Colgate Palmolive Casa Study

Topics: Colgate-Palmolive, Toothpaste, New York City Pages: 15 (4141 words) Published: October 7, 2012
History, Development and Growth of Colgate-Palmolive Company Beginnings
In 1806, when the company was founded by 23-year-old William Colgate, it concentrated exclusively on selling starch, soap, and candles from its New York City-based factory and shop. Upon entering his second year of business, Colgate became partners with Francis Smith, and the company became Smith and Colgate, a name it kept until 1812 when Colgate purchased Smith's share of the company and offered a partnership to his brother, Bowles Colgate. Now called William Colgate and Company, the firm expanded its manufacturing operations to a Jersey City, New Jersey, factory in 1820; this factory produced Colgate's two major products, Windsor toilet soaps and Pearl starch.

Upon its founder's death in 1857, the firm changed its name to Colgate & Company and was run by President Samuel Colgate until his death 40 years later. During his tenure several new products were developed, including perfumes, essences, and perfumed soap. The manufacture of starch was discontinued in 1866 after a fire destroyed the factory. In 1873 Colgate began selling toothpaste in a jar, followed 23 years later by the introduction of Colgate Ribbon Dental Cream, in the now familiar collapsible tube. By 1906 the company was also producing several varieties of laundry soap, toilet paper, and perfumes. Colgate & Company shifted its headquarters to Jersey City in 1910.

While the Colgate family managed its manufacturing operations on the East Coast, soap factories were also opened in 1864 by B.J. Johnson in Milwaukee, Wisconsin (under the name B.J. Johnson Soap Company), and in 1872 by the three Peet brothers in Kansas City, Kansas. In 1898 Johnson's company introduced Palmolive soap, which soon became the best-selling soap in the world and led the firm to change its name to the Palmolive Company in 1916. The Peets, who sold laundry soap mainly in the Midwest and western states, merged their company (Peet Brothers) with Palmolive in 1926, forming Palmolive-Peet Company. Two years later that firm joined with Colgate & Company to form Colgate-Palmolive-Peet Company, with headquarters in Jersey City. Palmolive-Peet's management initially assumed control of the combined organization.

On October 25, 1929, management signed an agreement to merge the company with Kraft Phoenix Cheese Corporation (forerunner of Kraft Foods) and Hershey Chocolate Company. The three companies would continue to operate independently, but they would become subsidiaries of a holding company slated to be called International Quality Products Corporation. Just four days after the deal was signed, however, the stock market crashed, forcing the huge amalgamation to be scuttled. In the wake of the crash, the Colgate family regained control of Colgate-Palmolive-Peet and installed Bayard Colgate as president in 1933.

International Expansion
Colgate & Company had been a pioneer in establishing international operations, creating a Canadian subsidiary in 1913 and one in France in 1920. In the early 1920s the firm expanded into Australia, the United Kingdom, Germany, and Mexico. Colgate or its successor firm next created subsidiaries in the Philippines, Brazil, Argentina, and South Africa in the late 1920s. In 1937 the company moved into India and by the end of the 1940s had operations in most of South America. By 1939 Colgate-Palmolive-Peet's sales hit $100 million.

In the 1940s and 1950s the company also built upon its strategy of growth by acquisition, buying up a number of smaller consumer product companies. Organic growth remained on the agenda as well, and in 1947 the company introduced two of its best-known products, Fab detergent and Ajax cleanser. These acquisitions and new products, however, did little to close the gap between Colgate and its arch-rival, the Procter & Gamble Company, a firm that had been formed in the 1830s and had by now assumed a commanding lead...
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