Accenture hpb consumer_healthcare_po_v_6 june 2012 v3

Copyright © 2012 Accenture. All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

High Performance Business

Consumer Healthcare Point of View

A DFR production

Horizon 2015

Whitney Baldwin – Accenture

Professional Biography

Current: Accenture Management Consulting, Life Sciences

Johnson & Johnson

• Brand Management, Personal Care

• J&J/Merck Consumer Pharmaceuticals

- Rx-OTC switch of Pepcid AC, first H2 in US market

- $200MM retail sales in Year 1; #1 Share

GlaxoSmithKline

• Global launch team for NiQuitin in EU and LatAm

• OTC Marketing Director, Consumer Healthcare UK

- IMS OTC Company of the Year, 2004

• VP, GSK Brand Reputation Initiative, US Pharmaceuticals

2 Copyright © 2012 Accenture All Rights Reserved.

Overview: High Performance Business(HPB) Analysis

• The High Performance Business (HPB) analysis consists of three sections:

– Company Rankings: High Performance Business rankings (success over

multiple years)

– State of the Market: Which trends and drivers are impacting the industry and what is

the outlook for the future?

– Distinctive Capabilities & Performance Anatomy: How do High Performers

execute and enable their game-winning strategies?


Executive Summary

HPB Rankings

• Dynamic marketplace: rankings have shifted as companies have performance

has evolved

- Reckitt Benckiser remains strongest performer

Distinctive Capabilities and Performance Anatomy

• High performers continuously raise the bar

• Technology enabling organizations


Copyright © 2012 Accenture All Rights Reserved.

High

Performance

Business

Ranking

5

5 Components of High Performance

Continued performance over

industry eras and life cycles Assessment of companies’ TRS

metrics over multiple time periods

Reliable and predictable

performance Consistency is measured as the

percentage of years over a 7 year

period that the company has

outperformed its peer set median

in each of a set of measure

(revenue growth, spread, annual

FV/IC)

Greater than expected

returns from investments Economic profitability (ROIC-WACC)

measures the ability of the company

to generate returns higher than its

cost of capital, the company’s ability

to create value

Top line revenue growth Key driver of economic profitability

revenue growth is a key outcome to

determine high performing companies

Higher future value (FV)

growth and level Measure the investors’

expectations of the value of the

company’s future cash flow

High

Performing

Business

Positioning for the Future

Peer Set


Accenture High Performance Business Methodology

Measures Long Term Financial Performance across 5

performance metrics

7

GROWTH 5 year Average

PROFITABILITY 5 year Average

HIGH PERFORMERS

MID TIER PERFORMERS

LOW PERFORMERS

Note: Growth is based on reported Consumer Healthcare Revenue Growth and Profitability is based on Return on Invested Capital (ROIC) calculated from estimated CH segment invested capital. Consumer Healthcare segment’s % contribution to Group net assets is applied to Group Invested Capital to calculate CH segment Invested Capital


Our HPB analysis has identified high to low performers in the Consumer Healthcare industry

HPB Scorecard 2012

Total Score Longevity Profitability Grow th FV Consistency Performace Definition:

Reckitt Benckiser CH A N/A B+ A+ N/A A+ High Health & Personal Care (excl Pharma)

Mead Johnson CH A- N/A A+ C+ N/A A+ High Group Revenue

GlaxoSmithKline CH B+ N/A C+ B+ N/A A High Consumer = OTC, Oral, Nutritional

Boehringer Ingelheim CH B N/A A+ C N/A C+ Avg Consumer = OTC, VDS

Sanofi-Aventis CH B N/A D+ A+ N/A B Avg Consumer = OTC

Novartis CH B- N/A C+ C N/A B+ Avg Consumer = OTC (excl Animal Health)

Bayer CH C+ N/A C C+ N/A C+ Avg Consumer Care

Rohto CH C+ N/A C+ D+ N/A B Avg Group Revenue

Prestige Brands CH C+ N/A D+ A N/A D+ Avg OTC

Merck CH C N/A D+ B N/A C Avg Consumer = OTC, Sun Care, Foot Care

Takeda CH C N/A C+ D+ N/A C+ Avg Consumer Healthcare

Beiersdorf CH C N/A C+ D N/A C+ Avg Group Revenue

Taisho C N/A C+ D+ N/A C Avg Self Medications

Pfizer Wyeth CH C- N/A D+ C+ N/A D+ Avg OTC & Nutrition*

Merck KGAA CH C- N/A D+ D+ N/A C Avg Consumer Healthcare

Procter & Gamble CH C- N/A C+ D N/A D+ Avg Healthcare Products

Johnson & Johnson CH D+ N/A D+ D+ N/A D Low Consumer

Lion Corp CH D+ N/A D+ D+ N/A D Low Healthcare

Omega Pharma CH D+ N/A D+ D+ N/A D Low Group Revenue

HPB Scorecard 2006-11 (3 & 5 yr equal weighted)


What

will shape

Future High

Performance?

Copyright © 2012 Accenture All Rights Reserved. 9

What really makes the difference?

Over the long-term, High Performers demonstrate

successful integration of seven distinctive capabilities

10

High Performance Building Blocks


Strategic Market Leadership Focus on winning in high-value categories and high potential markets

Market Focus

& Position

Actionable

Insights Actionable

information that

drives better

decisions

Distinctive

Capabilities

Innovation

Marketing New product

innovation with clear

differentiated benefits,

leveraging new

technology

In Store

Availability Customer

excellence that

drives in-store sales

Simple Operating Model Simple organisation that embraces scalability,

collaboration & integration Performance

Anatomy

High Performance Focus Systematic approach to drive continuous

performance improvement at speed

Business Foundations – IT, HR, Finance, Sales, Marketing, Supply

Chain

Functional infrastructure aligned to deliver business objectives

Performance

Foundations

Regulatory &

Switch

Excellence Cross market regulatory expertise driving product strategy & positioning




11




Market Focus

& Position

Actionable

Insights Actionable

information that

drives better

decisions

Distinctive

Capabilities

Innovation


innovation with clear ly


leveraging new

technology

In Store


excellence that




Anatomy

High Performance

Management Systematic approach to drive continuous



Chain


Performance

Foundations

Regulatory &

Switch


Strategic market leadership requires a move from internal

and historical to an external and future-driven strategic

planning process

High Performers …

• Build dominating brand portfolios

– Smaller portfolios containing more global brands

– Scale global brands while including selective

localisation for high potential and emerging

markets

• Place fewer, bigger and more profitable bets –

high growth and high margin categories

• Re-evaluate choice frequently in a volatile market

• Make global trade offs to build business rapidly

• Allocate resources more efficiently


High Performance Differentiators

17 Powerbrands

represent 70% of

Company net revenues

Reckitt Benckiser’s strategy is simple, but powerful …

and it’s working

Reckitt’s clear and consistent

strategy is to drive above

industry growth and returns

through: • A disproportionate focus on driving

Powerbrands, global leaders in

categories with high growth potential

• High levels of media and marketing

investment

• Exploiting opportunities from add-on

acquisitions

• Systematic and continuous innovation

to excite consumers (highest innovation

rate – 35% of sales from new products)

• Transforming net revenue growth into

even better profit and strong cash flow


Case Study

Dettol #1 in topical antiseptics and

antiseptic liquids

Strepsils #1 in medicated sore throat products

Veet #1 in Depilatories

Clearasil #2 in Acne Treatment

Mucinex #2 in cold & flu (incl. decongestants)

After Boots HCI and Adams Respiratory,

Reckitt’s latest acquisition is SSL

International.

Durex and Scholl will join Reckitt’s

Powerbrands in a newly created category:

“Sexual Wellbeing and Footcare”

Acquisition of Para pharma to

increase presence in

India




14




Market Focus

& Position

Actionable

Insights Actionable

information that

drives better

decisions

Distinctive

Capabilities

Innovation


innovation with clearly


leveraging new

technology

In Store


excellence that




Anatomy

High Performance




Chain


Performance

Foundations

Regulatory &

Switch


Actionable insights enable the business to move from

reactive and scattered decision making to proactive and

targeted decision making

High Performers …

• Have an integrated organisational focus on the

right skills and focus on cross-functional analytics,

creating more productive knowledge workers

• Make better decisions, driven by insight

• Maximise returns on decisions

• Use predictive, data-driven decision making

based on continuous stream of insight

• Buy rather than build – develop strong relationships

with key partners to ensure shared insights


• Invested $1bn in consumer & shopper

understanding between 2001 and 2007,

transforming from a traditional market

research organisation into a consumer

understanding powerhouse.

• Standardised information creation and

provision from its Global Business Services

unit

• Conducts direct research with >4m

consumers per year


Companies that still rely on ‘gut feel’ due to limited access

to enterprise-wide data and analytical talent will lose out


Companies need timely, in-depth actionable insights if they are to remain competitive globally — in effect a “whole business” approach to analytics

High performers are investing heavily in analytics

“Predictive analytics will be the difference between the winners and losers in the next economic cycle” Dave Rich, Managing Director Accenture Analytics

“…in this new age of future-facing business analytics, any BI user without strong advanced analytics capabilities is seriously deficient and at a competitive disadvantage” Business Intelligence (BI) Polishes Its Crystal Ball, Forrester, Aug 2010

Data explosion Ubiquitous computing and technology capabilities have increased dramatically the volume of data at companies’ disposal (structured and unstructured, visual, voice, geospatial)

Companies moving up the sophistication curve

Driven by globalisation and greater business complexity

The closed loop: from raw data to insights

Desire to move from deep functional insights to tying together the causal chain cross-functionally to be more predictive

• As a competitive differentiator …

• typically exploited as a service to minimise investments

High Performers have moved on from figuring out what

happened yesterday and are focusing on what could happen

tomorrow …


Co

mp

eti

tive A

dvan

tag

e

Optimisation

Predictive Modeling

Forecasting/ extrapolation

Statistical analysis

Alerts

Query/drill down

Ad hoc reports

Standard Reports

“What’s the best that can happen?”

“What will happen next?”

“What if these trends continue?”

“Why is this happening?”

“What actions are needed?”

“What exactly is the problem?”

“How many, how often, where?”

“What happened?”

Predictive Analytics (“now what”)

Descriptive Analytics (“what happened”)

Sophistication of Intelligence

aims for "360 degree" consumer insight


Case Study

Source: Procter & Gamble 2010






Market Focus

& Position

Actionable

Insights Actionable

information that

drives better

decisions

Distinctive

Capabilities

Innovation



differentiated benefits ,

leveraging new

technology

In Store


excellence that




Anatomy

High Performance

Management Systematic approach to continuously drive



Chain


Performance

Foundations

Regulatory &

Switch



Innovation marketing entails intensive market research and

consumer-led product development, combined with heavy

promotion of top brands

High Performers …

• Continuously update their product portfolio to ensure the right price/value

proposition

– Trusted global brands serve as an umbrella across segments and categories

– Continuous introduction and retirement of products

• Start from a margin improvement and then find the idea that delivers

• Spend disproportionate amounts of A&P on their core brands

• Give consumers new reasons to buy. Innovations are relevant and consumers

are willing to pay (more) for them

• Achieve superior returns on marketing investment by creatively managing the

channel mix

• Have opened their innovation process to other partners

• Have a connected innovation and marketing process and organisation



The formula for success is simple …

The art is in the execution


Age-, gender-, lifestyle- and condition-specific hyper

segmentation makes products relevant for different

consumer groups under a trusted brand umbrella


Age/Life Stage e.g. children, pregnant women or men over 50

Life Style Targeting by socioeconomic factors, e.g. athletes or busy people

Gender The first level of segmentation

Medical Condition Appealing to consumers with specific health problems, e.g. migraine

If an innovation catches on – even originating in a

seemingly unrelated category – it is quickly crossed

over to other categories … and copied by other players


2005 2008

Digestive … … Cough & Cold

2009

… Mouth care

Copycat products

Bayer’s Rennie Ice Boehringer’s Zantac Cool Mint

Dishwashing …

2009

… Cough & Cold

Bayer’s Aleve

GSK’s Beechams

Copycat products

To further persuade the consumer, successful companies

ensure their brands are recommended by experts and their

innovations supported by claims and ‘tested’ benefits


#1 recommended by dentists

#1 doctor recommended

Paediatrician recommended brand

Clinically proven technology

Scientifically proven

4 times stronger

Significant improvement after 3 weeks

Results in as little as 10 days

Requires just one single application

Dermatologically tested

Consumer goods companies are upping investments in

digital, social and mobile channels …


Consumer goods

companies are on the path

of growing their

interactive marketing

spend by 22% CAGR —

more than any other

industry.

This shift occurs as

marketers seek to combat

recessionary effects, further

engage consumers, and

embrace Adaptive Brand

Marketing.

Source: Forrester, 2010

Johnson & Johnson is reaching over a million moms,

one at a time …


• Mom-to-mom support :

“You can ask a question and hundreds

of women will respond and say, ‘I went

through the same thing and have you

tried this?’

• The programme is a free mobile

information service offering practical

information for improved maternal and

infant health.

Sources: Health News, iHealth, Johnson & Johnson, 2010

Case Study

#1 baby site

text4baby






Market Focus

& Position

Actionable

Insights Actionable

information that

drives better

decisions

Distinctive

Capabilities

Innovation




leveraging new

technology

In Store


excellence that




Anatomy

High Performance




Chain

Functional infrastructure aligned to business objectives

Performance

Foundations

Regulatory &

Switch



High Performers connect their customers into their

business model

High Performers …

• Have moved from a “push” to a “pull” model, enabled by a consumer driven

supply network

• Have access to near real time Point of Sales information by partnering with

retailers in the developed markets and distributors in emerging markets

• Engage in deep collaboration with their customers and build in flexibility to deal

with their variances and needs

• Have fully integrated trade marketing, supply chain and customer services

processes



High Performers are rethinking their supply chain to

become more demand driven


Consumer

Goods

Company Consumer/

Shopper Production Warehousing

& Distribution Retailer

Consumer/ Shopper

Production Warehousing & Distribution

Retailer Supplier

Consumer

Goods

Company

Push Model

Pull Model

• The ability to manage demand rather than just respond to it

• A networked rather than linear approach to global supply

• The ability to embed innovation in operations rather than keep it

isolated in the laboratory

http://www.google.com/imgres?imgurl=http://2.bp.blogspot.com/_2o0lYsB2Wb4/TJGW83urmrI/AAAAAAAAAQA/prDusk-3ho8/s1600/pull.gif&imgrefurl=http://ericanchong.blogspot.com/&usg=__j-Xty_DbxrZ6--ydgylcwH3yHLc=&h=666&w=936&sz=9&hl=en&start=1&zoom=1&um=1&itbs=1&tbnid=45kLSPZuKOk3VM:&tbnh=105&tbnw=148&prev=/images?q=pull&um=1&hl=en&sa=N&ndsp=20&tbs=isch:1

High Performers are getting increasingly sophisticated

in capturing POS data and turning this into actionable

insights …


Cu

sto

mis

ed

In

terf

ace

Demand Signal Repository Capabilities

Collect, cleanse, and harmonise demand

data from key retailers and syndicate data

with manufacturer’s master data

Perform value-driven analysis, insights,

and real-time alerts

Feed granular / aggregated data into key

applications like S&OP, Demand /

Replenishment Planning, Enterprise Data

Warehouse, RFID analytics, and more…

Analytical Engine Capabilities

SKU/Store level forecasting

Stock-out root cause analysis

Perpetual inventory calculation

Planogram compliance analysis

Promotion display analysis

CH Company Demand Signal

Repository

Analytical Engine

Sales Team

• Sales Leadership

• Sales Account

Executives

• Category Development

Managers

• Customer Service &

Logistics

• Marketing & Finance

… and are using the latest technologies to measure

shelf visibility in store


Digital merchandising services enable a company’s sales force to gather continuous data on buying

patterns, shelf availability, prices, promotions and product placement, from a simple image captured at

POS.

Shelf Smartphone KPI extraction Dashboard

Point of Sale HPC Company DM Services

How it works






Market Focus

& Position

Actionable

Insights Actionable

information that

drives better

decisions

Distinctive

Capabilities

Innovation




leveraging new

technology

In Store


excellence that




Anatomy

High Performance




Chain

Fucntional infrastructure aligned to business objectives

Performance

Foundations

Regulatory &

Switch



A simple operating model enables speedy decision making,

scalability and integration

High Performers …

• Have a simple operating model enabling speedy decision making globally and locally

• Provide integrated, global service delivery to the internal business customer

• Have created an externally linked global innovation network to reduce cost, increase

scope & speed (plug and play alliances)

• Can integrate acquisitions incredibly fast



CH companies have been moving from a traditional multi-

local model to a regional then global model and are now

simplifying their operating model to enable local flexibility in

the global model


ISS Lead

Global Process Owners

Fin IT HR Other

Service Management

Comms / Training

IT & Facilities Support NAM EMEA APAC

Service Development

Finance & Accounting

HR HR

Time

Service Management

STP OTC

Process Management

Pe

rfo

rma

nce

Fin IT HR

Country-based

Shared Services

IS

GBS Lead

Service Delivery

Supplier Management

Service Lines

FTS

RTR HTR MDM PLM Oth

er BI CRM

Multi Local Model Regional/Functional

Model Global Model Super Global – Super Local Model

1 2 3 4

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http://www.google.co.in/imgres?imgurl=http://ceoworld.biz/ceo/wp-content/uploads/2009/04/merck.gif&imgrefurl=http://ceoworld.biz/ceo/2009/04/21/merck-co-inc-medarex-inc-and-massachusetts-biologic-laboratories-sign-exclusive-licensing-agreement-for-investigational-monoclonal-antibody-combination-for-clostridium-difficile-infection&usg=__V3e-czjLZ1o2aWsG6WjDqShDh_M=&h=341&w=1061&sz=19&hl=en&start=2&zoom=1&um=1&itbs=1&tbnid=zKPC4aMg81pfOM:&tbnh=48&tbnw=150&prev=/images?q=merck+&+co&um=1&hl=en&sa=N&rls=com.microsoft:*&tbs=isch:1

http://www.google.co.in/imgres?imgurl=http://www.compliance-asim.de/images/content/1203673587_Boehringer_Ingelheim.jpg&imgrefurl=http://www.compliance-asim.de/docs/content.php?lang_id=2&parent_id=27&content_id=27&usg=__-a0OfZgWDCw_gdXqYELy55djdko=&h=307&w=945&sz=54&hl=en&start=1&zoom=1&um=1&itbs=1&tbnid=J9ofk58M5htAXM:&tbnh=48&tbnw=148&prev=/images?q=Boehringer+Ingelheim+GmbH&um=1&hl=en&sa=N&rls=com.microsoft:*&tbs=isch:1






Market Focus

& Position

Actionable

Insights Actionable

information that

drives better

decisions for

knowledge workers

Distinctive

Capabilities

Innovation


innovation with clear

functional benefits

which consumers are

willing and able to pay

more for

In Store


excellence that




Anatomy

High Performance

Management Systematic approach to drive performance

improvement at speed


Chain

Fit for purpose business infrastructure getting the basics right

Performance

Foundations

Regulatory &

Switch



High performance management is the ability to drive

financial goals in performance measurement and to multiply

talent to generate superior levels of effort

High Performers …

• Nurture commitment, achievement, entrepreneurship, and

teamwork

• Have an individualistic, swift decision-making, innovation,

financial & performance-driven culture

• Ensure performance is tracked against specific quantifiable

measures related to company goals

• Reward performance with attractive financial constructs, and

punish failure in equal measure


RB has 400 managers all around the world, yet has a

single compensation and incentive programme. At RB

any manager may receive bonuses of up to 144%

based on the performance of his group; not based on

outperforming some other group. Everyone is

focused on contributing to the overall good of RB, not

just their specific group.


• Novartis has a performance oriented culture

and is committed to reward people who invest

ideas and work into the company

• Novartis does not have employees, but

‘associates’ who are part of the same ideology

There has been much research, many articles written,

and even more industry opinions; our observations on

the enablers of high performing talent look like this


Theme Example

Getting the right business operating

model to drive the right business

performance

The P&G operating model is considered a key

industry differentiator

Using effective workforce planning for job

rotation, project roles, and achieving the

balance between ‘specialist’ and ‘general’

skills

RB has approaches to managing business

demands on jobs and structure of their jobs to

drive business results less expensively

Aligning performance management &

rewards with business results

Unilever has instituted a 6 month bonus cycle to

drive quick business results

Identify the need for and create the develop

of the right skills and capabilities across

the company

P&G uses multiple strategies to help ensure

depth of skills

Creating a culture that drives the very

highest business performance – and pulling

this winning culture throughout all aspects of

their business

Colgate’s commitment to developing personal

leadership is a formal process that includes goal-

setting, training courses to strengthen skills and

support personal development, and ongoing

feedback from managers

Summary

High performing organizations are driving harder to:

• Develop continuous, comprehensive insights of their customers

and translating these into innovation on a global scale at speed

• Evolve their business models to be more effective and efficient

• Enabling technology creates competitive advantage


Accenture Contacts

Whitney Baldwin

Management Consulting, Life Sciences

2001 Market Street

Philadelphia, PA 19103

USA

Mobile: +1 610 213 8408

[email protected]

Michael Brueckner

Managing Partner Life Sciences

Campus Kronberg 1

61476 Kronberg

Germany

Bus: +49 (6173) 94-67245

Mobile: +49 1755767245

[email protected]


Accenture hpb consumer_healthcare_po_v_6 june 2012 v3

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Transcript of Accenture hpb consumer_healthcare_po_v_6 june 2012 v3