PART A

Case Study - 50 MARKS (Answer all the five questions at the end of the case study each
answer carries 10 marks)

Founded in 1882, Beiersdorf is today one of the world’s leading companies in the consumer
goods industry. A strong, global brand portfolio and more than 20,000 employees in over 170
subsidiaries worldwide contribute to the Group’s success. Beiersdorf’s business is divided into
two separate, independently operating business segments. We are market leaders in both
segments and are confident that we can further increase our market share by anticipating the
wishes of our consumers and offering them real added value with innovative, high-quality
products.

In the Consumer Business Segment, our focus is on skin and body care. Our strong portfolio
comprises brands such as NIVEA, EUCERIN, LA PRAIRIE, and HANSAPLAST, which
are trusted by consumers around the world.

In the tesa Business Segment, we concentrate on developing high-quality self-adhesive systems

and product solutions for industry, craft businesses, and end consumers. Since 2001, tesa has
been managed as an independent subgroup.

At Beiersdorf we have been caring about skin since 1882. Beiersdorf’s success is based on
its strong portfolio of internationally leading brands. It is thanks to them that millions of
people around the world choose Beiersdorf day after day. Our brands boast innovative
strength, outstanding quality, and exceptional closeness to our consumers. By responding
quickly and flexibly to regional requirements, we are winning the hearts of consumers in
nearly all countries worldwide.

Our skin and body care brands form the focus of our successful brand portfolio and each
brand serves very different areas: NIVEA is aimed at the mass market, EUCERIN at the
dermocosmetics market, and LA PRAIRIE at the selective cosmetics market. With its
HANSAPLAST and ELASTOPLAST brands, Beiersdorf also has a global presence in the
field of plasters and wound care. Renowned brands such as LABELLO, AQUAPHOR,
FLORENA, 8X4, HIDROFUGAL, GAMMON, COPPERTONE, MAESTRO, CHAUL,
and STOP THE WATER WHILE USING ME! round off our extensive portfolio in the
Consumer Business Segment. Through the tesa brand, which has been managed since 2001
by Beiersdorf’s independent tesa subgroup, we also offer highly innovative self-adhesive
system and product solutions for industry, craft businesses, and consumers.

As of 2020, the Group Non-financial Statement is presented together with the Annual Report. In
further progressing on our “Care Beyond Skin” sustainability agenda, this year, we have made new
ambitious commitments concerning our environmental impact in two focus fields:

We care for a climate positive future:

Our climate targets were approved by the “Science Based Targets Initiative”:

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By 2025, we will achieve an absolute reduction of Scope 1 and 2 emissions by 30% and an
absolute reduction of our Scope 3 emissions by 10% versus the base year 2018. For the
Consumer Business Segment, we will reduce our absolute Scope 3 emissions by 30% in the
same timeframe and become climate neutral in our operations by 2030.

We care for fully circular resources:

By 2025, we will reduce fossil-based virgin plastic in our packaging by 50% and our plastic
packaging will contain a minimum of 30% recycled material in the consumer segment.

As we begin a new year, we look back on a 2020 that challenged us in many different ways. A
year in which the ongoing coronavirus pandemic held the world firmly in its grip and exerted an
unprecedented impact on the global economy. The crisis did not leave Beiersdorf unscathed.
However, we took swift and decisive action in spring 2020 to protect our employees, continue
serving our consumers, and secure our business operations. At the same time, we took key steps
for the future with our C.A.R.E.+ strategy.

Our staff all around the world gave their utmost and set a brilliant example with their initiative
and commitment. I would like to express them my heartfelt thanks on behalf of the entire
Executive Board. This team spirit is a source of pride and impressively illustrates Beiersdorf’s
unique corporate culture. The strong sense of cohesion in our company was also demonstrated by
the Solidarity Pact that we signed in mid-April. With this important agreement, our aim was to
mitigate the impact of possible falls in sales and to safeguard the jobs of all employee groups
without resorting to Kurzarbeit – the German government’s short-time support program.

Throughout the coronavirus pandemic, the essence of Beiersdorf has been clear to see: we care
for skin, therefore we care for people, and we care beyond skin. “Care Beyond Skin” is our
purpose and our responsibility to look after people, society, and the environment. It has driven us
for almost 140 years, and times of crisis are no exception. To support societies around the world
in their battle against the COVID-19 pandemic and its impacts, we launched a €50 million
humanitarian aid program – the largest in our corporate history – in as early as March 2020. This
program combines straightforward emergency aid with measures that have a long-term
orientation.

COVID-19 gave our business a challenging reporting year in many respects, yet it has also made
the relevance and long-term orientation of our C.A.R.E.+ business strategy more tangible
than ever before. Despite the unprecedented crisis, we made important progress on our
strategic priorities in 2020.

For example, we accelerated the digital transformation and significantly expanded our e-
commerce business with various initiatives such as the new NIVEA SKiN GUiDE skin analysis
web app. We proved our innovative strength with major innovations such as EUCERIN
Hyaluron Filler + Elasticity 3D Serum, which contains the patented ingredient Thiamidol®, and
additions to the NIVEA Naturally Good range. We achieved a special milestone with the
opening of our new innovation center in Shanghai. This significant investment in our research
and development represents a clear commitment to growth in China and Asia, a strategically

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important region. We also expanded our share of the Chinese market with EUCERIN.

Another important step in tapping new growth markets was the creation of our OSCAR&PAUL
Venture Capital Fund. Beiersdorf is using the fund to invest in promising start-ups, thereby
gaining access to disruptive technologies, business models, and skin care innovations. One such
investment was in Salford Valve Company Ltd. (Salvalco), a British company that develops
sustainable aerosol technologies. The acquisition of the Hamburg-based natural cosmetics
brand STOP THE WATER WHILE USING ME! in February 2020 was an important step for
Beiersdorf in tapping the fast-growing natural cosmetics market.

Our “Care Beyond Skin” sustainability agenda, which we established early in 2020, is driving
the transformation toward greater sustainability. Our agenda contributes to the United Nations
Sustainable Development Goals and takes into account the ten principles of the UN Global
Compact, of which both our business segments (Consumer and tesa) are committed members. In
terms of sustainability, we initiated more important changes in 2020 than in any other year to
date. We substantially strengthened our commitment to sustainability in both business segments,
reached important milestones, set new targets, and launched pioneering programs.

The year that lies ahead will not necessarily be easier than 2020. We face a volatile future.
However, we have proven that we are able to adjust swiftly and flexibly to changing
circumstances and that we can continue to push ahead with important projects even in times of
crisis. The direction of our C.A.R.E.+ strategy remains unchanged: we want to further strengthen
our digital connection with our consumers, to impress them with superior skin care innovations,
to gain further market share, and to return to sustainable, competitive growth.

Our strategy

For almost 140 years, our focus has been on skin care – our core competency. With our products,
we want people to feel good in their skin and launch skin care innovations that deliver real added
value. For us, our core value “Care” has therefore always been a key pillar of our success and the
trust shown by our consumers all around the world.

In February 2019, we established our C.A.R.E.+ business strategy – a multi-year investment program
setting clear strategic priorities for action. The goal of C.A.R.E.+ is to ensure competitive,
sustainable growth and respond to a fast-changing environment defined by for example
increasing digitalization, growing consumer awareness of sustainability, and ever intensifying
competition. The coronavirus pandemic has accelerated these trends and trans- formed consumer
demands and behavior. Yet even before the coronavirus crisis, a profound transformation was
taking place in the consumer goods industry and particularly the global skin care market.
Megatrends such as sustainability and responsible consumption continued in the reporting year,
and the development of digital consumer engagement and online shopping increased even
further. With C.A.R.E.+, Beiersdorf is addressing precisely these themes and is confident of
further increasing its growth potential.

In early 2019, Beiersdorf set five strategic priorities as part of C.A.R.E.+. The company honed
this focus again during the reporting year in the context of the coronavirus pandemic and the

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changing market realities (the “new nor- mal”) that have come with it. Beiersdorf’s purpose is
now a more explicit part of the strategy. We have also added a further strategic priority:
strengthening our brands by enriching their purpose. This reflects the corporate responsibility
of each of our brands and what our consumers expect from us today more than ever before: a
positive influence on society and the world in which they live. As part of another strategic
priority – the digital transformation –, we are digitalizing individual processes and our
infrastructure as a whole so that we can better adapt to the ever-accelerating disruption of our
industry in this area.

Our C.A.R.E.+ strategy now encompasses the following strategic priorities:

• Strengthen our brands by enriching their purpose

• Fast forward digital transformation (previously “Accelerate digital consumer connection”)

• Win with skin care

• Unlock white spot potential

• Fuel the growth through increased productivity

• Build on strong foundations: Culture – Core Values – Capabilities – Care Beyond

Skin (previously “Build on our strong foundations: Compliance – Core Values – Culture
– Sustainability”)

The COVID-19 crisis has clearly illustrated the importance of our long-term business strategy
C.A.R.E.+. We will therefore continue to invest in our C.A.R.E.+ initiatives and pursue our
priorities despite considerable eco- nomic challenges. The following initiatives and
examples show how we have resolutely followed our strategic path even in this uncertain year
and illustrate the substantial progress Beiersdorf has made on its strategic focus areas.

Research and Development

Beiersdorf’s business success has always been based on its outstanding research and
development. For us, this work is part of our DNA and key to the constant flow of new
innovations and solutions offering added value for our consumers all around the world.

To bring promising ideas to market as quickly as possible, we regularly evaluate our research
program and define clear focus areas. Our research team continuously produces groundbreaking
technologies, sustainable solutions, and new digitalized work processes. In line with our two
business segments, our activities have the following areas of focus:

In the Consumer Business Segment, Beiersdorf develops innovative, high-quality skin care
products. By addressing consumer needs, global trends, and regional requirements through our
research and product development, we create added value for millions of people around the
world.

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In the tesa Business Segment, we are committed to the development of high-quality self-
adhesive system and product solutions. Our product and technology development aims to
identify needs, respond flexibly to special requirements and market trends, and make our
customers’ workflows even more efficient and effective.

As of December 31, 2020, 1,433 people were employed in research and development at
Beiersdorf worldwide (previous year: 1,453). Of this total, 910 (previous year: 902) worked in
the Consumer Business Segment and 523 (previous year: 551) in the tesa Business Segment.

Despite the challenging circumstances in 2020, we increased our expenditure on research and
development in the reporting year. At the end of the fiscal year, expenditure in this area
amounted to €246 million, up 4.2% on the previous year (previous year: €236 million). In the
Consumer Business Segment, Beiersdorf invested €187 million (+5.4%) in research and
development over the past year. It invested €59 million (+0.6%) in the tesa Business Segment. The
increase in the Consumer Business Segment was mainly attributable to the opening of the new
research and innovation center in Shanghai, in which Beiersdorf invested €10 million in the
reporting year.

Collaboration boosts innovation

For Beiersdorf, collaboration with external partners is an integral component of our research and
development work. We are convinced, that through combining complementary expertise and
pooling our strengths, we enhance our collective capacity to innovate and accelerate the
development of tomorrow’s skin care. Beiersdorf’s global collaboration network comprises a
multitude of research institutions, universities, start-ups, independent scientists, and suppliers.
Alongside specific cooperation agreements, we embrace the principle of open innovation and
involve external partners in many of our devel opment projects. Under the “Pearlfinders – We
Open Innovation” umbrella, we offer them access to our confidential scientific research topics
via the “Trusted Network” online platform (https://trusted-pearlfinders.beiersdorf.com). Based on
trust, fairness, and partnership, this network also enables them to contribute their own ideas and
solutions.

Q1 Evaluate the corporate objectives of Beiersdorf.

Q2 Assess the role of Beiersdorf in protecting the People and Planet?

Q3 Evaluate and comment on the C.A.R.E.+ Strategy of the company.

Q4 Evaluate the products of Beiersdorf and discuss how it is helping the company to stay ahead
of competition.

Q5 Recommend and Justify a Strategic Road Map for Beiersdorf for the year 2040 with specific
timelines and milestones.

PART B

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 Answer any 5 out of the 8 Questions. Each answer carries 10 marks
Q1. Discuss the power of crowd sourcing of ideas in the context of FMCG Industry.

Q2. Critically analyse the various objectives of business with specific examples from the
corporate world

Q3. Assess the reasons for the failure of Carillion.

Q4. Explain the different ways in which Intrapreneurship can be incentivized with some
examples.

Q5. Evaluate the hidden S Curves of high performance in the context of a company offering
“Cloud based Software Solutions”.

Q6. What was it about Sawchuck and Leach’s video that made it viral?

Q7. What risks are involved with Westeron sourcing products from platforms such as
CrowdMaster or Kickstarter?

Q8. Explain Management Innovation with real life examples.

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