Strategic Analysis of Reckitt Benckiser Group: A Comprehensive Report

This report provides a comprehensive strategic evaluation of the Reckitt Benckiser Group, a British multinational company specializing in health, hygiene, and home products. The analysis begins with an examination of the company's purpose, vision, mission, and objectives, highlighting their importance in setting strategic direction and evaluating future strategies. The report then assesses Reckitt Benckiser's competitive advantage using the VRIO framework, evaluating its resources based on their value, rarity, imitability, and organization. Furthermore, a detailed PESTEL analysis is conducted to assess the political, economic, social, technological, legal, and environmental factors influencing the company. The report also applies Porter's Five Forces model to analyze the competitive dynamics within the industry, including the level of competition, potential new entrants, supplier power, and the threat of substitutes. Finally, the report reviews the overall organizational strategy, drawing conclusions about the company's strategic positioning and future prospects. This analysis aims to provide insights into Reckitt Benckiser's strategic approach and its ability to achieve its goals.

Strategy Evaluation

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Evaluation of Purpose, Vision, Mission and Objectives..............................................................1
Assessment of the competitive advantage...................................................................................2
PESTEL analysis.........................................................................................................................4
Porter's five forces model............................................................................................................6
Review of organizational strategy...............................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Strategy Evaluation refers to different types of techniques and methods which are used by
the organizations to ensure that they can effectively use the strategy in a proper manner so that
the various types of goals and objectives in short-term, medium-term and long-term can be
achieved effectively and efficiently (Adel, Zeinhom and Mahrous, 2018). The obtaining of
strategic direction of an organization can be done when the company uses methods for this
particular purpose. Assessment of the level of efficiency and effectiveness of the firm can be
done in a proper manner. This helps in taking of decisions which can be useful in the future. This
report is based on Reckitt Benckiser Group. It is a British multinational group which focuses on
the production of health, hygiene and home products. In this report, there will be detailed focus
on the various ways through which the strategic direction of an organization can be evaluated in
a proper way.
MAIN BODY
Evaluation of Purpose, Vision, Mission and Objectives
There is an value of Purpose, Vision, Mission and Objectives for a company so that it is
able to set a strategic direction (AlNouss, Ibrahim and Al-Sobhi, 2018). Thus for Reckitt
Benckiser Group there is a value of all of them because they are required for it in evaluating the
particular use of different types of strategies in the future. Their importance is present due to the
following reasons-
 Setting future goals and objectives- The use of Purpose, Vision, Mission and
Objectives is to make sure that the future goals and objectives can be set which will help
in determining the course of action which can be taken in the future. For example-
Reckitt Benckiser Group periodically reviews its various types of goals and objectives
and if there are any deviations and variances which are found then proper rectifying
actions can be taken to remove them.
 Evaluation of strategies effectively and efficiently- Purpose, Vision, Mission and
Objectives can be highly useful so that a proper evaluation of the strategies can be carried
out effectively and efficiently. This will be helpful in ensuring that the overall assessment
of the the position of the company can be done in the right manner. For example- Reckitt
Benckiser Group has to ensure that it carries out regular evaluation of its different types
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of strategies in a proper manner. Thereby future course of action can be determined in the
right way which can be quite helpful in taking of decisions for the future.
 Carrying out assessment- Purpose, Vision, Mission and Objectives can be useful in
carrying out assessment in the right manner (Aviat, Lagardère and Piquemal, 2017). This
can ensure that the company is able to efficiently and effectively assess its position at
present and the position which will be attained in the future time period by it in the right
manner. For example- Reckitt Benckiser Group assesses the present situation which is
prevailing in the market to be able to determine its strategy in the right way which is
helpful for it to be able to determine the actions to be taken in the future.
Purpose- The purpose of Reckitt Benckiser Group is to make sure that protect, heal and
nurture so that a cleaner and healthier world can be created. Thus the group exists to make sure
that it provides its consumers with health, hygiene and home products which can be highly useful
for them to be able to achieve the various types of goals and objectives related to making a better
world with less diseases and more healthier people.
Vision- The vision of Reckitt Becnkiser Group is to ensure that the company is able to
become the leading nutrition company of the world by providing better products for the
customers in the market which can enable them to be able to use them for ensuring the creation
of a better world in which there are less diseases and more healthier people. Thus the vision of
the company is for the long-term and the company strives to make a difference in this case.
Mission- The mission of Reckitt Benckiser Group is to make sure that the company is
able to provide better products to the customers which can thereby allow them to be able to attain
the desired level of goals and objectives. In this way the company can ensure that it provides
better health, hygiene and home products to the customers.
Assessment of the competitive advantage
Competitive advantage refers to the strategic edge which the company has over the
different types of competitors in the market (Chaabouni and Khemakhem, 2018). Its attainment
is required so that the firm is able to identify the level of efficiency and effectiveness which it
can attain in order to maximize the level of revenues and the profitability level in the future
without facing problems and issues. There is a particular importance which it has for Reckitt
Benckiser Group because the company deals in health, hygiene and home products and this
particular sector has a higher-level of competition which exists in the market. Therefore it
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becomes crucial that the firm is able to understand the particular importance of the different
types of strategies and techniques which can be adopted by it to be able to attain the short-term,
medium-term and long-term goals and objectives in the future without problems and issues.
For assessing the competitive advantage the use of various types of models can be made.
One of them is VRIO analysis (Gao, Wang and Shan, 2016). The analysis in the context of
Reckitt Benckiser Group is as follows-
Resources Valuable Rare Inimitable Organized
Customer base    
Goodwill   
Brand Image  
Employees 
The resources of Reckitt Benckiser Group are explained in the following manner-
Valuable resources- Customer base is valuable because it creates value for the company
by increasing the overall level of revenues effectively and efficiently. Goodwill is valuable
because it is created after years of sustained efforts made by the company by providing the value
to the customers. Brand Image is valuable because creating a good brand image helps the
company to be able to enhance its overall value in the market in the front of the different
customers (Genoveva and Siam, 2017).
Rare resources- Customer base is rare because not every company can have a vast range
of customers in the market. Goodwill is rare because the company has created after many years
of sustained efforts. Brand Image is rare because the company has made it after providing good
products and services to the customers. Employees are not rare because every company has
employees (Kukolja Taradi and Taradi, 2016).
Inimitable resources- Customer base is inimitable resource because most of the
customers of the company are loyal and will not shift to another company. Goodwill is inimitable
resource because the company's goodwill has been created due to the value provided by its goods
and services. Brand Image is not inimitable because the company's brand image can be affected
by the certain type of actions. Employees are not inimitable because they are present in the
companies (Kwon, Onoda and Oh, 2019).
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Organized resources- Customer base is an organized resource because most of the
customers of the company have a set range of needs and preferences and will not shift to the
other companies in the market. Goodwill is not organized because it can be affected if the
company provides a product or service which is not able to satisfy the customers then they may
give a negative review of the company. Employees are not organized because they can shift to
other companies also (Li, Ota and Dong, 2018).
PESTEL analysis
PESTLE stands for Political, Economic, Social, Technological, Legal and Environmental.
PESTLE analysis provides a systematic framework that analyse these factors and show how they
influence an organisation from outside (Mei and Xie, 2018).
PESTLE Analysis factors:
Political Factors: Political factors describes the extent to which government influences
industry or economic (Sanchez-Lopez, Boschetti and Hudak, 2018).
 Positive Impact: This factor builds trust of stakeholders and increase investors as
political stability builds good brand image of Reckitt Benckiser.
 Negative Impact: Profit of Reckitt Benckiser will be highly affected if they enter
countries with high taxation policies. Trade restrictions will also disturb export.
Economical Factors: This factor affects working of organisation and see how much
profitable they are.
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 Positive Impact: Rate of GDP growth helps Reckitt Benckiser to continue long term
growth. They can increase liquidity positions and strengthened their ability to enter new
market.
 Negative Impact: Exchange rate of many countries are relatively low as compared to
England. Due to recession Reckitt Benckiser employees have loose their jobs.
Social Factors: Social factors represents demographic characteristics,customs, norms
and population within the organisation.
 Positive Impact: This factor helps Reckitt Benckiser to generate full information relating
to market in advance. With the help of demographic characteristics they select that
segment of market which high potential.
 Negative Impact: Research regarding market conditions requires more man power and
time that could delay its operations.
Technological Factors: Factors like innovations, research and development,
automations and change in technology show how technology affect industries (Souza and da
Silva, 2019).
 Positive Impact: Increase in use of technology helps it to develop new ideas to promote
it products in new way. Social media marketing is one of them, that cater large audience
at same time.
 Negative Impact: Investment in new technology and research and development requires
more capital. This increases expenditures of Reckitt Benckiser.
Legal Factors: Legal factors comprises of certain laws like consumer laws, labour laws,
safety standards etc. and policies that affect business.
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 Positive Impact: With regulations of intellectual property rights they have protected
their patents and ideas. This has given them strong market position among different
players of market
 Negative Impact: England has fixed minimum wage system. This policy act as an
disadvantage for Reckitt Benckiser as they have to pay fixed amount to workers who are
not contributing that much in work.
Environmental Factors: These factors are important because of increase in raw material
scarcity, carbon footprint set by government and population control. They also includes weather
and climate change that mainly affect agriculture, insurance and tourism industry.
 Positive Impact: Reckitt Benckiser has studied shift of people towards eco friendly
products. This helps it to derive market strategy to promote its products and earn
stakeholders trust.
 Negative Impact: As many units of Reckitt Benckiser are situated near urban area which
makes difficult for it to do waste management practices. Operation cost shoot up in
winters due to adverse change in weather. Change in climate forces Reckitt Benckiser to
have flexible value chain.
Porter's five forces model
Porters Five Forces model analysis and identifies five competitive forces. It helps
companies to determine there weaknesses, strengths and provide framework for working its
operations. This model can be applied to any segment to know the level of competition in
market. This enhance long term profitability of company (Szymańska and Zalewska, 2018).
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Porter Five Force Model:
Competitor in the Industry: This force of Porter Model helps to determine number of
competition and their ability to shut down a company (Way, 2017). This competition can only be
survived by offering better deal or lower prices of products. Degree of competition for Reckitt
Benckiser is high. High rivalry shows Reckitt Benckiser will face strong pressure as profitability
is low.
Potential new entrants: Power of company is harm by new entrants. New entrants with
less money and time become effective competitor. Power of potential new entrants for Reckitt
Benckiser is High.
Power of Suppliers: Suppliers can increase the cost of input. Fewer suppliers indicates
dependency of more companies on them which will increase the cost of input and they will
make other advantages. On the other hand, if suppliers are not much company can make profit
while keeping its low cost of input. For Reckitt Benckiser power of supplier is high. They can
reduce margin that Reckitt Benckiser can determine from market.
Power of Customers: Negotiation power of customers make it difficult for the company
to make profit. If a company has independent, smaller and many customers it charge higher price
and make more profit (Yamamoto and Ikeda, 2016). It is mainly affected how much customers a
company has, how it will spend in finding new ones or market for outputs. Threat from power of
customers is low.
Threat of Substitutes: Use of substitute product and services act as a replacement of
company's product and its reputation. Businesses that are not selling substitute goods have
chances to increase the prices of product. On the other hand these goods increase chance of
loosing there customer which affect company's brand. For Reckitt Benckiser threat of substitutes
is relatively low.
Justification- With Porter five force model Reckitt Benckiser find out that out of 5
models 3 has high power force. Reckitt Benckiser can overcome from power of suppliers by
building sustainable differentiation, scale of economies which helps in better way of competing.
For Competitors in industry they can collaborate with competitors to increase market risk.
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Experimentation with new design with different raw materials will help in shifting to other raw
material if prices go high. For suppliers they have to find dedicated suppliers who's business
totally depend on Reckitt Benckiser so that they have less bargaining power. New entrants can be
tackle with the strategy of switching cost. If this cost for consumers will be high company will
establish base of loyalty customers. Product differentiation help Reckitt Benckiser to maintain
customers because of unique experience. Introduction of new products will attract news ones.
This will give reason to old customers to derive satisfaction and maintain loyalty. By doing
work on research and development and on capacities building Reckitt Benckiser can reduce extra
profit of new firms.
Review of organizational strategy
On the basis of analysis done above, it can be said that Reckitt Benckiser Group is a
company which has been able to assess the different types of situations which are prevailing
within the market. Thus the review of the organizational strategy is as follows-
Vision- The vision of the company is set to provide nutritious products to the customers
in the market so that it is able to become a market leader in the future. Therefore the vision
which has been set by it is quite good because it will enable it to be able to become a leader in
the market by enhancing its goodwill and brand image in front of the various types of customers
in the market.
Mission- The mission of the company is to provide better products to the various
customers in the market which will help in ensuring that the goals and objectives can be attained
in the future. Thus the mission of the company is helpful in ensuring that it frames appropriate
plans to be applied in the future without facing problems and issues.
Core Values- The core values of the company are responsibility, ownership,
achievement, entrepreneurship and partnership. These values have been very helpful for the
company to be able to ensure that their use can be made in order to be able to efficiently and
effectively attain the desired goals and objectives in the future.
SWOT analysis-
SWOT analysis
Strengths Weaknesses
 Goodwill- The goodwill of Reckitt  High Price- The price at which Reckitt
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Benckiser Group is quite good which
can be helpful for it to target the
customers in an appropriate manner
because they are attracted by the value
which is creates in the market.
 Economies of scale- The company is
very big and thus it manages its
operations at a large-scale which
ensures that it is able to cut down on its
costs to maximize its overall level of
profits.
Benckiser Group has been selling its
products is quite high which can affect
its level of operations and profitability
in the market.
 Lower Profit Margin- The company is
operating at a low profit margin in the
market which is creating an overall
impact on the level of revenues which
are being generated by it.
Opportunities Threats
 R&D- By investing more funds in
R&D Reckitt Benckiser Group can
ensure that it is able to provide
innovative products to the customers
within the market.
 Globalization- The company can
expand to the other countries within the
world which will be quite helpful for it
to be able to ensure that it attains the
goals and objectives in the market quite
easily.
 Market regulations- Higher-level of
regulations put by the government on
the prices can impact Reckitt Benckiser
Group as it can create a particular
impact on its level of operations.
 Growing competition- There has been
an increase in the level of competition
in the market which can affect the
company by reducing the level of
profits which it is earning.
Long-term goals- The long-term goals of Reckitt Benckiser Group are that it aims to
ensure that it can attain a higher-level of profitability within the market and to gain higher-level
of market share within the market. The company's long-term goals are good enough to ensure
that it can easily acquire a competitive advantage over its various competitors operating within
the market.
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Yearly objectives- The yearly objectives are set by Reckitt Benckiser Group so that the
plans are made year by year and can be implemented to get ahead of the competitors. The yearly
objectives of the company are quite effective to ensure that the overall level of efficiency and
effectiveness can be attained without problems and issues.
Action plans- The Action plans can be used by Reckitt Benckiser Group so that the goals
and objectives for the future can be attained. Therefore it can be said that the company makes use
of SMART Action plans which helps it in determining the course of action to be taken in the
future.
CONCLUSION
From the above report, it can be concluded that Strategy Evaluation is a technique
through which the overall level of strategies for the future can be determined in an effective
manner. The value of Purpose, Vision, Mission and Objectives is there for a company because
this can help a lot in ensuring that the overall strategy can be evaluated in the right manner.
VRIO analysis is an internal management tool which can help a lot in analysing the internal level
of competition in an effective manner. The use of PESTEL analysis can help a lot in ensuring
that the assessment of the external factors can be made. Porter's five forces is an useful model in
determining the position of the company in the market. Also, a review of the organization's
strategy can be made so that the overall conclusions and recommendations can be derived for the
purpose of application in the future.
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