Spectrum Brands Inc.,The Salesforce Dilemma Case Study Solution
Rayovac Corporation, the largest battery manufacturer in the world adopted the strategy of merger and acquisition due to the changing trends in the market and continuously intensifying competitive landscape. The company originally started its operations as consumer battery manufacturer and has a long history, but the competitive landscape of the industry grew stronger and intense with the passage of time and due to the emergence of some prominent players.
The first reason that can be regarded as the major encouragement for the company to pursue merger and acquisition is the stronghold of the retailers and their growing bargaining power. The competitiveness in the consumer brand industry is facing an inclining trend as the manufacturers are increasing that eventually creates competitive rivalry more intense. Merger and acquisition is a common trend and many large manufacturers have undergone this strategy in order to give extension to their brand portfolio and increase their chances of surviving in this competitive landscape in the consumer brand industry.
On the other hand, staying or competing in one category is no more essential and effective for firms and small firms are facing critical challenges to sustain their position in the market. Furthermore, the shift in the balance of power in the North American market from manufacturers to retailers has increased the challenge creating more obstacles to overcome. Therefore, Rayovac also had to acknowledge the importance of merger and acquisitionin order to stay in the market and keeping all these scenarios in mind the companyaes decision to formulate this strategy is appropriate and according to the market demands.
The company formulated Spectrum Brands that emerged due to the acquisitions of many multiple brands and undergoing a diversification strategy. The company made several acquisitions in order to gain diversification and in doing therefore, the company made some related diversification and unrelated diversification as well.
However, the companyaes main reason to make these multiple related and unrelated acquisitions include to strengthen the hold in the market and to compete more effectively in the consumer brand industry. Secondly, the company has been facing stiff challenge in the consumer battery industry and to increase the profitability the company had to acquire different brands.
Furthermore, the company also aimed at getting a global presence and to increase its global presence the company had to acquire brands in different regions to embark its presence strongly. Moreover, the company aimed at gaining a strong hold on the global distribution channels, increase the purchasing power and to enhance the operational processes.
The company has diversified in various categories and acquiring different brands in different categories have different reasons and motivations for the company. The multiple categories and their different reasons for acquiring brands in this category are described and discussed below.
The battery market is one of the most lucrative markets due to its size and profit margins. However, the growth rate of the market is quite low and the annual growth is steady and not highly attractive but this segment offers potential. On the other hand, the presence of Duracell and Energizer made the acquisition more essential and vital to compete strongly with these competitors.
The company also entered in various different segments and industries in order to gain diversification and to increase its hold on the market. The decision to pursue extensive merger and acquisition strategy is the right decision for the company after viewing the above stated objectives and trends in the market. The competitive landscape forced the company to pursue such strategy in order to compete with big names and to attain global presence. The company has been quite successful with its related diversification, but has suffered numerous challenges in the other segments.
However, these challenges cannot justify that the decision is not right as managing a large portfolio is not an easy task and through effective sales management and distributed focus this can be achieved. The decision to sell different brands and include different brands in the portfolio is reasonable and appropriate for the company, according to the current situation of the consumer brand industry.
The sales structure that is present at Rayovac and Remington, Nu-Gro, and Tetra/United Pet Group are almost similar. However, the description of sales structure of each of these companies is described below that will lead to a clear understanding of the sales structure of these companies………………….
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