3. WHAT IS THIS BUSH BOAKE ALLEN?
Manufactures flavor and fragrance chemicals and aroma chemicals for the
food, beverage, pharmaceutical, and household products industries.
The flavorings, including essential oils, seasonings, and spice extracts,
impart a desired taste and smell to a broad range of consumer products,
such as snack foods, confections, soft drinks, and alcoholic beverages. The
fragrance products appear in soaps, detergents, air fresheners, cleaners,
cosmetics, toiletries, and related products. BBA's aroma chemicals are
primarily used as raw materials in fragrance compounds.
“In BBA London Facility alone, houses 2000 different samples of strawberry
flavors which is a part of 26000 taste sample available for client demands”
4. STATS ABOUT BUSH BOAKE ALLEN
British chemicals manufacturer, founded Bush Boake Allen, Ltd. in 1966 by
merging W.J. Bush Ltd., A. Boake Roberts Ltd., and Stafford Allen Ltd. These
three companies dated back to the 19th century, with the oldest founded in
1833.
Mid to Large Size Company
Oligopoly Market
2000 Employees
3 Main Technical Labs – New Jersey, India and London
36 Labs around the world - to satisfy subjectivity of taste
$499 Million annual revenue in sales (1999)
Use of flavorist – Intellectual property
2 Major clients – Nestle and Unilever
President, CEO and Chairman – J.W. Boyden
6th in world of fragrance and flavor industry
India is the current biggest market with double digit growth consistently for 3
years
5. WHAT ARE THE ISSUE’S?
1)COMPETITION
- 6th in the world
- 300 competitors worldwide
- Speed and quality (some requirements have to be completed with 72 hours)
- Delivery lead time
- Consistency and Accuracy
2)SUBJECTIVITY OF TASTE
- Taste of Strawberry in Mumbai can be very different from the taste of Strawberry
in Amsterdam
- Unique markets, unique consumer tastes, unique client demands, no uniformity in
global perception of taste or aroma
3)CAPITAL & INVESTMENT
- R&D can cost any where from $2k to anywhere between $100-300K incurred
completely by BBA, with no guarantee of client business.
6. SWOT ANALYSIS
STRENGTHS WEAKNESS
1) Market Share - 6th Major Global 1) Human Capital - number of
Competitor flavorist
2) De-Centralized company structure 2) Capital – Availability of funds for
3) 36 labs globally - unique taste and R&D
flavors production. Close proximity to 3) Capital/Size of competitors
clients (oligopoly). Competition is intense
and significantly large
OPPORTUNITIES THREATS
1) Target developing countries -India is 1) Intellectual property - Industry
the biggest market, Brazil? dominated by trade secrets and no
2) Develop new markets – Diversify patterns
products 2) Limitations imposed by FDA and other
3) Joint Partnerships – In house with regulatory bodies
clients
7. WHAT SHOULD BBA DO?
RECOMMENDATIONS
Develop a universal base and master the engineering of
possibilities to easily tweak the base to create unique
combinations of flavors or fragrances. Patent this base.
Joint Partnership - mobility, sharing R&D cost, reduction
in lead time for production and delivery
8. WHATEVER HAPPENED TO BBA?
In 2000, International Flavors & Fragrances Inc.
brought over Bush Boake Allen for $970 Million Cash for
Stock Deal
With that deal International Flavors & Fragrances Inc.
is still the number in market share estimated worth around
2.8 billion USD
