RB’s POWERBRANDS
STRENGTH WEAKNESS
Steady double-digit growth
Attracts a devoted customer base
Achieves 60% gross margin
26.4% net profit margin
Accounts for 70% of RB’s net revenue Did not sell in as high volumes as P&G
De-emphasized R&D – receives budget of only 1.5% of net revenues
12 – 13% of revenues are invested into new product marketing for Powerbrands
Industry standard budget on advertising: 6% or 7% (RB is double)
30 – 40% of net revenues came from products introduced in the previous 3 years – symbolizing a disproportionate level of innovation in products compared to competitors
SPEED – crucial differentiator – first mover advantage
FOCUSED INNOVATION
Focus on 19 Powerbrands – growth is much higher in the Powerbrands because they are in high-growth categories where RB has very strong positions
Incremental approach to innovation – innovations on existing products.
THE RB TREATMENT
Re-invention of a standard, usual product into a specific, market-niche product e.g. Nurofen analgesic to Nurofen Express – fast-acting version
Ensuring the global rollout of products e.g. Vanish, Veet, Airwick,
Quick to integrate its acquisitions such as Boots Healthcare, Adams Respiratory, SSL international to RB’s business model
Creating an entirely new product category separate from the traditional e.g. Airwick – a high-end, premium, wall-mounted airfreshener that released freshener into the surrounding are at fixed intervals.
THE DISCIPLINE OF INNOVATION
By Peter Drucker
• Innovation is the specific function of entrepreneurship
• It is the means by which the entrepreneur either creates new wealth-producing resources of endows existing resources with enhanced potential for creating