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Rayovac is a large producer of consumer batteries and lighting goods, which operates in the international market. Its history dates back to over one century ago, and extensive business experiences helped the company to achieve one of the leading positions in the American and global markets. Rayovac commenced a rapid global development in 1999 with a series of acquisitions and other strategic decisions. The company’s global strategy will be analyzed in this paper.
Nowadays, Rayovac is behind its major competitors in the market, Duracell and Energizer, regarding sales and many other financial indicators. According to 2016 statistics, it held only 9.2% of the total market share in the United States that year, while Duracell had 39.9% and Energizer – 26.4% (“Market share of the leading battery brands,” 2018). It is worth noticing that the company’s position in terms of market share has remained more or less the same since the implementation of the global strategy in 1999. At the same time, Malto and Valenti (2018) note that, in 2018, Rayovac reported: “a 26 percent increase in worldwide sales last quarter, while its share of the U.S. market rose 24 percent to $337 million for the 52 weeks ended June 18” (para. 15). Overall, it is possible to say that the main strength, which contributed to the improvement of the company’s position, was a sustained focus on the well-balanced product value-price ratio, as well as innovation (Spectrum Brands, 2018). Nevertheless, the main identifiable weakness is the inability to outgrow its rivals, as well as market and sell its products more efficiently across the globe compared to Duracell and Energizer.
As for Rayovac’s diversification strategy, it mainly was realized through international acquisitions. According to Ingram, LaForge, Avila, Schwepker, and Williams (2015), beginning in 2003, “Rayovac acquired Remington Products, Inc., a company specializing in consumer shaving and grooming products” (p. 320). Then, in 2005, it purchased United Industries specialized in lawn and garden care products, Tetra Holdings offering fish supplies, and some other enterprises (Ingram et al., 2015). It is observed that such an approach to rapid diversification was implemented after the merger of Procter & Gamble and Gillette (the owner of Duracell) in 2005 (“Rayovac global strategy,” n.d.). In this way, the company aimed to decrease risks associated with the rival’s diversification and expansion strategy, improve its competitive position by broadening the brand portfolio, increasing the purchasing power, and building new global distribution channels. Moreover, rapid diversification and expansion led to huge improvements in the rate of sales. Consumers could buy the retailer’s products in over a million locations, in 120 countries states 2005 (“Rayovac global strategy,” n.d.). Therefore, it is valid to say that this strategy and acquisitions, in particular, were a success.
Overall, Rayovac’s corporate strategy in 2005 resulted in the enhancement of the distribution systems and the increase in net sales. However, the acquired corporations could have a lot of differences in terms of operations and cultures. It possibly was the primary difficulty for Rayovac’s management to integrate and align them. Nevertheless, well-established culture and work structure are core to employee productivity, which can be undermined during turbulent times of merger. Thus, it is recommended for the company to slow down the cultural integration process to avoid employees’ resistance to changes and minimizing the risk of increased turnover. Further focus on the development and communication of shared corporate values is important to maintain talents and skilled personnel in the organization.
References
Ingram, T. N., LaForge, R. W., Avila, R. A., Schwepker, C. H., & Williams, M. R. (2015). Sales management: Analysis and decision making (9th ed.). New York, NY: Routledge.
Malto, H., & Valenti, C. (2018). Battle of the batteries. ABC News.
Market share of the leading battery brands in the United States in 2016. (2018).
Rayovac global strategy. (n.d.).
Spectrum Brands. (2018). Why Rayovac?
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