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					      Market Attack Team




Christine Geheres – BASF
Peter A Koen – Stevens Institute of Technology
                                                 1
Market Attack Team




  A structured process for identifying
  and developing action plans for the
  next generation platforms (product,
          process or service)




                                         2
Agenda




     Overview of Market Attack Team


     Experience of Approach at Engelhard – now
     part of BASF


     Lessons Learned



                                                 3
Innovation Strategy


 What does it look like?                         Innovation
                                                 Score Card

            Corporate          Innovation
             Vision             Strategy



      Grand                       Core            Incremental
  Challenges and              Competencies       Development
  New Platforms              and Capabilities         and
                                                Implementation
                   Product                                        Product
                    Road                                           Road
                    Map                                            Map
                                                                    Stage
                                Portfolio                           Gate


                                                                   Project
      Market                                                     Management
   Attack Team
                                                                 Design for
                                                                 Six Sigma
                                                                              4
Integrated View




                           Front End of
                            Innovation
     Market                                  New Product
     Attack                               Development Stage
     Team
              Technology
                Attack
                Team


      Inappropriate                           Traditional Stage
        for use in                                   Gate
       incremental
         projects             Technology
                              Stage Gate                          5
Overview


                                                      3 months
                                                                 Experts
                                                                 Meeting
                    Phase 1
                    (Charter)        Phase 2            Phase 3          Phase 4
                                   (Market and         (Business        (Business
  Effort ideally                   Technology           Concept           Case
 includes 3 - 5                     Analysis)         Generation)      Generation)
full time people
                                                             Select                  Business
                                                Select broad           Challenge       Plan
                                                              best
                          Project Scope         concepts to concepts   Workshop
                                                 focus on




                                                                            Race to
                   Preparing                                               the Finish
                                     1st Deep            2nd Deep
                    to Dive
                                       Dive                Dive                                 6
BASF at Glance



BASF – The Chemical Company
                                                        The world’s leading
                                                        chemical company

                                                        Our portfolio ranges
                                                        from chemicals, plastics,
                                                        performance products,
                                                        agricultural products and
                                                        fine chemicals to crude
                                                        oil and natural gas
 Sales 2006: €52,610 million
 Income from operations (EBIT) 2006: €7,257 million
 Employees as of August, 2006: about 94,000*
  *including Engelhard , Degussa and Johnson Polymers                           7
Why did Engelhard use the Market Attack
Team approach?

 Engelhard (now part of BASF) had put a Growth Council into
 place to identify new areas of interest for the company
 The members were executive level managers
 Several “new” areas of interest had already been identified by
 the operating divisions, but needed quick resolution
 The expectations of the senior executives were very high
 regarding speed and quality of the output
 The market attack team approach was a new way to meet the
 expectations


   Goal: Quickly kill or move ideas to actionable plans
                                                                  8
Growth Council




    Consists of Engelhard Executive Leadership
      Business Group VP & GM’s
      Chief Technology Officer
      VP Mergers & Acquisitions
      Senior Scientist/Technologist
      Director Ventures



                                                 9
Market Attack Teams do not replace the
Stage Gate Process


             Front End of
             Innovation
                               New Product
                            Development Stage

         Market Attack
            Teams                               Commercialization




                            Stage Gate


   Market attack teams are more easily accepted by
     the organization than organizational change

                                                                    10
The company provided fertile ground for
Market Attack Teams

 Growth: (the conventional way)
    Extensions: New products to existing customers
                 vs.
 Expansions: New Markets - beyond current products and
 customers
    Speed: Get from Ideas to Action to Execution very fast
    Focus: Discard ideas and kill previously lingering
    projects fast
    Quality: Excellent work product

                                                             11
“Right” use of Market Attack Teams



  Indication of large market potential and potential return
        Worthy of significant effort
  Target market not well known
  Potentially a good fit with company’s core competencies



                      New      Market Attack
                     Channel     Teams!
            Market
                     Current
                     Channel

                                   Current        New
                                               Competency
                                       Technology             12
Legacy Engelhard‘s Cosmetic Activities
complement BASF‘s established Cosmetic
Solutions Business
                                                                   BASF Cosmetic Solutions


                                                                    Sun Care
  Engelhard Appearance                                Fragrances
  Performance Technologies                                          • UV Filters

 Beauty Care Solutions

  Skin Care                               Skin Care                 Skin Care
                                                                    • Actives
  • Advanced Solutions       Skin Care                 Oral Care


 Effect Pigments             Decorative                             Hair Care
                             Cosmetics    Sun Care    Hair Care
                                                                    • Polymers
  Decorative
  Cosmetics
  • Pigments                                                        Oral Care
                                                                    • Surfactants


                                                                    Fragrances
                                                                    • Aroma
                                                                      Chemicals

                                                                                             13
Phase 1

  Charter
  Develop charter (i.e. project scope, market, customer, risks,
  assumptions, senior management commitment, people and
  resources)
     Crystal clear scope is essential


  Purchase market report and hire marketing consultant to attend
  Phase 2 training session


  Preliminary Competitor and IP analysis should also be done


  Set senior management meeting date
     Determine temporary members who need to attend
                                                                   14
Charter used for Personal Care
Market Attack Team

    Charter for Personal Care Market Attack Team
                                                                   Resources: Core Team
    Scope: Project Mission                                         • Team sponsor (50%)
    • Identify opportunities globally for Engelhard to win in      • Team leader (70%)
       personal care based on competencies in materials and        • Lead technologist (50%)
       surface science (including appropriate acquired             • PC technical support (40%)
       capabilities)                                               • Process owner (35%)
    • “To win” means to add $x million of revenues in three        • Patent support (30%)
       years                                                       • PC marketing support (20%)
    • Outside the scope:
           o Color-based materials                                 Resources: Financial
           o Commodity businesses                                   Market studies                           $70,000
           o Business selling to end users (consumers)              Travel & misc.                            40,000
           o Equipment or service-based businesses                  Technical testing                         20,000
                                                                    Consultants (business & technical)        50,000
    Timing
                                                                    Competitive intelligence                  20,000
    • Kick-off: July 10-11, 2003                                       Total                                $200,000
    • Senior management review: October 17, 2003
                                                                   Preliminary Opportunity Analysis
    Deliverable                                                    (Assuming appropriate acquisition(s))
    • Comprehensive business plan that defines best way for
       Engelhard to “win” in personal care market and
       recommendations on “go-no go” decisions                                                     Technical Probability
                                                                                                           10
    Assumptions
                                                                                                            8
    • Engelhard is willing to acquire company with core
                                                                                                            6
       competency in organic materials                                                                      4          Commercial
    • Suitable acquisition(s) will be available within timeframe                Potential Reward
    • Engelhard is prepared to do acquisitions in this market if
                                                                                                            2
                                                                                                            0
                                                                                                                        Probability
       appropriate


                                                                                          Strategic Fit            Strategic Leverage



                                                                                                                                        15
Charter used for Personal Care
Market Attack Team


                                   Raw Material Cosmetic
                                   Market ($12 billion and
                                   growing 3 – 15%/year)
Market Attack Team
 Goal ($75 - $150
 Million in 3 years)




                       Engelhard
                         Sales

                                                             16
Effective Teams

   Creativity Under
    Time Pressure                              Individual creativity occurs when:
                                                   People are on a mission
                                                   Can FOCUS on one activity for a significant part of
                                                   their day
                                                   Are challenged and involved in their work


                                               Individual creativity does NOT occur when:
                                                   People feel they are on a treadmill
                                                   Experience a highly fragmented day
                                                   Have more group discussions rather than individual
                                                   meetings
                                                   Have lots of last minute changes in their plans and
 Amiable, T., Hadley, C. and Kramer, S., T.,       schedules
 “Creativity Under the Gun,” HBR, August
 2002.                                             After effects continue onto the 2nd and 3rd day
                                                                                                         17
Market Attack Team

Focus and Aggressive Goals


   Watson and Crick motive in the discovery of the double helix structure
   of DNA was to:
         “imitate Linus Pauling and beat him at his own game*”




 * Watson, J.D., The Double Helix, pg. 37, Atheneum, NY, 1968
                                                                            18
Phase 2

  Market Analysis
  Training Workshop (2 days)
     Overview Market Attack Team
     Business Plan Template
                                          Team + marketing consultant
     Market Segmentation
     Customer Needs Map
     Competitor Targets
     Customer, lead and analog users
     – Initial visits should have no solution in mind


  Phase 2 Activity
     “First” Cut of Maps
     Customer, lead and analog user visits                              19
Engelhard Criteria for the Personal Care
Segment

      Avoid commodities
      Good strategic fit (involves core competencies in surface and
      materials science and leverages current operations)
      Large market (>$100 million)
      Strong market growth (>5% per year)
      Materials suppliers achieve good margins (>% gross profit,
      >% EBIT)
      Sustainable competitive advantage
      Technology based
      Can capture significant market share
      Opportunities for new growth
      Good cultural fit
      Offers broad platforms

                                                                      20
Personal Care Market Segmentation Map




                                        21
Personal Care Market Segmentation Map




                                        22
Phase 2

 Competitive Analysis Storyboard

   Performance                                                                                                                                                                                                                          Locations                                                                                                                                                                            Acquisition History                                                                   MERGER AND ACQUISITION ACTIVITY
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   Functional Strategy
                                                                   Financial Highlights (millions of pounds)


 2,500
                                                                                                                                                                                                                                                                                                                                                                                                                                     20
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    Sales        Price in two ways: 1) Cost plus for the roll
                                                                                                                                                                                                                                                                                                                                                                                                                                     18
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 label market. 2) To value of product for
                                                                                                                                                                                                                                                                                                                                                                                                                                     16
 2,000

                                                                                                                                                                                                                                                                                                                                                                                                                                     14
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 medical and graphics market.
 1,500                                                                                                                                                                                                                                                                                                                                                                                                                               12                                                                                                                                                                                                                                             Marketing    Market segment focused for graphics and
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    Jt. Ventures

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 release. Customer focused for others.
                                                                                                                                                                                                       1995
                                                                                                                                                                                                                                                                                                                                                                                                                                     10                                                                                                                                                                                                                             Divestitures
                                                                                                                                                                                                       1996
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    Acquisitions
 1,000
                                                                                                                                                                                                                                                    S ite
                                                                                                                                                                                                                                                    K e rk ra d e
                                                                                                                                                                                                                                                                                                         S p e c ia lty
                                                                                                                                                                                                                                                                                                          M e d ic a l
                                                                                                                                                                                                                                                                                                                                                                                                                                       8
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    Manfacturing Low-cost supplier for release business.
                                                                                                                                                                                                                                                                                                                                                                                                                                       6

    500                                                                                                                                                                                                                                             U .K .
                                                                                                                                                                                                                                                    L a n c a s te r
                                                                                                                                                                                                                                                                                                       G ra p h ic A r ts
                                                                                                                                                                                                                                                                                                          B ra n d e d                                                                                                                 4
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 Service and confidentiality for graphics
       0
                                                                                                                                                                                                                                                    S p a r ta n b u r g                                P h o to r e s is t                                                                                                            2                                                                                                                                                                                                                                                         business. Partnering (integrated EDI, etc.)
                                    Net Sales                                            Inc. Before Taxes                                              Operating Profit
                                                                                                                                                                                                                                                                                                                                                                                                                                       0
                                                                                                                                                                                                                                                                                                                                                                                                                                                  1986            1987                    1988              1989                   1990            1991                 1992            1993             1994              1995            1996       1997                                       for toll coating business.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    R&D          Centralize R&D in N. Carolina for coated /

   Strategic Intent                                                                                                                                                                                                                       Business Segments                                                                                                                                                                  Intellectual Property                                                                                                                                                                                                                                               graphics business to get critical mass.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 Develop technical leadership position by
                                                                                                                                                                                                                                                                            S e c to rs
                                                                                                                                                                                                                                                                                                                             S a le s o f 2 ,2 7 7                      * P r o fits o f 1 8 4                                                                                                    1997 REXAM PATENT PORTFOLIO (260 TOTAL)                                                                                                                                                        working with key customers.
   M I S S I O N : T o r e c o v e r t h e C o r p o r a t e fo r t u n e s                                                                                                                                                                                                                                                  (m illio n p o u n d s )                   (m illio n p o u n d s )
                                                                                                                                                                                                                                              C o a t e d F ilm s                                                                         416                                         33                                                                                                                  Healthcare Pkg
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                6%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   Beauty Pkg
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      2%                                                                                                                                            Finance      Metric was ROS. Metric is now RONA.
   V ISIO N :                        T o b e t h e g lo b a l le a d e r in h ig h p e r f o r m a n c e p a c k a g in g a n d c o a t e d f ilm s a n d                                                                                     F o o d & B e v e ra g e                                                                    406                                         34
                                     p ap er g ro u p                                                                                                                                                                                         In d u s tria l P k g                                                                       228                                         29                                                                                         Industrial Pkg
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      9%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 They are trying to be strict with obtaining the
                                                                                                                                                                                                                                              H e a lth c a re P k g                                                                      182                                         14
   G O A L S:                           25% R O N A                                                                                                                                                                                           B e a u ty P k g                                                                            122                                         12                                                                                                                                                                                                                                                                                                         needed returns on their new investments.
                                                                                                                                                                                                                                              P r in t in g                                                                               266                                         28
   T A C T IC S                                                                                                                                                                                                                               B u ild in g & E n g g                                                                      366                                         41                                                                                                                                                                                                        Coated Films/Paper

   •
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       41%
               D is p o s e o f 2 0 f ir m s w it h c o m b in e d s a le s o f G B 3 0 3 M n a n d lo s s e s o f G B 3 M n                                                                                                                  O c t a g o n ( d is p o s a l u n it )                                                     292                                         -7                                                                                Printing




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Current Status
                                                                                                                                                                                                                                                                                                                                                                                                                                                                         11%
   •           P o s it io n t h e c o m p a n y t o t a k e a d v a n t a g e o f t h e o p p o r t u n it ie s w it h in t h e m a r k e t p la c e
   •           E n a c t t h e “ D e v e lo p m e n t 2 0 0 0 B u s in e s s S t r a t e g y ” w h ic h w ill:                                                                                                                                1 9 9 6 F in a n c ia l A n a ly s is                                                        B y R e g io n
                  a ) r e d u c e a d m in is t r a t iv e c o s t s                                                                                                                                                                                                                                                         S a le s o f 2 ,2 7 7                      * P r o fits o f 1 8 4
                  b ) c r e a t e g r e a t e r in v o lv e m e n t o f c u s t o m e r s w it h p r o d u c t d e v e lo p m e n t in t h e                                                                                                                                   A re a s
                                                                                                                                                                                                                                                                                                                             (m illio n p o u n d s )                   (m illio n p o u n d s )
                         c o nc e p t sta g e
                  c ) p la n in v e s t m e n t a r o u n d c u s t o m e r n e e d s                                                                                                                                                         U n ite d K in g d o m & Ir e la n d                                                      1 ,0 1 5                                      85                                                                    Bldg. & Engineering

                  d ) in c r e a s e c u s t o m e r a n d s u p p lie r r e la t io n s h ip                                                                                                                                                 C o n te n e n ta l E u ro p e                                                              314                                         10                                                                            11%

                                                                                                                                                                                                                                              T h e A m e ric a s                                                                         832                                         84                                                                                                                                                                                                                                                                                                                     1997 - 1st QUARTER UPDATE
                                                                                                                                                                                                                                              R e s t o f th e W o rld                                                                    116                                          5
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    Management is confident the restructuring will result in improved performance.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Food & Bev. Pkg                                                                                                                                           Management is encouraged by the following first four months performances:
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               20%




   Sector Strategic                                                                                                                                                                                                                                                                               Organization                                                                                                                                                                              INTELLECTUAL PROPERTY (1971-1997)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    SALES
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    Cost reductions and improved operating efficiencies have benefited the company. Coated
 C o a te d F i lm s & P a p e r s              A c h i e v e g l o b a l s p r e a d o f b u s in e s s b y y e a r 2 0 0 0 . D e v e l o p m a r k e t l e a d e r s h i p p o s i ti o n b y fo c u s i n g o n                        C     H     A     I R        M       A   N                                                                                                                                    30                                                                                                                                                                                                                                                          Films and Papers had a strong start while Printing suffered from weaker volumes.
                                                c u s t o m e r s ' a n d e m p l o y e e s ' n e e d s . E s t a b l is h b e s t p r a c t ic e s a t a l l m a n u f a c t u r i n g s i te s . ( N o t e : M a y s p i n o ff a s




   Intent
                                                                                                                                                                                                                                          J e r e m               y     L a n c a s t e r                ( 6 1 )
                                                s e p a r a te c o m p a n y , b u t a ll g r o w th a n d p r o fits a re h e r e .)                                                                                                     A p p o in t e d     t o   t h e    B o a r d    i n    J a n u a r y   1 9 9 6     a n d     a s   C h a ir m a n   in    M a y        1 9 9 6 .                                                                                                                                                                                                                                                                                         Generally trading and cash flow have been satisfactory.
                                                                                                                                                                                                                                          F o r m e r ly    C h a i r m a n       a n d   C h ie f    E x e c u t iv e   o f   W    o ls e ly   P L C    a n d   c u r r e n t ly    n o n
 In d u s tria l P a c k a g in g               G e n e r a te p r o d u c ti v it y f r o m b o th c a p i ta l e x p e n d i tu r e a n d p e o p l e . C o n ti n u e t o c h a l le n g e c o s t b a s e . M e e t o r               e x e c u t iv e   C h a i r m a n      o f R o t o r k   P L C , D e p u t y      C h a i r m a n    o f H e p w o r t h  P L C       a n d   a
                                                e x c e e d c u s to m e r s ' n e e d s o r r e q u ir e m e n t s . M a i n t a i n r e l a ti o n s w i th c u s t o m e r s a t a l l l e v e l s                                     n o n   e x e c u t iv e    d ir e c t o r  o f T o m k in s o n s      P L C ,    K l e in w o r t  B e n s o n   G r o u p    P L C      a n d
                                                                                                                                                                                                                                          P r o v e n d    G r o u p    P L C .                                                                                                                                         25                                                                                                                                                                                                                                                          RAW M ATERIALS
 H e a lth c a re P a c k a g in g              D e v e l o p p r o d u c t s th a t r e d u c e c o s ts a n d d e l iv e r m f g . e ffi c i e n c i e s . B e c o m e t h e m o s t c o s t e ff e c t iv e p r o d u c e r o f
                                                m e d i c a l p a c k a g i n g i n w o r l d . I n t e g r a t e b u s i n e s s i n t h e U S t o r e d u c e c o s t a n d b e c o m e m o r e r e s p o n s i v e . A d ju s t
                                                                                                                                                                                                                                          C
                                                                                                                                                                                                                                          R
                                                                                                                                                                                                                                                H
                                                                                                                                                                                                                                               o l f
                                                                                                                                                                                                                                                      I E
                                                                                                                                                                                                                                                          B
                                                                                                                                                                                                                                                              F         E      X E
                                                                                                                                                                                                                                                                  o r j e s s o n
                                                                                                                                                                                                                                                                                         C   U     T I V
                                                                                                                                                                                                                                                                                                 ( 5 4 )
                                                                                                                                                                                                                                                                                                             E                                                                                                                                                                                                                                                                                                                                                                      Prices were calm during the first four months and are likely to remain for the near future.
                                                to n e w c o m p e titiv e e n v ir o n m e n t                                                                                                                                           A p p o in t e d   t o   t h e   B o a r d  in   J a n u a r y     1 9 9 6   a n d  a s   C h ie f E x e c u t i v e   a n d   M a n a g in g
                                                                                                                                                                                                                                          D ir e c t o r  in   J u ly    1 9 9 6 .    P r io r  t o   jo i n i n g   R e x a m ,   h e   w a s  C h ie f     E x e c u t iv e    o f t h e
                                                                                                                                                                                                                                          S w e d is h    p a c k a g i n g    c o m p a n y , P L M        A B .                                                                                                       20
 F o o d a n d B e v e ra g e                   I n t e g r a te m u l ti - fa c to r y c o o r d in a t io n s o th a t a ll s it e s p u l l to g e th e r t o t h e s a m e h i g h s t a n d a r d s fo r th e b e n e fi t o f       •     N o t e :  T h e r e is n o c o r e c o m p e t e n c y in in t e r n a lly d r iv e n g r o w t h , a ll a c q u is it io n s .  R o lf                                                                                                                                                                                                                                                          Building & Engg                   EXCHANGE MARKETS
                                                t h e S e c to r 's w i n n i n g c u s to m e r s , w h e th e r l o c a l, n a t io n a l , o r i n t e r n a ti o n a l .                                                              is t o b u ild t h e t e a m    a n d d r iv e t h e o r g a n iz a t io n t o c h a n g e t h in g s
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  Printing                          Results from movements in the foreign exchange markets are likely to be reduced when
                                                                                                                                                                                                                                          S     E    C      T O            R       D   I R    E    C     T O       R   S                                                                                                                                                                                                                                                                                                                          Beauty Pkg
 B e a u ty P a c k a g in g                    P o s i ti o n l ip s ti c k b u s i n e s s w h e r e i t c a n b u i ld i ts p r o fi ta b i l it y & g r o w it s m a r k e t s h a r e a r o u n d w o r ld . D e v e l o p
                                                m a n a g e m e n t te a m s c o m m i tt e d t o s h a r in g k n o w l e d g e & s k i l ls . C r e a te a c u l tu r e fo c u s e d o n w o r ld w i d e l e v e l o f
                                                                                                                                                                                                                                          F r a n k               B    u r n s i d e
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  Healthcare Pkg
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    translated into Sterling. However at the current rates, this impact will be minor. Rexam
                                                                                                                                                                                                                                          S    e c t o r      D       ir e c t o r     o f   R    e x a m        I n d u s t r i a l   P   a c k a g in g .                                                             15
                                                p e r f o r m a n c e , q u a li ty & c u s to m e r s e r v i c e
                                                                                                                                                                                                                                          Y    v e s          D       o m      i n i o n i         ( 5 0 )
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  Industrial Pkg                    is unlikely to experience any significant trading or transaction currency impact as only a
 P rin tin g                                    L a y th e fo u n d a t io n fo r c o n s i s te n t g r o w t h in t h e fu tu r e . R e i n fo r c e p o s i ti o n a s m a r k e t l e a d e r b y ta k in g                           S e c t o r D ir e
                                                                                                                                                                                                                                          G r o u p       s in c            e
                                                                                                                                                                                                                                                                             c t o r
                                                                                                                                                                                                                                                                                  1 9
                                                                                                                                                                                                                                                                                         o f R e x a m
                                                                                                                                                                                                                                                                                         9 5 .    H e
                                                                                                                                                                                                                                                                                                              B e a u t y
                                                                                                                                                                                                                                                                                                         s p e n t     1 5
                                                                                                                                                                                                                                                                                                                              P a c k a g i n g , b a s e d
                                                                                                                                                                                                                                                                                                                               y e a r s    in     P a c k a g in g
                                                                                                                                                                                                                                                                                                                                                                    in    P a r is , h a s
                                                                                                                                                                                                                                                                                                                                                                         w it h
                                                                                                                                                                                                                                                                                                                                                                                              b e e n
                                                                                                                                                                                                                                                                                                                                                                                  C a r n a u d
                                                                                                                                                                                                                                                                                                                                                                                                        w it h
                                                                                                                                                                                                                                                                                                                                                                                                    M e t a l
                                                                                                                                                                                                                                                                                                                                                                                                                t h e
                                                                                                                                                                                                                                                                                                                                                                                                               B o x
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  Food & Beverage                   small proportion of the Group’s total sales are exported from Britain and there are some
                                                a d v a n ta g e o f d i ff ic u l t m a r k e t c o n d i ti o n s . R e fo c u s m a n a g e m e n t t o s e r v e v e r y d if fe r e n t n e e d s o f b o t h lo c a l a n d                                                                                                                                                                                                                                                                                                                                                                                                                 Coated Films
                                                g lo b a l c u s to m e rs
                                                                                                                                                                                                                                          w h e r e       h e
                                                                                                                                                                                                                                          D ir e c t o r o f
                                                                                                                                                                                                                                                                            w a s
                                                                                                                                                                                                                                                                            t h e    F
                                                                                                                                                                                                                                                                                           r e s p o n s i b le
                                                                                                                                                                                                                                                                                            o o d   D iv i s io n
                                                                                                                                                                                                                                                                                                                   f o r
                                                                                                                                                                                                                                                                                                                     a n d
                                                                                                                                                                                                                                                                                                                           v a r i o u s
                                                                                                                                                                                                                                                                                                                               t h e n   t h e
                                                                                                                                                                                                                                                                                                                                              f o r e ig n
                                                                                                                                                                                                                                                                                                                                                  W
                                                                                                                                                                                                                                                                                                                                                              s u b s id ia r i e s
                                                                                                                                                                                                                                                                                                                                                       o r ld w id e
                                                                                                                                                                                                                                                                                                                                                                                       b e f o r e   b e c o m in g
                                                                                                                                                                                                                                                                                                                                                                        A e r o s o l D i v is io n . H e      w a s    10
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    purchasing benefits from the current foreign exchange situation.
                                                                                                                                                                                                                                          r e c r u i t e d                  t o    R     e x a m      o r ig i n a lly    t o     r u n    t h e     G r o u p ’s     F r e n c h    f r a g r a n c e   p u m p s
 B u ild in g & E n g in e e rin g              C o m m it m e n t to n e w p r o d u c t d e s i g n a n d i n n o v a ti o n                                                                                                            b u s in e s s , S                  o f a b    .

                                                                                                                                                                                                                                          R    o b
                                                                                                                                                                                                                                          S e c t o r
                                                                                                                                                                                                                                                          G       l u s k i n
                                                                                                                                                                                                                                                          D ir e c t o r  o f  R e x a m
                                                                                                                                                                                                                                                                                         ( 5 0 )
                                                                                                                                                                                                                                                                                               H e a lt h c a r e     P a c k a g i n g ,     b a s e d    in    C h i c a g o ,     h a s    b e e n
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    M ERGES AND ACQUISITIONS
           R e x a m 's C o a t e d F i l m s a n d P a p e r S e c t o r :                                                                C o m m itte d to R & D                                                                        w it h    t h e
                                                                                                                                                                                                                                          H e a lt h c a r e
                                                                                                                                                                                                                                                            G r o u p    s in c e    1 9 9 3 . H i s
                                                                                                                                                                                                                                                                  C o r p o r a t io n     a n d
                                                                                                                                                                                                                                                                                                         b a c k g r o u n d
                                                                                                                                                                                                                                                                                                    R o h m       a n d
                                                                                                                                                                                                                                                                                                                                  in c lu d e s
                                                                                                                                                                                                                                                                                                                             H a a s
                                                                                                                                                                                                                                                                                                                                                    n in e
                                                                                                                                                                                                                                                                                                                                         C o m p a n y ,
                                                                                                                                                                                                                                                                                                                                                              y e a r s
                                                                                                                                                                                                                                                                                                                                                               a s   w e l l
                                                                                                                                                                                                                                                                                                                                                                            a t b o t h
                                                                                                                                                                                                                                                                                                                                                                                a s
                                                                                                                                                                                                                                                                                                                                                                                           B a x t e r
                                                                                                                                                                                                                                                                                                                                                                                       t h r e e   o f                  5                                                                                                                                                                                                                                                           The company continues to swiftly dispose of underperforming businesses. To date nine
           T h e s e c t o r 's r e s e a r c h a n d d e v e l o p m e n t e f f o r t e m p l o y s a p p r o x i m a t e l y
                                                                                                                                                                                                                                          T e n n e c o       P a c k a g in g .
                                                                                                                                                                                                                                          in t e r n a t io n a l
                                                                                                                                                                                                                                                                                      H e
                                                                                                                                                                                                                                                                     o p e r a t io n s .
                                                                                                                                                                                                                                                                                             h a s
                                                                                                                                                                                                                                                                                            H e
                                                                                                                                                                                                                                                                                                     h e ld
                                                                                                                                                                                                                                                                                                   w a s
                                                                                                                                                                                                                                                                                                                s e n i o r
                                                                                                                                                                                                                                                                                                             r e c r u i t e d
                                                                                                                                                                                                                                                                                                                               p o s it i o n s
                                                                                                                                                                                                                                                                                                                                 o r ig i n a lly
                                                                                                                                                                                                                                                                                                                                                  a t
                                                                                                                                                                                                                                                                                                                                                     t o
                                                                                                                                                                                                                                                                                                                                                         t h e s e
                                                                                                                                                                                                                                                                                                                                                          R e x a m
                                                                                                                                                                                                                                                                                                                                                                       f ir m s ,
                                                                                                                                                                                                                                                                                                                                                                            t o
                                                                                                                                                                                                                                                                                                                                                                                     la r g e l y
                                                                                                                                                                                                                                                                                                                                                                                 r u n    R e x a m
                                                                                                                                                                                                                                                                                                                                                                                                   in
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    businesses have been sold for some 70 million pounds which represents about 60% of the
                                                                                                                                                                                                                                          M e d ic a l P a c k a g in g         in   t h e  U n it e d   S t a t e s .
           1 5 0 s c ie n tis ts , e n g in e e r s , a n d t e c h n ic ia n s lo c a te d a t f o u r s ite s in th e                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             expected total proceeds. The nine businesses sold had a combined sales of 121 million
                                                                                                                                                                                                                                          R    o b e r t              T .      H   a m       i l t o n     ( 5 4 )
           U n ite d K in g d o m a n d U n ite d S ta te s . It is f o c u s e d o n th e d e v e lo p m e n t                                                                                                                           S e c t o r D ir e c t o r o f C o a t e d           F il m s   a n d     P a p e r s , b a s e d        in    C h a r lo t t e , h a s  b e e n     w it h                   0                                                                                                                                                                                                                                                           pounds. Negotiations on further disposals are ongoing and significant additional progress
                                                                                                                                                                                                                                                                                                                                                                                                                             1970

                                                                                                                                                                                                                                                                                                                                                                                                                                    1971

                                                                                                                                                                                                                                                                                                                                                                                                                                           1972

                                                                                                                                                                                                                                                                                                                                                                                                                                                   1973

                                                                                                                                                                                                                                                                                                                                                                                                                                                          1974

                                                                                                                                                                                                                                                                                                                                                                                                                                                                 1975

                                                                                                                                                                                                                                                                                                                                                                                                                                                                          1976

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           1978

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   1979

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            1980

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   1981

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            1982

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     1983

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            1984

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   1985

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          1986

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 1987

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          1988

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 1989

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        1990

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               1991

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      1992

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             1993

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    1994

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           1995

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  1996

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         1997
                                                                                                                                                                                                                                          t h e G r o u p     s i n c e    1 9 9 5 . H e       s p e n t o v e r t h ir t y     y e a r s  w i t h     E a s t m a n     K o d a k  C o m p a n y
           o f le a d in g e d g e te c h n o lo g y p la tf o r m s f o r s e v e ra l e m e r g in g h ig h                                                                                                                             a n d   r o s e  t o    t h e   p o s it i o n    o f V ic e    P r e s id e n t a n d        G e n e r a l M a n a g e r , U n it e d          S t a t e s                                                                                                                                                                                                                                                                               is expected to be achieved by the time the September interim results are reported.
                                                                                                                                                                                                                                          a n d    C a n a d a       R e g io n ,      a n    o r g a n iz a t i o n    w i t h   s a le s     o f    $ 5 . 5   b ill io n .  H e    a ls o    w a s
           g r o w th m a r k e ts s u c h a s d ig ita l p h o to g ra p h y , f la t p a n e l d is p la y s a n d                                                                                                                      m a n a g in g       d ir e c t o r    o f     K o d a k     L t d . ,   r e s p o n s ib l e     f o r     R & D ,     m a n u f a c t u r in g     a n d
                                                                                                                                                                                                                                          m a r k e t in g   a c t i v it ie s i n    t h e   U K .
           m a n y a r e a s o f e le c tr o n ic s .
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    (Note: Surprised they have not been bought yet. Allu-Swisse, VanLeer, Lintec
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    companies are all suitors or potential suitors.)




                                                                                                Large storyboards are effective communication tools
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  23
Phase 2

  Intellectual Property Maps




                               24
Phase 2

  Market Analysis

    Phase 2 Deliverables
    “Very Rough” Business Concepts
       Market Segmentation
       Product Service Needs
       Competitive Analysis
       IP Evaluations




                                     25
Phase 3

 Business Concept Generation
   Meeting (1 – 2 days)
      Overview of Market Segmentation, Customer Needs Map,
      Competitors and IP
      Discussion of “Rough” Business Concepts
      How will competitive advantage be achieved?




                                                             26
Phase 3

 Delivery Systems

 Working with an industry consultant, after some very “lively”
 discussion, the team identified delivery systems as the focus
 of Phase 3 efforts.
   One of Fastest growing category – growing at 10% a year
   Engelhard already had core competencies in delivery systems
   Could sell them in their existing skin appearance and
   performance channel

    Delivery systems are technologies that enable the protective
   encapsulation of sensitive and unstable active ingredients until
                     they are applied to the skin
                                                                      27
Phase 3

  Business Concept Generation
  Phase 3 Activity
     Continued customer, lead and analog user visits – though more targeted
     around business concepts
     Reviewing claims of key patents
     Early identification of alliance partners and acquisition candidates
     In-depth competitive analysis on key competitors


  Phase 3 Deliverables
     Several (2 – 3) Business Concepts which are inherent wins:
     –   Large unmet customer need and value proposition
     –   Competitive Advantage
     –   Protectable
     –   Large and growing market
     –   High Margins                                                         28
Phase 4

   Business Case Generation
  Challenge Workshop (1 day)
     Presentation by the team on the 1-2 business concepts
     Attendees broken into 3 teams and lead by non team member to:
     – Develop a whole new concept
     – Build on existing concept
     – Or recommend that concept is not feasible



  Team believed that the aggressive growth targets could not be met
   through internal means and recommended that the acquisition of
       two of the larger companies delivery systems companies.

                                                                      29
Phase 4

 Business Case Generation
    Phase 4 Activity
       Preparation of Business Case with detailed plan to the
       next decision gate and recommendations


    Phase 4 Deliverables
       Business Plan




                                                                30
Business Case Presentation

    Logistics


        Preparation              Steering Group Meeting                       Follow Up

                                  Core Team
                                                          Steering Group    Minutes Distributed
                                 Presentation
          Issues and                                       Review (Core       to the Steering
                                (Attendance of
           Concerns                                       Team is not in     Group and Core
                               entire core team
                                                            attendance)            Team
                                   required)


           5 days                           2 – 3 hours                          1-3 days

    Steering        Steering                                       Steering Group
     Group           Group                                      advises Core Team of
    Receives         Meets                                            Decision
   Documents                                                        Meeting Ends


                                                                                                  31
Personal Care Market Attack Team
Epilogue

    Formed a new team to implement the
    recommendations
       Full time leader (Director of Business Development for
       Personal Care)
       Marketing and Technical Resource


    Acquisition of:




                                        Engelhard purchased
                                     Coletica for $66 million Euro
                                                                     32
Lessons learned


    Visible senior management commitment a must
    (empowers team)
    Have a clear charter
    (mission/timing/deliverables/resources)
    “Dedicated” team effort essential, including 50%+
    time commitment
    Dealing with frustration, confusion, lack of clarity --
    all hallmarks of the team kick-off (it’s OK!)
    Interviewing multiple lead users, external and in-
    house experts is critical, needs to be global,
    depending on the market
                                                              33
Lessons learned



   Keep an open mind when first studying
   market/opportunity
   Recognize short timeline
   Challenge Workshop improves team’s output
   Use comprehensive facts for effective decision-making
   Develop “process owners” inside the company to first
   collect and then share expertise of the market attack
   team approach
   The process can be somewhat adapted to the
   company’s needs, but principles need to be adhered to
                                                           34
Challenges of Approach


 Benefits
    Breakthrough concepts and solutions always emerge
    Real actionable recommendations with an understanding of risk/reward benefits
    “…the best work product ever produced at our Company….” Division President from $1.5
    billion division of $4 billion company
    Rich information on emerging and future needs
    Entirely new concepts - sometimes even larger – though outside the charter often emerge


 Challenges
    Efficiently finding and gaining access to customers, lead users and experts
    Translating and combining many pieces of information
    –   Lots of chaos in the beginning
    Difficulty in predicting the pathway from start to finish
    Expensive in people and resources (i.e. travel, marketing and technology consultants,
    marketing reports and competitive intelligence analysis)
    Stretches people – weaknesses of “mediocre” performers become highlighted very early35

				
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