Handling Colgate's distasteful toothpaste
Susan has talked about the dispute in detail. The initiations, responses, decisions......The reason that Colgate made such compromises is, Colgate’s, also other Multinational National Corporations’, have international social responsibilities. Colgate’s business with H&H apparently violates its moral obligation owned to US public. The product name is highly offensive among US public. Colgate’s promise that product only marketed in Asian market however cannot avoid its global duty. Apart from theoretical reference, the key reason behind this is business consideration, yes or no? Personally i’d say the profitability in Asian market cannot compensate image damage in US market. So Colgate negotiate with partner, try to repair damage, stuff has been discussed.
Next part is Colgate’s expansion. Globally of course. Well, William has mentioned before, half Colgate’s profits come from foreign market. At the time EU and US markets are highly developed. No potential for huge profit increase. In sense of profit seeking, Colgate need to develop new market.
Asian market, huge population means customers, money everything. Especially toothpaste used on a daily base. Although Asia’s economy less developed than EU and US market, it seems profitable. Poverty is no longer a problem al well. It can be told by performances of simillar products, Darlie toothpaste for example. Well at that time the toothpaste mostly focus on Japan, HK, TW, these markets are more developed. Mainland China and India, two countries with largest population in the world. Less competition there. P&G entered mainland China, HK, TW in 1988 1987 1985 respectively.
By purchasing 50% shares of H&H, Colgate gain access to the market directly. From what P&G did, we can tell Colgate has advantage simply because Colgate move faster than P&G. Partial acquisition has so many advantages, such as low risk, quick access to market, market power,...
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