Spectrum Brands

5156 words 21 pages
A Strategic Analysis

TABLE OF CONTENTS
INTRODUCTION 1
WORLD MARKET 1
CORPORATE HISTORY 1
GROWTH STRATEGY 2
SPECTRUM AND UNITED INDUSTRIES 2
GROWTH STRATEGY 2
SPECTRUM BRANDS 3
MANAGEMENT 3
STRATEGY 3
RELATED DIVERSIFICATION 3
UNRELATED DIVERSIFICATION 4
MARKETING 5
MANUFACTURING, RAW MATERIALS, DISTRIBUTION, AND SUPPLIERS 10
CONSOLIDATION EFFORTS 10
RAW MATERIALS 11
DISTRIBUTION AND SUPPLIERS 12
SPECTRUM BRANDS FINANCES 12
SALES 12
INCOME 13
PROFITABILITY RATIOS 13
LIQUIDITY RATIOS 14
LEVERAGE RATIOS 15
ACTIVITY RATIO 16
SHARE PRICE 17
RECOMMENDATIONS 18
REFERENCES 19

INTRODUCTION
Spectrum Brands (SPC) is a global branded consumer products company with seven major product lines including Rayovac
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In doing so it eliminated one of the four operating segment structures in order to streamline the management into the following three segments: Global Batteries and Personal Care, Home & Garden and Global Pet Supplies. This move helped them to reduce costs and staff.
STRATEGY
Related Diversification
Rayovac’s early growth and success were due mainly to two well-defined strategies. First, Rayovac’s strategy was to compete on price. Rayovac priced their alkaline batteries below Duracell and Energizer to gain market share. Rayovac also made significant partnerships with low-cost box merchandisers such as Wal-Mart, Lowes, and BJ’s Warehouses, to distribute its products. Under the Jones’ leadership, Rayovac batteries distribution list reached over 100,000 stores in North America and it tripled its distribution points in just four years15.

The second growth strategy employed by Rayovac management team early on was mergers and acquisitions into related businesses, and the year after year growth proved that it was a successful strategy. To overcome the saturated US market later in 1997, Rayovac acquired BRISCO GMBH in Germany and BRISCO B.V. in Holland, assemblers and distributors of hearing aid batteries in Europe. The acquisition of VARTA Limited allowed Rayovac to extend its presence from Europe into Mexico, Latin America, and other South America countries. Varta battery products are sold in more than 200,000 retail locations in Europe. Varta

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