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e-Business in the chemical, rubber and plastics industry5.4 Medikémia (Hungary)AbstractMedikémia is a medium-sized manufacturer of cleaners for cars, housekeeping andPCs, aerosol paints, insecticides and pesticides, and ingredients for construction. Thecompany was founded in 1967 and is located in Szeged, Hungary, with 100%Hungarian ownership. Medikémia sells its products mainly to wholesale traders both onthe local and foreign market.Medikémia uses ICT-based applications in all their organisational processes frommanufacturing to selling. For example, they use ICT-based quality control, computerassistedsupply chain management and e-marketing. This case study tries to assessthe impact which the increasing use of ICT and e-business has had on Medikémia'scompetitiveness, performance and organisation. Findings indicate that ICT-basedinnovation and e-business adoption have been essential to survive in the market. ICTenabled the firm to rationalise their intra-organisational processes, which lead toworkforce reductions.Case study fact sheetFull name of the company:Medikémia Ipari és Kereskedelmi Zártkörűen MűködőRészvénytársaságLocation (HQ / main branches): Hungary, 6728 Szeged, Zsámbokréti sor 1/AMain business activity:Year of foundation: 1967Number of employees: 136Turnover in last financial year:Primary customers:Most significant geographic market:Main e-business applicationsstudied:Case contact person(s):Manufacture of products for maintaining and cleaningcars, aerosol paints, cleaners for housekeeping,insecticides and pesticides, ingredients for constructionsand cleaners for PCsabout €8 millionWholesalers, retail dealers and multinational companiesHungary, Romania, Slovakia, Ukraina, Montenegro,Germany, MaltaICT and e-business impacts on employment andworkforce compositionMr Attila Rózsa, Head of Marketing Department5.4.1 Background and objectivesCompany profileMedikémia is one of a few chemical companies in Hungary having 100% Hungarianownership, being a profitable joint stock company, and dealing only with Hungarianproducts.Medikémia was established in 1967. In the early years, its main activity was theproduction of medicinal balm. In 1976, Medikémia started developing car maintainingproducts (such as brake fluid and anti-freeze fluid) which were not available in theHungarian market at that time. These products became highly successful. In 1986151
e-Business in the chemical, rubber and plastics industryMedikémia introduced a new brand, "Prevent", which unified all car products. In 1993 itchanged its legal profile from a small co-operative (which was the only legal profile ofprivate firms at that time) to a joint stock company. In 1993 many new products wereintroduced; by 1995, all products which the company sells today were established.Medikémia produces about 450 kinds of products. 70% of the sales are in the Hungarianmarket. The remaining 30% of sales are exports, mainly to Romania, Slovakia, Ukraina,Montenegro, Germany and Malta. The main brands are:Prevent: car maintaining productsHippolit: housekeeping productsMaestro: paint productsProfix: construction and installation productsChip: electronic cleaner productsKentaur: store products.The most important sales and distribution partners of Medikémia are wholesalers andlarge retail chains such as MOL, SHEL, CORA, METRO and TESCO.Increase in competition since 2000After 2000, Medikémia has been confronted with the biggest increase in competition ever,as several big multinational companies entered the Hungarian market. “Prevent”, thecompany’s most important product, is still market leader in the Hungarian market andprobably in the Eastern European market as well. This product line does not really haveserious competitors in the Hungarian market. All other products, however, are challengedby serious competitors. “Hippolit”, for example, is in competition with Caola and Comfortproducts. For “Profix”, the main competitors are Henkel, and “Chip” competes with 3M.Medikémia does not directly sell to end users. Its main customers are wholesale traders,retail dealers, multinational companies and petrol stations. In these customerrelationships, e-business is very important for marketing, sales and logistics. A keychallenge for medium-sized producers as Medikémia in dealing with retailers is that theycompete with big multinational brands which can offer better prices, in particular inelectronic auctions.Medikémia positions itself in the premium quality segment in the case of “Prevent” and“Maestro” products. In the case of products for housekeeping and construction,Medikémia always considers the best price/quality ratio. That is why Medikémia haslower prices for “Hippolit” or “Chip” products compared with, for example, competingproducts such as “Pronto” or “3M”. The “Kentaur” products are the cheapest products ofMedikémia, and are equivalent for “Tesco” or “Winny” products in Tesco or Cora.However, as Mr. Rózsa, Head of Hungarian Marketing and Sales Department, says, thequality of Medikémia’s Kentaur product "is in the medium range, which in Medikémia’s152
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