Henkel: Building a

Winning Culture Harvard

Case Solution & Analysis
Introduction
The paper attempts to describe the strategic management problem of Henkel along with the
companys background and core values. The paper also attempts to describe the internal and
external analysis of Henkel through the implementation of different theories and models which
includes SWOT analysis, PEST Analysis, and Porters five forces model. Furthermore, the paper
provides alternative solutions with their advantages and disadvantages in order to select the
best feasible option. Moreover, the paper provides recommendations with step by step action
plan to implement the alternative decided. Lastly, the paper also provides the executive
summary of the paper.
Strategic Management Problem
Company Background
Henkel is one of the largest manufacturers of chemical brands which were founded in the year
1876. The company provides the leading technological brands in Laundries & homecare,
adhesive technologies, and provides different categories of products in beauty care. The most
popular brands of the company include Persil, Loctite, and Schwarzkopf. In the laundry and
home care sector, Henkel offers heavy duty detergents and as well as special detergents. In the
year 2012, the company reported sales of 4556 million which comprises of 28% of the entire
sales reported for the company.
The beauty care products have been provided by the company in the field of hair, toiletries, oral
hygiene, and skin care. Henkel is considered as the leading supplier for salon products. The
company managed to generate a sales of 3542 million in the year 2012. This sector constitutes
21% of the entire sales of the company for the particular year. The business sector of Adhesive
technologies is an important sector for the company as it constitutes towards the 50% of the
entire sales for the year 2012. Henkel is the market leader in producing adhesives, sealants, and
other industrial application. The sales of the company for the year were 8256 million.
Problem Statement

While considering the problems in the beauty care industry, the company has invested heavily
in its Dial product as the EBIT for the particular product has decreased by 0.2% from the year
2011 to 2012. Therefore, the results have not met the expectations of the company and it has
resulted in the growing weakness for the beauty care products for the company. The bargaining
power of the company is lower with its retailers in the developing countries which weakens the
position and allows more discounts and trade offers for its promotion of its brands.
Furthermore, the Henkels frame of orientation allows improved performance from employees,
however it also enables to kill their morale. The particular strategy focuses on increasing
internal competition which may result in increased unethical behaviors and internal damage to
the company.
Analysis
SWOT Analysis
Strengths
Henkel has a good reputation and a strong brand awareness in the country. The company also
has a large capital and investment involved in KSA which shows that the company is financially
sound. Henkel has wide range of products which provides the company to cater a wide range of
market that low spending power and also targets to those that have high spending power. The
company is well recognized amongst customers due to their quality of products. Henkel also
have an expertise in offering its products which differentiates itself from many
competitors (Thain & Bradley, 2014)
Weaknesses
Due to the low availability of suppliers in the Middle East, company has limited access towards
cheap resources which allows the company to sell products at high prices. As the company also
develops chemical products, the company faces many critics from different pressure groups in
the development of its products. The company also has a nag to respond slowly to the
problems of their customers. As Henkel have developed its business model based on the
mechanistic model, therefore the company faces problems regarding maintaining the span of
control and also being weak in solving the problems of its customers (Thain & Bradley, 2014).
Opportunities
Due to the increased economic growth of the country, KSA have focused on reducing the
barriers of entry for companies. Therefore, this provides a huge opportunity for Henkel and
other new entrants to introduce their products in the KSA market. This strategy has also
allowed companies to expand their different product range to meet the demands of their
customers. Apart from the big competitors of Henkel which includes Unilever.
This is just a sample partial case solution. Please place the order on the website to order your own
originally done case solution.
This case shows, CEO-led organizational change due to site objectives, performance
assessment and accountability. When Kasper Rorsted became the CEO of Henkel, a German

company is a manufacturer of personal care products, laundry products and adhesives, in

2008, he was determined to make the corporate culture of good enough in a singularly
focused on winning in the competitive market. Historically, Henkel was a comfortable, stable
place to work. Many employees have not received negative feedback performance. In an effort
to refute the widespread attitude of complacency, Rorsted implemented multistage change
initiative aimed at creating a winning culture. First, in November 2008, he announced a set of
ambitious financial goals for 2012. As the financial crisis roiled the global economy, he
reiterated his commitment to these goals, sending a clear signal to Henkel employees and
external stakeholders that excuse is no longer acceptable. Rorsted next introduced a new set of
five values of the company, replacing the previous list of 10 values, which several people were
able to read from memory, the first of which emphasizes a focus on customers. It also
established a new, simplified system of performance management, which assessed the
performance management and improvement potential in four levels. system also includes
forced ranking requirement, mandatory that a certain percentage of workers (in each business
unit and corporate) ranked among the top high, medium or low performers. These estimates
significantly impacted bonus compensation managers. At the end of 2011-the time in which the
event takes place, Henkel is well on its way to the goal in 2012. After shedding nearly half of the
top management team, along with multiple sites of products and brands, Henkel, appears to be
more compact, more competitive, winner of the organization. Hide
by Robert L. Simons, Natalie Kindred Source: Harvard Business School 19 pages. Publication
Date: February 7 2012. Prod. #: 112060-PDF-ENG
How We Work?
Just email us your case materials and instructions to order@thecasesolutions.com and
confirm your order by making the payment here
Case study

The case describes the evolution of the market for laundry detergents in India. Although the
brothers of the input lever was the starting point, Nirma detergent is a product of the masses by
targeting the segment of the economy. When P & G entered the market in 1985, the market was
already well established by the existing players. P & G started 2-3-4 project, open a rift in the Indian
market in 2015, P & G wanted to double the number of Indians who use its products, treble per
capita spending by Indians and Sales quadruple net operations in India. The case discusses a
number of marketing innovations expanding the range of products, pricing product lines
expansion of the brand the players competing use. With a small number of differentiated products
in the market companies have had to think and position offers. The era of price war and increased
marketing spend to attract the attention of customers and gather market share significantly strained
profitability. After successful forays into the middle of the segment with the tides and the Naturals, P
& G asks whether it should launch a brand for the segment of the economy also. P & G is behind in
capturing the growth story of India. How was I going to play ball with HUL realistic when working in a
less than HUL categories? You have a choice but to take on HUL front in broad categories such as

detergents?
by
Seema Gupta,
Kanchan Mishra,
Ashish Maheshwari
Source: Indian Institute of Management Bangalore
23 pages.
Release Date: September 1, 2013. Prod #: IMB433-PDF-ENG
Procter & Gamble India: Gap in the portfolio? Case Solution

Henkel Building a Winning Culture

Case ID - 112060

Abstract