financial report and registration document 2011 - Groupe SEB

1 Business
Presentation of the Group
sectors
Separate and complementary business models
To respond to broad demand ranging from first utility products to
sophisticated solutions, a combination of three complementary approaches
is used:
� an offering of basic, plain, low-priced products consisting almost entirely
of fi nished articles procured in countries with low-cost production factors
and which are used for rapid renewal of product ranges or promotional
offers. The research process is then non-existent, development is short and
simplifi ed, marketing and sales budgets are cut to a minimum (promotions,
for example). These entry-level products are mostly sold without being
branded or under a retailer brand. In moderate growth, they represent a
still modest portion of the small domestic appliance market because they
concern a limited portion of the existing product offer;
� the development of good-quality mid-range products. The idea is
to propose a full range for consumers to differentiate and renew their
equipment: breakthrough products, innovative functions and unique
benefi ts, resulting from a robust innovation approach – advanced high-tech
performance, easy to use and clean, user-friendly, time-saving, design,
Multiple forms of competition
The Small Domestic Equipment market is very fragmented globally, both
in small domestic appliances and in cookware. In practice, changes in the
sector over the last ten years – with, in particular, the increased relocation
of production to countries with low production costs – have greatly changed
the way of approaching markets, more local today than global. The launch
of international brands, which can in some cases be marketed under
local/regional brands, allows for a two-sided market approach that takes
advantage of economies of scale as well as the value of local market share.
To this end, Groupe SEB is the only player with such a broad international
spectrum, and it draws on this strength and on the prime positioning of its
local brands when marketing its six international brands.
The Group has numerous and various competitors worldwide, but few of
them have truly global coverage:
� Philips is certainly the Group’s foremost rival through its large and
small domestic appliances and its presence on almost all of the
world’s continents. Other industry giants with extensive offerings and
international coverage include DeLonghi (DeLonghi, Kenwood, etc.),
Procter & Gamble (Braun, Oral-B), Bosch-Siemens and Conair (Babyliss,
Cuisinart, etc.). In cookware, competitors include the US group
Meyer (Silverstone, Farberware, Prestige, Anolon, Circulon, etc.) and the
German brands WMF (WMF, Silit, Kaiser, etc.) and Fissler;
� other players are primarily present in their domestic market or a few
reference markets: Magimix, Taurus, Imetec, Severin and Staub/Zwilling,
specifi cally in various European countries; Spectrum Brands (Black &
Decker, George Foreman, Russell Hobbs, Remington, etc.) and
Jarden (Sunbeam, Mr Coffee, Oster, etc.) in North America, for
example; Mallory, Mondial, Britania and Tramontina, among others, in
handy storage, and many more tangible features for consumers. For retail
distribution, the approach translates into point-of-sale promotions and
store shelf layouts with the support of a steady marketing and advertising
policy and an established customer service. This segment still represents
the strongest part of the market, and the shrinkage factor in favour of
higher-end and entry-level products (hour-glass effect) has now stabilised;
� focus on the high-end market segment with carefully designed products
which meet strict criteria of quality, results or appearance. These articles,
leveraged by premium brands, are aimed at demanding consumers and/
or experts, looking for status symbols or high-value service. Thanks to a
recent boom, these ranges are now marketed by dedicated sales teams
who build genuine partnerships with selective distributors in order to
exploit and optimise the huge development potential of these products
over the long term. The segment is still sensitive to the economic situation,
as demonstrated by the 2008-2009 crisis.
These three market approach models are used together in nearly all mature
markets and are beginning to appear in certain emerging markets.
South America; Zelmer in Central Europe; Panasonic (also including the
National brand) and Tiger in Japan; Maspion in Indonesia; Midea, Joyoung,
Airmate and ASD in China, etc;
� numerous high-end specialists concentrating on one or two product
segments – such as Dyson, Vorwerk, Jura and Laurastar, etc. in small
domestic appliances – or on a special area of expertise, like French
company Le Creuset, which specialises in cast iron cookware.
At the same time, another form of competition continues to grow with
“non-branded” products and retailer brands. These competitors offer a
predominantly entry-level range, which is aggressively priced as a result of
one-off contracts with Chinese subcontractors, and aim mainly to generate
traffi c at points of sale.
The market dynamism remains primarily driven by large European groups
such as Groupe SEB, Philips, Bosch Siemens or DeLonghi, which develop
new products and concepts, open up new categories and set up in new
territories. By doing this, they are winning market share, enjoying economies
of scale and improving their competitiveness in terms of production, R&D and
retail distribution. Meanwhile, national players have grown stronger in
recent years, boosting specifi c targeted offerings tailored to the markets.
Furthermore, the development of local competitors can be seen in booming
Asian emerging markets.
In general, competition has become fi erce in recent years, both with regard
to small domestic appliances and cookware, largely as a result of retail
distribution, especially supermarkets, which enjoy an ever-increasing
presence in this market with their own product lines and are able to exert
stronger pressure on prices.
8 GROUPE SEB Financial Report and Registration Document 2011