The Companys Strengths Through the Implementation of Its Strategic Approaches – Case Study Example
Hansgrohe AG is a 109-year old company that has built a solid reputation in the sanitation sector as a leading innovator in kitchen and bathroom fixtures, particularly mixers, showers and shower systems. The company prides itself in creating original products that aim to define a more functional, more comfortable and more beautiful state of the art for bathroom appointments and fixtures. Hansgrohe products are visible in prominent prestige projects among which are the giant luxury cruiser “Queen Mary II”, in Terminal 5 of Heathrow Airport in London, and in the Burj Khalifa in Dubai, the tallest man-made structure ever built. Other sites include the Chancellor’s office in Berlin, New York’s Yoo luxury apartments, and the Masdar City Institute of Science and Technology in Abu Dhabi.
The Company was founded by Hans Grohe in Schilltach in 1901. Water as an element has always been a passion for the founder, as well as a commitment to accuracy, craftsmanship, and the meticulous working style attributed to his orientation in the Black Forest. These are values with which he imbibed his Company are the defining features that have made Hansgrohe the internationally renowned company it is today.
Hansgrohe is a private shareholding company and is therefore not listed for public trading in the stock market. Its shareholders are Masco Corporation (USA) which has 68 percent ownership in the company, and the rest (32 percent) is controlled by the Klaus Grohe family. Staying private is part of the management control and adherence to the standards of Hans Grohe that have defined the Company since its inception. With a nominal capital of € 61 million, the Company realized its most recent sales revenue of € 668 million and earnings before interest and tax (EBIT) of € 110 million. Profit realized for the year amounted to €78 million, for a net profit margin of 12 percent, at a time when the financial crisis has rendered double digit margins, let along positive profit, a rarity.
The Company has four brands by which it showcases its creativity and innovativeness. Its mother brand, Hansgrohe, has made a mark in innovative excellence in fittings in showers. Its second brand, Axor, is known for its exclusive designer collections for individual bathroom solutions. A third brand, Pharo, arrives at wellbeing solutions for the bathroom, and finally Pontos is renowned for its grey water recycling systems for the sustainable handling of resource water. The various brands showcase the Company’s strengths through the implementation of its strategic approaches, namely (1) innovation jump, (2) global speed and channel management, (3) productivity, (4) internationalization and streamlining of business practices, and (5) organizational development and reinforcement of management teams.
In the assessment of its annual performance, Hansgrohe’s productivity was seen to have increased by +1% with a reduction in working capital by -12%. It was also determined that sales revenue per employee increased to € 218,000, which is attributable to the positive results of the Company’s personnel incentive programmes as well as streamlining efforts that eliminated unnecessary costs and expenses. In the emerging markets, the Company’s sales increased by +12%, redounding to an overall contribution of international sales amounting to 80 percent of the Company’s total revenues. Of the total sales figure, 34 percent is attributable to the introduction of new products with significant innovative features.
Hansgrohe has emerged from its humble beginnings and is now a multinational corporation with ten production facilities in three continents, as well as sales companies and support locations in 36 countries. Its worldwide presence in the sanitation industry is distinguished by innovative products and excellent support service (Hansgrohe website).