Professional Documents
Culture Documents
To,
Tobby Mammon
By,
Shailee
Nature of the industry & market:
One of the many business units within the company-“Rayovac Battery Division Of Spectrum
Brands Canada Inc” was the Rayovac battery division, a leading global supplier of household
and industrial batteries.
The household battery market comprises consumer batteries which are used daily in
various consumer electronics and high use standard household devices. Sales of these
batteries around the world continued to grow. Technology within the industry continued to
develop as competitors tried to stay ahead by finding the: ’next big idea.’ As of 2005, alkaline
was the dominant household battery chemistry in north America. The overall Canadian
market was estimated to be $300million.(70% alkaline, 10%rechargable batteries, 20%
others)
The rechargeable battery market was a small and highly fragmented market. In 2004 it
represented only 5% of the North America battery market and 10% of the Canadian market.
There was no dominant market leader.
Duracell and energizers were the market leaders and riders for the rechargeable batteries to
get $2in profit with the trade off of the alkaline batteries business. Batteries were
manufactured and supplied by Japan and China.
The organization:
If Rayovac Canada were to proceed with this rechargeable opportunity, the ultimate goal
would be to become the market leader in the rechargeable battery segment in Canada by
moving quickly and taking a proactive stance towards building this market in North America.
Buyer’s behaviour:
They can be divided into 2 categories-Light and heavy users on the bases of spending. Heavy
users further can be segmented into family with children and techies. Within Canada, the
family segment made up close to $200 million and that of techies being 0f $75millions of the
market. In comparison to families techies would have fewer batteries on the go at any given
time but would replace them more frequently.
The management has to take following decisions for strategic and branding perspective of the
new category launch.
There is quite a huge potential market to be explored hence the company should
definitely entre to the niche market of rechargeable batteries. There is no
substantial player present in their region and hence they can take the advantage
of the first mover. Addition to that they can make the mark in this market with
the help of existing well established brand name.
The new strategy is needed to ground on market leaders. Now for the same the
company can use two ways to entering a new segment.
Or
• It can leverage its strength and brand awareness to gain share within the
alkaline segment.
• I t should position it self as a value brand as the manufacturing cost is nil
and it can be easily available from Japanese and Chinese market.
• Again the branding and advertising can be done on the bases of different
features of the product.
1. Will the brand name in the industry for rechargeable batteries be able to boost
all the categories?
2. SWOT analysis.
To understand whether this new venture will prove profitable for the whole
business unit or not we need to do a SWOT analysis for the same. This is shown
as below.
Strengths:
Rayovac already has penetrated sales teams and relations with the big hyper
markets to sell of their product. They have already an established market and
they are in need to just push a product into the market.
Weaknesses:
They will initially require high amount of advertisement expenditure and also
other technical resources to sustain the long term competitive advantage when
they are providing entirely new product range to the niche marketers. The main
hindrance is that the manufacturing of the rechargeable batteries have to be
outsourced from the Japanese and Chinese companies like Panasonic and Sony.
Opportunities:
The Canadian market represents 205 of North America sales which stands for
$40million annual sales by 2005 in rechargeable batteries which is expected to
grow to $100 million annual sales by 2010.
Threats:
The main challenge is to establish the long lasting relationships with the retailers
and the distributers as the players like Duracell and Energizers are already
having strong relationships with them and the bargaining power may play its
major role to introduce a new product in the market.
Another aspect is from the competitors. Those who are competing in the house
hold non rechargeable batteries may shift their focus from that to this business
though it is not that likely. Though the company will get the outsourcing
manufacturing but there will create the ground work to step in and take over.