Reckitt Benckiser Reshapes Company Strategy
Reckitt Benckiser (RB) recently announced a number of important changes to the company and its strategy to fuel another decade of market outperformance and attractive shareholder returns.
“RB has delivered a decade of superior growth and shareholder value. However, with slower market growth and increased competition, we need to reshape our strategy to enable us to continue our track record of outperformance,” says Rakesh Kapoor, chief executive officer, Reckitt Benckiser.
Under the new strategy, Reckitt Benckiser:
• Targets Health & Hygiene Powerbrands: Successful Powerbrand strategy continues, but focus and investment increased on higher growth, higher margin health & hygiene in addition to home.
• Targets faster growing markets: Prioritizes 16 “Powermarkets”, mainly emerging, for disproportionate investment and growth.
• Redeploys resources to emerging markets: Two new emerging market Area structures formed (previously 1); North America and Europe merged into one Area structure (previously 2).
• Increases investment in brand building: Targets annual cost savings to fuel an additional investment of £100m in brand equity building.
• Targets steady operating margin expansion: Continues strategy of steady operating margin* enhancement over medium term — whilst increasing brand investment
• Sets three medium term (5-year) key performance indicators: 200bps of net revenue (NR) growth above market growth on average each year; emerging market Areas to be 50% of “core” business NR by 2016 (up from 42%); health and hygiene to be 72% of core business NR by 2016 (up from 67%).
Click here for more details on this bold transformation initiative.
“RB has delivered a decade of superior growth and shareholder value. However, with slower market growth and increased competition, we need to reshape our strategy to enable us to continue our track record of outperformance,” says Rakesh Kapoor, chief executive officer, Reckitt Benckiser.
Under the new strategy, Reckitt Benckiser:
• Targets Health & Hygiene Powerbrands: Successful Powerbrand strategy continues, but focus and investment increased on higher growth, higher margin health & hygiene in addition to home.
• Targets faster growing markets: Prioritizes 16 “Powermarkets”, mainly emerging, for disproportionate investment and growth.
• Redeploys resources to emerging markets: Two new emerging market Area structures formed (previously 1); North America and Europe merged into one Area structure (previously 2).
• Increases investment in brand building: Targets annual cost savings to fuel an additional investment of £100m in brand equity building.
• Targets steady operating margin expansion: Continues strategy of steady operating margin* enhancement over medium term — whilst increasing brand investment
• Sets three medium term (5-year) key performance indicators: 200bps of net revenue (NR) growth above market growth on average each year; emerging market Areas to be 50% of “core” business NR by 2016 (up from 42%); health and hygiene to be 72% of core business NR by 2016 (up from 67%).
Click here for more details on this bold transformation initiative.