COMPANY PROFILE -Reckitt Benckiser Group
Business Sector :FMCG
Operating Geography :United Kingdom, Global
About Reckitt Benckiser Group :Reckitt Benckiser Group plc is a manufacturer and marketer of health, hygiene and home products. It was formed in 1999 by the merger of the UK-based Reckitt & Colman plc and the Netherlands-based Benckiser NV. Headquartered in Slough, England, the company is selling its products in 180 countries and has about 35000 employees. Rakesh Kapoor is the current CEO.
Reckitt Benckiser Group Revenue :£ 9.891 billion (FY ending December 31st, 2016)
Competitive Analysis of Reckitt Benckiser Group
|1. Growth driven by strong global brands |
2. Global presence with sector diversification
3. High performing Research and Development
4. Multiple awards and recognitions
|1. Embroiled in controversies|
2. Low penetration in rural markets
3. Lack of growth in meaningful categories
|1. Acquisition of Mead Johnson to drive growth and open new market access |
2. High potential in Chinese and Indian markets
3. Expanding portfolios across categories and geographies
|1. Strong competition|
2. Emergence of private label brands
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Detailed SWOT Analysis of Reckitt Benckiser Group
1. Growth driven by strong global brands: Reckitt Benckiser’s has delivered consistent growth over the years driven by its strong global brands. The company derives major strength from its ‘power’ brands, names such as Dettol, Harpic, Durex, Strepsils, Gaviscon, Vanish and Calgon. The company's strategy is to have a highly focused portfolio and is driving growth through innovation and investing disproportionately on its 19 Powerbrands and 16 high-potential markets - Powermarkets, which are responsible for close to 80% of net revenues. The company reported an Adjusted Earnings per Share of 302.0p and declared a dividend of 153.2p for FY16.
2. Global presence with sector diversification: Reckitt Benckiser has operations in 60 countries and its products are sold in 200 countries across six continents. They have 37,000 employees or ‘entrepreneurs’ as they like to call it, across the globe, all inspired by a vision of a world where people are healthier and live better. The acquisition Mead Johnson will also significantly strengthens Reckitt Benckiser’s position in developing markets, especially Asia and Latin America. Further Reckitt’s consumer products span several market sectors, a situation which provides attractive diversification. The company’s product categories span across four major areas – Health, Hygiene, Home and; Portfolio (including food) products.
3. High performing Research and Development: Reckitt Benckiser’s global, well-connected R&D team features a diverse mix of different functions and specialisms. Primarily the R&D of Reckitt Benckiser focuses on five key functions – category R&D, regulatory affairs, evidence-consumer safety and oversight, 3D and packaging and innovation and sustainability. The teams are located across 35 different countries around the world with major facilities in Germany, Italy, India, China, Thailand and the USA. The company’s state of art £105m Centre for Scientific Excellence in Hull is RB’s biggest healthcare development centers.
4. Multiple awards and recognitions: RB group has constantly been in media, gaining recognition for its efforts in terms of innovation, marketing and sustainability. In Dow Jones sustainability world index 2015, RB scored 83 out of 100. In addition, for seventh consecutive year RB has been identified as a leader in carbon disclosure project. In innovation, Dettol and Lysol's No-Touch hand wash system took gold in product design at the Design Business Association's Design Effectiveness Awards. In marketing, Durex Fundawear grabbed silver award at the Cannes Lions International Festival of Creativity, while RB received Company of the Year in the British OTC industry.
1. Embroilment in controversies: Reckitt Benckiser got a hit on its reputation in South Korea when it found itself surrounded by the controversy regarding the deadly lung injuries caused by the usage of humidifier sterilizers marketed by the firm. Although the incident occurred in the 2011, the official apology was offered in 2016 which did further damage. In another incident in 2015, the company had to recall 1.5 million bottles of the congestion and cold medicine Mucinex due to mislabeling issues.
2. Low penetration in rural markets: Rural markets have always been the greener pastures for any marketer in the view of high growth and untapped potential. The rural consumers are known to have low income, low brand awareness and inadequate information. Despite increased focus on emerging markets, 64% of RB’s home care business is generated from developed mature markets. RB need to come up with new strategies to develop the yet untapped rural markets, especially in emerging economies in South Asia and Africa.
3. Lack of growth in meaningful categories: Reckitt Benckiser must explore growth potential in categories such as air care and dish-washing where it is lagging behind its competitors. Some of the Reckitt Benckiser’s 16 Power markets are mature ones that present the right income conditions for consumers who are more likely to purchase higher-value products that offer a degree of convenience through innovations such as automation. Allergy care is a particularly glaring hole in RB’s global portfolio, but other areas, including dermatological care could benefit from greater investment.
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Reckitt Benckiser SWOT and PESTLE analysis has been conducted and reviewed by senior analysts from Barakaat Consulting.