Independent University, Bangladesh

Term Paper

Course Code: MGT201

Course Title: Principles of Management
Section: 06

Submitted To:
Miss Afnan Ashfaque
Lecturer
Department of Management
School of Business and Entrepreneurship

Submitted By:

PROJECT
Sarfaraj Mehrab Ahmed Sunayra Mahmud Munmun
ID: 2022033 ID: 1811268

Md. Ataya Rabbi Ansari Nadia Islam

ID: 1910852 ID: 1930652

Kazi Maksudur Rahman

ID: 1920601

Date of Submission: 30th December, 2020

Contents
Executive Summary ................................................................................ 2
Research Methods ................................................................................... 3
Introduction ............................................................................................. 3
SWOT Analysis........................................................................................ 4
External Factors/ PESTLE ..................................................................... 6
Stakeholders ............................................................................................. 8
Competitive Advantage........................................................................... 9
Conclusion and Findings ...................................................................... 10
References .............................................................................................. 11
Executive Summary
This report consists of information regarding a multinational corporation, Reckitt
Benckiser. Reckitt Benckiser, RB in short, produces FMCG goods specifically healthcare and
personal care products. This report has elaborated the external factors related to the growth of the
business using business tools and also the internal factors that can be used as the best advantage.
The first tool implemented was SWOT which showed the internal aspects like strengths and
weaknesses of the company and how they can be used to exploit the opportunities and mitigate
the threats. Secondly, the external factors were given in details which illustrated how the
company could be affected due to those points. All of the factors are directly or indirectly
influenced by the stakeholders which is given in details to show how the crucial stakeholders
affect the organization. Lastly, the competitive advantage of Reckitt Benckiser was provided to
show how this company has been in the market for so long and how they are better than their
competitors.
This report also provided an idea to the researchers that how a multinational need to work
globally, taking care of all the external factors and stakeholders that can affect the business. All
these materials lead to the conclusion that Reckitt Benckiser is a strong multinational company
with good financial background and how they have upheld their glorious legacy of making the
world a healthier and cleaner place.
Research Methods
As Reckitt Benckiser is a public limited multinational company, most of the gathered
information was found through articles published in prominent newspapers, from online stores,
from RB’s own website and other reliable and valid websites. The team chemistry has developed
to such a stage where members worked more like a team rather than a group, this has helped the
team in organizing and analyzing the information by having healthy discussions and debates
leading to practical experience of Collaborating, Accommodating and Compromising. Each key
topic was researched by all individuals which they used to analyze later into the discussion and
debate sessions. Individuals had to state a reason to support their mentioned point which helped
the team to analyze effectively and reach conclusion efficiently because of the session’s nature of
debate and discussion.

Introduction
Focusing on a healthier and cleaner planet, Reckitt Benckiser is one of the top household
and personal product companies with over 40,000+ employees with a total revenue of
12.85billion GBP (2019). After merging with the Dutch Benckiser N.V, Reckitt and Colman
became Reckitt Benckiser plc which operates in over 60 countries and sells products in more
than 180 countries, making it easily one of the largest multinational companies for consumer
goods. Apart from numerous business portfolios, RB focuses on producing a wide range of
healthcare and cleaning consumer goods such as Veet, Dettol, Lysol, Harpic, Mortein and so on.
With the mission of creating innovative products that communities can conveniently use to
pursue a healthier life and with the vision to turn a world where everyone can live better as well
as healthier, Reckitt Benckiser has been able to keep their legacy strong for over 200 years
because of their perfect fusion of science and social responsibility, which has allowed them to
assist people in leading a healthier lifestyle.
SWOT Analysis
SWOT Analysis is a tool used to analyze the internal strengths and weakness and external
opportunities and threats to develop better and strategic decision making. After identifying and
analyzing the points, organizations can try to strengthen or further enrich their strengths and try
to capitalize their opportunities, whereas they will also try to mitigate weaknesses and identify
and prevent threats.

STRENGTHS
Goodwill and Brand Image: Reckitt Benckiser Plc is a multinational company, hence it is
apparent that such a renowned company operates on its Brand Image and Goodwill. This
is one of the major strengths because RB is known to produce goods with exceptional
quality, so if a consumer is going to buy an antiseptic, they will have more confident on
RB’s product than other products which is why they need to be consistent with their
products because of their brand image. Moreover, RB has a reputation on fulfilling their
social responsibilities which has created a goodwill for them, this will not only benefit
them financially but also creates a bridge of trust with consumers.

Strong Financial Position: With a total global revenue of 12.85 billion GBP and a total
revenue of 4.1 million BDT in Bangladesh, these values illustrate that RB has a strong
financial position. Not only that it is also one of the top 15 companies on London Stock
Exchange. Having a strong financial position can lead to future product development and
develop the organization’s R&D sector as well as make successful acquisitions in the
future.

Quality of Goods: RB brands produce goods of premium quality and is one of the best in
toiletries, such as Dettol (largest-selling antiseptic), Veet (largest-selling depilatory),
Durex (best-selling male contraceptive), Strepsils (largest-selling sore throat medicine),
Air Wick (world’s second largest-selling air freshener) and lastly, Harpic reaching 2
million households in India.

Talented Workforce: RB has one of the most talented workforces because of their
selection and training process. They also support their employees to grow entrepreneurial
abilities like creativity and risk-taking that can develop individual’s ability to turn ideas
into reality, this in turn also helps the organization.
WEAKNESS
High Price of Products: Due to the premium quality of goods, prices tend to be higher
than its competitors, for instance, a bar of Dettol and Lifebuoy soap weighing 75gm cost
BDT 42 and BDT 35 respectively. This often leads the consumer to buy cheaper
products.

OPPORTUNITIES
Corona Virus Pandemic: This epidemic can be the perfect scenario to exploit for
business use as RB focuses on healthcare products. RB should invest heavily in brands
like Dettol, Vanish and Durex to meet the need of consumer as people need to wash
hands more often, wash their clothes every time they go out for necessities and to
maintain WHO regulations of not conceiving respectively. Moreover, they can create
online awareness programs also.

Enter New Markets: RB can aim to enter new markets by innovating new products for a
different demography. Since most of the products are relatively costly, they can either
create new portions/ volumes for the same product or come up with a new cheaper
product for rural and low-class people.

RB Global Challenge: RB Global Challenge allows Reckitt Benckiser to recruit the

brightest minds from all over the world. This attracts fresh and talented graduates to join
of the best multinationals in the world.

THREATS
Local Competitors: Growth of local companies producing similar goods will create a
strong competition, moreover, local competitors will set cheaper prices to take market
share.

Fake Products: Local Companies often try to replicate the name of the product by giving
them poor quality goods with high prices. This can often tarnish the brand image and
goodwill of the organization.
External Factors/ PESTLE
All businesses and organizations work in an environment, when the organization is
affected by factors that are not within the organization are known as external factors. To analyze
the external factors, we opted to use PESTLE, which is another tool used by organizations to
scrutinize the external forces that can affect the business environment and thus allowing
organizations to make better strategic decisions. However, our team has decided to illustrate
Political/Legal, Sociocultural, Economic, Global, Technological and Demographical factors.

POLITICAL AND LEGAL FACTORS

Reckitt Benckiser plc is a multinational corporation, meaning it has cross-border dealings
and transactions. Firstly, the operating country’s policies should match where the company wants
to operate because if the government policies such as taxation and foreign trade policies have a
higher tax rate or does not show promising financial benefits like reaching break-even within a
small period, the organization might choose to operate in a different country with easier
restrictions. In 2019, RB Bangladesh paid a tax rate of 6.3% on their revenue, if this value is
increased, it will affect RB Bangladesh’s profit negatively. Moreover, the political stability of a
country is the primary research before starting to operate in a country, with terrible instability,
the company might not even conduct business which can only increase their maintenance and
logistics costs and can have a negative impact on the organization’s financial condition. To add
fuel to this fire of instability, corruption will also lead to a higher cost as bribing officials to
conduct business will be necessary.
On the other hand, RB has to be aware of the safety standards of goods and for the
workforce even because of labor acts around the world. The organization should also be aware of
the copyright issues because local companies can replicate their product which gives a bad
reputation to the original brand, having knowledge about the copyright laws can allow the
company to take actions against the local company.

ECONOMICAL FACTORS
Before initiating any kind of operation in a country, RB should analyze the GDP growth
rate of the country. Multinational corporation usually tend to work in developing countries where
the GDP growth rate is usually high. This gives better opportunity to the people of that country
as unemployment rate is decreased and the standard of living is also improving. RB should also
be aware of the Interest rate and Inflation rate because higher interest rate can indicate higher
investments because the return that people will get will be more. Moreover, if the inflation rate is
very high, the purchasing power of people can decrease which might lead to no sales of RB’s
products and that can lead to negative impact on the financial condition of the company. Factors
like Foreign exchange rate can also have an impact because of the foreign direct investments
made on the company from other countries.

GLOBAL FACTORS
The global economy impacts the corporation in numerous ways because a border-conflict
or a political conflict in a neighboring operating country can risk the business ties with that
country. Not only that, a global economic downturn like the Coronavirus Pandemic can also
affect the organization.

SOCIOCULTURAL AND DEMOGRAPHIC FACTORS

As the organization is working in a country, that country has a particular culture as well
as age distribution. RB must be aware of the Income group along with lifestyle attitudes because
this information will be able to create a segmented marketing scheme which can attract more
consumers. The population and their mindset need to be understood because RB cannot advertise
their male contraceptive brand in a conservative country due to cultural barriers. On the other
hand, the post pandemic demand can also help the company boost because people will now be
more health conscious.

TECHNOLOGICAL FACTORS
Due to advanced technology, not only the production process will speed up because of
increased efficiency of the robots but also the employees will be benefited as simple tasks like
recording information is now easier with the help of technology. The employees can be further
trained using technological methods that can spark fire in employees for innovation. Technology
can also improve logistics by digitalizing as it will develop the supply chain of the company, not
only that, but RB can also have their own online shop for B2B purposes, so that retailers can
place orders in bulk from the website. Narrowing down to Bangladesh’s perspective,
advancement in technology will be in congruent to the government’s Digital Bangladesh
campaign as the manufacturing sector is developed by advanced machineries.
Stakeholders

Stakeholders are the entities those who are affected by any decisions taken by the
organization. The diagram above shows the stakeholders of a typical organization and the critical
stakeholders of the organization are distinguished as given below:

Customers: Are impacted by the quality of the service and are the main stakeholder
because without them, there will be no revenue to run the company.
Competitors: Are in the constant battle of gaining more market share. Competitors are
healthy because consumers can differentiate the quality of products. In contrast, price
wars can also affect the financial situation.
Government: Is crucial because with their objection and not complying with their legal
procedures, RB will not be able to operate in the country. Government also earns revenue
from Corporate Tax and other taxations. On the contrary, bribery and corruption can also
harm the business.
Media: Brand name and value is spread through proper relationship with media partners.
They are necessary for advertisement and social events coverage. However, media also
has the power to tarnish the goodwill as a simple incident can be a major news because of
RB’s name and value. Hence, it is also important to maintain premium quality.
Suppliers: Are necessary because of the impeccable supply chain and logistics. They
need to transport product ingredients and packaging materials at the right time at the right
place otherwise there will be a disruption and delay in production process.
 Shareholders: Are important as they invest capital within the business and expect to earn
a certain rate of revenue from the business. If shares start dropping, the company might
not get enough financial backing.
Employees: Are the heart of the organization, without them, the organization would not
exist. To keep them satisfied, RB needs to keep employee health and safety in mind,
maintain business ethics, provide gender equity, give better remuneration and attract and
appreciate talent.

Competitive Advantage
Competitive advantage allows a company to produce goods or services better and cheaper
than their competitors. This advantage enables a business to perform better than its rivals in the
market. An organization is likely to be more successful if they gain competitive advantage in the
marketplace, which is essential to business success.

Price: makes the company to stand-out from its competitors. Lower price with great
quality is something which attracts the attention of the customers. For instance, Harpic
Bathroom Cleaner's price is BDT160 for 1 liter, whereas Magiclean Bathroom Cleaner
is BDT350 for 500ml. As Harpic cleaner has a lower price rate, so people more tend to
buy Harpic more and that is why Harpic is more popular among all.

Quality: Offering high quality product gives a competitive edge in a market as well as
allows a premium price to be charged. Maintaining the quality can satisfy the customers
so it can be profitable for the organization along with good reputation. For example:
Dettol soap of 75gm costs BDT42 and Lifebuoy soap of 75gm costs BDT35, so in this
case the price is a bit higher than the competitor, but still quality is assured to be better
than the rivals because Dettol contains triclosan, which has greater health benefits as
stated by FDA.

Market Segmentation: Designates the market into contrasting groups, according to

demographic, geographic, behavioral and psychographic traits and acquire competitive
advantages by concentrating on a specific market segment. For example: Lizol cement
surface cleaner is the first product globally available in such a unique concept which
focuses on the South Asian market. By 2020 more than 18 crores homes in India will
have cement floors, so among 18 crores 33% homes are just in South India. This floor
cleaner category is growing with the progressing urbanization.
 Advertising: Through creative and innovative advertisements, customers can be
persuaded to buy the products. A good and inventive advert can make the product
familiar to the customer, and it can also let the customers know the specialties of their
products or services. For example: Mortein first came up with the fictional
advertisement of a mosquito planning before attacking a house, this advertisement later
became so popular that other companies started making different versions of it.

Innovation: Innovation escalates productivity and diversity, it diversifies the

organization from the competitors. When a firm makes unique features and services, it
appeals to a major segment of the market. For example: Products like Electronic nail
care system and Lizol cement floor cleaner are unique.

Market Share: When the market share is bigger, the organization can be more
advantageous. Companies with bigger market share can obtain loans with lower interests
and greater share creates a greater brand image which attracts consumers. For example:
Harpic has 85% market share in Bangladesh toilet cleaning market. Moreover, because
of greater market share and brand image, sales of RB jumped even in the pandemic.

Customer Service and Support: Customers feel at ease when they get satisfactory
customer service and support. It is also beneficial for increasing revenue and brand
loyalty. For example: RB obviously has a massive community across the world.
Consequently, they provide customer care service based in different regions. Even in
their website, they include a map where its achievable to get consumer service and
support option all around the globe, with a phenomenal choice of other languages
according to the region.

Conclusion and Findings

To recapitulate, Reckitt Benckiser is an established multinational corporation with only
one weakness. The company has developed to such a stage with a talented workforce, an
innovative marketing and R&D team and all the sectors that the organization works in an
efficient and effective manner. Apart from the internal matters, RB also handles its external
environment carefully. In addition, their social impacts have reached thousands of people and is
making the world a better place. Oppositely, prices of few products can be reduced which might
give them an increased sale. Apart from these, Reckitt Benckiser is one the best multinational
corporations producing FMCG products.
References
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ResearchAndMarkets.com
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Statista
https://www.statista.com/statistics/316988/number-of-employees-at-reckitt-benckiser-
worldwide/
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https://disfold.com/top-companies-uk-ftse/
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The Business Standard
https://tbsnews.net/companies/reckitt-benckisers-sales-jump-demand-disinfectant-booms-112243
Ahsan Habib (2020), Reckitt Benckiser profits off people’s heightened hygiene habits amid
pandemic, The Daily Star
https://www.thedailystar.net/business/news/reckitt-benckiser-profits-peoples-heightened-
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Jessica Wilson (2014), Antibacterial Soaps, Consumer
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Price of Products (2020)
https://chaldal.com/search/harpic / https://chaldal.com/search/magiclean /
https://chaldal.com/search/dettol%20soap / https://chaldal.com/search/lifebuoy%20soap