Geberit中国的策略流程再造A解读课件

1、Roland Berger & Partners International Management ConsultantsBarcelona Beijing Berlin Brussels Bucharest Budapest Buenos Aires Detroit Dsseldorf Frankfurt Hamburg Kiev LisbonLondon Madrid Milan Moscow Munich New York Paris Prague Riga Rome So Paulo Shanghai Stuttgart Tokyo Vienna ZurichStrategic re-

2、engineering of Geberit China Interim report Geberit International AGShanghai, Oct. 22nd, 2000SHA-4309-03690-08-15a.PPT-xRoland Berger & Partners IntContent (1)PageManagement Summary5A.Market environment 12A1.Macro business environment in China13A2. Market analysis of sanitary system 36A3. Market ana

3、lysis of piping system 67B.Strategy evaluation and Sales & Marketing80B1.Strategy evaluation81B1.1Corporate strategy analysis82B1.2Product strategy evaluation89B2.Sales & Marketing91B2.1Retail channel GSHA95B2.2Project channel GSHA103B2.3OEM channel GDAI107B2.4Marketing110B2.5Benchmarking: Kohler (C

4、hina)112SHA-4309-03690-08-15a.PPT-xContent (1)PageManagement SumContent (2)PageC.Financial, organization and processes analysis122C1.Financial situation analysis123C1.1Geberit Shanghai124C1.2Geberit Daishan138C2.Organization and processes145C2.1Organization structure146C2.2Management structure151C2.

5、3Key process analysis157D.Restructuring options164D1.General options and pre-selection165D2.In-depth evaluation176D2.1Equity buyout178D2.2Termination183D2.3Bankruptcy186D2.4Comparison of the alternatives190D3.Feasible scenarios 193SHA-4309-03690-08-15a.PPT-xContent (2)PageC.Financial, Back-upAcronym

6、 listBoDCCSCJVEJVFDIFICGDAIGSHAJVKTSVGMWFOEBoard of DirectorsCompetence Center ShanghaiCo-operative Joint VentureEquity Joint ventureForeign Direct InvestmentForeign Investment CommissionGeberit Flushing Technology (Daishan) Co. Ltd.Geberit Plumbing Technology (Shanghai) Co. Ltd.Joint VentureKohler

7、Technical SpecialistVice General ManagerWholly Foreign Owned EnterprisesSHA-4309-03690-08-15a.PPT-xBack-upAcronym listBoDBoard ofManagement summarySHA-4309-03690-08-15a.PPT-xManagement summarySHA-4309-036China could be a market of strategic importance for Geberits international business(1)China is a

8、 promising market for Geberit. We have an achievable business target of RMB 200 million revenue by year 2005, from which, 130 million comes from sanitary products and 70 million is generated by piping business. Among all the product lines, tank fittings, Pluvia and concealed cistern are the top 3 pr

9、oduct lines with the potential of RMB 140 million or 70% of the totalOverall Chinese macro economic development is undergoing a strong momentum. In the next 5 years, it is estimated that GDP will grow at 7% annually, the growth of fixed asset investment will increase by 8%, and housing construction

10、will also grow by 8% p.a.Chinese sanitary market is mostly a ceramic market, with an annual demand of 43 million units of sanitary ceramic products in China in 1999 which means the potential market of nearly 2 million sets for tank fittings as well as 2 million units of medium to high end cisterns s

11、old in the market. With the growth in the housing market, Chinese sanitary market will continue an annual growth of 68%. Furthermore, due to the rapid increase of bathroom decoration, the medium to high end segment of sanitary products will definitely lead the industry growth. By 2005, the share of

12、medium to high end segment will rise from current 20% to 35%Market environmentSHA-4309-03690-08-15a.PPT-xChina could be a market of strChina could be a market of strategic importance for Geberits international business(2)As the largest construction industry in the world, China presents an immense po

13、tential for Geberits piping products. Both HDPE and Mepla possess significant product advantages over the currently used Chinese products. However, the significant price gap could be a serious barrier for a deep market penetration. For Pluvia, the opportunities are very attractive. Presently more th

14、an 15 roof projects, altogether 700,000 sqm are in different phases of the process of biddingBoth Geberits concealed cistern and Pluvia roof drainage system are mismatched with Chinese traditional industry habits, this can only be solved by a long-term commitment in the China market and effective ma

15、rketing. Due to the Chinese consumers traditional mindset that plastic product are lower priced, Chantier doesnt have an optimistic market perspectiveRight now, for most of Geberits products, the competition is not so tough, which means a golden opportunity for Geberit to become a market leader in C

16、hina. It also means time pressure for Geberit. Currently competitors (e.g. Grohe DAL, Caroma) are gearing up and will become aggressive very soonMarket environmentSHA-4309-03690-08-15a.PPT-xChina could be a market of strOverall, the strategy of Geberit in China has not been fully achieved and sales

17、and marketing are particularly weak(1)Strategy and sales & marketingAlthough GSHA developed a strategy when founded, the strategic objectives to penetrate into the Chinese market havent been achieved-current strategy is unfocusedThe vision of GSHA is not communicated within the organization, nor is

18、it implementedIn comparison, GDAIs strategy is going in the right direction and is in the process of being implemented, They still have problems to solve, such as slow market responsiveness, poor customer understanding etc.The core competence of Geberit Europe stands for advanced technology, premium

19、 quality and brand, excellent pre-and-after sales services. This has not all been transferred to Geberit ChinaCurrent product portfolio of selling Chantier, Duofix and public products is unbalanced. Strategic focus should be on concealed cistern, tank fittings and Pluvia and HDPEAs to sales and mark

20、eting operations, GSHA has no clear strategy in developing distribution networkSHA-4309-03690-08-15a.PPT-xOverall, the strategy of GeberOverall, the strategy of Geberit in China has not been fully achieved and sales and marketing are particularly weak(2)Strategy and sales & marketingGeberits product

21、s are sold through 3 channels: retail sales and project sales through distributors, and OEMGeberit lacks clear planning of retail network development and has neither intention nor leverage to monitor distributors network operationsProject sales performance has been affected mainly by both poor custo

22、mer services and incompatibility with current Chinese installation and application habitsThere are a number of setbacks that need to be overcome to improve OEM sales: unsatisfactory product development and customization, slow market responsiveness and high pricingExcept for a very few marketing rela

23、ted activities such as seminars and attending exhibitions, essentially marketing department doesnt perform marketing functions such as building up brand etc. Kohler has done far better compared to Geberit in the area of sales and marketing, such as raise brand awareness, influence customers and desi

24、gn instituteSHA-4309-03690-08-15a.PPT-xOverall, the strategy of GeberFinancials, organization and processesThe GM of GSHA lacks leadership. His management style is self-centered. It is widely perceived that he does not trust the local staff. His personality is not accepted by employees. As a result,

25、 there is no motivating corporate culture, no trust between management team and staff, no motivation and commitment among the staff and high staff turnover. ( e.g. CCS ) The official organizational structure, which is changed frequently, is not implemented. Departments function is not clearly define

26、d. Some functions ( e.g. HR ) are overlapping and some are not implemented. ( e.g. Marketing)The current operation process is production - oriented instead of market-oriented, leading to ignorance of market demands. The control of the whole process is only on paper and is not followed in reality. Al

27、though there is no open conflicts between them, the JV partners pursue their own (personal) interests. It is particularly obvious when recruitment, promotion and lay-off are concerned.GSHA is on the brim of bankruptcy. More than 70% of products sold have negative gross profit margin, resulting in an

28、 increase of operating losses in line with increase of sales. The company cannot survive without a continuous cash injection from the parent company. Although the operating losses of GDAI have been reduced as a result of improved gross profit margins and increased sales, the financial situation is s

29、till criticalThere is no leadership at GSHA. GSHA is close to bankruptcy. GDAI shows positive development trendSHA-4309-03690-08-15a.PPT-xFinancials, organization and pGeberit should aim for equity buyout and consider termination or bankruptcy as fall-back positionRestructuring optionsTo separate fr

30、om the Chinese partner is a premise to secure success of restructuring Some key problems particularly affecting to HRM are related to the Chinese partnerIn addition, Lidas products are contributing to the huge loss due to their -7% gross profit margin and the sharp decline in sales volume due to shr

31、inkage of low end marketTherefore, only equity buyout, termination and bankruptcy are feasibleConsidering cost, time, risk and the potential impact on future integration and consolidation, equity buyout should be deemed as the first choice, and termination or bankruptcy as fall-back positionThe buyo

32、ut and termination options depend to a large extend on the willingness of the Chinese partner and can take a long time. Therefore, Geberit should start preparations and negotiations quicklySHA-4309-03690-08-15a.PPT-xGeberit should aim for equity A. Market environmentSHA-4309-03690-08-15a.PPT-xA. Mar

33、ket environmentSHA-430A1. Macro business environment in ChinaSHA-4309-03690-08-15a.PPT-xA1. Macro business environmeOverall the business environment is positive for Geberits investment in ChinaMacro business environment in China8% annual growth forecasted for construction industryStrong momentum for

34、 real estate market growthSteady growth for high end real estate market7% annual GDP growth estimated in the next five yearsAnother boom for FDI1) expectedAn estimated 8% annual growth for fixed asset investment by 2005Consistent economic policies towards reform and opening upDramatic Chinese househ

35、old income growth during the past 15 yearsMacro economic trendHousing supply marketGovernment policiesSocial factorsGovernments preparation for WTO entry Central governments effort to develop western regionThe emergence of top consumers group with strong purchasing powerSignificantly increased bathr

36、oom decoration standard and spending1): Foreign direct investmentSHA-4309-03690-08-15a.PPT-xOverall the business environmeChina is one of the fastest developing countries in Asia and the globeAnnual GDP growth in China %GDP growth in Asia, 1998/1999China1) EstimateJapanMalaysiaIndonesia IndiaPhilipp

37、inesTaiwanSingaporeHong KongThailandGermany1.4%USA4.1%Source: OECD, Roland Berger & Partners analysis1)SHA-4309-03690-08-15a.PPT-xChina is one of the fastest deThe key indicators of the first half of 2000 show a strong confidence in the Chinese macro economic trendFixed asset investment hit RMB 754

38、billion in the first half of 2000, up 12.1% compared with the period of last year, among these, the investment of real estate was RMB 201 billion, up 24.1%Sales volume of the retail market reached RMB 1625 billion, up 10.1%, and the disposable income per urban resident increased by 7.7%Foreign trade

39、 volume achieved a significant growth of 37%, amounted at USD 217 billion, among these, export was USD 115 billion, up 38%, import was USD 102 billion, up 36%Key indicators in the first half of 20008.2% GDP growth achieved in the first half of 2000Source: County Information Center36503950+8.2%Billio

40、n RMBSHA-4309-03690-08-15a.PPT-xThe key indicators of the firsIn the next 5 years, macro economic development will be optimistic in ChinaWTO accession will bring 1.75% more foreign investment, USD 100 billion incremental FDI per year, will boost economy growth by 1% annuallyThe fixed asset investmen

41、t is estimated to grow at 8% per yearChina plans to accelerate the urbanization process by 2% per yearReal estate market will grow at 7-8% p.a. in the next five yearsThe trend of Chinas macro-economy7% annual GDP growth1) in the next five years1978 = 1001): excluding the inflation factor2): Estimati

42、onSource: China Infobank, Asian monitor, RB&P analysis2)+10.8% p.a.+7.8% p.a.+11.6% p.a.+8.1% p.a.+7% p.a.SHA-4309-03690-08-15a.PPT-xIn the next 5 years, macro ecoA boom for foreign investment can be expected in China in the next 510 yearsFDI growthGrowth of European Union investmentBillion USDBilli

43、on USD60.9%p.a.4.2%5.7%6.6%9.2%8.8%11.1%The weighted share of European companies investment in total FDI is increasing70.11.5% p.a.12% p.a.1)1) Estimation based on the assumption of WTO entrySource: Sate Statistics Bureau, RB&P analysis70% p.a.15.8% p.a.SHA-4309-03690-08-15a.PPT-xA boom for foreign

44、investment WFOE (wholly foreign owned enterprise) is becoming a more and more widely-accepted approach for foreign investmentComposition of FDI in ChinaLegal formation of foreign investmentSource: State Statistics BureauBack-up154.856.9European UnionJapanUSATaiwanHongkongOthers23.925.624.921.5Billio

45、n USDBillion USDThe accumulation of actual foreign investment to the end of 1999Actual foreign investment of Jan. July 20009.93.0EJVWFOECJV6.8EJV: Equity Joint Venture CJV: Cooperative Joint VentureOthersTotal: 307.6Total: 19.9SHA-4309-03690-08-15a.PPT-xWFOE (wholly foreign owned entThe fixed asset

46、investment is estimated to grow at 8% annually in the next 5 years, and more than 60% will be invested in construction projectThe growth of fixed asset investmentComposition of the fixed asset investment in 1999Source: China Statistic Yearbook 2000, RB&P analysisBillion RMB14.8%8.8%13.9%5.1%8%p.a.Bi

47、llion RMB1879.3400.6Purchase of machinery equipmentConstruction and installationOthers705.3Total: 2985.3SHA-4309-03690-08-15a.PPT-xThe fixed asset investment is Construction industry will grow steadily at an estimated 8% annual rateGross output value of construction industryBillion RMBGrowth of gove

48、rnment infrastructure investmentGrowth of residential housing supplyGrowth of real estate marketGrowth of renovation market21.8%7.6%10.3%10.3%8%Source: China Statistic Yearbook 2000, National Planning Commission, RB&P analysisSHA-4309-03690-08-15a.PPT-xConstruction industry will groThe total floor s

49、pace of housing supply has experienced an average annual growth of 6.5% in the past 5 years, more than 8% growth can be expected this yearGrowth of total housing supplyAverage annual growth of urban residential supply is 12.7%, which is leading the total growth rate of 6.5%, and will continue to be

50、the growth engineRural residential supply growth is limited due to slow farmers income growthWTO entry is expected to stimulate another high-growth period of office building supplyTrend of housing supplyBillion sqm+6.5% p.a.Urban residentialRural residentialNon-residential1.461.621.661.711.872.031)1

51、): Projection based on the progress of the first half year of 2000Source: China Statistic Yearbook 2000, China Construction Industry Yearbook 1999, RB&P analysis+8.5%SHA-4309-03690-08-15a.PPT-xThe total floor space of housiBuilding construction can be divided into residential buildings and non-resid

52、ential buildingsBack-upBuildings classificationTotal constructionResidential buildingsNon-residential buildingsUrban residentialRural residentialIndustrial buildingsCommercial buildingsOthersManufacturing plantHotelRetail storeRestaurantEntertainmentOthersPublic buildingse.g.: airport, exhibition ce

53、nter, stadiumInstitutional buildingsHospitals SchoolsOthersOthersOffice buildingsSHA-4309-03690-08-15a.PPT-xBuilding construction can be dTotal housing supply in 1999 reached 1.87 billion sqm in ChinaThe floor space completedNationalBeijingShanghaiJiangsuZhejiangGuangdongResidential Urban Villas and

54、 good apartments (sold) RuralIndustrialCommercial Office Others (retailing, entertainment, catering )Others (public, institutional, hospitals, schools )Total13935594.36834111223119104147187419.6015.200.554.4017.274.116.811.914.9036.8717.3213.360.393.9615.263.955.022.152.8732.58101.0428.490.3172.5639

55、.697.7016.347.229.12138.0164.8120.810.3044.0024.257.0810.885.585.3089.6086.0442.380.8943.6639.1113.1115.528.606.92125.14Back-upHousing supply of nationwide and key areas 1999Million sqmSource: China Statistics Yearbook 2000, Provincial Statistics Yearbook 2000SHA-4309-03690-08-15a.PPT-xTotal housing

56、 supply in 1999 rThe residential floor space supply accounts for 74.3% of the total housing supply in 1999Composition of housing supply (1999)Compositions of non-residential buildings (1999)Back-up481559Rural residential buildingsNon-residential buildingsUrban residential buildings834Million sqm1191

57、47Industrial buildingsOffice buildingsOthers111Million sqmTotal: 1874Total: 481104Other commercial buildingsThe group of commercial buildingsSHA-4309-03690-08-15a.PPT-xThe residential floor space suReal estate market is showing a strong momentum in 2000, sales of square meters up 38% from Jan. to Ju

58、ly vs. the same period in1999Source: State Statistic Bureau, China InfobankFloor space completedMillion sqm+19.1%Housing salesMarket indication of 2000. 171999 (1-7)2000 (1-7)+38%1999 (1-7)2000 (1-7)72%84%28%16%The actual investment in real estate reached RMB 250.4 billion, up 28.6%32 million square

59、 meters of land was used for real estate development, up 23.1%Market price slightly increased by 1.9%Top cities such as Shanghai, Beijing, Guangzhou, Shenzhen are leading the growth, e.g. the private consumption in Beijing was almost tripled to 2.3 million square meters compared with the period of t

60、he last yearPrivate buyerInstitutional buyerMillion sqm36.350.1SHA-4309-03690-08-15a.PPT-xReal estate market is showing High end real estate is on track of steady growth during the past 5 yearsGrowth of sales of villas and high end apartments*Composition of high end real estate market (1999)*: The h