Strategic Management CIA -3

Assignment on Company Analysis

INDIVIDUAL ASSIGNMENT
By

THANISH SUJAUDEEN (2027716)

Under the Guidance of

Dr. Elangovan N

Christ Institute of Management

CHRIST (DEEMED TO BE UNIVERSITY), Bengaluru

10th AUG 2021

INTRODUCTION

A company analysis is a method/study that determines the current state of a company's

performance. It depicts the company's 'on paper' value in terms of productivity and financials,
providing a full picture of the company's position in the market and among its rivals. The
company analysis provides answers to critical concerns about the firm's risks, liquidity, asset
value, profit growth, and cash flows. Fundamental analysis is regarded as such since it provides
an entire view of the firm.

A comprehensive view of the current situation aids in the comprehension of future forecasts. For
example, a firm can determine if the introduction of a new product is viable based on its existing
profit growth rate. It's also useful when a firm wants to expand into other markets. It assists the
firm in determining the impact of a new portfolio as well as the impact of a diversified
investment.

COMPANY PROFILE

Reckitt Benckiser plc is one of the world's leading manufacturers of home goods. Reckitt
Benckiser was formed in December 1999 when Reckitt & Colman plc and Benckiser N.V.
merged. Reckitt Benckiser has a wide range of household brands in five categories. Reckitt
Benckiser also has a modest foothold in the food sector in the United States through its French's
company, which produces mustards and sauces; this business line is a remnant from Reckitt &
Colman, which had a long history in the field. Western Europe accounted for 41% of revenues in
2000, while North America accounted for 30%, the Asia-Pacific area for 11%, Latin America for
8%, and the rest of the world for 10%. Reckitt Benckiser's goods are sold in 180 countries across
the world.
Six key priorities remain Against the backdrop of COVID-19 and the three themes underlying
our new Sustainability Strategy, the six priorities identified in our 2019 materiality assessment
remain important to us:

• Global health and development, and public health challenges

• Product quality and safety
• Packaging and waste
• Traceable, responsible ingredients and impacts on land and biodiversity
• Water consumption and quality
• Fair wages and working practices, and supply chain labour rights.

CHALLENGES FACED BY THE COMPANY GLOBALLY

Maintaining stock availability

As the pandemic took hold, consumer demand for Dettol, Lysol and other market leading
hygiene brands escalated dramatically. The company had anticipated the demand surge in
January and worked hard to ramp up supply and also maximise the output. Production moved to
a 24-hour, 7-day-week schedule at 35 of our factories.

Global supply chains, which rely on consistent supplies from a variety of vendors and
shipping firms, faced particular problems as a result of the epidemic. Component and ingredient
sourcing become a major issue for the business. Outside vendors provide approximately 100
distinct parts and raw materials to the company's Jingzhou facility in China, for example. When
the company's regular suppliers ran out of stock, supply teams had to explore the marketplace for
alternatives, then evaluate them to ensure they met the company's quality standards. TThey were
successful. Obtaining these supplies often included transporting tonnes of raw materials across
continents, if necessary through air freight. Cost, on the other hand, was a minor issue. The
company's manufacturing centres were working nonstop. Many of them had to figure out how to
do it while adhering to tight social distance, quarantine, and curfew rules. Of course, the firm had
to ensure that everyone was safe. These were really difficult circumstances that put the systems
to the test like never before. The demand for Lysol and Dettol has increased dramatically across
the world. It didn't matter how much we produced at times since everything was sold out. We
grew our productivity dramatically in a short period of time and learned valuable lessons about
resilience and adaptability. It's still difficult to say whether all of this increased demand for
hygiene products will translate into a more long-term change in consumer behaviour. We do
recognise, however, that any future epidemic will dramatically increase demand. As a result, we
are investing today to increase the capacity of COVID-19 essential goods like disinfectants,
sanitizers, soaps, and surface cleansers, as well as to improve the company's production
flexibility.

Reckitt Benckiser To Sell China Baby-Formula Business In $2.2-Bn Deal

Reckitt Benckiser Group agreed to sell its Chinese baby-formula business to Primavera Capital
Group for $2.2 billion as the company seeks to exit from the struggling sector. Reckitt will retain
an 8 per cent stake in the unit and sees net cash proceeds of about $1.3 billion, which it plans to
use to reduce debt,

Cheaper alternatives from competitive brands

With consumers opting for cheaper over-the-counter drugs, the company’s business has been
going through a rough patch. Reckitt Benckiser Group’s Nurofen painkiller costs 2.20 pounds
($2.80) for a pack of 16 pills. UK grocer J Sainsbury sells a private-label alternative for a third of
the price. That’s the challenge facing Reckitt’s CEO, Laxman Narasimhan

Delhi High Court stays NAA order asking Reckitt to deposit Rs 63 lakh

The Delhi High Court stayed the National Anti-profiteering Authority (NAA) order directing
pharma major Reckitt Benckiser to deposit in the consumer welfare fund over Rs 63 lakh it
allegedly profiteered from the sale of Dettol handwash between 2017 to 2019.
HUL's toilet cleaner brand Domex takes potshot on Reckitt's Harpic

Hindustan Unilever, India's largest consumer goods firm, has engaged in comparison advertising
once again, this time targeting competitor Reckitt Benckiser. Reckitt's Harpic cannot eliminate
malodour when cleaning, according to HUL NSE 0.35 percent's current commercial, which was
published on Friday.

OPPORTUNITIES OPEN FOR THE COMPANY GLOBALLY

Indians are putting their hand sanitisers away and stocking up on home care items in
unprecedented numbers.

Reckitt Benckiser, is increasing marketing spending in India to enhance the narrative of its
brands amid the deadly second wave of the coronavirus. Because India is experiencing a severe
second wave of the coronavirus, the firm is boosting message marketing spending to assist
combat the virus. Indian arm grew in double digits in the March quarter, led by strong underlying
demand of Dettol and expansion of disinfectant sprays and laundry sanitisers which more than
offset increased competitive pressures

Growth in new markets

Reckitt & Benckiser have been ramping up focus on emerging markets like the BRIC countries
and also East Asian countries. The company has been gaining popularity in these markets and
they show a lot of promise in the future especially in the domain of home care.

Reckitt Benckiser sees immense growth in India with or without Covid

Health and hygiene major Reckitt Benckiser (RB) said that India was one of three largest growth
contributors for the company in 2020. All geographic regions have grown, with the largest
contributors to growth including the US, India, and China. With the second wave of Covid
pandemic spreading fast in India, sales of Reckitt Benckiser’s key health and hygiene products
skyrocketed during the January-March quarter. The firm, which recorded double-digit growth
across all major markets, saw its business emerging strongest in India. Also the company stated
that Reckitt Benckiser CEO is deeply optimistic about the India market. Because whether there
is covid or no covid, India will be in the top 3 position coming under top contributors in terms of
sales for the company.

Acquisitions done by Reckitt Benckiser

Acquired Company Announced date

Queen V Jan 20, 2021

Biofreeze Feb 24, 2021

TheraPearl Feb 26, 2021

Paras Pharmaceutical Dec 13, 2010

K-Y Lubricants March 10, 2014

There are several advantages in Acquiring an already existing company which are:

● Better financing options

● Already established brand.
● Existing customers.
● Well-established supply chain.
● Access to trained staff and proven internal processes.
● More financial reward in growth.
● Greater likelihood of success.
 IMPACT OF CHALLENGES ON DIVISIONAL AND CORPORATE
LEVEL STRATEGY

1) Reckitt Benckiser to step up marketing in India amid devastating second Covid wave
2) Indians are putting away their sanitisers and stocking up on home care products like
never before
3) Reckitt Benckiser sees immense growth in India with or without Covid

Strategies of Reckitt Benckiser

The company has three core strategic priorities: to accelerate organic growth on the top line,
maintain or grow our margins, and ensure we enhance our return on capital employed. RB 2.0 is
the right platform to deliver future growth and outperformance. Our Hygiene Home business unit
is now a focused household business with the management agility that we value so highly at RB.
In Health, we have a portfolio of global, market-leading consumer health brands. The Health
business unit is focused on reigniting growth by completing the integration of MJN and
delivering an operating model that works effectively across our five consumer healthcare market
segments. Delivering RB 2.0 will also create the optionality and flexibility we require as we
configure RB for the longer term
References

https://economictimes.indiatimes.com/
https://www.reckitt.com/
https://www.reckitt.com/investors/annual-report-2020/