Breakout room 6 :-

Harshleen Kaur Bains

Sanchita Khattar
Tanushree Pandey
Arqam Abdullah
Saptarshi Chatterjee
Omkar Gosavi
Neelanshu Sunil
Deepesh Bisht
Vaibhavi Singh

Q1. Do a SWOT analysis of Diversey.

Strengths Weakness

● End to end cleaning solution ● Higher pricing

● Environment friendly products
● Offers a superior product and high level
of quality
● After sales service as a feature
● Strong R&D
● Direct sales network
● Skilled work force
● Rich Legacy of Global Expertise &
Experience
● Distribution channels are not developed
yet
● Poor inventory management
● Competitive Analysis & Benchmarking not
possible due to unorganized sector
● High Cost Overhead – Operational
Inefficiencies
 Opportunities Threats

● Largely untapped market ● Lower price offerings by the competitors

● Increase in brand awareness
● Digital marketing development in the
world
● Campaigns like Swachh Bharat
● Industry CAGR 10-12%
● Lack of change in customer perception
about the benefits of cleanliness
● Inability to tap Unorganized market
● Price sensitive
● Increased competitors

Q2. Apply the Micheal Porter 5 forces model to

describe the industry attractiveness of this
industry.

1. Threat of substitute products and services - The threat of substitutes is high as:

1. New product innovation is the key in this industry, 2. Low awareness among customers, 3.
Low switching cost (water) regarding the quality standards increases the threat of
substitutes. Now, since the threat is high, Diversey Cleaning has to either continuously
invest into R&D or it risks losing out to disruptors in the industry.

2. Bargaining power of suppliers of Diversey Cleaning - The bargaining power is medium

as:

1. Suppliers are international, 2. Diversey established a good customer service team resolving
all operational issues with stakeholders like suppliers, 3. In an industry with a high number of
suppliers, Diversey in India The Growth Challenges and Options can switch to different
suppliers at any time without experiencing any costs of the business.

3. Bargaining power of buyers of Diversey Cleaning – The bargaining power here is high
since:

1. The sensitivity with respect to prices is high, 2. Lack of awareness about the brand, 3. Low
switching costs. Now, since the buyers have strong bargaining power then they usually tend to
drive prices down thus limiting the potential of the Diversey Cleaning to earn sustainable profits.
4. Threat of new entrants - The threat of new entrants is medium to high as:

1. The capital requirement is huge and a lot of costs are to be incurred for the technicians to be
trained, 2. There are limited economies to scale, 3. The switching costs are low.

5. Rivalry among existing players – The threat of rivals is medium since: 1. There is no
dominant player, 2. Moderate product differentiation, 3. Lesser players in the end-to-end
cleaning solution.

Q.3 Value Chain Analysis

Firm infrastructure - Warehouses for vast Inventory Management, 4 divisional offices and 6
manufacturing units - to deal with imports and production

Human Resource Management - Diversey had a proper organizational layout where each
segment of customer had a head and each head had to report to the vice president, and
intermediaries who would rely on customer data and update the suppliers

Technology development - cost effective for price sensitive customer and result oriented
product approaches, new products to be developed based on customer product change
requests. Diversify focusses on concept based approach and not product based approach.

Procurement - 95% relied on imports from Europe to maintain quality. 35% of their equipment
is imported from Europe, with manufacturing units in the north and 5 - manufacturing units in
India spread across North, South and East regions

Inbound logistics - Involves meeting up with the demand for spare parts which has an irregular
demand

Outbound logistics - An interface employee as an ambassador to both external suppliers and

customers.
‘
Operations - consisted of regional based manufacturing, based on forecasting and projections
from sales and marketing team, sourcing is done from various suppliers and once order plan
has been fixed it will be completed within 48 hours of projection.
Marketing & sales - Driving consumer behaviour towards scientific cleaning and providing end
to end support and best after sales service support. Marketing & sales team were also involved
in forecasting and demand projections

Service - To retain the confidence of customers, Diversey made sure that old products spare
parts are still available even though it was a costly affair

Q4. What are the challenges faced by Diversey in

the Indian geography?

● Benchmarking of Products & Services

It was difficult for Diversey to benchmark their product against the local competitors who
provided low quality low cost cleaning solutions.

Even Diversey’s lowest cost offering was priced higher than the local players’ cleaning
solutions.

India was a price conscious market and the quality was overlooked when it came to
price.

● Indian mindset pertaining to cleaning

The biggest competition for Diversey at the time were phenyl and plain water.

Mindsets of Indians pertaining to cleaning were not developed as of yet.

The traditional mindset towards cleaning was that it was a menial daily chore to be
carried out by the lowest socio-economic segments using water and their hands or
extremely rudimentary tools.

Due to the lack of information and education regarding the right process, the right
program and the right product, ignorance prevailed and people were averse to pay for
cleaning supplies.
● One size fits All Mentality

Most Indian customers expected a single product which met all their cleaning needs,
irrespective of the differences of form and structure.

Majority of the population still did not realise the importance of applying the right type
and composition of chemical solutions for different needs.

● Distribution Channels to reach farthest customers

One of the challenges for Diversey was to setting distribution channels to reach potential
customers like the 5000 dhobis in Mumbai.

Dhobis---credit-based, buyer-seller relationship with local contractors,purchased

chemical solutions from local shops on credit and used this chemical for washing all
clothes irrespective of the fabric of the clothes, had the flexibility to pay at the local shops
according to their payment cycles.

● Inventory management of spare parts

Diversy made a point to keep the inventory for spare parts for at least 10 years ( unlike
any other player in the market) to instill a trust factor in their customers.

Diversey was unable to decide upon an effective SKU rationalization strategy.

Also they usually imported the spare parts from abroad, which meant higher lead times.
so to be ever ready keeping inventory made sense to them.

Their clients were usually big organization like railways, where the demand was irregular
but demanded the changes quickly.

But it impacted their costs. Maintaining such inventories required almost 3% of their total
operating costs and 15% of total sales.

● Barriers in entering Tier 2 & Tier 3 cities

Diversey didn’t have the large domestic accounts including five-star hotels, large
corporate hospitals and large Indian corporations in Tier II and Tier II cities, all of which
had a presence in one or more cities in India and required large volumes of cleaning
equipment, chemicals and services.

Sector was dominated by the unorganized sector in the small cities, which was
composed of small regional players that offered low-cost, low-quality chemical solutions.
Q5. What should be Diversey's approach to sell
to the Dhobi segment of India?
● Diversey can launch packaged products. This will allow the customers to buy one
solution for all their cleaning needs. This package should contain 2-3 multipurpose
offerings which would cover all the possible requirements.
● Distribution mechanisms should be very robust to make the products available in tie-2
and 3 cities.

● Cost should be competitive with the well-known products from established players.
● Channeling and Social media team should work upon spreading ‘Word of Mouth’.
Diversey has generic and superficial marketing approach, they have not focused on this
approach.

Q6. Alterations that Diversey should undergo to

improve after sales performance.
1. Setting up a sales support team
set up a sales support team, which includes pre-sales and after-sales support professionals
responsible for providing technical support and handling all support issues to the customers.

2. Customer feedback process

The company invests in gaining and incorporating customer feedback and in solving customer
queries effectively with the help of a sales support team, which includes pre-sales and
after-sales support professionals.

3. Knowledge transfer
It ensures that while it offers the best quality products to its customers, it also provides
education and awareness on their optimum usage to ensure the surfaces and clothing to which
they were applied had a long life.

4. Minimization of redundancies
Only those SKUs that maximise profits should be given importance, this will invariably lead to
efficient inventory management and will save aid in generating the highest possible amount of
direct sales in the future and will also reduce the costs from the company’s end.
Q7. Structure of Diversey- merits and demerits
The company has divided its operations into 4 zones- East, West, North and South. The North
zone has the manufacturing unit. They have dedicated teams for Market penetration and After
sales.

Merits-

● Sales representatives act as the interface between internal sales team and external
suppliers and distributors.
● Products are highly reliable and safeguard consumer safety
● Company has end-to-end cleaning solutions so customers get a complete portfolio of
products and services.
● Strong after sales support offered by the company with timely replacements of
consumables.
● Long term B2B tie-ups.

Demerits-

● Company holds unreasonable inventory because the import systems are not capable of
responding quickly.
● Affordability of the offerings is not good since the benchmark of indian customers is not
aligned with the international standards
● The ‘Channeling’ team should focus on the customer base in tier-2 and 3 cities and
improve product perception in Cleaning services and ‘Dhobi’ segment.