The success of Bahlsen in France

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The success ofBahlsen in France

• Best in France Case Study
• December 2005

By Ms. Gounou Ehssane Ms. Grassl Stephanie
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Executive Overview

• I. History Business
• II. Products Clients
• III. Coming to France
• IV. Company values French culture

• V. Constraints in France
• VI. Adaptation to France
• VII. Key success factors
• VIII. Recommendations

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I. History Business
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History

• 1889 Hermann Bahlsen starts his own
  biscuiterie in Germany
• ? Creation of new products umbrella brands
• 1960 First sales offices in France Italy
• 1994 Merger with biscuits St Michel
• Bahlsen St Michel SAS
• Two family companies
• Through this acquisition the mother
  company Bahlsen extends its portfolio

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Bahlsen St Michel 2005

• Part of the group Bahlsen Germany
• 3700 employees
• 542 million euros of sales
• Exports to more than 80 countries
• Presence in Europe, North America Asia
• Bahlsen St Michel France
• 124 million euros of sales
• 476 employees
• ? France is an important location (second
  headquarter)

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France

• Headquarter Rueil Malmaison
• St Michel Production of St Michel cookies
• Commercy Production of patisserie

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II. Products Clients
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Products
Distinction between brand St Michel and Bahlsen
Bahlsen Produced elsewhere
St Michel Produced in France
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Products

• Product lines are hardly being discontinued
• innovated all the time in order to exploit the
  product
• lines to maximum level.
• Innovation
• Remarkable
• Variation of tastes and forms
• Adapt to new tastes of the consumers
• Innovation product Bahlsen ? Done in Europe
  France has little influence on them
• Innovation of brand St Michel ? Done in France

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Location choice

• Reason for location choice
• Resources
• Capacity
• Cost
• But for the Brand St Michel the location choice
  was
• different
• More historical than strategically
• St Michel is a specialité Française
• In France maximum production capacity
• has been reached!

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Bahlsen in Europe
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Clients

• Distribution channels
• There are two circuits
• GMS (grandes et moyennes surfaces) 80
• CHD (consommation hors domicile) 20
• Products sold in all big supermarkets ? good
  reference
• French customers know
• 97 St Michel
• 91 Bahlsen
• Brands are perceived independent
• Big change to transform St Michel into Bahlsen
• But must that be the task?

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Positioning

• Publicity more for Bahlsen then for St Michel
• 2 brands in one company
• 2 different marketing departments
• 2 different directors
• 2 different teams
• Positioning of products is different, because
• Different segments
• Different price consummation pattern
• Different image

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Differences

• St Michel
• Traditional (100 years)
• Already loyal consumers
• Family product
• Specialité Française

• Bahlsen
• Modern
• Innovative
• Younger people

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• French presence is important in order to get
• closer to the consumers !

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III. Coming to France
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Why coming to France

• Bahlsen already exported to 74 countries in 1956
• They wanted to open up the French market
• 1960 ? Bahlsen in France
• No fast penetration of the market
• 1994 ? Acquisition of St Michel
• Complementarity
• ? Products sucrés et salés
• ? Direct contact with customer

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With the sales realised in France, it is
profitable to be in France costs are
relatively low
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• IV. Company values French culture

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Company values I

• No real problems when Bahlsen came to France
  concerning the cultural values
• BUT
• Problems occurred when buying St.Michel.
• ? St.Michel had to change its point of view
• - Former company with small structure
• Family business
• Reporting
• Acceptance of being in a big company
• Not only decision maker
• Less autonomy

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Company values II

• The key values are
• Quality
• Informing the consumer
• Health issues
• Regular quality controls
• Bahlsen succeeded because
• Business structure culture
• Informal behavior
• Exchanges in RD
• This lead to an approach of the companies
• but the transition took time
• New ways of communication with headquarter

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V. Constraints in France

• Not as many differences between Germany and
  France legal or fiscal ? EU
• Production cost
• Only RH costs which may concern in the future
• Differences concerning French labor law
• - 35 hour work
• - long-term constraints of firing personnel

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VI. Adaptations undertaken

• No dramatic changes undertaken
• European culture
• Having to report
• French working culture
• International orientation
• No international recruiting (depends more on the
  individual profile)
• Bahlsen France is more  French 
• Former international trainee programs but too
  costly
• ? now there is only the reporting and the
  product exchange

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Adaptations undertaken

• No much integration of French managers in the
  international organization.
• Not many exchanges in the management
• it depends on the department, for ex. many
  engineers exchanges
• Key constraint costs
• Higher RH costs
• No real communication constraints

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VII. Key Success Factors

• High quality of products due to many standards
• Strict selection of ingredients
• ? Instead natural, healthy ingredients for
  products
• Then there is the European regulations
  certification IFS (international food standard)
  and ISO
• Innovation
• Big stabile market with stable and high sales
• Central location in France
• The high quality of life
• The savoir-faire the tradition
• Qualified labor market
• Political stability

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VII. Key Success factors

• Informal culture ( Mr. Bahlsen)
• Reporting ?? you feel protected because you
  belong to a big group
• However
• Future investments in Europe are not sure
• ? but at least feeling that Bahlsen is
• attached to its employees

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VIII. Recommendations

• Before coming to France
• Having right portfolio of products for that
  country
• Being close to your customers
• Good reference
• EU
• Motivation
• Analyse before implementing
• Adaptions while in France
• Keep the spirit of family company
• Innovation of products
• Quality ? savoir-faire

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VIII. Recommendations

• Choose right distribution channels ? negotiation
  power
• Acknowledge differences between certain brands
  and position them differently
• Do not want to copy Bahslen Germany in France
• Keep your own identity
• Do not impose too much from the headquarters
• Look at the needs of local customers
• Future Investments
• Economies of scale
• Exchange in skills
• Be careful with employees when making tough
  decisions

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Do not be afraid of differences
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We Thank

• Valerie Sajot,
• Human Ressources Development
• 22-24, rue Victorien Sardou
• 92563 Rueil-Malmaison
• Telephone [phone]
• Valerie.sajot_at_bahlsen.com
• Melanie Andre
• Human Ressources
• 22-24, rue Victorien Sardou
• 92563 Rueil-Malmaison
• Telephone [phone]
• Melanie.andre_at_bahlsen.com

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Bibliography

• www.bahlsen.com
• www.bahlsen.fr
• Presentation Bahlsen France
• The Global Challenge Evans, Pucik, Barsouk
• Questionnairy Best in France

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Our Team

• Gounou Ehssane
• - Current address
• K038, 1, rue de la Libération
• 78351 Jouy-en-Josas, France
• - Permanent address
• Verdistraat 256, 5343VM Oss, The Netherlands
• Grassl Stephanie
• - Current address
• K040, 1, rue de la Libération
• 78351 Jouy-en-Josas, France
• - Permanent address
• Esterbergstr.39, 81377 München, Germany