【正文】 o Paulo – Shanghai – Stuttgart – Tokyo – Vienna – Zurich Nirma\interimrpt Contents Page A. Fierce petition from international and domestic players has imposed 3 great challenge on Henkel B. To achieve turnaround, Henkel should adopt an aggressive expansion strategy 10 C. Roland Berger will help develop the appropriate strategy: project outline 12 D. Project anization and time frame 22 E. Value of the project 12 F. Roland Berger is a best partner of Henkel to exploit China detergent market: 12 selected reference Annex A: Case study Qiqiang 32 Annex B: Case study PG 42 Nirma\interimrpt A. Fierce petition from international and domestic players has imposed great challenge on Henkel Nirma\interimrpt After fast increase in earlier 1990th, annual growth of China detergent market has slowed down in these years National market volume of laundry detergent [in Mio. tons] 1993 1994 1995 1996 1997 2023* * Estimation Source: Chinese light Industry Yearbook(1999), Roland Berger Partners’ analysis ~ +% . 2~3%. Nirma\interimrpt Gross profitability of Whitecat regular powder Overcapcity in detergent industry Price reduction of Major brand (RMB/Kg) Overcapacity in detergent indudstry leads to price reduction and thus reduces the product profitability ? At present, there are about 150 manufactures in detergent industry with capacity of million tons, but total market volume is about million tons, so the utilization rate of capacity is about 70% ? Marekt entry of detergent industry is pretty low and there lies a lot of unregistered factories, If taking their capacity into account, the utilizaition rate will be furthur reduced to about 50%60% 11% 1998年 1999年 3% Tide OMO Whitecat (regular powder) 1998年 1999年 Average price reduction of the whole industry is 10% Nirma\interimrpt After having established prominent position in high end market, PG and Unilever begin to perate middle and low end market Market structure of high end (Price： 10RMB/Kg) Market stucture of middle end (Price： 7~10RMB/Kg) Market structure of low end (Price： 7RMB/Kg) Proportion of high end market is % Proportion of middle end market is % Proportion of low end market is % 20%9%2%69%13%9%3%75%%%%PG Others Benckiser Unilever PG Benckiser Others Henkel Henkel Unilever Others Resource: AC Nielson retailing audit 19992023 Nirma\interimrpt Brand Share Company Tide % PG Ariel % PG OMO % Unilever Power 28 % Benckiser Persil % Henkel Market share of international players’brands in different segment Brand Share Company GFL % PG Panda % PG WIPP % Henkel Tianjin % Henkel Dosia % Benckiser Backup Market stucture of middle end (Price： 7~10RMB/Kg) Market structure of low end (Price： 7RMB/Kg) Brand Share Company Fangcao % Unilever Yunquan % Unilever Sunlight % Unilever Seagull % Henkel Tiantian % Henkel Guilin % Henkel Market structure of high end (Price： 10RMB/Kg) Resource: AC Nielson retailing audit 19992023 Nirma\interimrpt Nirma\interimrpt Although a late er, Benckiser has successful perated north market with Dosia through welldesigned entry strategy ? Through acquiring distributors from PG, Dosia chose Liaoning province as its initial entry area ? In Heilongjiang and Jilin province, petitors are not so strong as that in other parts of China. local brands, such as Tiantian, are in dominant positions, so Dosia chose these two province as subsequent peration areas ? Competition is in choas in Shandong, and distribution work is not well regulated with lots of small distributors/wholesalers peting with each other, so it is easy for Dosia to perate the market and cultivate its qualified disbition channel ? In order to guarantee the success, channel peration is also backed up by strong advertisement champaign Marekt share of Dosia in north China Market entry design 5 . 5 %7 . 3 %8 . 3 %9 . 6 %9 . 4 % 9 . 4 %1 1 . 7 %Jan 1999 Mar 1999 May 1999 Jul 1999 Sep 1999 Nov 1999 Jan 2023 Resource: AC Nielson retailing audit 19992023 Nirma\interimrpt Some domestic players are also making effor