1.0 Introduction from 21Th to 24Th June, I Have Gone to USA and Spent
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1.0 Introduction From 21th to 24th June, I have gone to USA and spent a week at the country for discussing our future collaborations with suppliers of health supplements. Two largest suppliers were chosen and compared. They are USANA Corporation and Shaklee Corporation. This business trip has two objectives: 1) To gather information about USANA Incorporated and Shaklee Corporation. 2) To examine products from these corporation. To gather information about Shaklee Corporation, I spent the first three days in California; a state which harbors Shaklee’s Headquarters. We managed to held meeting and site visit to Shaklee’s lab. On forth day and upward, I travelled to West Valley City, Utah to meet executives at USANA headquarters. However, we can’t discuss much as only short meeting in Salt Lake City were held. 2.0 Trip to Shaklee Corporation (21th to 22th June 2011) On the first day of my trip (21th June 2011) to Shaklee Corporation, a meeting was held in the Shaklee’s headquarters in Pleasanton, California. The objectives of this meeting are: 1) To discuss business opportunities with Shaklee. 2) To keep good relationship with Shaklee Corporation for future business opportunities. During the meeting, I managed to meet CEO or Chairman of Board of Shaklee Corporation, Roger Barnett and Shaklee International’s President, Bradford Richardson. However, I did not have the opportunity to discuss business matter with them as they have to attend another program. Therefore, the discussion was lead by Chief Marketing Officer, Mr. Brad Harrington. Surprisingly, other executive from management team also participated in this meeting such as Cindy Latham, The Senior Vice President (Marketing) and Laura Hughes, Senior Vice President (Sales and Field Development). The meeting started with a presentation about Shaklee’s founder by Mr. Brad Harrington. Afterwards, its followed by introduction of Shaklee Corporation and how they doing business by Laura Hughes. From the presentation, I learned that although Shaklee was a successful corporation in United Stated but the number of its branch is still limited to certain country such as U.S, Canada, Japan and China. Therefore, I proposed to open a branch in United Kingdom. My question was quickly answered by Cindy Latham. According her, despite this suggestion was a good idea; the corporation has to be concern about the economic crisis that occurs lately. Hence, longterm market monitoring programs need to be done in the potential area to make sure that branching is a success. During this trip, I also gained additional information about this corporation’s condition for the past ten years. Like other big companies in the world, Shaklee also has its upside down. However, they manage to keep it stable and maintain as one of most trusted health supplement in the world. All information about Shaklee was described below. 2.1 Founder of Shaklee Dr. Forrest C. Shaklee was born in 1894 in a farm in Carcisle, Iowa, USA. He is such a great person as he dedicated most of his life doing research that inspires millions of people from all over the world. By using his philosophy and Shaklee Corporation, he helped many people throughout the world both in term of health and wealth. After spend most of his life researching about the importance of nutrition to human health, Dr. Shaklee created Shaklee’s product in 1956’s. Together with his two sons, Forrest Jr. and Raleigh, they started distributing and selling nutritional supplements. The corporation sales plan at that time was based on Golden Role and Dr. Shaklee’s philosophy, “Thoughtmanship”. In his career, Dr. Shaklee has been awarded by many personal honors including special recognition from the California Secretary State. In 1975, he was appointed as Chairman Emeritus of Shaklee Corporation, a position he retained till his death in 1985 at the age of 91.the recognition of Dr. Shaklee not just restricted in nutrition industry, but also in philosophy and business. His name has appeared in many publications such Who’s Who in The West, Who’s Who in America, Who’s Who in The World and The International Register of Profiles. 2.2 Shaklee Corporation In the late 1970s, Shaklee Corporation has become a publicly traded corporation and was listed on the New York Stock Exchange. In November 1986, this corporation began to diversify by sign an agreement with RJR Nabisco to purchase Bear Creek Corporation for $1233 million; a direct marketing corporation that best known for its Harry and David Fruit of The Month Club (New York Times, 1986). Three years later (February 1989), Shaklee sold its 78 percent interest in Shaklee Japan to the Yamanouchi Pharmaceutical Corporation for $350 million, while maintaining its licensing agreement and continuing to collect royalty payments from the Japanese operations (New York Times, 1989a). However, a month later Shaklee Corporation received an unsolicited acquisition proposal from a group led by Irwin L. Jacobs, the Minneapolis financier known also by his nickname "Irv the Liquidator". Analysts placed the leveraged buyout value of Shaklee at $35 a share. The Jacobs group had been aggressively accumulating Shaklee shares, and disclosed it currently held a 14.98 percent stake in the San Francisco-based corporation. As return, Shaklee immediately declared a special dividend of $20 a share, as a way to discourage takeover interest in Shaklee. Despite that, the corporation disputed that view. Shaklee's anti-takeover provisions come into play when an investor reaches 15 percent (New York Times, 1989b). After a few tense weeks, during which time Jacobs increased his stake in Shaklee (New York Times, 1989c); Shaklee Corporation announced it was being acquired by Yamanouchi Pharmaceutical for $28 a share in cash, or about $395 million. The partnership of Yamanouchi with Shaklee in Japan helped make the transaction possible, and cast Yamanouchi as a "white knight" in helping Shaklee fend off the hostile takeover bid by Jacobs (New York Times, 1989d). Jacobs announced he would not challenge the Yamanouchi bid (New York Times, 1989e) and the deal with Yamanouchi was quickly finalized (New York Times, 1989f). Therefore, in 1989, Shaklee became a privately held corporation. However, in April 2004, Yamanouchi sold Shaklee Corporation to American billionaire Roger Barnett, managing partner of Activated Holdings LLC, for $310 million. Bear Creek and the Harry and David line were separated from the corporation and were sold to Wasserstein Perella & Co. for $260 million (New York Times, 2004). Barnett became the new CEO and Chairman of the Board of Shaklee Corporation. 2.3 Business method Dr. Shaklee found out that conversation was the best way to spread the message of health, because it's based on trust in the people you know. Instead of putting money into advertising and supply chains and storefronts, Shaklee believe that money is better spent by rewarding people who share Shaklee products with the people they know. Even as business grew, Shaklee Corporation has remained focused on the direct sales approach because it is the personal contact and services that give greater value to the customer, more than any other system of marketing. 2.4 Site Visit On the second day, I was invited by Brad Harrington to visit both Shaklee’s Laboratory in California; one in Hayward and the other one in Stanford University, Palo Alto. This time I was accompany by Laura Hughes. The visits objectives are: 1) To observed Shaklee Laboratory condition 2) To collect information about Shaklee’s product The laboratory in Harward is called The Forrest C. Shaklee Research Center. This facility was first served as laboratory in 1971, fifteen years after Dr. Shaklee founded Shaklee products. It has 52,000 square feet of space to research and development laboratories to bring scientifically based superior products to Shaklee customers. This visit was devoted to give me an experience to see and feel how Shaklee’s products were different from other companies’ health supplement. At the research center, I got warm welcomed by Dr. Carsten R. Smidt, Chief Scientific Officer from Research and Development Unit. First, I saw a short movie about history and general outline about The Forrest C. Shaklee Research Center then followed by a facility tour. 2.4.1 Facility Tour During about that 3 hour, Dr. Smidt showed me various modern facilities and components they have at the research center. First, he brought me to quality control laboratories. These laboratories were set to examine the finished product to ensure that final products follow certain standard. In the lab, he explained in details about every object that he showed me. For instance: stability chamber, a chamber used to verify the life of the tablets; tablets hardness tester, small machine that use to test the hardness of tablets; disintegration tester; a tube that test tablets dissolve in condition similar to our stomach; High Pressure Liquid Chromatography (HPLC), most expensive instrument to identify raw materials in finished product; Inductive Coupled Plasma Spectrophotometers (ICP), a machine that measure quantity of minerals in finished product; Infrared Spectrophotometers, use to identify material for minerals identification; After the quality control lab visit, Dr. Smidt explained how the finished product was made. First, he brought me to a vast raw material storage. The warehouse is so large about 36,000 square meters. Here they explained the details about how they manage such large warehouse. In this warehouse, they keep about $15 million inventory of raw materials. Electronic bar code system was used to identify incoming and outcoming raw materials. Afterwards, I was brought to a room called Pharmacy Area. This room functioning as place for prepare raw material to be blended together. Therefore, every formula has a standard operation procedure and all blends must have uniformity regarding the particle size.