Bush Boake Allen
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Bush Boake Allen (BBA) is a British manufacturer of flavor and fragrance chemicals used in food, beverages, and household products. It operates 36 labs worldwide to satisfy different tastes across global markets. While BBA holds 6% of the global market share, it faces strong competition and high research costs. To address these issues, the document recommends BBA develop a universal flavor base that can be tweaked for unique combinations, and pursue joint partnerships to share R&D expenses. In 2000, BBA was acquired by International Flavors & Fragrances for $970 million.
Bush Boake Allen
- 1. CASE REVIEW
- 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