罗兰贝格geberit 中国的策略流程再造a（英文版）课件

- 1 - Roland Berger & Partners International Management Consultants Barcelona Beijing Berlin Brussels Bucharest Budapest Buenos Aires Detroit Dsseldorf Frankfurt Hamburg Kiev Lisbon London Madrid Milan Moscow Munich New York Paris Prague Riga Rome So Paulo Shanghai Stuttgart Tokyo Vienna Zurich Strategic re-engineering of Geberit China Interim report Geberit International AG Shanghai, Oct. 22nd, 2000 SHA-4309-03690-08-15a.PPT-x - 2 - Content (1)Page Management Summary5 A.Market environment 12 A1.Macro business environment in China 13 A2. Market analysis of sanitary system 36 A3. Market analysis of piping system 67 B.Strategy evaluation and Sales & Marketing 80 B1.Strategy evaluation 81 B1.1Corporate strategy analysis 82 B1.2Product strategy evaluation 89 B2.Sales & Marketing 91 B2.1Retail channel GSHA 95 B2.2Project channel GSHA 103 B2.3OEM channel GDAI 107 B2.4Marketing 110 B2.5Benchmarking: Kohler (China) 112 SHA-4309-03690-08-15a.PPT-x - 3 - Content (2)Page C.Financial, organization and processes analysis 122 C1.Financial situation analysis 123 C1.1Geberit Shanghai 124 C1.2Geberit Daishan 138 C2.Organization and processes 145 C2.1Organization structure 146 C2.2Management structure 151 C2.3Key process analysis 157 D.Restructuring options 164 D1.General options and pre-selection 165 D2.In-depth evaluation 176 D2.1Equity buyout 178 D2.2Termination 183 D2.3Bankruptcy 186 D2.4Comparison of the alternatives 190 D3.Feasible scenarios 193 SHA-4309-03690-08-15a.PPT-x - 4 - Back-upAcronym list BoD CCS CJV EJV FDI FIC GDAI GSHA JV KTS VGM WFOE Board of Directors Competence Center Shanghai Co-operative Joint Venture Equity Joint venture Foreign Direct Investment Foreign Investment Commission Geberit Flushing Technology (Daishan) Co. Ltd. Geberit Plumbing Technology (Shanghai) Co. Ltd. Joint Venture Kohler Technical Specialist Vice General Manager Wholly Foreign Owned Enterprises SHA-4309-03690-08-15a.PPT-x - 5 - Management summary SHA-4309-03690-08-15a.PPT-x - 6 - China could be a market of strategic importance for Geberits international business(1) China is a 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 product lines with the potential of RMB 140 million or 70% of the total Overall 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 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 sold 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 medium to high end segment will rise from current 20% to 35% Market environment SHA-4309-03690-08-15a.PPT-x - 7 - China could be a market of strategic importance for Geberits international business(2) As the largest construction industry in the world, China presents an immense potential 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 than 15 roof projects, altogether 700,000 sqm are in different phases of the process of bidding Both 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 marketing. Due to the Chinese consumers traditional mindset that plastic product are lower priced, Chantier doesnt have an optimistic market perspective Right 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 China. It also means time pressure for Geberit. Currently competitors (e.g. Grohe DAL, Caroma) are gearing up and will become aggressive very soon Market environment SHA-4309-03690-08-15a.PPT-x - 8 - Overall, the strategy of Geberit in China has not been fully achieved and sales and marketing are particularly weak(1) Strategy and sales & marketing Although GSHA developed a strategy when founded, the strategic objectives to penetrate into the Chinese market havent been achieved-current strategy is unfocused The vision of GSHA is not communicated within the organization, nor is it implemented In 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 quality and brand, excellent pre-and-after sales services. This has not all been transferred to Geberit China Current product portfolio of selling Chantier, Duofix and public products is unbalanced. Strategic focus should be on concealed cistern, tank fittings and Pluvia and HDPE As to sales and marketing operations, GSHA has no clear strategy in developing distribution network SHA-4309-03690-08-15a.PPT-x - 9 - Overall, the strategy of Geberit in China has not been fully achieved and sales and marketing are particularly weak(2) Strategy and sales & marketing Geberits products are sold through 3 channels: retail sales and project sales through distributors, and OEM Geberit lacks clear planning of retail network development and has neither intention nor leverage to monitor distributors network operations Project sales performance has been affected mainly by both poor customer services and incompatibility with current Chinese installation and application habits There are a number of setbacks that need to be overcome to improve OEM sales: unsatisfactory product development and customization, slow market responsiveness and high pricing Except for a very few marketing related 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 design institute SHA-4309-03690-08-15a.PPT-x - 10 - Financials, organization and processes The 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, 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 defined. 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. Although 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 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 still critical There is no leadership at GSHA. GSHA is close to bankruptcy. GDAI shows positive development trend SHA-4309-03690-08-15a.PPT-x - 11 - Geberit should aim for equity buyout and consider termination or bankruptcy as fall-back position Restructuring options To separate from the Chinese partner is a premise to secure success of restructuring Some key problems particularly affecting to HRM are related to the Chinese partner In 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 shrinkage of low end market Therefore, only equity buyout, termination and bankruptcy are feasible Considering 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 position The buyout 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 quickly SHA-4309-03690-08-15a.PPT-x - 12 - A. Market environment SHA-4309-03690-08-15a.PPT-x - 13 - A1. Macro business environment in China SHA-4309-03690-08-15a.PPT-x - 14 - Overall the business environment is positive for Geberits investment in China Macro business environment in China 8% annual growth forecasted for construction industry Strong momentum for real estate market growth Steady growth for high end real estate market 7% annual GDP growth estimated in the next five years Another boom for FDI1) expected An estimated 8% annual growth for fixed asset investment by 2005 Consistent economic policies towards reform and opening up Dramatic Chinese household income growth during the past 15 years Macro economic trendHousing supply market Government policiesSocial factors Governments preparation for WTO entry Central governments effort to develop western region The emergence of top consumers group with strong purchasing power Significantly increased bathroom decoration standard and spending 1): Foreign direct investment SHA-4309-03690-08-15a.PPT-x - 15 - China is one of the fastest developing countries in Asia and the globe Annual GDP growth in China %GDP growth in Asia, 1998/1999 China 1) Estimate Japan Malaysia Indonesia India Philippines Taiwan Singapore Hong Kong Thailand Germany 1.4% USA 4.1% Source: OECD, Roland Berger & Partners analysis 1) SHA-4309-03690-08-15a.PPT-x - 16 - The key indicators of the first half of 2000 show a strong confidence in the Chinese macro economic trend Fixed asset investment hit RMB 754 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 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 2000 Source: County Information Center 3650 3950 +8.2% Billion RMB SHA-4309-03690-08-15a.PPT-x - 17 - In the next 5 years, macro economic development will be optimistic in China WTO accession will bring 1.75% more foreign investment, USD 100 billion incremental FDI per year, will boost economy growth by 1% annually The fixed asset investment is estimated to grow at 8% per year China plans to accelerate the urbanization process by 2% per year Real estate market will grow at 7-8% p.a. in the next five years The trend of Chinas macro-economy7% annual GDP growth1) in the next five years 1978 = 100 1): excluding the inflation factor 2): Estimation Source: China Infobank, Asian monitor, RB&P analysis 2) +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-x - 18 - A boom for foreign investment can be expected in China in the next 510 years FDI growthGrowth of European Union investment Billion USDBillion USD 60.9%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 increasing 70.1 1.5% p.a.12% p.a. 1) 1) Estimation based on the assumption of WTO entry Source: Sate Statistics Bureau, RB&P analysis 70% p.a.15.8% p.a. SHA-4309-03690-08-15a.PPT-x - 19 - WFOE (wholly foreign owned enterprise) is becoming a more and more widely-accepted approach for foreign investment Composition of FDI in ChinaLegal formation of foreign investment Source: State Statistics Bureau Back-up 154.8 56.9 European Union Japan USA Taiwan Hongkong Others 23.9 25.6 24.9 21.5 Billion USDBillion USD The accumulation of actual foreign investment to the end of 1999 Actual foreign investment of Jan. July 2000 9.9 3.0 EJV WFOE CJV 6.8 EJV: Equity Joint Venture CJV: Cooperative Joint Venture Others Total: 307.6Total: 19.9 SHA-4309-03690-08-15a.PPT-x - 20 - The fixed asset investment is estimated to grow at 8% annually in the next 5 years, and more than 60% will be invested in construction project The growth of fixed asset investmentComposition of the fixed asset investment in 1999 Source: China Statistic Yearbook 2000, RB&P analysis Billion RMB 14.8% 8.8% 13.9% 5.1% 8%p.a. Billion RMB 1879.3 400.6 Purchase of machinery equipment Construction and installation Others 705.3 Total: 2985.3 SHA-4309-03690-08-15a.PPT-x - 21 - Construction industry will grow steadily at an estimated 8% annual rate Gross output value of construction industry Billion RMB Growth of government infrastructure investment Growth of residential housing supply Growth of real estate market Growth of renovation market 21.8% 7.6% 10.3% 10.3% 8% Source: China Statistic Yearbook 2000, National Planning Commission, RB&P analysis SHA-4309-03690-08-15a.PPT-x - 22 - The total floor space 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 year Growth of total housing supply Average annual growth of urban residential supply is 12.7%, which is leading the total growth rate of 6.5%, and will continue to be the growth engine Rural residential supply growth is limited due to slow farmers income growth WTO entry is expected to stimulate another high-growth period of office building supply Trend of housing supply Billion sqm +6.5% p.a. Urban residential Rural residential Non- residential 1.46 1.62 1.66 1.71 1.87 2.031) 1): Projection based on the progress of the first half year of 2000 Source: China Statistic Yearbook 2000, China Construction Industry Yearbook 1999, RB&P analysis +8.5% SHA-4309-03690-08-15a.PPT-x - 23 - Building construction can be divided into residential buildings and non-residential buildings Back-upBuildings classification Total construction Residential buildingsNon-residential buildings Urban residentialRural residentialIndustrial buildingsCommercial buildingsOthers Manufacturing plant Hotel Retail store Restaurant Entertainment Others Public buildings e.g.: airport, exhibition center, stadium Institutional buildings Hospitals Schools Others Others Office buildings SHA-4309-03690-08-15a.PPT-x - 24 - Total housing supply in 1999 reached 1.87 billion sqm in China The floor space completedNationalBeijingShanghaiJiangsuZhejiang Guang dong Residential Urban Villas and good apartments (sold) Rural Industrial Commercial Office Others (retailing, entertainment, catering ) Others (public, institutional, hospitals, schools ) Total 1393 559 4.36 834 111 223 119 104 147 1874 19.60 15.20 0.55 4.40 17.27 4.11 6.81 1.91 4.90 36.87 17.32 13.36 0.39 3.96 15.26 3.95 5.02 2.15 2.87 32.58 101.04 28.49 0.31 72.56 39.69 7.70 16.34 7.22 9.12 138.01 64.81 20.81 0.30 44.00 24.25 7.08 10.88 5.58 5.30 89.60 86.04 42.38 0.89 43.66 39.11 13.11 15.52 8.60 6.92 125.14 Back-upHousing supply of nationwide and key areas 1999 Million sqm Source: China Statistics Yearbook 2000, Provincial Statistics Yearbook 2000 SHA-4309-03690-08-15a.PPT-x - 25 - The residential floor space supply accounts for 74.3% of the total housing supply in 1999 Composition of housing supply (1999)Compositions of non-residential buildings (1999) Back-up 481 559 Rural residential buildings Non-residential buildings Urban residential buildings 834 Million sqm 119 147 Industrial buildings Office buildings Others 111 Million sqm Total: 1874Total: 481 104 Other commercial buildings The group of commercial buildings SHA-4309-03690-08-15a.PPT-x - 26 - Real estate market is showing a strong momentum in 2000, sales of square meters up 38% from Jan. to July vs. the same period in1999 Source: State Statistic Bureau, China Infobank Floor space completed Million sqm +19.1% Housing salesMarket indication of 2000. 17 1999 (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 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 the last year Private buyerInstitutional buyer Million sqm 36.3 50.1 SHA-4309-03690-08-15a.PPT-x - 27 - High end real estate is on track of steady growth during the past 5 years Growth of sales of villas and high end apartments*