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

  • 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

    Market leaders: Duracel and Energizer (80% market share)  adaptation to consumer needs and valuable negotiating power with retailers…

    • 698 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    Battery Industry

    • 947 Words
    • 4 Pages

    Threat of new entrants is low, as the capital requirements and technology development needed to stay relevant in the market proves to be a daunting barrier to entry. Also, in order to realize a significant profit, economies of scale must be realized to produce a massive amount of batteries while keeping costs low. This would be harder for smaller entrants to achieve.…

    • 947 Words
    • 4 Pages
    Powerful 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
  • Good Essays

    The acquisition of Duracell was seen as many as a smart move. Analyst, shareholders, executives, had high expectations with this merger. Unfortunately, this acquisition created several problems for Gillette since their main goal of profit maximization was not being accomplished.…

    • 1846 Words
    • 8 Pages
    Good Essays
  • Satisfactory Essays

    4. Why was Gillette unable to achieve the same success in batteries that it had been able to achieve in shaving products?…

    • 494 Words
    • 2 Pages
    Satisfactory 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

    Berry, A., et al, c.a. 2004. The Gillette Company. [online] Scribd. Available at: http://www.scribd.com/doc/32659954/GILLETTE [Accessed 22 November 2012].…

    • 1003 Words
    • 5 Pages
    Good Essays
  • Better Essays

    General Electric, (GE), is a diversified technology and financial services corporation that has a history of tremendous success. The company’s name is well known across the United States and is recognized by consumers as the “practical innovator” (Crystal & Herskovitz, 2010). In order to continue its achievements, GE’s strategy is to focus its resources in new product innovation and comprehensive brand positioning. It has created the “Profile” and “Monogram” brands to re-invent kitchen appliances and to transform its image to being more upscale. GE’s marketing leadership would like to continue to conduct significant research to gain cutting edge features that will excite their customers to pay more for innovation to generate a higher profit (Crystal & Herskovitz, 2010). It has a significant advantage over its competition due to its long-lasting and implied trust from its brand that has distinguished itself over the past 100 years.…

    • 1254 Words
    • 6 Pages
    Better 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
  • Good Essays

    Most of the synergies for this deal lie in the complementariness between P&G and Gillette. Both companies were key performers in the consumer products industry, but both had specific strengths within the industry. Beyond the complementariness of products were corporate strengths. P&G had strength in marketing to women, where as Gillette’s core segment was men. Thus, taking skills from both corporations would create strong synergies in attracting large…

    • 714 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    B&Dwrite Up

    • 2093 Words
    • 9 Pages

    Issues in this case is diversification strategy runned by Black & Decker corporation. As a diversified global manufacturer and marketer of household, commercial, and industrial product, Black & Decker need to…

    • 2093 Words
    • 9 Pages
    Powerful 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

    Gillette protects its industry leadership on the back of intensive expenditure in R&D and the careful recording of the experiences that men have using Gillette razors. Armed with its superior knowledge on shavers and shaving, Gillette manages to outgun the competition by constantly leaping forward with novel products, which therefore have superior quality.…

    • 1646 Words
    • 7 Pages
    Good Essays