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Accenture hpb consumer_healthcare_po_v_6 june 2012 v3
 

Accenture hpb consumer_healthcare_po_v_6 june 2012 v3

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    Accenture hpb consumer_healthcare_po_v_6 june 2012 v3 Accenture hpb consumer_healthcare_po_v_6 june 2012 v3 Presentation Transcript

    • High Performance Business Consumer Healthcare Point of ViewHorizon 2015 Copyright © 2012 Accenture. All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. A DFR production
    • Whitney Baldwin – Accenture Professional BiographyCurrent: Accenture Management Consulting, Life SciencesJohnson & Johnson• Brand Management, Personal Care• J&J/Merck Consumer Pharmaceuticals - Rx-OTC switch of Pepcid AC, first H2 in US market - $200MM retail sales in Year 1; #1 ShareGlaxoSmithKline• Global launch team for NiQuitin in EU and LatAm• OTC Marketing Director, Consumer Healthcare UK - IMS OTC Company of the Year, 2004• VP, GSK Brand Reputation Initiative, US Pharmaceuticals Copyright © 2012 Accenture All Rights Reserved. 2
    • Overview: High Performance Business(HPB) Analysis• The High Performance Business (HPB) analysis consists of three sections: – Company Rankings: High Performance Business rankings (success over multiple years) – State of the Market: Which trends and drivers are impacting the industry and what is the outlook for the future? – Distinctive Capabilities & Performance Anatomy: How do High Performers execute and enable their game-winning strategies? Copyright © 2012 Accenture All Rights Reserved. 3
    • Executive SummaryHPB Rankings• Dynamic marketplace: rankings have shifted as companies have performance has evolved - Reckitt Benckiser remains strongest performerDistinctive Capabilities and Performance Anatomy• High performers continuously raise the bar• Technology enabling organizations Copyright © 2012 Accenture All Rights Reserved. 4
    • HighPerformanceBusinessRankingCopyright © 2012 Accenture All Rights Reserved. 5
    • Accenture High Performance Business Methodology Measures Long Term Financial Performance across 5 performance metrics 5 Components of High PerformanceContinued performance over Reliable and predictableindustry eras and life cycles performanceAssessment of companies’ TRS Consistency is measured as themetrics over multiple time periods percentage of years over a 7 year period that the company has outperformed its peer set median in each of a set of measure (revenue growth, spread, annual High FV/IC) Performing Business Greater than expected Positioning returns from investmentsTop line revenue growth Economic profitability (ROIC-WACC) for the FutureKey driver of economic profitability measures the ability of the companyrevenue growth is a key outcome to to generate returns higher than itsdetermine high performing companies Peer Set cost of capital, the company’s ability to create value Higher future value (FV) growth and level Measure the investors’ expectations of the value of the company’s future cash flow Copyright © 2012 Accenture All Rights Reserved.
    • Our HPB analysis has identified high to low performers in the Consumer Healthcare industryGROWTH5 year Average HIGH PERFORMERS MID TIER PERFORMERS LOW PERFORMERS Note: Growth is based on reported Consumer Healthcare Revenue Growth and Profitability is based on Return on Invested Capital (ROIC) calculated from estimated CH segment invested capital. Consumer Healthcare segment’s % contribution to Group net assets is PROFITABILITY applied to Group Invested Capital to calculate CH segment Invested Capital 5 year Average Copyright © 2012 Accenture All Rights Reserved. 7
    • HPB Scorecard 2012 HPB Scorecard 2006-11 (3 & 5 yr equal weighted) Total Score Longevity Profitability Grow th FV Consistency Performace Definition:Reckitt Benckiser CH A N/A B+ A+ N/A A+ High Health & Personal Care (excl Pharma)Mead Johnson CH A- N/A A+ C+ N/A A+ High Group RevenueGlaxoSmithKline CH B+ N/A C+ B+ N/A A High Consumer = OTC, Oral, NutritionalBoehringer Ingelheim CH B N/A A+ C N/A C+ Avg Consumer = OTC, VDSSanofi-Aventis CH B N/A D+ A+ N/A B Avg Consumer = OTCNovartis CH B- N/A C+ C N/A B+ Avg Consumer = OTC (excl Animal Health)Bayer CH C+ N/A C C+ N/A C+ Avg Consumer CareRohto CH C+ N/A C+ D+ N/A B Avg Group RevenuePrestige Brands CH C+ N/A D+ A N/A D+ Avg OTCMerck CH C N/A D+ B N/A C Avg Consumer = OTC, Sun Care, Foot CareTakeda CH C N/A C+ D+ N/A C+ Avg Consumer HealthcareBeiersdorf CH C N/A C+ D N/A C+ Avg Group RevenueTaisho C N/A C+ D+ N/A C Avg Self MedicationsPfizer Wyeth CH C- N/A D+ C+ N/A D+ Avg OTC & Nutrition*Merck KGAA CH C- N/A D+ D+ N/A C Avg Consumer HealthcareProcter & Gamble CH C- N/A C+ D N/A D+ Avg Healthcare ProductsJohnson & Johnson CH D+ N/A D+ D+ N/A D Low ConsumerLion Corp CH D+ N/A D+ D+ N/A D Low HealthcareOmega Pharma CH D+ N/A D+ D+ N/A D Low Group Revenue Copyright © 2012 Accenture All Rights Reserved.
    • Whatwill shapeFuture HighPerformance?Copyright © 2012 Accenture All Rights Reserved. 9
    • What really makes the difference? Over the long-term, High Performers demonstrate successful integration of seven distinctive capabilities High Performance Building BlocksMarket Focus Strategic Market Leadership Focus on winning in high-value categories and high potential markets& Position Actionable Innovation In Store Regulatory & Insights Marketing Availability Switch Actionable New product Customer ExcellenceDistinctive information that innovation with clear excellence that Cross marketCapabilities drives better differentiated benefits, drives in-store sales regulatory expertise decisions leveraging new driving product technology strategy & positioning Simple Operating Model High Performance FocusPerformance Simple organisation that embraces scalability, Systematic approach to drive continuous collaboration & integration performance improvement at speedAnatomyPerformance Business Foundations – IT, HR, Finance, Sales, Marketing, SupplyFoundations Chain Functional infrastructure aligned to deliver business objectives Copyright © 2012 Accenture All Rights Reserved. 10
    • What really makes the difference? Over the long-term, High Performers demonstrate successful integration of seven distinctive capabilities High Performance Building BlocksMarket Focus Strategic Market Leadership Focus on winning in high-value categories and high potential markets& Position Actionable Innovation In Store Regulatory & Insights Marketing Availability Switch Actionable New product Customer ExcellenceDistinctive information that innovation with clear ly excellence that Cross marketCapabilities drives better differentiated benefits, drives in-store sales regulatory expertise decisions leveraging new driving product technology strategy & positioning Simple Operating Model High PerformancePerformance Simple organisation that embraces scalability, Management collaboration & integrationAnatomy Systematic approach to drive continuous performance improvement at speedPerformance Business Foundations – IT, HR, Finance, Sales, Marketing, SupplyFoundations Chain Functional infrastructure aligned to deliver business objectives Copyright © 2012 Accenture All Rights Reserved. 11
    • Strategic market leadership requires a move from internal and historical to an external and future-driven strategic planning processHigh Performance DifferentiatorsHigh Performers …• Build dominating brand portfolios 17 Powerbrands – Smaller portfolios containing more global brands represent 70% of – Scale global brands while including selective Company net revenues localisation for high potential and emerging markets• Place fewer, bigger and more profitable bets – high growth and high margin categories• Re-evaluate choice frequently in a volatile market• Make global trade offs to build business rapidly• Allocate resources more efficiently Copyright © 2012 Accenture All Rights Reserved. 12
    • Case Study Reckitt Benckiser’s strategy is simple, but powerful … and it’s workingReckitt’s clear and consistentstrategy is to drive above Dettol #1 in topical antiseptics and antiseptic liquidsindustry growth and returns Strepsils #1 in medicated sore throat productsthrough: Veet #1 in Depilatories• A disproportionate focus on driving Clearasil #2 in Acne Treatment Powerbrands, global leaders in Mucinex #2 in cold & flu (incl. decongestants) categories with high growth potential• High levels of media and marketing investment After Boots HCI and Adams Respiratory, Reckitt’s latest acquisition is SSL International. Durex and Scholl will join Reckitt’s• Exploiting opportunities from add-on Powerbrands in a newly created category: acquisitions “Sexual Wellbeing and Footcare”• Systematic and continuous innovation to excite consumers (highest innovation rate – 35% of sales from new products) Acquisition of• Transforming net revenue growth into Para pharma to increase even better profit and strong cash flow presence in India Copyright © 2012 Accenture All Rights Reserved. 13
    • What really makes the difference? Over the long-term, High Performers demonstrate successful integration of seven distinctive capabilities High Performance Building BlocksMarket Focus Strategic Market Leadership Focus on winning in high-value categories and high potential markets& Position Actionable Innovation In Store Regulatory & Insights Marketing Availability Switch Actionable New product Customer ExcellenceDistinctive information that innovation with clearly excellence that Cross marketCapabilities drives better differentiated benefits, drives in-store sales regulatory expertise decisions leveraging new driving product technology strategy & positioning Simple Operating Model High PerformancePerformance Simple organisation that embraces scalability, Management collaboration & integrationAnatomy Systematic approach to drive continuous performance improvement at speedPerformance Business Foundations – IT, HR, Finance, Sales, Marketing, SupplyFoundations Chain Functional infrastructure aligned to deliver business objectives Copyright © 2012 Accenture All Rights Reserved. 14
    • Actionable insights enable the business to move from reactive and scattered decision making to proactive and targeted decision makingHigh Performance DifferentiatorsHigh Performers … • Invested $1bn in consumer & shopper• Have an integrated organisational focus on the understanding between 2001 and 2007, transforming from a traditional market right skills and focus on cross-functional analytics, research organisation into a consumer creating more productive knowledge workers understanding powerhouse. • Standardised information creation and• Make better decisions, driven by insight provision from its Global Business Services unit• Maximise returns on decisions • Conducts direct research with >4m• Use predictive, data-driven decision making consumers per year based on continuous stream of insight• Buy rather than build – develop strong relationships with key partners to ensure shared insights Copyright © 2012 Accenture All Rights Reserved. 15
    • Companies that still rely on ‘gut feel’ due to limited access to enterprise-wide data and analytical talent will lose outCompanies need timely, in-depth actionable insights if they are to remain competitive globally— in effect a “whole business” approach to analytics Data explosion Companies moving up the The closed loop: from raw sophistication curve data to insights Ubiquitous computing and technology capabilities have Driven by globalisation and greater Desire to move from deep functional increased dramatically the volume of business complexity insights to tying together the causal data at companies’ disposal chain cross-functionally to be more (structured and unstructured, visual, predictive voice, geospatial)“Predictive analytics “…in this new age ofwill be the difference High performers are investing future-facing businessbetween the winnersand losers in the heavily in analytics analytics, any BI user without strongnext economic advanced analyticscycle” • As a competitive differentiator … capabilities isDave Rich, Managing Director seriously deficient and at a competitiveAccenture Analytics • typically exploited as a service to disadvantage” minimise investments Business Intelligence (BI) Polishes Its Crystal Ball, Forrester, Aug 2010 Copyright © 2012 Accenture All Rights Reserved. 16
    • High Performers have moved on from figuring out what happened yesterday and are focusing on what could happen tomorrow … Optimisation “What’s the best that can happen?” Predictive Modeling “What will happen next?”Competitive Advantage Predictive Analytics Forecasting/ “What if these trends extrapolation continue?” (“now what”) Statistical analysis “Why is this happening?” Alerts “What actions are needed?” Query/drill down “What exactly is the problem?” Descriptive Ad hoc “How many, how often, Analytics reports where?” (“what happened”) Standard “What happened?” Reports Sophistication of Intelligence Copyright © 2012 Accenture All Rights Reserved. 17
    • Case Study aims for "360 degree" consumer insightCopyright © 2012 Accenture All Rights Reserved. Source: Procter & Gamble 2010 18
    • What really makes the difference? Over the long-term, High Performers demonstrate successful integration of seven distinctive capabilities High Performance Building BlocksMarket Focus Strategic Market Leadership Focus on winning in high-value categories and high potential markets& Position Actionable Innovation In Store Regulatory & Insights Marketing Availability Switch Actionable New product Customer ExcellenceDistinctive information that innovation with clearly excellence that Cross marketCapabilities drives better differentiated benefits , drives in-store sales regulatory expertise decisions leveraging new driving product technology strategy & positioning Simple Operating Model High PerformancePerformance Simple organisation that embraces scalability, Management collaboration & integrationAnatomy Systematic approach to continuously drive performance improvement at speedPerformance Business Foundations – IT, HR, Finance, Sales, Marketing, SupplyFoundations Chain Functional infrastructure aligned to deliver business objectives Copyright © 2012 Accenture All Rights Reserved. 19
    • Innovation marketing entails intensive market research and consumer-led product development, combined with heavy promotion of top brandsHigh Performance DifferentiatorsHigh Performers …• Continuously update their product portfolio to ensure the right price/value proposition – Trusted global brands serve as an umbrella across segments and categories – Continuous introduction and retirement of products• Start from a margin improvement and then find the idea that delivers• Spend disproportionate amounts of A&P on their core brands• Give consumers new reasons to buy. Innovations are relevant and consumers are willing to pay (more) for them• Achieve superior returns on marketing investment by creatively managing the channel mix• Have opened their innovation process to other partners• Have a connected innovation and marketing process and organisation Copyright © 2012 Accenture All Rights Reserved. 20
    • The formula for success is simple …The art is in the executionCopyright © 2012 Accenture All Rights Reserved. 21
    • Age-, gender-, lifestyle- and condition-specific hyper segmentation makes products relevant for different consumer groups under a trusted brand umbrellaGender Age/Life StageThe first level of segmentation e.g. children, pregnant women or men over 50Medical Condition Life StyleAppealing to consumers with specific health problems, e.g. migraine Targeting by socioeconomic factors, e.g. athletes or busy people Copyright © 2012 Accenture All Rights Reserved. 22
    • If an innovation catches on – even originating in aseemingly unrelated category – it is quickly crossedover to other categories … and copied by other players Digestive … … Cough & Cold … Mouth care 2005 2008 2009 Copycat products Bayer’s Rennie Ice Boehringer’s Zantac Cool Mint Dishwashing … … Cough & Cold GSK’s Beechams Copycat products Bayer’s Aleve 2009Copyright © 2012 Accenture All Rights Reserved. 23
    • To further persuade the consumer, successful companies ensure their brands are recommended by experts and their innovations supported by claims and ‘tested’ benefits#1 recommended by dentists#1 doctor recommendedPaediatrician recommended brandClinically proven technologyScientifically proven4 times strongerSignificant improvement after 3 weeksResults in as little as 10 daysRequires just one single applicationDermatologically tested Copyright © 2012 Accenture All Rights Reserved. 24
    • Consumer goods companies are upping investments in digital, social and mobile channels …Consumer goodscompanies are on the pathof growing theirinteractive marketingspend by 22% CAGR —more than any otherindustry.This shift occurs asmarketers seek to combatrecessionary effects, furtherengage consumers, andembrace Adaptive BrandMarketing. Source: Forrester, 2010 Copyright © 2012 Accenture All Rights Reserved. 25
    • Case Study Johnson & Johnson is reaching over a million moms, one at a time … • Mom-to-mom support : “You can ask a question and hundreds of women will respond and say, ‘I went through the same thing and have you tried this?’ #1 baby site text4baby • The programme is a free mobile information service offering practical information for improved maternal and infant health.Sources: Health News, iHealth, Johnson & Johnson, 2010 Copyright © 2012 Accenture All Rights Reserved. 26
    • What really makes the difference? Over the long-term, High Performers demonstrate successful integration of seven distinctive capabilities High Performance Building BlocksMarket Focus Strategic Market Leadership Focus on winning in high-value categories and high potential markets& Position Actionable Innovation In Store Regulatory & Insights Marketing Availability Switch Actionable New product Customer ExcellenceDistinctive information that innovation with clearly excellence that Cross marketCapabilities drives better differentiated benefits, drives in-store sales regulatory expertise decisions leveraging new driving product technology strategy & positioning Simple Operating Model High PerformancePerformance Simple organisation that embraces scalability, Management collaboration & integrationAnatomy Systematic approach to drive continuous performance improvement at speedPerformance Business Foundations – IT, HR, Finance, Sales, Marketing, SupplyFoundations Chain Functional infrastructure aligned to business objectives Copyright © 2012 Accenture All Rights Reserved. 27
    • High Performers connect their customers into their business modelHigh Performance DifferentiatorsHigh Performers …• Have moved from a “push” to a “pull” model, enabled by a consumer driven supply network• Have access to near real time Point of Sales information by partnering with retailers in the developed markets and distributors in emerging markets• Engage in deep collaboration with their customers and build in flexibility to deal with their variances and needs• Have fully integrated trade marketing, supply chain and customer services processes Copyright © 2012 Accenture All Rights Reserved. 28
    • High Performers are rethinking their supply chain tobecome more demand drivenConsumer Push Goods ModelCompany Production Warehousing Retailer Consumer/ & Distribution Shopper Pull Model Consumer Goods Company Supplier Production Warehousing Retailer Consumer/ & Distribution Shopper • The ability to manage demand rather than just respond to it • A networked rather than linear approach to global supply • The ability to embed innovation in operations rather than keep itCopyright © 2012 Accenture All Rights Reserved. isolated in the laboratory 29
    • High Performers are getting increasingly sophisticated in capturing POS data and turning this into actionable insights … Demand Analytical CH Company Signal Engine Repository Demand Signal Repository Capabilities Analytical Engine Capabilities Sales TeamCustomised Interface  Collect, cleanse, and harmonise demand  SKU/Store level forecasting • Sales Leadership data from key retailers and syndicate data  Stock-out root cause analysis • Sales Account with manufacturer’s master data  Perpetual inventory calculation Executives  Perform value-driven analysis, insights,  Planogram compliance analysis • Category Development and real-time alerts  Promotion display analysis Managers  Feed granular / aggregated data into key • Customer Service & applications like S&OP, Demand / Logistics Replenishment Planning, Enterprise Data • Marketing & Finance Warehouse, RFID analytics, and more… Copyright © 2012 Accenture All Rights Reserved. 30
    • … and are using the latest technologies to measure shelf visibility in storeDigital merchandising services enable a company’s sales force to gather continuous data on buyingpatterns, shelf availability, prices, promotions and product placement, from a simple image captured atPOS. Point of Sale DM Services HPC Company Shelf Smartphone KPI extraction Dashboard How it works Copyright © 2012 Accenture All Rights Reserved. 31
    • What really makes the difference? Over the long-term, High Performers demonstrate successful integration of seven distinctive capabilities High Performance Building BlocksMarket Focus Strategic Market Leadership Focus on winning in high-value categories and high potential markets& Position Actionable Innovation In Store Regulatory & Insights Marketing Availability Switch Actionable New product Customer ExcellenceDistinctive information that innovation with clearly excellence that Cross marketCapabilities drives better differentiated benefits, drives in-store sales regulatory expertise decisions leveraging new driving product technology strategy & positioning Simple Operating Model High PerformancePerformance Simple organisation that embraces scalability, Management collaboration & integrationAnatomy Systematic approach to drive continuous performance improvement at speedPerformance Business Foundations – IT, HR, Finance, Sales, Marketing, SupplyFoundations Chain Fucntional infrastructure aligned to business objectives Copyright © 2012 Accenture All Rights Reserved. 32
    • A simple operating model enables speedy decision making, scalability and integrationHigh Performance DifferentiatorsHigh Performers …• Have a simple operating model enabling speedy decision making globally and locally• Provide integrated, global service delivery to the internal business customer• Have created an externally linked global innovation network to reduce cost, increase scope & speed (plug and play alliances)• Can integrate acquisitions incredibly fast Copyright © 2012 Accenture All Rights Reserved. 33
    • CH companies have been moving from a traditional multi- local model to a regional then global model and are now simplifying their operating model to enable local flexibility in the global model GBS LeadPerformance Process Management ISS Lead Service Development Service Management Fin IT HR Other Service Delivery Finance & Accounting Service Management Supplier Management Fin IT HR IS Service Lines Comms / Training Country-based HR HR Shared Services IT & Facilities Support OTC STP BI FTS CRM Other NAM EMEA APAC RTR HTR MDM PLM Global Process Owners 1 2 3 4 Time Regional/Functional Multi Local Model Global Model Super Global – Super Local Model Model Copyright © 2012 Accenture All Rights Reserved. 34
    • What really makes the difference? Over the long-term, High Performers demonstrate successful integration of seven distinctive capabilities High Performance Building BlocksMarket Focus Strategic Market Leadership Focus on winning in high-value categories and high potential markets& Position Actionable Innovation In Store Regulatory & Insights Marketing Availability Switch Actionable New product Customer ExcellenceDistinctive information that innovation with clear excellence that Cross marketCapabilities drives better functional benefits drives in-store sales regulatory expertise decisions for which consumers are driving product knowledge workers willing and able to pay strategy & positioning more for Simple Operating Model High PerformancePerformance Simple organisation that embraces scalability, Management collaboration & integrationAnatomy Systematic approach to drive performance improvement at speedPerformance Business Foundations – IT, HR, Finance, Sales, Marketing, SupplyFoundations Chain Fit for purpose business infrastructure getting the basics right Copyright © 2012 Accenture All Rights Reserved. 35
    • High performance management is the ability to drive financial goals in performance measurement and to multiply talent to generate superior levels of effortHigh Performance DifferentiatorsHigh Performers … RB has 400 managers all around the world, yet has a• Nurture commitment, achievement, entrepreneurship, and single compensation and incentive programme. At RB any manager may receive bonuses of up to 144% teamwork based on the performance of his group; not based on outperforming some other group. Everyone is focused on contributing to the overall good of RB, not just their specific group.• Have an individualistic, swift decision-making, innovation, financial & performance-driven culture• Ensure performance is tracked against specific quantifiable measures related to company goals • Novartis has a performance oriented culture and is committed to reward people who invest ideas and work into the company • Novartis does not have employees, but• Reward performance with attractive financial constructs, and ‘associates’ who are part of the same ideology punish failure in equal measure Copyright © 2012 Accenture All Rights Reserved. 36
    • There has been much research, many articles written, and even more industry opinions; our observations on the enablers of high performing talent look like this Theme ExampleGetting the right business operating The P&G operating model is considered a keymodel to drive the right business industry differentiatorperformanceUsing effective workforce planning for job RB has approaches to managing businessrotation, project roles, and achieving the demands on jobs and structure of their jobs to drive business results less expensivelybalance between ‘specialist’ and ‘general’skillsAligning performance management & Unilever has instituted a 6 month bonus cycle torewards with business results drive quick business resultsIdentify the need for and create the develop P&G uses multiple strategies to help ensureof the right skills and capabilities across depth of skillsthe companyCreating a culture that drives the very Colgate’s commitment to developing personalhighest business performance – and pulling leadership is a formal process that includes goal- setting, training courses to strengthen skills andthis winning culture throughout all aspects of support personal development, and ongoingtheir business feedback from managers Copyright © 2012 Accenture All Rights Reserved. 37
    • SummaryHigh performing organizations are driving harder to:• Develop continuous, comprehensive insights of their customers and translating these into innovation on a global scale at speed• Evolve their business models to be more effective and efficient• Enabling technology creates competitive advantage Copyright © 2012 Accenture All Rights Reserved. 38
    • Accenture Contacts Whitney Baldwin Management Consulting, Life Sciences 2001 Market Street Philadelphia, PA 19103 USA Mobile: +1 610 213 8408 whitney.baldwin@accenture.com Michael Brueckner Managing Partner Life Sciences Campus Kronberg 1 61476 Kronberg Germany Bus: +49 (6173) 94-67245 Mobile: +49 1755767245 michael.brueckner@accenture.comCopyright © 2012 Accenture All Rights Reserved. 39