Growing a business by developing products and markets
A Beiersdorf case study

Page 1: Introduction

A business that grows is often better placed to meet its customers' needs. Growth can also help a business to stay ahead of its competitors. Beiersdorf is the skincare company behind leading brands NIVEA, ELASTOPLAST, ATRIXO and EUCERIN. Over the past 10 years the company has grown consistently and rapidly through a carefully controlled and well managed expansion of its portfolio of...
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Page 2: Growth

Growing a business can involve increasing: turnover (the value of sales) profits size and share of the market number and range of products company's geographical spread number of employees. When a company grows it will expand into areas that offer new opportunities. It will also cut back in areas that are not performing as well or are in permanent decline. A company can grow internally by...
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Page 3: Ansoff's growth strategies

The business analyst Igor Ansoff outlined some important strategies for business growth. He identified four key approaches to growing a business. Beiersdorf's development illustrates all four. Market penetration: Increasing market share for a firm's products in its existing markets. Several approaches help to achieve this, including product improvement; updating and building/improving existing...
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Page 4: Beiersdorf's growth strategies

Market penetration Selling more products involves either growing the market as a whole or taking market share from competitors. NIVEA increases its sales by adjusting the marketing mix: Product - reformulating products to make them more effective e.g. better at moisturising. Price -reflecting good value but at a premium to retailers' own or private labels to represent quality. Place - finding...
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Page 5: Market development

Market development The UK launch of NIVEA deodorant is a good example of market development within the NIVEA range. This is Europe's No. 1 brand. The chart shows 2004 figures for selected countries in Western Europe. It indicates the growth potential for NIVEA deodorant in the UK.The UK deodorant market is currently worth £300m annually. It is a highly competitive market, dominated by one...
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Page 6: Conclusion

Beiersdorf is Europe's leading skincare company. It continually seeks to grow through developing its products and its markets. Beiersdorf UK's development of the NIVEA brands fits in well with Igor Ansoff's ideas. The company continues to build a successful business by developing new and existing products and markets as well as diversifying into new markets with new products.
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