Beirsdorf Ag

The building blocks of Beiersdorf’s success lie in the company’s local adaptation strategy which focused on the needs and characteristics of regional markets and its consumers. The innovative research and development is another important success factor, which was behind the rapid growth of the company and many of its breakthrough brands such as Nivea. Beiersdorf’s collaboration with 50 institutes and its high profile researchers all over the world as well as its online Open Innovation Initiative “Pearllfinder” resulted in the company’s ability to tailor to the preferences of the consumers of each market and develop products to meet the needs of a specific region through its ongoing sophisticated research. In addition, it was the market research that led for Beiersdorf to identify a gap in the market and lead to the launch of the company’s most successful brands, Nivea, aimed mainly at young women initially and later diversify into other product lines, i.e deodorants, bath and shower and products for men. Beiersdorf’s brands were trusted to be of high quality, known for its reliability, consistency and effectiveness. Nivea has dominated the cosmetics industry with its products and has positioned the company ahead of its competitors. Beiersdorf has also succeeded in earning a prestigious reputation with its premium priced brands, such as La Prairie. However, a combination of internal and external factors began to signal the company some risks of a declining growth and thus have resulted in Beiersdorf’s decision to initiate restructuring. (Hasse, 2013)

Some of the external factors include a stagnating consumer base and slow economic growth in Beiersdorf’s main sales region, Western Europe and the company’s over reliance on this mature market, as well as increasing competition in the markets where Beiersdorf was once a dominant player. From the internal perspective of the company, Beiersdorf has missed out on increasing its presence in a large cosmetics industry...