HENKEL Case Study

• Keshav Mohan (138)

• Neha Shrimali (145)

• Sipra Tekriwal (168)

• Tirup Patel (171)

• Vivek Jhala (175)

HISTORY

• Founded in 1876 as Henkel & Cie by Fritz Henkel and two more partners.

• First product marketed – "Universalwaschmittel", a universal detergent based on

silicate.

• In 1878 first German brand-name detergent appeared: Henkel's Bleich-Soda .

• Affordably-priced product supplied in sturdy paper bags. Made from water-glass

and soda, it was the result of Fritz Henkel's own research.

• In 1879 Fritz Henkel was entered as the sole owner in the register of companies.

• In 1883 to improve liquidity and make better use of the Company's

travelling sales staff, Fritz Henkel decided to sell merchandise in

addition to his detergents.

• Range included the colorant ultramarine [laundry bluing agent], gloss

starch, a liquid cleaning agent, a pomade for cleaning, beef extract, and

a hair pomade.

• Persil came in 1907 as the first “self-acting laundry detergent” which

accounted for 40 % of its income .

• Gradually new products were launched and Henkel went international .

MISSION

Henkel – Leading Aerospace in innovative

solutions and world class service through

our people & products .

VISION A global leader in brands and technologies.

GENERAL INFORMATION

• Type – Kommanditgesellschaft auf Aktien with Aktiengesellschaft as partner

with unlimited liability .

• Industry – Chemicals, consumer products .

• Founded – 1876 .

• Headquarters – Düsseldorf, Germany .

• Key people – Kasper Rorsted (CEO and Chairman of the executive board),

Simone Bagel-Trah (Chairman of the supervisory board)

• Products – Personal care, laundry and

cleaning products, adhesives and sealants

(brands...)

• Revenue – €15.09 billion (2010)

• Operating income – €1.723 billion (2010)

• Profit – €1.118 billion (2010)

• Total assets – €17.53 billion (end 2010)

• Total equity – €7.950 billion (end 2010)

• Employees – 48,140 (average, 2010)

• Subsidiaries – Dial Corporation

BRANDS

COMPETITORS CLEANING DIVISION – CHEMICAL DIVISION – BEAUTY DIVISION –

Introduction to the Case• Case study is about corporate sustainability,

corporate social responsibility, following ethical

practices and proper code of conduct.

• It is about how Henkel (Chile) started producing

toluene free products to prevent health issues.

• It also talks about how Henkel has adopted

marketing techniques to promote the toluene

free products to the customers.

• Henkel always followed ethical practices which

helped it establish a wide customer base and

brand loyalty.

Diamond Model

Diamond Model in relation to the Henkel Case

• Purpose : The purpose of the firm is to produce and sell household cleaners and

body care products. The other main purpose of the case is to stop the production

of toluene containing adhesives.

• Strategies :

1. To use cyclohexane and acetone,

2. Follow ethical practices to broaden customer base

3. Promote ethical products

4. Consult the recognized laboratories

Standards and Regulations :

• Rejects corruption an

bribery.

• Success throughout

sustainability.

• Open communication.

5 corporate values

• We put our customers at the center of what we do.

• We value, challenge and reward our people.

• We drive excellent sustainable financial performance.

• We are committed to leadership in sustainability.

• We build our future on our family business

foundation.

Core Values

• Customer Driven

• Excellence in quality

• Strive for innovation

• Promote change

• Sustainability

• Corporate Social Responsibility

• Teamwork and Leadership

• Develop superior brands and

technologies

Social commitment

We have grouped all of our social involvement programs – international

corporate citizenship activities that go beyond our business undertakings –

under the Henkel Smile umbrella. With this program, we promote and support

social, educational, scientific, cultural, leisure, sports, health and environmental

projects. Alongside material contributions, an important role is played by our

employees and pensioners who also devote their enthusiasm, understanding,

willingness to help, and personal commitment to their project ideas.

Code of ethics• Henkel strictly rejects all sorts of corruption.

• They underline the strict ban on all forms of bribery and other undesirable business

practices.

• Economic success through sustainability.

• Individual responsibility and motivation.

• Safe and environmentally compatible products and technologies.

• Safe and efficient plants and production processes.

• Treatment of business partners and market behavior.

• Sustainable business processes.

• Technology and knowledge transfer.

• Management systems for continuous responsibility and continuous improvement.

• Open dialogue.

Stakeholders’ model• Business organizations have responsibility to various groups in society and not just the

owners/ shareholder.• It includes a responsibility for the natural environment.• Thus, decisions should be taken in the wider interest.

Classification of Stakeholders

Internal Stakeholder’s• The owners• The employees

External Stakeholder’s• The government• The local community organization• The competitors• The media• The environmentalists

Connected Stakeholder’s• The customers

The Government

• The health ministry was convinced by the

toxicological and safety advantages of the new

formulation.

• Henkel Chile was visited by the Health Secretary of

Chile and received public support for the initiative.

• The Health Ministry prepared a national law to

prohibit the production and marketing of

adhesives containing toluene.

• The Chilean Minister of Health awarded the

company with the national health award in

recognition of its pioneering role in banning

toluene.

The Owners

Owner’s objectives:

• Alternative product-Same productive performance-Lesser health

problems

• Provide product information and education regarding product hazards.

• Eliminate sniffing as a social problem, especially for children who are

likely to be addicts.

• Improve health and safety properties of products for it’s clients in general

• Secure and develop the market share and customer satisfaction through

sustainable product improvements and public eco-leadership recognition

The Competitors

• Henkel Chile worked to convince the

competitors of the advantages of using

the safer cyclohexane.

• The Chemical Industry Association

investigated the matter and finally all the

other competitors switched over to

cyclohexane and completely banned

toluene.

• They supported and actively participated

in the cause too.

The Media The Environmentalists

• The comparative advantages of

‘toluene’ free adhesives were very

beneficial.

• A press conference to promote the

innovation of toluene free adhesives

was organized.

• The initiative was well received by the

media.

• It was very well covered by

newspapers, television and specialized

scientific magazines.

• Eco-Leadership and Sustainable

Development.

• Henkel’s market success and its

ability to strengthen cooperation

between various stakeholders lead to

multiple environmental and social

benefits.

Local community organizations• University of Chile: Scientific research of product

properties.

• CITUC: Research on health aspects and scientific

promotion of the Henkel improvements.

• Chemical Industry Association of Chile: Promotion of

the increased use and production of toluene-free

adhesives through industry wide discussions.

• Chilean Ministry of Health (Departments of Mental,

Environmental and Public Health): Close observation

of the scientific and commercial progress made with

regard to most effective spreading the social and

health benefits of the new products.

The Customers

• The previous adhesives were the

market leaders in Chile.

• PROBLEM: To convince the customers

that the new innovated product was at

par with the previous product as far as

the quality was concerned.

How to counter the problem? The Result

• Personal mailing to main customers

and distributors (summary

information and technical details).

• Visits of customers.

• Advertisement (and image)

campaigns for the public at large in

newspapers, at bus stops, etc.

• Point of sale information.

• Initial phase: Some customers

complained that they were not

familiar with the new product

properties.

• However, the information campaigns

were effective in regaining the clients

that had been temporarily lost and

even led to higher overall customer

satisfaction.

Stakeholder group with --------------- Level of importance:

1. High interest and High power --------------- High importance

2. Low interest and High power --------------- Medium importance

3. Low interest and Low power --------------- Low importance

4. High interest and Low power --------------- Medium importance

INTRODUCTION:

Mendelow’s stakeholder mapping matrix is a tool to classify stakeholders according to

their importance to the organization.

It provides a tool that organizations can use to classify their various stakeholders.

Depending on their interest in the organization and their power over the organization,

stakeholders can be ranked as mentioned below.

Mendelow’s Stakeholder Mapping Matrix:

Mendelow’s Matrix:

Observers

Informing/ empowering

Key players

Involving

Crowd

Ignoring

Bystanders

Encouraging

LEVEL OF

INTEREST

HIGH

LOW

HIGH

POWER OF INFLUENCE

LOW

Application Of Mendelow’s Matrix In Henkel Chile Case:

Observers:

1. Shareholders.

2. Employees.

3. Chemical Industry

Association of

Chile.

4. Competitors.

Key players:

1. Consumers (Poor

Children).

2. C.I.T.U.C.

Crowd:

1. Consumers.

2. Academic Communities.

Bystanders:

1. University of Chile.

2. Chilean Minister of Health.

3. Government.

HIGH

LOW

HIGH

POWER OF INFLUENCE

LEVEL OF

INTEREST

LOW

Conclusion

• Henkel enjoys high goodwill.

• It was committed to Eco-Leadership and sustainable development.

• Henkel’s market success and it’s ability to strengthen co-operation between stakeholders

led to multiple environmental and social benefits.

• Henkel had wide customer base and customer loyalty.

• False practices like bribery and corruption were strictly rejected.

• They adopted the best marketing techniques to promote their products.

• The balance between product improvements and performance aspects could be

successfully communicated to their customers.

• Henkel always believed in attaining their goals by following ethical practices and

maintaining the product quality and standards.

THANK YOU!