SEB group – Group10@Sophia

SEB group is a global leading company of small domestic appliance. The company name means Société d’Emboutissage de Bourgogne (SEB). It sells 6 products every second around the world and has launched famous innovative products which are now considerate as “must-have” in the domestic appliance domain.

The history of the company started 150 years earlier thanks to Antoine Lescure who initiated everything in 1857 in Selongey (next to Dijon in France). Eventhough Antoine Lescure started from scratch, the company is now leader on its market and has a turnover of about 4.6 billion euros in 2013 which means an increase of 2.5% in comparison to the previous year. (figures from BFMbusiness, Jones Newswires). The company has about 25 000 employees in 49 different countries. This is definitely a global company.

SEB group is composed of several subsidiaries that contribute to reach such a dynamic growth. Among them there are : Rowenta, Krups, Moulinex, Tefal, All-Clad, Calor or Supor in China.

The production is realized in 29 plants located all around the world: 12 in Europe (10 in France), 1 in the US, 3 in Brazil, 3 in Colombia, 5 in China, 1 in Vietnam, 1 in Russia and 1 in India. SEB has managed to keep its industrial sites in France thanks to the delocalization of its cheap domestic appliance products and a very intensive Research and Development strategy[1]Therefore 40% of the products are still “made in France” and the company belongs to the few that have never left the country. Products with an important added value are still manufactured in France even if the company owns manufacturing plants in countries such as China since the takeover of Supor in 2011.

As we said before, due to the competitiveness, SEB Group decided to implement an industrial reorganization plan. The world leader of the small electrical household appliances succeeded in maintaining a part of his production in France by focusing on the R&D, but they decided to offshore the low price segment. Concerning the products on which the brand has a leader position, they decided to keep some of the production in Europe, and the rest outside EU. For the latter, they conserve intern the R&D part (products and process). Finally, they decide to outsource the product that has become standard[2].

From an economic point of view, this strategy paid off. The group succeed to gain international recognition becoming a market leader in different area.

In the US, All-Clad and Mirro WearEver acquisitions, respectively in 2004 and 2006, led to reach complementary segments of market, offering culinary items from entry level model to the top of the range and to become North-American leader in this market. Acquisitions in Brazil and Italia in 2005, Colombia, Vietnam and India in 2001 and Egypt and Canada in 2013, allow the group to strengthen his worldwide influence. Moreover, the acquisition process of Supor (2007-2011), n°1 of culinary items and n°3 of small domestic appliances, allows him to seize the opportunity of important Chinese market potential.

The Group succeeds in combining growth and competitiveness by promoting innovation and flexibility, proposing a diversify offer and respecting a rigorous cost management. His differentiation and upgrade have permitted to improve his benefit margin and to re-invest in R&D, initiating a virtuous circle[3]. Emerging markets are still in an equipment phase (fast urbanization and middle class development), so the globalization is a constant opportunity as well as a competition-increasing factor. This is why the group understood the importance to constantly adapt its strategy and to bet on an innovative and diversify strategy ; diversified by its localization and by his offer.

If we consider the environmental issues, globalization lead to increased ecologic impact of transports, linked to manufacturing and commercialization. The group has strengthen his eco-logistics approach in 2008 in reducing his CO2 emission. Despite that, he registered an increase in its emissions of 16,7% from 2012 to 2013 (resulting from a methodological calculation evolution among the group). Its emissions rose by 253K tons of C02 today.

To improve his ecological impact, Seb orientates his action following 3 levers : Improvement of the rate of completion of the units of transport (lorries or maritime containers); development of alternate ways of road-transportation (waterway, rail) and the intensification of the requirements towards the carriers[4].

Last but not least, the social impact mitigates positive repercussions of globalization on the group. The outsourcing leaded to close factories in France (in Vosges, Jura and Sarthe) and to suppress 900 jobs in 2005 for example. In 2012, Seb group took a census of 6,000 French employees versus 25,000 in the world. Eventhough Seb proposes other solutions (geographical resettlement etc.) to people losing their job, the qualification level of jobs created through globalization is not the same as the jobs destroyed. And some people could assimilate this strategy to social dumping[5].

 

 

[1] i.e. Corinne Scemama, L’Express, “Pourquoi Seb garde la frite”, article published on 11.01.2012

[2] http://www.groupeseb.com/sites/default/files/publications/SEB2008.pdf.V11.pdf

[3]http://www.groupeseb.com/sites/default/files/publications/GroupeSEB_FinancialReport&Registration_document2012_0.pdf

[4] http://www.groupeseb.com/fr/content/eco-logistique

[5] http://www.blemaire.com/siad2/sit_07/MSImardi/Prudent_Guyot/delocalisations/une_delocalisation_industrielle.htm