戰(zhàn)略性重組.ppt

RolandBerger Partners InternationalManagementConsultantsBarcelona Beijing Berlin Brussels Bucharest Budapest BuenosAires Detroit D sseldorf Frankfurt Hamburg Kiev LisbonLondon Madrid Milan Moscow Munich NewYork Paris Prague Riga Rome S oPaulo Shanghai Stuttgart Tokyo Vienna Zurich Strategicre engineeringofGeberitChina Interimreport GeberitInternationalAG Content 1 Page ManagementSummary5A Marketenvironment12A1 MacrobusinessenvironmentinChina13A2 Marketanalysisofsanitarysystem36A3 Marketanalysisofpipingsystem67B StrategyevaluationandSales Marketing80B1 Strategyevaluation81B1 1Corporatestrategyanalysis82B1 2Productstrategyevaluation89B2 Sales Marketing91B2 1RetailchannelGSHA95B2 2ProjectchannelGSHA103B2 3OEMchannelGDAI107B2 4Marketing110B2 5Benchmarking Kohler China 112 Content 2 Page C Financial organizationandprocessesanalysis122C1 Financialsituationanalysis123C1 1GeberitShanghai124C1 2GeberitDaishan138C2 Organizationandprocesses145C2 1Organizationstructure146C2 2Managementstructure151C2 3Keyprocessanalysis157D Restructuringoptions164D1 Generaloptionsandpre selection165D2 In depthevaluation176D2 1Equitybuyout178D2 2Termination183D2 3Bankruptcy186D2 4Comparisonofthealternatives190D3 Feasiblescenarios193 Acronymlist BoDCCSCJVEJVFDIFICGDAIGSHAJVKTSVGMWFOE BoardofDirectorsCompetenceCenterShanghaiCo operativeJointVentureEquityJointventureForeignDirectInvestmentForeignInvestmentCommissionGeberitFlushingTechnology Daishan Co Ltd GeberitPlumbingTechnology Shanghai Co Ltd JointVentureKohlerTechnicalSpecialistViceGeneralManagerWhollyForeignOwnedEnterprises SHA 4309 03690 08 15a PPT x Managementsummary ChinacouldbeamarketofstrategicimportanceforGeberit sinternationalbusiness 1 ChinaisapromisingmarketforGeberit WehaveanachievablebusinesstargetofRMB200millionrevenuebyyear2005 fromwhich 130millioncomesfromsanitaryproductsand70millionisgeneratedbypipingbusiness Amongalltheproductlines tankfittings Pluviaandconcealedcisternarethetop3productlineswiththepotentialofRMB140millionor70 ofthetotalOverallChinesemacroeconomicdevelopmentisundergoingastrongmomentum Inthenext5years itisestimatedthatGDPwillgrowat7 annually thegrowthoffixedassetinvestmentwillincreaseby8 andhousingconstructionwillalsogrowby8 p a Chinesesanitarymarketismostlyaceramicmarket withanannualdemandof43millionunitsofsanitaryceramicproductsinChinain1999whichmeansthepotentialmarketofnearly2millionsetsfortankfittingsaswellas2millionunitsofmediumtohighendcisternssoldinthemarket Withthegrowthinthehousingmarket Chinesesanitarymarketwillcontinueanannualgrowthof6 8 Furthermore duetotherapidincreaseofbathroomdecoration themediumtohighendsegmentofsanitaryproductswilldefinitelyleadtheindustrygrowth By2005 theshareofmediumtohighendsegmentwillrisefromcurrent20 to35 Marketenvironment ChinacouldbeamarketofstrategicimportanceforGeberit sinternationalbusiness 2 Asthelargestconstructionindustryintheworld ChinapresentsanimmensepotentialforGeberit spipingproducts BothHDPEandMeplapossesssignificantproductadvantagesoverthecurrentlyusedChineseproducts However thesignificantpricegapcouldbeaseriousbarrierforadeepmarketpenetration ForPluvia theopportunitiesareveryattractive Presentlymorethan15roofprojects altogether700 000sqmareindifferentphasesoftheprocessofbiddingBothGeberit sconcealedcisternandPluviaroofdrainagesystemaremismatchedwithChinesetraditionalindustryhabits thiscanonlybesolvedbyalong termcommitmentintheChinamarketandeffectivemarketing DuetotheChineseconsumerstraditionalmindsetthatplasticproductarelowerpriced Chantierdoesn thaveanoptimisticmarketperspectiveRightnow formostofGeberit sproducts thecompetitionisnotsotough whichmeansagoldenopportunityforGeberittobecomeamarketleaderinChina ItalsomeanstimepressureforGeberit Currentlycompetitors e g GroheDAL Caroma aregearingupandwillbecomeaggressiveverysoon Marketenvironment Overall thestrategyofGeberitinChinahasnotbeenfullyachievedandsalesandmarketingareparticularlyweak 1 Strategyandsales marketing AlthoughGSHAdevelopedastrategywhenfounded thestrategicobjectivestopenetrateintotheChinesemarkethaven tbeenachieved currentstrategyisunfocusedThevisionofGSHAisnotcommunicatedwithintheorganization norisitimplementedIncomparison GDAI sstrategyisgoingintherightdirectionandisintheprocessofbeingimplemented Theystillhaveproblemstosolve suchasslowmarketresponsiveness poorcustomerunderstandingetc ThecorecompetenceofGeberitEuropestandsforadvancedtechnology premiumqualityandbrand excellentpre and aftersalesservices ThishasnotallbeentransferredtoGeberitChinaCurrentproductportfolioofsellingChantier Duofixandpublicproductsisunbalanced Strategicfocusshouldbeonconcealedcistern tankfittingsandPluviaandHDPEAstosalesandmarketingoperations GSHAhasnoclearstrategyindevelopingdistributionnetwork Overall thestrategyofGeberitinChinahasnotbeenfullyachievedandsalesandmarketingareparticularlyweak 2 Strategyandsales marketing Geberit sproductsaresoldthrough3channels retailsalesandprojectsalesthroughdistributors andOEMGeberitlacksclearplanningofretailnetworkdevelopmentandhasneitherintentionnorleveragetomonitordistributor snetworkoperationsProjectsalesperformancehasbeenaffectedmainlybybothpoorcustomerservicesandincompatibilitywithcurrentChineseinstallationandapplicationhabitsThereareanumberofsetbacksthatneedtobeovercometoimproveOEMsales unsatisfactoryproductdevelopmentandcustomization slowmarketresponsivenessandhighpricingExceptforaveryfewmarketingrelatedactivitiessuchasseminarsandattendingexhibitions essentiallymarketingdepartmentdoesn tperformmarketingfunctionssuchasbuildingupbrandetc KohlerhasdonefarbettercomparedtoGeberitintheareaofsalesandmarketing suchasraisebrandawareness influencecustomersanddesigninstitute Financials organizationandprocesses TheGMofGSHAlacksleadership Hismanagementstyleisself centered Itiswidelyperceivedthathedoesnottrustthelocalstaff Hispersonalityisnotacceptedbyemployees Asaresult thereisnomotivatingcorporateculture notrustbetweenmanagementteamandstaff nomotivationandcommitmentamongthestaffandhighstaffturnover e g CCS Theofficialorganizationalstructure whichischangedfrequently isnotimplemented Department sfunctionisnotclearlydefined Somefunctions e g HR areoverlappingandsomearenotimplemented e g Marketing Thecurrentoperationprocessisproduction orientedinsteadofmarket oriented leadingtoignoranceofmarketdemands Thecontrolofthewholeprocessisonlyonpaperandisnotfollowedinreality Althoughthereisnoopenconflictsbetweenthem theJVpartnerspursuetheirown personal interests Itisparticularlyobviouswhenrecruitment promotionandlay offareconcerned GSHAisonthebrimofbankruptcy Morethan70 ofproductssoldhavenegativegrossprofitmargin resultinginanincreaseofoperatinglossesinlinewithincreaseofsales Thecompanycannotsurvivewithoutacontinuouscashinjectionfromtheparentcompany AlthoughtheoperatinglossesofGDAIhavebeenreducedasaresultofimprovedgrossprofitmarginsandincreasedsales thefinancialsituationisstillcritical ThereisnoleadershipatGSHA GSHAisclosetobankruptcy GDAIshowspositivedevelopmenttrend Geberitshouldaimforequitybuyoutandconsiderterminationorbankruptcyasfall backposition Restructuringoptions ToseparatefromtheChinesepartnerisapremisetosecuresuccessofrestructuringSomekeyproblemsparticularlyaffectingtoHRMarerelatedtotheChinesepartnerInaddition Lida sproductsarecontributingtothehugelossduetotheir 7 grossprofitmarginandthesharpdeclineinsalesvolumeduetoshrinkageoflowendmarketTherefore onlyequitybuyout terminationandbankruptcyarefeasibleConsideringcost time riskandthepotentialimpactonfutureintegrationandconsolidation equitybuyoutshouldbedeemedasthefirstchoice andterminationorbankruptcyasfall backpositionThebuyoutandterminationoptionsdependtoalargeextendonthewillingnessoftheChinesepartnerandcantakealongtime Therefore Geberitshouldstartpreparationsandnegotiationsquickly SHA 4309 03690 08 15a PPT x A Marketenvironment SHA 4309 03690 08 15a PPT x A1 MacrobusinessenvironmentinChina OverallthebusinessenvironmentispositiveforGeberit sinvestmentinChina MacrobusinessenvironmentinChina 8 annualgrowthforecastedforconstructionindustryStrongmomentumforrealestatemarketgrowthSteadygrowthforhighendrealestatemarket 7 annualGDPgrowthestimatedinthenextfiveyearsAnotherboomforFDI1 expectedAnestimated8 annualgrowthforfixedassetinvestmentby2005 Consistenteconomicpoliciestowardsreformandopeningup DramaticChinesehouseholdincomegrowthduringthepast15years Macroeconomictrend Housingsupplymarket Governmentpolicies Socialfactors Government spreparationforWTOentryCentralgovernment sefforttodevelopwesternregion TheemergenceoftopconsumersgroupwithstrongpurchasingpowerSignificantlyincreasedbathroomdecorationstandardandspending 1 Foreigndirectinvestment ChinaisoneofthefastestdevelopingcountriesinAsiaandtheglobe AnnualGDPgrowthinChina GDPgrowthinAsia 1998 1999 China 1 Estimate Japan Malaysia Indonesia India Philippines Taiwan Singapore HongKong Thailand Germany1 4 USA4 1 Source OECD RolandBerger Partnersanalysis 1 Thekeyindicatorsofthefirsthalfof2000showastrongconfidenceintheChinesemacroeconomictrend FixedassetinvestmenthitRMB754billioninthefirsthalfof2000 up12 1 comparedwiththeperiodoflastyear amongthese theinvestmentofrealestatewasRMB201billion up24 1 SalesvolumeoftheretailmarketreachedRMB1625billion up10 1 andthedisposableincomeperurbanresidentincreasedby7 7 Foreigntradevolumeachievedasignificantgrowthof37 amountedatUSD217billion amongthese exportwasUSD115billion up38 importwasUSD102billion up36 Keyindicatorsinthefirsthalfof2000 8 2 GDPgrowthachievedinthefirsthalfof2000 Source CountyInformationCenter 3650 3950 8 2 BillionRMB Inthenext5years macroeconomicdevelopmentwillbeoptimisticinChina WTOaccessionwillbring1 75 moreforeigninvestment USD100billionincrementalFDIperyear willboosteconomygrowthby1 annuallyThefixedassetinvestmentisestimatedtogrowat8 peryearChinaplanstoacceleratetheurbanizationprocessby2 peryearRealestatemarketwillgrowat7 8 p a inthenextfiveyears ThetrendofChina smacro economy 7 annualGDPgrowth1 inthenextfiveyears 1978 100 1 excludingtheinflationfactor2 Estimation Source ChinaInfobank Asianmonitor RB Panalysis 2 AboomforforeigninvestmentcanbeexpectedinChinainthenext5 10years FDIgrowth GrowthofEuropeanUnioninvestment BillionUSD BillionUSD 60 9 p a 4 2 5 7 6 6 9 2 8 8 11 1 TheweightedshareofEuropeancompanies investmentintotalFDIisincreasing 70 1 1 5 p a 12 p a 1 1 EstimationbasedontheassumptionofWTOentry Source SateStatisticsBureau RB Panalysis 70 p a 15 8 p a WFOE whollyforeignownedenterprise isbecomingamoreandmorewidely acceptedapproachforforeigninvestment CompositionofFDIinChina Legalformationofforeigninvestment Source StateStatisticsBureau 154 8 56 9 EuropeanUnion Japan USA Taiwan Hongkong Others 23 9 25 6 24 9 21 5 BillionUSD BillionUSD Theaccumulationofactualforeigninvestmenttotheendof1999 ActualforeigninvestmentofJan July2000 9 9 3 0 EJV WFOE CJV 6 8 EJV EquityJointVentureCJV CooperativeJointVenture Others Total 307 6 Total 19 9 Thefixedassetinvestmentisestimatedtogrowat8 annuallyinthenext5years andmorethan60 willbeinvestedinconstructionproject Thegrowthoffixedassetinvestment Compositionofthefixedassetinvestmentin1999 Source ChinaStatisticYearbook2000 RB Panalysis BillionRMB 8 8 13 9 5 1 8 p a BillionRMB 1879 3 400 6 Purchaseofmachineryequipment Constructionandinstallation Others 705 3 Total 2985 3 Constructionindustrywillgrowsteadilyatanestimated8 annualrate Grossoutputvalueofconstructionindustry BillionRMB Growthofgovernmentinfrastructureinvestment Growthofresidentialhousingsupply Growthofrealestatemarket Growthofrenovationmarket Source ChinaStatisticYearbook2000 NationalPlanningCommission RB Panalysis Thetotalfloorspaceofhousingsupplyhasexperiencedanaverageannualgrowthof6 5 inthepast5years morethan8 growthcanbeexpectedthisyear Growthoftotalhousingsupply Averageannualgrowthofurbanresidentialsupplyis12 7 whichisleadingthetotalgrowthrateof6 5 andwillcontinuetobethegrowthengineRuralresidentialsupplygrowthislimitedduetoslowfarmers incomegrowthWTOentryisexpectedtostimulateanotherhigh growthperiodofofficebuildingsupply Trendofhousingsupply Billionsqm 6 5 p a Urbanresidential Ruralresidential Non residential 1 46 1 62 1 66 1 71 1 87 2 031 1 Projectionbasedontheprogressofthefirsthalfyearof2000 Source ChinaStatisticYearbook2000 ChinaConstructionIndustryYearbook1999 RB Panalysis 8 5 Buildingconstructioncanbedividedintoresidentialbuildingsandnon residentialbuildings Buildingsclassification Totalconstruction Residentialbuildings Non residentialbuildings Urbanresidential Ruralresidential Industrialbuildings Commercialbuildings Others Manufacturingplant HotelRetailstoreRestaurantEntertainmentOthers Publicbuildingse g airport exhibitioncenter stadiumInstitutionalbuildingsHospitalsSchoolsOthers Others Officebuildings Totalhousingsupplyin1999reached1 87billionsqminChina Thefloorspacecompleted ResidentialUrbanVillasandgoodapartments sold RuralIndustrialCommercialOfficeOthers retailing entertainment catering Others public institutional hospitals schools Total 13935594 368341112231191041471874 19 6015 200 554 4017 274 116 811 914 9036 87 17 3213 360 393 9615 263 955 022 152 8732 58 101 0428 490 3172 5639 697 7016 347 229 12138 01 64 8120 810 3044 0024 257 0810 885 585 3089 60 86 0442 380 8943 6639 1113 1115 528 606 92125 14 Housingsupplyofnationwideandkeyareas1999 Millionsqm Source ChinaStatisticsYearbook2000 ProvincialStatisticsYearbook2000 Theresidentialfloorspacesupplyaccountsfor74 3 ofthetotalhousingsupplyin1999 Compositionofhousingsupply 1999 Compositionsofnon residentialbuildings 1999 481 559 Ruralresidentialbuildings Non residentialbuildings Urbanresidentialbuildings 834 Millionsqm 119 147 Industrialbuildings Officebuildings Others 111 Millionsqm Total 1874 Total 481 104 Othercommercialbuildings Thegroupofcommercialbuildings Realestatemarketisshowingastrongmomentumin2000 salesofsquaremetersup38 fromJan toJulyvs thesameperiodin1999 Source StateStatisticBureau ChinaInfobank Floorspacecompleted Millionsqm 19 1 Housingsales Marketindicationof2000 1 7 1999 1 7 2000 1 7 38 1999 1 7 2000 1 7 72 84 28 16 TheactualinvestmentinrealestatereachedRMB250 4billion up28 6 32millionsquaremetersoflandwasusedforrealestatedevelopment up23 1 Marketpriceslightlyincreasedby1 9 TopcitiessuchasShanghai Beijing Guangzhou Shenzhenareleadingthegrowth e g theprivateconsumptioninBeijingwasalmosttripledto2 3millionsquaremeterscomparedwiththeperiodofthelastyear Privatebuyer Institutionalbuyer Millionsqm 36 3 50 1 Highendrealestateisontrackofsteadygrowthduringthepast5years Growthofsalesofvillasandhighendapartments Compositionofhighendrealestatemarket 1999 Thehighendrealestatemarketisdefinedbythesellingpricepersqm in1999 thecriteriaisabove4500RMBpersqm Guangdong Others Shanghai Beijing Millionsqm 15 p a Millionsqm 2 52 0 89 0 55 0 39 42 Total 4 36 Chinesegovernmentisendeavoringtodrivesustainableeconomicgrowth Continuouslyadoptthedirectionmarketorientedeconomydevelopment themarketwillopenfurtherPrepareforWTOentrytogainmoreforeigninvestmentandsellmoreabroad TonarrowthegapofeconomicdevelopmentbetweencoastalareaandwesternregionTocreateextradomesticmarketdemandbygovernmentdirectionsetting Sustainableeconomicgrowth Domesticmarketdemanddriven Keepthegrowthofgovernment sinvestmentininfrastructurePrioritizethemarketdevelopmentofrealestatebyissuingoutstimulatingpolicies suchashousingprivatizationpolicy taxcutofhousingconsumptionCreateconsumptionmarketdemandbyincreasingthepayofgovernmentstaff50 loweringdowndepositinterestetc KeepSOEreformatthetopagendaofeconomicdevelopment toachievealong termsolutionforaviableSOEbusiness someshort termpainsmaybecausedsuchasalargeamountofworkerslaid off ProbablyChinawilljoinWTOearlyin2001 whichwillmakeatremendousimpactintheChinesemacroeconomicenvironment Boosteconomicdevelopment ImpacttoGeberit sbusinessinChina Intensifymarketcompetition MorefavorableinvestmentenvironmentEasiertoimportGeberitEuropeanproducedproductstoChinesemarket Impacttomacroeconomicenvironment Overall WTOwillmakeadramaticimpactonChina seconomicdevelopmentbyopeningthedoortoforeignbusinessandmakingChineseproductsmoreaccessibletotheglobalmarketWTOentrywillboostonenewtideofforeigninvestmentinChinesemarketWTOentrywillalsobringconsumerspendinggrowth WTOentrymeansmoreinternationalplayerswillcometoChinesemarketbyexportingtheirproductswiththelowertarifforbydirectinvestmentinthemarketThetariffforsanitaryproduct nowaround40 willbereducedto10 inthecoming5years agreatfavorforAmericanorEuropeansanitaryproductsimportedtoChina WTOentrywillstrengthenkeycompetitors determinationforChinesemarketlikeCaroma GroheDal Theywillmoveintothemarketquickly WTOentryimplication Westernregiondevelopmentwillcreateaconsiderablemarketdemand however Geberitshouldnotbeoverly optimistic ImplicationtoGeberit Government sdirection Chinesegovernmentwillinvest100billionUSDininfrastructureconstructionacrossthewesternregioninthecoming10years invest24billionUSDinecologicalenvironmentprotectionandenhancement70 oftheloansfrominternationalfinancialorganizationandpreferentialloanstoChinesegovernmentwillbepouredintowesternregionGovernmentissuedextraincentivesandpreferentialtreatmenttoattractmoreforeigninvestmentinthewesternregionThewesternindustrystructurewillbeoptimizedtobemoreefficientandenvironmentalfriendlyToimprovefarmer sincome ThemassiveinfrastructureupgradeandconstructionwillcreatecertainmarketdemandforGeberit sproducts E g around20airportsinwesternregionwillbebuiltorupgradedinthenext5years apotentialmarketforPluviaandpublicproducts ThehouseholdincomeandthegeneraleconomicdevelopmentinwesternregionwillstilllagfarbehindtheeasterncoastalareainChina Itwilltakequitealongtimeforthewesttocatchup Geberitshouldnotbeoverly optimistictotargetatthevastbutpoorwesternmarket Source ChinaInfobank RB Panalysis China swesternregion avastlandwithrichnaturalresources lagsfarbehindnationaleconomicdevelopment Overview 1999 Geography Indicator Incomepercapita Landarea Population GDP GDPpercapita Westernregion 406USD SKM5 4mn 285mn USD133 2bn 467 4USD As ofnational 60 57 24 15 62 Accountfornomorethan4 oftotalcontractedandutilizedforeigninvestmentR