SWOT Analysis of Reckitt Benckiser focuses on Strength, Weakness, Opportunities, and Threats. Strength and weakness are internal factors and Opportunities and Threats are external factors. SWOT Analysis of Reckitt Benckiser helps the company to analyze its market potential and help bank to formulate strategies.
Reckitt Benckiser originated from United Kingdom. Reckitt Benckiser manufactures wellness, hygiene and personal care products. Reckitt Benckiser has several top-selling brands such as Dettol. Reckitt Benckiser has a total workforce of 30,000 individuals. Harpic, Strepsils, Vanish, Durex, and Lysol. Reckitt & Benckiser plans to create commodities that enhance human wellbeing through a wide range of items in the lifestyle category, making the environment a safer and better place to live.
The company has activities in a wide range of fields and has best sellers in each of the product segments in which it works. However, the brand has gained a great deal of reputation for its home cleaning products such as Lysol and Harpic, and is currently one of the market leaders in this field.
Reckitt & Benckiser was founded in the year 1999 with the merger of Reckitt & Colman plc and Benckiser NV.
Strengths in the SWOT analysis of Reckitt Benckiser
- Popular brands: Reckitt & Benckiser has a popular range of products in its respective divisions, several of which are best selling labels. Harpic, Strepsils, Dettol, Lysol, Clearasil, Mortein, Vanish and Durex are among some of these. Such brands are all household names and have provided a very high degree of brand value to the company.
- Strategy: In all their divisions, Reckitt & Benckiser has aggressively sought to climb higher than the market average to create a leadership role in fast growth portfolios by maintaining a strong cash flow in all their items. This is what made them create brands that are popular.
- Market competition in various categories: Reckitt & benkinser in several categories includes the world’s biggest labels. Harpic in the category of bathroom washing, Dettol in antiseptics, Woolite in the category of detergent, Lysol in the category of domestic washing and Durex in condoms are some of them.
- Acquisition focus: several very clever acquisitions have been made by Reckitt & Benckiser, focused mainly on East Asian markets such as Japan and China, where the firm has yet to achieve critical mass. In regions where they have no footprint or leading goods, they also work on purchasing small but profitable enterprises.
- Focused on market penetration: Reckitt & Benckiser focused on deepening penetration in developed markets rather than diversifying into new types of goods. The company has 18 power brands and they are looking at leveraging the influence of the existing accomplishment to duplicate it in markets where the company has very to no exposure instead of focusing at making more effective brands.
- Distribution and Reach: In almost every state, Reckitt & Benckiser has a large number of dealers, backed by a strong distribution network that ensures that its goods are readily accessible to a large number of consumers in a timely way.
- Cost structure: The low-cost structure of Reckitt & Benckiser allows it to manufacture at a low cost and to sell its goods at a low price, making it affordable to its clients.
- Dealer Community: Reckitt & Benckiser has a good partnership with its dealers which not only supplies them but also focuses on promoting the products and training of the company.
- Financial position: Reckitt & Benckiser has a solid financial position with consecutive earnings over the last 5 years, along with accumulated income reserves that can be used to fund potential capital spending.
- Has a broad asset base offering greater solvency.
- Return on Capital Expenditure: In the past, Reckitt & Benckiser was able to effectively produce positive returns on the capital expenditure it spent on different ventures.
- Automation: has enabled more effective resource utilization and cost reduction from various stages of production. It also enables its goods to be consistent in quality, and offers the flexibility to scale up and scale down production as per market demand.
- Trained labor force: Reckitt & Benckiser has invested heavily in its workforce training, which has resulted in its hiring a significant number of professional and motivated workers.
- Has a diverse workforce, with people of many ethnic, racial, cultural, and educational backgrounds who help the organization bring in various ideas and methodologies to do things.
- Has trained and certified competent team workers.
- Entering new markets: Creative teams from Reckitt & Benckiser have helped it to come up with new products and reach new markets. In the past, it was successful, in most of the initiatives it took in new markets.
- Social Media: Reckitt & Benckiser has a strong social media presence with millions of followers on the three most prominent social networking platforms: Facebook, Twitter, and Instagram. It has a high degree of customer engagement with low customer response time on those channels.
- Website: Reckitt & Benckiser has a well-functioning and engaging website that attracts a huge amount of traffic and sales on the internet.
- Product Portfolio: Reckitt & Benckiser has a broad selection of products where it sells products in a wide variety of categories. It has a range of exclusive product deals which competitors don’t have.
- Reckitt & Benckiser’s geography and location give it a cost advantage in servicing its customers as compared with the competition.
- Reckitt & Benckiser has a well-established IT system that ensures its internal and external operations are successful.
- Reckitt & Benckiser has many intellectual property rights including trademarks and patents. This requires exclusivity of their products and rivals are unable to copy or reverse engineer it.
- Reckitt & Benckiser is a company that has been on the market for years and that people recognize. That makes it highly aware of its brand.
- Over the years, its goods have retained consistency and are still respected by consumers, who regard it as good value for the price they spend.
- Relationships: Reckitt & Benckiser develops strategic partnerships with its manufacturers, distributors, retailers, and other interested parties. This helps it to use them in the future if need be.
Weaknesses in the SWOT analysis of Reckitt Benckiser
- Weaknesses are used to refer to places where change is needed by the organization or the brand. Two of Reckitt & Benckiser’s main shortcomings are:
- Leadership issues: In September 2017, four of the top management of Reckitt & Benkiser quit the firm, suggesting that the organization could face a serious leadership crisis in the following year. At the same time, the departure of the heads of IT, employees, marketing, and emerging markets has impacted the company’s credibility and generated negative speculation among the stakeholders.
- Over-dependence on star products: Reckitt & Benckiser heavily rely on its 18 consumer brands and has invested more than 40% of their revenue to these products, all of which have been introduced in the last 3 years. This impacts the company’s product philosophy, which, opposed to more creative rivals such as Unilever, would work against it.
- Mead Johnson’s takeover: Reckitt & Benckiser paid a whopping 18 million pounds to take on Mead Johnson, a corporation that works in the area of child feeding. As the organization has no experience in the field of child feeding, which is itself a highly competitive market, this change turned out to be a failure.
Opportunities in the SWOT analysis of Reckitt Benckiser
- Development in new markets: Reckitt & Benckiser has expanded their emphasis on developing markets such as the BRIC and East Asian countries. In these markets, the business has gained prominence and shows a lot of potential in the future, particularly in the field of home care.
Threats in the SWOT analysis of Reckitt Benckiser
- Brexit: Due to Brexit, businesses based in the UK have experienced significant financial difficulties and the increasingly unstable costs of goods have also boosted the cost of most items. There have been vital threats to the organization.
- Competition: SmithKline Beecham, Unilever, and Procter & Gamble also face competition from the group.
- Suppliers: The suppliers ‘ bargaining power has risen over the years with the number of suppliers declining. This means that input costs for Reckitt Benckiser will grow.
- New entrants: various competitors have joined the market and gain market share by purchasing a market share from established companies. Reckitt Benckiser is affected by this because it may lose its customers to these new entrants.
- Growing competition: Rising rivalry within the industry has placed downward pressure on prices. This could result in lower sales for Reckitt Benckiser if it responds to shifts in costs, or loss of market share if not.
- Exchange rate: the exchange rate tends to fluctuate and this affects a globally exporting business like Reckitt Benckiser because its suppliers are local.
- Political instability in the country proves to be an obstacle in business, at times hindering efficiency and creating unnecessary costs for the company.
- The country’s fluctuating interest rates will not offer a healthy financial and economic climate.
- Customer tastes are evolving, and this puts pressure on businesses to continually adapt their goods to satisfy these consumers ‘ needs.
- International trade laws continue to evolve and this means that businesses comply if they are to operate internationally.
- Also, alternative goods available are growing, which is a systemic challenge to the entire industry as current product demand is decreasing.
- The rise in fuel prices has increased Reckitt Benckiser’s production costs. Such costs have also risen as other companies supplying materials for this business have also suffered from higher fuel prices, thereby paying more.
- Reckitt Benckiser was challenged by increased promotions by rivals. There’s more spam than ever on most sites and consumers are bombarded with numerous messages. This limits the efficacy of Reckitt Benckiser advertising messages.
- Constant technological advances require training of the workforce, because the inability to keep up with these changes will lead to business loss for Reckitt Benckiser.
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