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Lubricating Shell’s growth in Thailand

When a company seeks top-line growth and business simplification, partnering with an experienced Market Expansion Services provider with an extensive distribution network and infrastructure, solid expertise and years of experience, is an obvious route to take. While outsourcing services is always an option, selling off an entire distribution operation so that the company can concentrate on its core business has also proved a smooth path to success.

Shell in Thailand

Challenge
Shell is a global energy and petrochemicals group with around 101,000 employees in more than 90 countries and territories worldwide. Headquartered in The Hague, in 2009 the company was ranked No. 1 among the Fortune 500, with global revenues of over USD 278 billion. The Shell Company first began operations in Thailand in 1892 and is a major presence in the kingdom today, its products trusted by millions of customers.

Facing the challenge in Thailand of increasing its lubricants growth levels while streamlining its business operations, Shell examined all its options and took the decision to sell its Shell Distribution Company, a subsidiary of the Shell Company in Thailand, to global Market Expansion Services leader DKSH.

The Shell Distribution Company is the primary sales and distribution platform for Shell lubricant products on the high street in Thailand. After extensive negotiations, DKSH acquired 100% of its shares in February 2010, together with its staff of 205 based at 27 sites across the country.

Approach
After detailed analysis conducted during the transition phase of the takeover, DKSH implemented revised performance measurement and reward schemes for employees and ran comprehensive training programs covering basic call procedures, product knowledge, and distribution policies. DKSH also introduced new standards for promotional activities.

Other activities included finding synergies with DKSH’s existing sales set-up, reviewing sales team routings to ensure optimal retail coverage and upgrading the salespeople’s PDAs as a way to enhance efficiency and effectiveness.

As part of its comprehensive Market Expansion Services offering, DKSH is also working closely with the Shell Company to evaluate its existing supply chain model in order to find savings in primary transportation and lead times.

Results
Thanks to the commitment of both companies, the transfer of ownership went smoothly and the newly-integrated team continues to deliver excellent customer service and improved sales results. DKSH’s expertise is not only helping to improve the professionalism and effectiveness of the sales force – it is also expanding market coverage for Shell through leveraging DKSH’s extensive existing network. Shell initially served 10,000 high street retail outlets, but is now on track to meet its target of placing its products in a total of 20,000 garages and auto-part stores nationwide. Achieving this ambitious goal will satisfy Shell’s customers’ expectations for product purchasing convenience, while significantly expanding the market for its high performance lubricants.

Market Expansion Services: leveraging expertise and networks while reducing costs and risk
DKSH has proved its ability to seamlessly integrate Shell’s operations into a wider platform. Today it is providing better service to both the company and its customers, delivered with less complexity, lower risk, and reduced fixed costs, along with greater market penetration. By selling its distribution operation to DKSH, Shell has secured a smooth-running engine of growth for many years to come.