through the success of their brand NIVEA, which was first established in Hamburg in 1911. Over the years, NIVEA has gained global recognition and its iconic blue logo has become synonymous with tradition and quality. By the year 2000, NIVEA had achieved worldwide sales of over 2 billion Euros, a remarkable increase compared to the sales generated in 1990.

NIVEA is a brand that includes various products sharing the same name and "promise". These products belong to the same category and are perceived by consumers as having excellent quality.

Through organic growth, NIVEA has attained global dominance in the skincare industry over time. To enter the Asian market, NIVEA collaborated with the esteemed Japanese chemical company, Kao

Corporation. As a result, NIVEA now commands an impressive 15% share of the worldwide skincare market and is recognized as the top-selling brand globally (source: AC NIELSEN 1999).

NIVEA's worldwide success can be attributed to its consumer-oriented marketing approach, strategic investments in research and development, and leadership in implementing proactive marketing policies to meet consumer needs.

Furthermore, NIVEA's international reach allows it to effectively target a global consumer base. In the subsequent sections, we will examine NIVEA's international strategy in detail.

When it comes to entering a market, NIVEA employs the export market selection tool, which helps assess and identify opportunities in foreign markets. This brand takes a proactive approach to selecting which foreign markets to compete in and actively seeks out business rather than waiting passively.

NIVEA conducts market and consumer studies before entering foreign markets in order to comprehend their characteristics. If there is a favorable prospect in a rapidly expanding market where NIVEA possesses products that can satisfy consumer requirements, the brand ventures into that market. For instance, Ireland exhibited a need for top-notch shower and deodorant products, which NIVEA successfully met, resulting in its penetration of the Irish market.

A more traditional method for launching products in a new country involves selecting a country that is not only geographically close but also shares similarities in terms of culture, economy, and politics with a country where the products are already available. This approach allows for economies of scale. NIVEA adopts an expansive strategy by establishing markets that resemble existing markets. They take advantage of the nearest neighbor approach when expanding into the UK and Irish markets. To achieve economies of scale, NIVEA Ireland

typically prepares for a simultaneous launch alongside NIVEA UK's introduction of products to the UK market. This is because many British advertising media are also accessible in Ireland, and the primary feasibility study is conducted in the UK.

In terms of launching new products in foreign countries, NIVEA typically selects products from its existing portfolio that have already been introduced in other markets and are deemed suitable for introduction to other markets after making certain modifications to meet local consumers' needs.

NIVEA conducts extensive research on the target demographic, including Spanish males, to gather essential information. Using this knowledge, a product is created to appeal specifically to the desired audience. Next, a feasibility study is conducted and if positive results are achieved, a prototype is developed. The product then goes through test marketing which involves observing and discussing with the intended consumers. Once the test phase proves successful, the marketing team can move forward with launching the product in the local market. This includes creating a financial plan and communication strategy tailored for that specific market.

Next, we will examine the marketing strategies used by NIVEA to promote its products.

Beiersdorf employs a distinct marketing approach and advertisement style that sets it apart from other companies, such as L'Oreal.

The group has a global perspective and also takes local actions in its advertising. Local subsidiaries have the flexibility to tailor promotions to their country, but they must adhere to international guidelines that allow consumers to recognize the NIVEA brand. These guidelines include using soft colors in advertising materials, featuring unknown models rather than famous celebrities, incorporating the color blue as a reminder of the globally renowned NIVEA Creme, and ensuring

consistency in models used for specific product categories across different countries (except for Asian countries). In Japan, advertisements feature Asian models to better resonate with consumers.

NIVEA appears to use the same commercials in multiple European countries. For example, the TV commercial for a NIVEA Deodorant product was identical in France, the Netherlands, and Hungary. Additionally, NIVEA Visage recently introduced a new product called "cri??me d'i??nergie," and the same poster was displayed on bus stops in both France and the Netherlands simultaneously (with language adaptations, of course). NIVEA utilizes consistent advertising across culturally and socially similar countries.

However, the various subsidiaries have the flexibility to implement localized promotional strategies that cater to specific regional needs, particularly for sales promotion. For example, they can distribute samples in magazines or stores and have the freedom to create unique gifts that are given to consumers when they purchase certain products, such as manicure sets or necklaces.

The NIVEA advertising strategy combines global directives with local specificities, reflecting Beiersdorf's philosophy of thinking globally and acting locally.

To conclude with NIVEA, we would like to showcase the global success of their strategy through the following results.

NIVEA has become the world's largest skin and personal care brand, leading in multiple international markets. In 2002, it achieved total sales of 2.5 billion Euros. The brand experienced a significant growth of 17%, particularly in categories such as NIVEA Hair care, NIVEA for Men, NIVEA Beaute, and NIVEA Deodorant. The expansion was also notable in Eastern Europe.

NIVEA has taken the lead in the skin care sector in Australia and Turkey for the first time in 2002. In addition, NIVEA Deodorant also became the leader of the market in

Bulgaria, Poland, Portugal, and Turkey in 2002. This pattern continued with other categories as well.