Founded in 1906, Rayovac had become, over the course of the twentieth century, one of the...

Founded in 1906, Rayovac had become, over the course of the twentieth century, one of the best-known battery producers in the U.S. However in 1996, with its market share steadily eroding due to fierce competition from Duracell, Energizer, and Panasonic, it was purchased by the private equity firm Thomas H. Lee and Partners (THL). Over the next decade the firm embarked upon an ambitious acquisitions program which saw it grow from a $400 million annual revenue business in 1996 to an over $2.8 billion annual revenue business by 2005.

In 2003, the global battery market was worth about $24 billion in sales with the U.S. accounting for about one third of global consumption. About 73% of Rayovac’s revenues came from North America. Though the U.S. market was growing at an annual rate of 7.4%, fierce competition in the U.S. led to considerable price discounting and required significant advertising and promotional expenditures. Rayovac, as the number three player in market share behind Duracell (a division of Gillette) and Energizer, competed as a value brand rather than as a premium brand. It sold a high-quality product but at prices 10-15% below its main competitors. With the proliferation of personal electronic devices, Rayovac expected strong growth to continue, especially in emerging markets around the world as income grew there.

Q1: Do a SWOT analysis for Rayovac.

Strengths:

Weakness:

Opportunities:

Threats:

Solutions

Expert Solution

Strengths:

(1) Rayovac developed itself as a value brand rather than a premium brand and thus even after great competition from other top companies it stood as a third largest market share holder.

Weakness:

(1) Even after being a century old company Rayovac was unable to spread its market share in other parts of the world (27%), as most of its revenue (73%) came form North America.

Opportunities:

(1) In the deacde after 1996 Rayovac cashed on the opportunities by focusing on ambitious accquistions and within a period of 9 years its market value increased from $400 million to $2.8 billion.

Threats:

(1) The biggest threat to Rayovac was as most of its revenue (73%) was genertaed in North America. So if in future the comapny is unable to overcome some unavoidable consequences such as change in government policies, new prodcuts by rival companies, change in customers needs, etc. it will lead to a great loss to the company.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Over the twentieth century, the ability to process information in terms of labor units has improved...

Over the twentieth century, the ability to process information in terms of labor units has improved by a factor in the order of 1 to 5 trillion. This improvement represents a compounded growth rate of between 30 to 35 percent per year for a century. At the turn of the twentieth century, the mechanical calculator offered a modest productivity increase but the number of workers required to maintain the accounts of a medium-sized business still remained very high. Many tasks...

Who was the best president of the twentieth century? Why?

As of 2010, Xerox Corporation (NYSE: XRX) is a $22 billion, multinational company founded in 1906...

As of 2010, Xerox Corporation (NYSE: XRX) is a $22 billion, multinational company founded in 1906 and operating in 160 countries. Xerox is headquartered in Norwalk, Connecticut, and employs 130,000 people. Such companies depend on the productivity and performance of their employees. The journey over the last 100 years has withstood many successes and failures. In 2000, Xerox was facing bankruptcy after years of mismanagement, piles of debt, and mounting questions about its accounting practices. How does a company of...

Discuss the impact of urbanization on delinquency in the late eighteenth to early twentieth century.

how has the nature of global capitalism changed across the twentieth century?

From the end of the Civil War into the early twentieth-century, was Reconstruction a success or...

From the end of the Civil War into the early twentieth-century, was Reconstruction a success or a failure (or both) in its efforts to establish civil rights for African Americans?

In the middle of the twentieth century, US factories were considered the most productive in the...

In the middle of the twentieth century, US factories were considered the most productive in the world. Briefly outline the progression since that point and invoke at least one pioneer of change.

Compare and contrast the second industrial revolution (late nineteenth century to the early twentieth century) to the first industrial revolution (late eighteenth century to the early nineteenth century)

Compare and contrast the second industrial revolution (late nineteenth century to the early twentieth century) to the first industrial revolution (late eighteenth century to the early nineteenth century).

How has the relationship between labor and capital changed across the twentieth century?

At the turn of the twentieth century, Russian statesmen, intellectuals and revolutionaries were contemplating the Russian...

At the turn of the twentieth century, Russian statesmen, intellectuals and revolutionaries were contemplating the Russian condition and developing competing views for the future of Russia. You should analyze Russia's condition circa 1900-1910, identifying some of Russia's strengths and weaknesses and noting some of the problems that Russia faced. Given your knowledge of Russian history up to the start of the twentieth century, you should then explain what you think will happen to Russia.

Subjects