Preview

Gillette’s Energy Drain (a): the Acquisition of Duracell

Powerful Essays
Open Document
Open Document
4251 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Gillette’s Energy Drain (a): the Acquisition of Duracell
Gillette’s Energy Drain (A): The Acquisition of Duracell

MACK Consulting
Michelle Neill, Ali Nassem, Cindy Arsenault, Krystal Mayne, Charlene Ford, Laura Robertson
March 20, 2008
Bus 491 - Gary Evans PROBLEM STATEMENTS – STRATEGIC ISSUES
The Duracell Division of Gillette has lost market share and failed to move forward in the last four years, which may be the result of a lack of strategic vision and/or mandate from Gillette’s Board of Directors. It is our opinion that perhaps too much emphasis or “hype” was placed on the acquisitions potential and not enough effort has been re-focused on maintaining the Duracell Division itself.
Gillette, and certainly Duracell, needs a revamped strategy to increase its market share and minimize its marketing and operating costs.
IT IS MY OPINION THAT HERE THE 5 POINTS SHOULD BE MOVED AS OUR STRATEGIC ISSUES. Also, the last point on page 4 regarding Energizer and Walmarts relationship, I believe, should also be included as a strategic issue that should be touched on in the final analysis, because in my opinion, this is a big issue. Duracell needs to improve its supplier/retail relationship!

So, Duracell needs to improve the relationship with retailers to improve its sales, should Duracell go back to the “old” ways or acquire a competitor……………….what does everyone else think

Also, the changes that I made I did not mark so everyone could read it over and see if it flows in stead of putting more enphasious on my changes alone…..

Krystal

Let me know what you guys think.
INTRODUCTION/ANALYSIS OF THE BATTERY INDUSTRY

The competitive landscape changed considerably after Gillette’s acquisition of Duracell in 1996. Prior to the purchase, Duracell’s competition was mainly from Energizer, who was the worldwide leader in dry cell batteries. The original Energizer held a market share of 36.6% in 1997, dropping to below 30% by the year 2000 with their operating revenues dropping as well.

Competition was also

You May Also Find These Documents Helpful

  • Powerful Essays

    HBR Paramount Clean Edge

    • 2283 Words
    • 10 Pages

    Paramount cannot afford in failing to inadequately implement Clean Edge products in the Super-Premium razor market but if we appropriately engineer three factors: Branding, positioning and accurately allocate a marketing budget we can be successful in the launch of Clean Edge. In 2009, Paramount earned $170 million in revenue and $26 million in gross profit in the nondisposable razors and refill cartridges. We currently do not have any razors in the Super-Premium segment. Our biggest competitor Prince, has two razors in the Super-Premium segment and earned $224 million in revenues and $45 million in operating profit. By positioning Clean Edge in a mainstream position, branding Clean Edge as “Paramount Clean Edge” and allocating $4 million dollars of the trade promotion to consumer promotions we would not only stay under our marketing budget for the year but analysis shows we could generate a 20% increase in revenue the first year alone.…

    • 2283 Words
    • 10 Pages
    Powerful Essays
  • Better Essays

    Another factor that the companies have to analyze is the objective customer. Changes in this item arise when potential clients are identified, which currently is not being prioritized as to marketing, sales and distribution. Of all the elements it is the least used, but however it can present excellent opportunities for growth. Also, the corporation may use the new technologies. These new technologies are the result of research and development scientists and engineers, and represent a fundamental part of innovation (Gitman & McDaniel, 2007). Thus, “Duracell Powermat” will fulfill this concept to Starbucks, because it will service its regular client and will be an attraction to those who do…

    • 1104 Words
    • 5 Pages
    Better Essays
  • Good Essays

    Rayovac Case Analysis

    • 1366 Words
    • 6 Pages

    - In Canada the overall battery market is 300 million; 70% of which is the alkaline category, 20% other, and only 10% the rechargeable category. In order for a company to be successful they needed to be involved in the alkaline segment.…

    • 1366 Words
    • 6 Pages
    Good Essays
  • Satisfactory Essays

    Gillette Fusion

    • 678 Words
    • 3 Pages

    In order to increase total sales and put Gillette Fusion on track to be a $1 billion business in the next few years, Gillette Fusion should launch a new advertising campaign and reduce cartridge package prices by 20% with the introduction of a onetime coupon.…

    • 678 Words
    • 3 Pages
    Satisfactory Essays
  • Satisfactory Essays

    In 1996, Gillette acquired Duracell batteries for $7.3 billion in stock. The purchase was met with optimism not only by Gillette's senior management and its highly visible director, Warren Buffett, but also by Wall Street analysts. Despite the initial enthusiasm, Duracell had become a drain on Gillette's performance and had brought an end to Gillette's impressive earnings growth history. It had also cost Michael Hawley, a former CEO, his job after only 18 months in the position, due to his inability to turn around the financial hemorrhaging at the Duracell division.…

    • 457 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Considering consumer trends, and the company’s current outlook, changes need to be made. The strategies I recommend are to market the company as a more receptive brand in the United States as well as looking to penetrate international markets while closing down underperforming…

    • 3442 Words
    • 14 Pages
    Powerful Essays
  • Powerful Essays

    Rayovac Case Study

    • 2009 Words
    • 9 Pages

    on price. They price their alkaline batteries below Duracell and Energizer to gain market share.…

    • 2009 Words
    • 9 Pages
    Powerful Essays
  • Good Essays

    Back Bay Battery Strategy

    • 771 Words
    • 4 Pages

    Market data analysis stressed two main facts: i) the promising potential of ultracapacitors and ii) surfacing mature market conditions for conventional NiMH batteries. The first piece of information implied that it would be critical to beat the competition and be the first company to offer customers the features and benefits they demanded in the new product. That would have allowed Back Bay to gain a competitive advantage and keep existing customers (that could easily switch from the company’s conventional batteries to the company’s ultracapacitors) as well as attract new ones. The second piece of information implied that demand for my core business products would soon start to decline and that a price war would be inevitable. It became clear to me that to sustain growth for Back Bay I had to focus my R&D efforts on innovative products as demand for NiMH batteries would slowly drift away towards the adoption of new technologies. From a financial standpoint, it was important to do it while my NiMH business was highly profitable so that I could use the cash it generated to fund innovation in the ultracapacitors line. For these reasons, my strategy was to invest heavily in:…

    • 771 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Currently, Gillette’s operating segments include personal grooming, small appliances, and oral care products, and the portable power segment. In the portable power segment, Duracell’s major competitors consist of Energizer and Rayovac while new and emerging ones included Sony, Kodak, Panasonic, and other private label brands. The collective entrance of these competitors in the 1990s is the primary reasons for Gillette’s lack of success in the battery industry, discussed below.…

    • 1177 Words
    • 5 Pages
    Good Essays
  • Satisfactory Essays

    Gillette Case Study

    • 312 Words
    • 1 Page

    1. What are your decisions about the quality level(s), prices and advertising expenditures to offer for blank cassettes? Because a 60 minute tape is the standard in the industry I decided to use that length for the tape. After calculating the three different quality options I found that it makes most sense to enter the market with a standard quality blank tape; to be sold at a retail value of $1.95 ($0.98 sales price to the retailer). This is if I accept the advertising budget from our advertising agency of $2 million in the first year and $1.2 million for each subsequent year and $500 thousand in overhead. This is also assuming that the market share will be divided at 50% for budget, 35% for standard, and 15% for professional.…

    • 312 Words
    • 1 Page
    Satisfactory Essays
  • Good Essays

    Ralph Bingham, VP new business development of Gillette Safety Razor Division (SRD) needs to decide whether to enter the rapidly growing blank recording cassette market. He is assessing whether Gillette can use its strengths in high volume manufacturing and marketing of mass distributed packaged goods to assume a leadership position in this new market. I recommend Gillette avoids entering this market…

    • 1190 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    Duracell is a member of the Gillette Company owned by Proctor & Gamble and is the alkaline battery market leader holding approximately 50 percent of the U.S. market share. Gillette's overall goal focuses on the skillful marketing of superior technology to achieve worldwide leadership. The Duracell name means reliability to consumers and that is why their products are trusted by customers every day. They use the most advanced technologies to ensure that the power is there when the customers need it to be.…

    • 1483 Words
    • 6 Pages
    Powerful Essays
  • Satisfactory Essays

    Gillette Indonesia Case Analysis Gillette - SWOT Analysis #Strength High Quality Brand Local manufacturing 50% Market share already Gillette name means Shaving in Indonesia First Mover advantage #Weakness Employee ( Manager) retainability Poor distribution in remote villages #Opportunity 160 million population with 30% living in cities Political environment stability Increasing income Western influence in Shaving Increasing work opportunities Potential to increase the shaving incidents (compared to HK and Aus)…

    • 511 Words
    • 3 Pages
    Satisfactory Essays
  • Satisfactory Essays

    In regards to mainstream positioning, this may be an effective way for Paramount to retain its more loyal customers. The company’s last high-end product (the Pro) had attracted consumers since it was one of the more innovative products in the razor market. By introducing another cutting-edge shaving technology into the broad marketing position, it may help to keep those customers who want to stay up to date with the most innovative products. Mainstream unit volumes are expected to gain over three times that of the niche market in the first year. However, the new Clean Edge razor has great long-term potential. The down-side of entering this new product into mainstream would be the fact that the pro is already been marketed mainstream, and the clean edge would risk decreasing the brand power, and this would in turn lead to cannibalization. Positioning the product as a mainstream product, 60% of new sales would come from existing product lines. Also, with mainstream marketing comes a need to increase marketing in order to reach the mass amount of consumers.…

    • 523 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    Duracell Turnaround

    • 930 Words
    • 4 Pages

    As you requested, I would like to point out major reason for declining on profitability of Duracell. Now, the batteries are common commodities and it is not necessary for customer to look at much on product differentiation and brand. According to the study, the purchase decision for batteries is done by impulse and there is no significant brand differentiation. Thus, the price is a main factor. With mature market and price sensitive customers, it is evitable for Duracell and competitors to lower the price to attract the customer. Thus, profit margin continuously decline. There are few segments especially rechargeable and lithium ion battery market has been grow (as a result, overall revenue grow), still big market is alkaline battery and market is already saturated.…

    • 930 Words
    • 4 Pages
    Powerful Essays