Essay on Rayovac Corporation International Growth and Diversification

Published: 2021-06-29 08:35:06
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Rayovac was founded in the year 1906 in Wisconsin, Madison city as a Dry Battery Industry (Ruble, 1989). In the United States, Rayovac developed as the primary company supplying high-quality batteries. In 1996, Panasonic, Duracell, and Energizer were taking over the Rayovac industry. However, Thomas H. Lee (THL) a private company acquired Rayovac. THL focused on personal care supplies and shaving products. This business helped to maximized Rayovac market share with a rate of 7% in the United States. Therefore, Rayovac changed its name in 2005 to Spectrum Brands after announcing its interest in pet supply industries.

Assessment of Rayovac's Strategy and Position in the Global Battery Market

In the U.S. battery market, the competition was raising from Duracell and Energetic. For Rayovac organization to contend well in the market, the company adopted a different identity Spectrum Brands in 2005. Taking on the new name is a historical point that perceives the Company's change from being a U.S.-centered organization to a worldwide company with a variety of products. Using this strategy, Rayovac has become the leading international company specializing in alkaline batteries and rechargeable batteries at a reduced price (Roger, 2010).

Strengths of Rayovac Company

In this case, one of the strengths of Rayovac Company is that it is one of the most successful organizations which has been operating for more than 100 years both locally and worldwide. A current expanded brand portfolio facilitated Rayovac to have a contact with retailers, for example, RONA where their products were previously not available. Rayovac manufactures batteries that have the same quality as Duracell and Energizer products. The organization as well has a dynamic, high-vitality culture that encourages innovativeness and high intensity (Jham, 2014).

Weaknesses of Rayovac Company

As indicated in the case study 3-4 of Rayovac Corporate, one of the apparent weaknesses of Rayovac is their failure to exceed their rivals like Energizer as well as Duracell producers which overwhelm the market, particularly the North American market. Additionally, Rayovac fails to showcase their new battery items in the market productively.

Assessment of Rayovac's Diversification Strategy

The Rayovac Chief Executive, David A. Jones, assured that the company's 1999 strategy of diversification was instituted to develop the Rayovac Brand name as well as to increase its productivity. Additionally, the company executed a Merger and Acquisition (M&A) technique to develop the business globally. In the year 2002, the company obtained a battery business of European-centered battery producers VARTA's for 258 million dollars; they also acquired Microlite South America, which is a Brazilian battery manufacturer, to develop its operations in South America as well as the Chinese battery production office which lowered their cost of production. Following this diversification, in 2003, Rayovac gained Remington Products Organization (Jham, 2014).

Analysis of the Remington, United Industries, and Tetra Acquisitions

Combining the Remington, United Industries, as well as Tetra acquisitions; approximately doubled the annual revenues of Spectrum Brands. Remington Company; expanded the Spectrum Company's product assortment, - making it the largest producers of pet supplies and most acknowledged brands in the world. When Spectrum Brands got into pet supply industry with United Pet Group (UPG), the company was able to sell its products in the leading retail chains like Wal-Mart. The Tetra acquisition made Spectrum Brands the leading aquatic suppliers worldwide. The expanded supply fortifies the organization's associations with the major international retailers by empowering the company to meet their needs for an efficient customer service, products dissemination, and an effective supply chain.

The Conceptual Logic behind the Rayovac Acquisitions

The significant factor that is found in the market, in this case, is competition. However, Spectrum Brands considered the diversification strategy in Remington Company, United Industries, and Tetra acquisitions to maximize productiveness, generate high profits through supplying new products as well as acquiring an efficient distribution network. For instance, Spectrum has rationalized its way of developing new Remington items, decreasing the goods quantity as an approach to minimize expenses. Earlier, there were 27 local rotary razors models, but now there are only seven.

Analysis of Rayovac's Corporate Strategy in 2005

In the year 2005, Rayovac proclaimed its interests to obtain two pet supply companies. The company as well wanted to change its name to Spectrum Brands. This decision helped Rayovac Company to increase the sales as well as earnings. Therefore, nineteen of the world's 20 biggest retailers and 1 million store areas in 120 nations sold the company's products through proficient and productive promotion in international markets in the same year (Jham, 2014).

A Change Recommendation to the Top Management

In many organizations, changes in the administration groups are carried out because of poor leadership performance and lack of significant change management. Therefore, following the high growth of Rayovac Company, I should recommend the top management to employ more staffs to relieve the management and also give the employees the support regarding arising issues in their day-to-day work. The management should as well provide basic training to the workers regarding the new obligations they had undertaken.

Conclusion

Rayovac Company (Spectrum) had a mission to outperform the other consumer battery industries in the United States. However, after joining the Remington Company, United Industries, and Tetra Acquisitions, Rayovac maximized its productivity and generated high profits through supplying of the new products as well as acquired an efficient distribution network. It as well became the leading company in the international market.

References

Jham, V & Puri, S. (2014). Cases on consumer-centric marketing management. Hershey, PA.

Roger, K. (2010). Strategic marketing problems: cases and comments.

Ruble, K. (1981). The RAYOVAC story: The first 75 years. United States: North Central Pub. Co.

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