GSK Consumer Health
Providing clear strategic guidance for a $10.9bn joint venture
Services: Consumer Insight | Quantitative Research | Qualitative Research | Growth Strategy | M&A Strategy | Brand Strategy | Brand Positioning | Proposition Development | Portfolio Strategy
Restructuring an enormous merged global healthcare portfolio for GSK
Challenge
In 2014, GSK and Novartis merged their OTC healthcare business into a single joint venture, creating one of the largest businesses of its kind in the world.
Overnight, it became clear that there were significant issues with the structure of that portfolio and the roles the brands within it played. With revenues of $10.9bn, there was a pressing need to find a partner to help the two businesses deliver the value they expected to realise from the deal.
Clear’s expertise in managing M&A driven transformation within complex consumer brand portfolios, combined with the fact that we had worked with both businesses for a number of years, meant we were perfectly placed to be that strategic partner.
Clarity
So how do you optimise your portfolio and grow at the same time?
Balancing the profitability of individual brands with the changing needs of consumers is the foundation of a Clear approach.
Our Growth Map is a multi-dimensional segmentation of functional and emotional needs, overlayed with commercial data, shopping behaviour and more at a global level. It delivers a consistent, global framework for marketing strategy, underpinned by rigorous commercial analysis.
That clarity is particularly useful when you’re a leader looking to define clear roles for a portfolio of brands and to avoid unnecessary cannibalisation of market share. In a category where you’re a multi-billion dollar player, that’s priceless.
Collaborative growth, underpinned by clarity
Solution
We created a clever data driven approach to brand positioning – which underpinned transformative innovation.
The commercial rigour sized the prize. The human understanding gave us the ability to develop propositions and new innovations that tapped into developing consumer attitudes.
Our work allowed GSK and Novartis to define an effective brand positioning for each of their existing brands. But beyond that it also highlighted the white space opportunities being missed by the competition. In combination with additional qualitative exploration, it allowed us to focus in on the real-world triggers, frustrations and barriers that consumers faced.
Results
Our work delivered clarity at a time when the businesses and marketing teams that worked for them were managing significant change. Clear’s simple, globally understood platform for growth became a marketing touchstone. It built connectivity and common ground between and across multidisciplinary teams.
GSK’s Consumer Healthcare business reported sales of £7.8 billion in 2017 and since 2015 sales have grown 4% on a 3 year CAGR basis (2015-2017 at 2014 CER) with an overall improvement in operating margins from 11.3% in 2015 to 17.7% in 2017.
100% of the innovation ideas delivered exceeded IPSOS Action Standards.
Between 2014 and 2017, GSK’s share of the digestive health category grew 4.3% to 6.8% globally, driven largely by the Tums brand.
GSK made the decision to buyout Novartis’s stake in the JV in March 2018.