Monday, 3 April 2017

Reckitt Benckiser Reassesses Strategy

Updating Chapter 1 of my new Essential Guide to Marketing Planning, take a look at Table 1.3, which illustrates levels of strategy for Reckitt Benckiser.

Corporate strategy covers decisions about long-term direction, value creation and priorities, as well as purpose and focus.

Business strategy covers decisions about each unit's scope, competitive approaches, markets, and resource allocation.

Marketing strategy covers decisions about products/brands, communications, channels/logistics, pricing, and marketing support.

Now Reckitt Benckiser is reassessing its corporate and business strategies, considering whether to sell off its food unit, which includes French's mustards and sauces. Although this unit contributed £400m to RB's revenues in 2016, the company doesn't consider food to be a 'core business' according to this statement:
'Food is a truly fantastic business with great brands, people and a history of outperformance. It is nevertheless non core to RB. We have therefore decided to initiate a strategic review of Food where we will explore all options for this great business'.
Reckitt Benckiser recently reached agreement for acquiring Mead Johnson Nutrition, an expensive deal that would require funding and focus. Thus, RB's decision to consider leaving the food business, which would allow the company to reallocate resources and focus on the remaining business units plus the new infant nutrition unit. 

On the level of marketing strategy, RB is looking at ways of using Big Data across multiple media (traditional and digital/social/mobile) to reach consumers in a more personal way via communications. 'As a brand, data ownership is your most valuable asset. It drives insights, it drives sales, and helps to know your consumer', says the Global Media Director.