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Rayovac Corporation Case Solution & Answer

Rayovac Corporation Case Solution

Introduction

The case study is based on the foundation of the Rayovac Corporation to be the part of supply of new items, such as:continuous batteries to be offered in the global market, especially in North America. In this concern, marketing analysis needs to be conducted to recognize and confirm all the opportunities and strengths of this work in the market.

The big question is whether Rayovac should carry on with this idea or not and if they do what planning should they choose to enter the market. It is very crucial if Rayovac continues to follow the continuous battery market, because if a project does not produce decreased cash flow to the business, then the firm would have to bear the loss.

If Rayovac continues with this new work’s concept, what would be the best planning for Rayovac to follow? Should they be a niche or a capacity participant in the market, or should they choose to use this idea at all?

Industrial Analysis

Rayovac Corp is known as the world’s biggest manufacturer and consumer of batteries. The business sells batteries for households. Furthermore, the Rayovac’s product line includes alkaline batteries in all quality and sizes, to be able to successfully function in the most competitive but profitable domestic market

Furthermore,to deal with Canada’s possible consumer’sknowledgeof continuous-batteries, there is a great demand in North America and overseas and the vice president is not confident regarding how the firm should use its marketing strategies.

The firm’s mission is to be the single choice of the battery consumers and the continuous battery market in the world. They aim to sell the best quality batteries which  will supply and fulfill the needs of the market through a new way of energy consumption for domestic and manufacturing use.

Question 1.Identify a unit (for example: a department, a faculty/school, or an admin. office) of the UCL and explain how the blue ocean strategy can be used to improve its activities. You need to “eliminate, reduce, raise & create” (ERRC grid; each should have not more than 3 points) to make reinvention. Please also draw a strategy canvas with at least 6 strategic factors. (18 marks).

The conventionally made philosophical units are listed below

Department of Information Studies

The blue sea strategy is to follow the variation’s well as to decrease the costs in order to open up a new retail space and to create a new request. It is about building and misrepresenting market space, thus making the demand less important. It is based on the idea that the market limit sand the industry construction are not given, but can be reconstructed through the measure sand the trusts-of industry players.

Improve the planning and center of all the departments in the UCL through student separation.The administration often has a difficult time providing an important message that identifies with each different student.Dividing the people into groups helps introducing the complete-student journey by separating the messages. And through the blue ocean strategy; the UCL can target the right student with the right communication to boost the current situation.

Eliminate

Government rules require universities to have strategiesfor outside speakers and events, staff training, and the use of IT. It also clarifies that the avoidancemethod should be successful and balanced.

 

Raise

·         Ordered Research programs in all the departments.

·         Increase the awareness of future research studies of information studies.

 

Question 2. Summarize Rayovac’s acquisitions by completing the details in the case using the following table. An example of using ROV Ltd. is given. (10 marks)

Year Company Acquired Price Paid Location Key characteristics of the Acquired Company
1999 ROV Ltd. $155 m Latin America (except Brazil) Leading zinc-carbon batteries manufacturer.
2002 Varta AG $ 258m North America Varta was the leading European-basedproducer  of generalbatteries
2003 Remington Products Company $322 m North America the low-cost producer with capital expenditures
2004 Microlite acquisition Latin American Microlite S.A., the largestproducer of consumer batteries in Brazil
2005 TetraHoldings

UnitedIndustries

$2 b   ·         North American producer of consumer lawn and garden

·         pet fishand reptile products

 

 

In the year 2002, Rayovac purchased a German consumer battery company,“Varta AG” for $ 258 m (Rayovac gives about 6 times the earnings before interest and tax * of Varta’s yearly’s). Varta was Europe’s leading manufacturer of 2001 $390 m quality batteries. Before the purchase, 73% of Rayovac’s sales came from North America, while 86% of Varta’s sales came from Europe. The biggest development was in Latin America where combined working boosted Rayovac’s market share, outside Brazil. And Rayovac became a market leader in consumer batteries in Germany and Austria, which made it the 2nd dominant-manufacturer in Europe.

Rayovac was the biggest producer of zinc element batteries in LA, a division where the firm enjoyed a strong product identification. However, LA was afflicted by usual economic-decreases, and consumers had lower buying capacity. Despite the geographical uncertainty; Latin America played a crucial role in the firm’s strategic plan for planning and divisions.

Remington is considered to be the low-priced manufacturer with the highest revenues of about 1 % of its sales. Production was mainly exported to low-priced suppliers in the Far East, especially in China.

United Industries has been the biggest North American producer of consumer care-items, garden care items, home insect control items and specialty animal items.

Rayovac’s interest in local animal service was registered-again with the acquisition of German Tetra Holdings within two months-after the United’s acquisition of $ 555 m (acquisition of Tetra – to pay 10tearnings before interest and tax yearly).

Question 3. Evaluate Rayovac’s corporate and global expansion strategies/entry modes by providing details in the case using the following table. Provide not more than two points each of the strategic rationale/benefits as well as the potential risks/challenges to Rayovac. (28 marks)

 

Company Acquired Corporate Strategy & Global Expansion Strategy/Entry Mode Strategic Rationale/

Benefits to Rayovac

Potential Risks/

Challenges to Rayovac

ROV Ltd. Horizontal integration; overseas acquisitions/

wholly-owned subsidiary

1.   Increase global battery market size outside the US.

2.   Increase market power against consumers and suppliers.

1.      Economic risks – economic downturns.

2.      Due diligence issue – delinquent accounts increase found after the acquisition.

Varta AG Horizontal Integration

Related Diversification. As both firms are a consumer battery manufacturer that is trying to change and enter new possible markets.

1.      Battery business for Varta consumer AG Germany – Battery consumer battery types are widely considered in Europe and Latin America. Their battery technology and production/distribution infrastructure are state-of-the-art.

2.      Cost savings of $30-40 mevery year.

1: One of the major challenges will always be the economic decline that is uncertain.

2: Rayovac’s corporate responsibilities of managing the other firm would be a challenge

Remington Products Company Mixed Mode Diversification Remington is considered a low-cost manufacturer with resource spendingof approximately 1% of revenues. Production is mainly contracted to low-cost suppliers, Therefore, any collaborationbetween the two firms would be limited to administration, buying,and arrangement, with estimated yearly savings of nearly $23 m One of the biggest challengesthat Rayovac sees is its failure to surpassits competitors such as Duracell and Energizer, which control the market, particularly the North American market in terms of cost. In addition, one of Rayovac’s challengeswould be to overcome the inability to market their battery items correctly.

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