Colgate’s Distasteful Toothpaste

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1.Identify the major strategic and ethical issues faced by Colgate in its partnership with Hawley and Hazel. In August 1985, Colgate bought a 50 percent partnership in the Hawley and Hazel group, an Asian company leading the toothpaste markets of China, Taiwan, Hong Kong, Singapore, Malaysia and Thailand. This strategic move was initiated because Colgate already had a strong presence on foreign markets and notably in Europe, so it decided to enter the Asian markets with a partnership with a strong and well-known company. Even though this was a 50 percent partnership, Hawley and Hazel kept the right to make the major decisions, which Colgate could not do. Soon enough, Colgate was faced by a major issue: Hawley and Hazel’s main product “Darkie” was subject to a wave of dissatisfaction among the civil rights groups of the United States. Indeed, “Darkie” toothpaste’s logo, marketed in Asia since the 1920s, had been inspired by the comedian and singer Al Jolson, who used to paint his face in black to entertain his audience. The founder of “Darkie” thought that a black-faced logo with white teeth would attract customers, which worked really well and the soon “Darkie” became the leader in the Asian toothpaste market. When Colgate initiated the partnership with Hawley and Hazel, it did not realize that a product sold only on the Asian market could have an impact on its image from the domestic market. US minorities and civil rights groups, with the help of the ICCR (Interfaith Center on Corporate Responsibility) who started the fight a few years after Colgate and Hawley and Hazel joined, reproached the company for using a very offensive logo and brand name for its product. Colgate tried to justify itself by explaining that it had been initiated with a good intention from the founder’s admiration for Al Jolson. Also, in the Chinese culture, imitation is considered as an important form of flattery and respect. Therefore, in spite of the critics and pressures, Colgate did...
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