Gillette’s Energy Drain (a): the Acquisition of Duracell

4251 WordsOct 24, 200918 Pages
Gillette’s Energy Drain (A): The Acquisition of Duracell MACK Consulting Michelle Neill, Ali Nassem, Cindy Arsenault, Krystal Mayne, Charlene Ford, Laura Robertson March 20, 2008 Bus 491 - Gary Evans PROBLEM STATEMENTS – STRATEGIC ISSUES The Duracell Division of Gillette has lost market share and failed to move forward in the last four years, which may be the result of a lack of strategic vision and/or mandate from Gillette’s Board of Directors. It is our opinion that perhaps too much emphasis or “hype” was placed on the acquisitions potential and not enough effort has been re-focused on maintaining the Duracell Division itself. Gillette, and certainly Duracell, needs a revamped strategy to increase its market share and…show more content…
Superstore and Wal-mart). Knowing how Wal-mart works with regard to its suppliers (i.e. buying in bulk, huge consumer market share, as well as the inventory technology interface with suppliers, etc.), this shows a huge relationship between Energizer and Wal-mart in allowing such displays to be erected. PORTER’S FIVE FORCES We chose the Porter’s Five Forces as a valuable analysis tool as it helped us to identify the potential threats from new entrants as well as the power that the buyers have over the sales in this industry. It also helped us to identify the amount of competitiveness within the industry and how easily other products could be substituted for our products. From this analysis (see Appendix III), we identified an issue regarding pricing strategy that we feel is important to address in our proposed solution. The key ingredient to success appears to be that battery companies must compete on price, rather than brand. This is exemplified by Duracell and Energizer’s plateau/loss of market share and Rayovac’s gain. Since there is little differentiation among batteries, other than a company’s different types (which is only competing against itself), they can easily be replaced by other brands that may appear more attractive to buyers. Consumers have a tendency to buy batteries based on price, rather than brand, since their perspective is “a battery is a battery” and they are basically all the same. Since the threat of entry of new suppliers is high

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