Nivea SkincareOperations Strategy ProjectAkshay Bhardwaj 07303 Mayank Arora 07330Nikhil Aggarwal 07338Shalini Agarwal 07349Vitrag Sheladia 07351Shobhit Goyal 063051

Introduction

Global skin- and body-care brand that is owned by theGermancompanyBeiersdorf.

Founded on March 28, 1882, by pharmacist Carl Paul Beiersdorf

Nivea comes from Latin word niveus which means snow white

Total Revenue $6.89 billion in 2012

Sold about 60-70 million units across all products in India in 2013-14

Nivea Skin CareCaters to all categories Male or female, young or old, fair or dark, oily or dry, sensitive or normal.

Product range:Bath careBody careDeodorantsFace & lip careNivea creme

Skin Care Industry in India

Skin Care Market PotentialAccording to Euromonitor, changing consumer lifestyle, adoption of developed world cultures, desire to look good & rapid urbanization are few causes for growing skin care awareness & marketThe market is expected to reach $1.2 billion by 2017

Skin Care Industry Issues & Challenges

Blue agenda the strategic compassNIVEA systematically continued its Focus on Skin Care. Closer to Markets strategy in 2014 and developed a strategic compass, its Blue Agenda. This clearly defines the companys objectives and how to implement them.NIVEA is reaffirming its claim to be the number 1 skin care company in the product categories and markets that are important to it.The companys strategic activities are focused on four fields: Strengthening its brandsIncreasing its innovative powerSystematically expanding its impact and presence in the emerging marketsIncreasing the companys efficiency and speed.

Blue agenda the strategic compassSkin care will be the main growth driver in the global cosmetics market accounting for 45% of growth. Hence, NIVEA has focused on its brand value and implementing a uniform brand presence using a new logo and new design.The first products in the NIVEA Body category with the new round logo were introduced into the shops in May 2014; followed by the NIVEA Face category July 2014 and the NIVEA Hair and NIVEA Baby product categories by end 2014.Changes to the product packaging, which will materially strengthen the brands presence, were also incorporated as part of the migration of the entire NIVEA product family to the new logo.

Blue agenda the strategic compassThe reorganization of NIVEAs research and development activities to leverage the immense internal potential is another key area of focus.NIVEA took specific measures to align the research and development department even more strongly with consumer expectations. The R&D function involved in the innovation process at NIVEA were previously process driven. But, from January 2015 onwards, the new structure for the R&D area has been centered to the the six core categories Body, Face, Sun, Men, Deo, and Shower.NIVEA Baby and NIVEA Hair play a role as tactical categories at a local level. The objective is to develop innovative products that are ideally tailored to meet consumers different needs responding quickly and using efficient structures.

Blue agenda the strategic compassNIVEA has planned to systematically increase its impact and presence in the emerging markets. Its regional research centers in Silao (Mexico) and Wuhan (China)point to the fact that NIVEA is getting even closer to the markets.Construction of a new production center with significantly higher capacity is scheduled to commence in Sanand, Gujarat in March, 2015 to serve the rapidly growing demand in the Indian sub-continent and simultaneously improve structures by bundling resources at a single location.The facility being set up at a cost ofRs.1,000 crore, will also have a research and development (R&D) centre for product development and innovation in packaging to make the product more economical. The centre will also focus on developing products specifically catering to the needs of the Indian consumers.

Blue agenda the strategic compassIncreasing the companys efficiency and speed serves the corporate objective of further increasing growth and earnings power.NIVEA works continually to make processes more efficient, speed up decisions, and optimize cost structures.The Blue Agenda builds on the trust-based corporate culture, adding the values of entrepreneurship, personal responsibility, change, and speed. In this way, NIVEA aims to encourage and require employees to think and act like entrepreneurs and to take a decisive approach.

Manufacturing flow of Nivea Tier II Tier ISupplier SupplierSupplier 1Supplier 3Supplier 2Supplier 2Supplier 1Contract ManufacturerNIVEACF AgentsDistributorCustomerRetailerThe company procures the raw materials, majorly chemicals, from the qualified suppliers only.They have a policy of ensuring quality at source. All their suppliers are made to comply to strict quality standards. This reduces the need for the company to check the raw materials at their manufacturing site.

Framework after implementing uniform brand presence New packaging will lower the cost.Uniform branding for all products will help them cut down cost of marketing.Same team for branding of all the products will improve the dependability

Framework after reorganization of NIVEAs research and development activities Reorganization of R&D will make the facility flexible and innovative.Reorganization of R&D will incur cost to the company

Framework after increasing its impact and presence in the emerging marketsNew plant in Gujarat will increase the capacity as well as the cost to the companyNew plant will help in fulfilling the needs of nearby marketsNew R&D facility will help in innovating new products of high qualityPlant being close to the market will decrease the time for product to reach market

Final Framework

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