G R O U P 6

Group6: Justine Bernard Lisa Taurines Frederique Ramananarivo Victoriano osa sanz Maxime Vifian

LAFARGE INTERNAL ANALYS IS

TOP MANAGEMENT GOALS

•  Financial & economical performance: •  Total sales in 2008 : 19 billions € •  Growth from 2007 to 2008 : +8,1%

•  Power inside the firm: •  The Lafarge Group is the world leader •  The CEO is former HEC Bruno LAFONT •  The Headquarters are in Paris & the eldest R&D center in

Lyon •  Present in 79 countries

•  Long term vision: •  Expending to the emerging markets •  Growing concerns about environment, cost reduction,

employee safety & innovation

SBU IDENTIFICATION & ASSESSMENT

•  Firm’s activities: ABELL matrix

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Customer needs

Customer groups

Technology

Accessibility

Awareness

Know-how

Environmental concerns

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SALES PERFORMANCE & EVOLUTIONS

•  Competitive position: World leader in cement, aggregates and concrete, gypsum

•  Global Turnover in 2008: 19 billions €

CRITICAL ANALYSIS OF THE CURRENT MARKETING STRATEGY AND MIX

•  STP strategy: •  Segmentation criteria: private and professional users •  Target: B2B & B2C, choice and strategy: be

everywhere and taking care of people, planet & profit •  Positioning: innovative, awareness of the brand,

accessible •  4 P’s analysis:

•  Product: Cement, Aggregates & concrete, Gypsum •  Price: ? •  Place: respectively, in 50, 40 and 29 countries •  Promotion: essentially on the corporate website

CRITICAL ANALYSIS OF THE CURRENT MARKETING STRATEGY AND MIX

•  Critical analysis: •  A corporate website all-in-one, reaching stakeholders

through identified topics but there is not enough transparency and reactivity.

•  Few efforts of mass advertising poorly broadcasted that remained unknown: it was in 1996, the advertising campaign “materials to build the world”

LAFARGE EXTERNAL ANALYS IS

MACRO-ENVIRONMENT: PESTEL

• Political: Even if Lafarge is present all over the world, the company works mostly in developed countries, then it does not face important political conflict. However their business is really dependent on political context especially for building permit

• Economic: The economic crisis has a really important impact on the business of construction, particularly in developed countries since the amounts of money they are spending are way lower

•  Sociocultural: World population keep growing

•  Technological: Nowadays extracting process of materials needed to make cement are at the state of the art. Most of houses & building has needed cement for their construction

MACRO-ENVIRONMENT: PESTEL

• Environmental: Our current society try be very careful concerning the environment and especially the impacts on the climate change and the scarce of resources

•  Legal: Developed countries have to respect the Kyoto Protocol concerning the CO2 emissions. They have to respect the laws of the different countries where they are working. Laws about construction can often prevent the construction of a building

• Opinion leaders & trends: Nowadays, the main trend concern the sustainability development especially in terms of renewable energies, recycling of industrial waste and a lower energy consumption. Building manufacturers try to be as eco-friendly as possible

•  International: Emerging countries are the main actors of the growth in building materials thanks to their urban and demographic development and their economic growth

MACRO-ENVIRONMENT: INDUSTRIAL & SECTOR ANALYSIS

• Competitors rivalry: •  Even if Lafarge is the market leader for building materials, the

competition is really strong in this business. Lafarge has 5 main competitors (CRH, HOLCIM, CEMEX, Heidelberg cement & Italcementi).

•  Except for Italcementi their turnover 2008 is higher than €14 billions •  Their strategy concerning social networks is different, indeed some

of them use them and not the others

• Buyer Power: •  Lafarge has a worldwide presence and then has a large number

of customers •  However their contracts represent huge amount of money, then

they have a big bargaining power especially for big projects like roads or railways

MACRO-ENVIRONMENT: INDUSTRIAL & SECTOR ANALYSIS

•  Substitutes: To replace the use of its products, we can for example use wood, steel, iron or glass depending of the case. Some of these products are more eco-friendly and others cheaper than cement

•  Supplier power: Since Lafarge extract directly the raw materials that they use to produce their goods, the only suppliers are the ones producing engines they are using, then it seems that their bargaining power is not that important

• New entrants: An important threat could come from the emerging countries, for instance in Asia. Their own market is growing and that allows the companies to develop themselves, become stronger and get a comparative advantage. Then the main barrier for new entrants is the required capital (for infrastructures, raw material … )

MACRO-ENVIRONMENT: INDUSTRIAL & SECTOR ANALYSIS

Companies  from  emerging  countries  could  become  really  powerful  in  the  next  

few  years  Bargaining  power  of  suppliers  is  not  really  high  since  Lafarge  extract  its  own  raw  materials.  They  are  only  dependent  of  engines  providers  

Many  buyers  but  they  s>ll  have  a  high  bargaining  power  since  they  represent  huge  

contracts  

Some  products  that  are  cheaper  or  more  eco-­‐friendly  could  replace  

cement  in  some  cases  like  for  exemple  wood  or  glass    

Compe>tors  all  over  the  

world  but  they  are  the  market  

leader  

MICRO-ENVIRONMENT: MARKET DEFINITION

• Generic Market: Cements + special cements with added characteristics / Woods, iron, steel, glass

• Quantitative: 100 million tons of cement each year

• Qualitative: •  Nowadays the trend is to be eco-friendly and thanks to the

innovation they succeed to use twice as less amount of raw materials to produce the same good

•  The second important aspect concerns the safety of the labour force

MICRO-ENVIRONMENT: MARKET OFFERING

•  The distribution channels: Lafarge communicates only through its internet website

•  For now the direct competitors of Lafarge are in developed countries but since Lafarge try to increase its presence in emerging countries, it faces new competitors

•  Lafarge has a strong innovative strategy and is actually the market leader

QUESTION 1:

Using only information provided in the case, you will evaluate and select 2 social networks that allow an efficient corporate communication, taking into account the sector’s structure, Lafarge possibilities & competition moves.

Helpful Armful

Inte

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Strengths •  Market leader with a worldwide presence •  Huge innovations & know-how •  Market knowledge •  Significant acquisitions such as Orascom Cement in Egypt • A strong R&D business unit • Taking care of their employees

Weaknesses •  Low visibility • Just one promotion channel: the corporate website •  Most of its customers in Western Europe & North America

Exte

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Opportunities • Emergent countries development • Population keep growing then an increasing need of MGB industries • Trend of environmental concern

Threats •  Economical Crisis background • New competitors

SWOT ANALYSIS

Criteria to choose the two social networks: •  Adapted to B to B •  Increasing the visibility of Lafarge •  Highlight their competitive advantages compared

to their competitors •  Targeting new customers and above all in emerging

countries

•  It has several business advantages: •  Advertising targeting and surveys •  Future employee recruitment •  New partners and clients •  Buzz and videos •  SEO and link to the website

•  Facebook can have a big impact on stakeholders because it is mainly used and well-known worldwide but it is not adapted as a corporate communication tool.

•  We think the Lafarge Group does not need to start with a Facebook page because it is more adapted to communicate directly with its customers (B2C) but not to do B2B.

FACEBOOK

TWITTER

•  It has several business advantages: •  Status & micro-sharing •  Increasing business purpose and professional followers •  Relationships between users •  Polls & surveys •  Link to the website

•  Twitter has less users than Facebook but he has a increasing business purpose and a bigger impact on stakeholders trough the web influencers.

•  We think the Lafarge Group should start with a Twitter account, as a corporate communication tool and as an interaction platform with all its stakeholders.

LINKEDIN

•  It has several business advantages: •  Building its digital identity (professional & personal presentation) •  3rd degree connections •  Find people, jobs & opportunities •  Community & groups to talk about brands & products

•  LinkedIn is a very dynamic platform that allows third degree connections and has a worldwide influence.

•  We think that the Lafarge Group should integrate LinkedIn as its second social network, because its users are increasing, its main purpose is professional and combined with Twitter, all the expectances for the Group corporate communication are fulfilled.

•  It has several business advantages: •  Famous in France and Asia •  Groups with a belonging feeling •  Spaces with specific subjects •  Geographic clubs •  Need to be alive

•  Viadeo doesn’t have a worldwide platform, so it has too much boundaries in order to be the second social network of a multinational company.

•  We think that the Lafarge Group should not use Viadeo as a social network because, even if its business advantages are very interesting for the company, the geographic impact would be too small.

VIADEO

CONCLUSION QUESTION 2

•  Finally, we choose Twitter and LinkedIn because these are the social networks which will be the most efficient for a company like Lafarge. •  interactive platform •  Professional purpose •  Increasing number of users •  Better for a B to B business •  Geographic impact

According to the social networks selected in the first question, you will propose a coherent positioning and communication strategy. It is mandatory to details the themes and messages you plan to communicate through these networks. A particular care will be given to the definition of operational objectives, means and costs used and expected returns.

QUESTION 2:

COMMUNICATION STRATEGY

On the one hand, on Twitter, Lafarge will provide immediate news about them and their projects. It allows to a dynamic communication. On the other hand, on LinkedIn, Lafarge will create its profile and its digital identity. At the same time, it will gather a community with its employees, its suppliers, its clients and its potential stakeholders. Lafarge doesn’t follow the same objectives with these two social networks.

POSITIONING ON TWITTER

New positioning on Twitter: Bringing immediate information to its stakeholders worldwide.

Segmenting Targeting

Geographical Developed and emerging countries People concerned by a particular building (neighborhood)

Demographical-Occupation Professional: suppliers and clients

Behavioral To be comfortable with new technology

Behavioral-Users status Followers on Twitter

Behavioral-Needs and benefits Look after immediate information

COMMUNICATION STRATEGY ON TWITTER

•  Themes and messages: Every news concerning the group and the different projects.

For example the date of a launching project, inaugurations, visits of political personalities or an appointment to the nomination of a director…

•  Operational / communication objectives: •  To provide immediate information about the group and its projects. It

means in real-time (daily or more frequently). •  To give more transparency •  To show the dynamism of the group. It has hundred projects worldwide •  To communicate about their strengths: this is the market leader, it has

made acquisitions (as Orascom Cement), the group has a strong know-how

•  To organize (and use) polls and surveys about some of their projects and show they take care of the public opinion

POSITIONING ON LINKEDIN

•  New positioning on LinkedIn: Creating a community with its stakeholders worldwide.

Segmenting targeting

Geographical Developed and emerging countries

Demographical-Occupation Professional: suppliers, clients, employees and potential employees

Demographical-Life cycle Students (potential employees)

Behavioral To be comfortable with new technology

Behavioral-Users status Users of LinkedIn

Behavioral-Needs and benefits Look after jobs and opportunities (ex: new projects for suppliers )

COMMUNICATION STRATEGY ON LINKEDIN

•  Themes and messages: At first, Lafarge will create its LinkedIn profile with its history, its former and new projects. It will provide opportunities as jobs offers for students or new projects for suppliers. In this way, Lafarge will create its network composed by its stakeholders and potential stakeholders. This community will be also a platform of discussion about brands or services.

•  Operational / communication objectives: •  To develop its digital identity •  To create a community between Lafarge and its stakeholders •  To give its stakeholders the feeling to belong to Lafarge ‘s projects •  To create a platform of mutual exchanges

MEANS AND COSTS

•  Tangible resources -  Employees: A community manager in charged social

networking -  Physical: A laptop and an internet access

•  Intangible resources -  Financial: It is free to register on Twitter and Linkedln

•  Finally, these communication strategies haven’t important costs compared to other existing strategies ( as posters for example). There is just the wage of the manager in charge of the social networking.

You will propose a communication plan emphasizing on actions taken in-line with objectives previously defined. Your must include timeline and budget. You can support your plan by relying on both information provided in the case and the knowledge acquired through your study lectures, personal business culture and own creativeness.

QUESTION 3:

GOALS

A communication adapted to B to B: •  For the group:

•  Increasing the international visibility of Lafarge •  Targeting new customers and above all in emerging countries •  To show the dynamism of the group •  To communicate about their environmental concern •  To develop its digital identity

•  For the clients and suppliers •  To give more transparency •  To create a community between Lafarge and its stakeholders •  To give its stakeholders the feeling to belong to Lafarge ‘s projects •  To create a platform of mutual exchanges

SEGMENTS &TARGETS

Segmenting Targeting

Geographical Emerging countries Developed countries

Demographical - Occupation

Exhibitors in building shows and stakeholders of building shows

Behavioral-Needs and benefits

Look after information

Psychographical- interest

Readers of specialized medias

Phsychographical - interest Sustainable development concern

TOOLS

•  Sponsoring: •  Sponsoring of professional events, “Building Show Lafarge”

in developing countries (as Batimat in France ). It offers an international visibility every year in the emerging market.

•  Public relations: •  Interviews about sustainable development issues in

specialized magazines. It gives legitimacy to Lafarge because it is published by specialized journalists.

TOOLS

•  Direct marketing: •  Participation of international building show as Ecobuild,

which is specialized on sustainable design, construction and the build environment. This is a way to show their environmental concern.

•  Newsletters addressed to their clients and suppliers, each month. It will contain the news about the projects and the group development.

•  Advertising: •  Advertising in specialized magazines

RESOURCES & BUDGET

•  Resources: •  Lafarge is the leader on the market, that’s why it could

probably spend the benefits of projects •  To expand the communication projects on many months in

order to have time to get the money.

•  Budget: •  2 big investments: sponsoring and advertising in specialized

magazines •  Very high budget

TIMELINE

Jan. Feb. Mar. Apr. May Jun. July Aug. Sep. Oct. Nov. Dec.

Twitter XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX

LinkedIn XX XX XX XX XX XX XX XX XX XX XX

Newsletters X X X X X X X X X X X X

Sponsoring

XXX XXX

Advertising

X X X X X X

Interviews

X X X

Build show

XXX XXX

CONCLUSION

•  Lafarge is the leader on the market but has a lot of progress to do on the web if it want to stay competitive.

•  The most interesting social networks are Twitter and LinkedIn.

•  But there are many other ways to promote our firm like sponsoring or advertisements.

•  It costs money but this is important to show to its potential customers that this is an innovative corporation.

•  Furthermore it will respond to the goals we have fixed previously concerning its visibility, transparency, identity and so on.