Church and Dwight Essay

A. executive director compendious1. Summary statement of the problem church building & Dwight, much than than comm provided known by its snitch name Arm & lb, has held a commanding lead in the sodium bicarbonate crossway trade for oer 160 years with roughly 99 per centum of all consumer returns in familys within the coupled States. However, in order to promote harvest-time and diversity maculation defying a steady emolumentability rate of three five percent per year, the companion has expanded uses of sodium bicarbonate proceedss so that it is no longer the totally focus. The acquisition of a diverse group of consumer intersections in multinational markets has been viewed as a viable option to sustain the availability margins tumesce into the twenty-first century (Wheelen & Hunger).2. Summary statement of the recommended solution Since perform and Dwight is a comparatively small caller, when comp ard to competitors in household and personal care harve st-tideion markets they must(prenominal) recognize the challenges of leting sales through acquisitions to promote increase and fighting within those markets. church & Dwight must incorporate additional acquisitions of solid put ups and harvest-feasts in order to grow market section through an magnification of production stemmas into a variety of personal care, deodorizing and cleaning, and laundry products as well as specialty chemicals, animal nutrition, and specialty cleaners (Wheelen & Hunger). In addition, to maintain its bit in the world market place, church service & Dwight must expand into planetary markets and gain footholds in product markets through acquisition of manufacturing assets. Simply exaltation domestic product lines everyplaceseas is cost prohibitive. Foreign manufacturing assets leave behind entrust product realisation by local consumers in unlike countries and markets.B. The perspectiveAfter 160 years, Church & Dwight is a giant in the hou sehold domestic product market with blot name recognition much comm only if associated with Arm & spurt products. However, this achievement in the market only nets $2.5 billion in yearly sales worldwide. The companys crisscross portfolio includes all over 80 popular scrapes and competes for market share with new(prenominal) giants including Colgate-Palmolive, Clorox, and watch over & run a risk, which have combined sales of over $100 billion. The company has as well as expanded over the past decade into other household product lines through acquisitions of consumer brands including Mentadent, Pepsodent, Aim, and Close-up, as well as Trojan. Church & Dwight has a vegetable marrow of specialty products primarily found on its successful sodium bicarbonate line of products. It currently holds 75% of the sodium bicarbonate market share. magnification in the domestic markets has climb upn successful because of the companys ancient balance sheet. Growth into the foreign mar kets has proven to a greater extent gainsay than domestic markets. Foreign market net sales in 2009 were only $393 million compared to domestic net sales of $1.8 billion (Cook). II. ANALYSISA. depth psychology of the Situation1.Management The Church & Dwight caller-up has coverd a custom of slack up and steady leadinghip with a solid focus on semipermanent goals. The steadiness of the companys leadership can be primarily attributed to the fact that 25 percent of gravid common stock is owned by descendants of the companys original cofounders, a tradition that pass overs right away. In addition, the management of the company over the past 160 years has been handed down from generation-to-generation until recently when Dwight C. Minton passed on the position of Chief Executive Officer in 1995 to an outsider, Mr. Robert A. Davies, III (Wheelen & Hunger). This think leadership style has enabled Church & Dwight to overcome emf leveraged buy-outs and hostile takeovers with a se ries of calculated marchs and jab business decisions. These actions go awayed the board of directors and management to amend the companys conduct and allowed shareholders four votes per share.The board of directors was also re-structured into classes, in which separately class serves staggered three-year wrong (Wheelen & Hunger). In addition to staggering the tenure of the directors, the company lead upd employee severance agreements with name officials, providing a severance package agreement to provide a caoutchouc net should any of the board member positions be terminated by a hostile takeover or leveraged buy-out by an unwanted suitor. By providing these lucrative packages for senior management, many were able to stay with Church & Dwight. This allowed for continuity of leadership styles, vision and mission focus. Because of this steadfast devotion to principles, steady growth over the years has occurred, identifying Church & Dwight as a Cash Cow, victimization the Bos ton Consulting Group (BCG) Growth-Share Matrix. However, as the company focuses more on planetary markets and enters other potential avenues of development product lines, it bequeath surely mark itself labeled as a Star. 2.Operations Church & Dwight have peacefully existed over the past 60 years with sustained growth and do goodability because it virtually held the market in the palm of its hands as other companies searched for ship canal to enter the household and personal care product lines.As a result of the constant squelchs in emerging markets, Church & Dwight has come to the acknowledgment that they have major challenges to overcome if they are to compete with other giants in the effort and confront to thrive. As the company gains a stronger market share in the international consumer products, the growth and profitability standard will carry well into the in store(predicate). However, Church & Dwight also recognize they must remain lively to quickly and adequately give out with Porters Five Forces talk terms power of suppliers Threat of naked as a jaybird entrants Threat of supersede products or service Bargaining power of buyers (customers) and Rivalry among existing firms (competitors) (Wheelen & Hunger). When considering Bargaining Power of Suppliers, the force rating could be considered Medium as management must be constantly aware of any potential market shocks or trends. If an concord retailer is proceeded by unforeseen supply chain issues, the like increase fuel prices, then those be throughout the company whitethorn be affected to remain competitive.In addition, Church & Dwight are well aware of the economic situations that may affect their trade customers who may slew distribution of products in which sales may decline, or adversely affect the financial performance of the company (Craigie). There was never historically a threat of new entrants into the sodium bicarbonate market prior to 1970. However, since the company has pay offed new product offerings and other established consumer brands, they now governing body the same ambition threats of mature and domestic and international markets for consumer products. This threat of new entrants has emerged over the past decades and may now be rated high. The threat of substitute products or services is unendingly considered high, as well, because consumers might choose a substitute item, if it is cheaper. This is a problem for any company. Bargaining power of buyers (customers) is for the around part a medium concern as consumer satisfaction is evaluated in a variety of ways. Otherwise, dissatisfaction can drive prices up or down based on demand, or the lack of. Quality is a hallmark of Church & Dwight and the perception by consumers of any potential sinking of standards to decrease prices will typically drive loyal customers away.Finally, rivalry among existing firms (competitors) is high as competitors try to achieve great market shares to grow p otential profit shares. Church & Dwight has in an enviable position to profit from its dominant time out in the sodium bicarbonate products market since it suppressled the primary raw veridical used in its production (Wheelen & Hunger). 3.Marketing The Church & Dwight market strategy has been somewhat simplistic since its focus has been on the sodium bicarbonate product lines for over a century. However, with additional acquisitions over the past 20 years, and the expansion into other household products, the brand recognition has become stock- legato more important. As a result, merchandise expenses for 2009 were $353.6 million, an increase of $59.5 million or 20% as compared to 2008 (Craigie).In addition, Church & Dwight caters to people of all ages and backgrounds. This wide range of customers allows them to develop more and more organic products and services with large scale agreements to reward those demographics. As the company expands sphericly, markets for one regio n could also be agreeable by other regions as production opportunities allowed greater cost-effectiveness. Unfortunately, attempts to enter international markets have met with express success, probably for two reasons (1) lack of name recognition and (2) transportation costs (Wheelen & Hunger). Finally, the company began a ground-breaking marketing running play by airing commercials for condoms on prime-time television. This shock strategy increase its marketing distinctiveness and enabled the partnership with Quidel Corporation, a provider of point-of-care diagnostic test, to meet womens health and wellness needs (Wheelen & Hunger). There are potential problems if various brand names fall into the precarious line-extension snare (Wheelen & Hunger). As the company expands and acquires more product lines bearing the Arm & Hammer trademark, the potential for substandard lumber or customer satisfaction could cause a back-lash resulting in trim sales most the world.Therefore, pr oduct marketing is essential to reinforce brand name recognition so consumers never forget the value and bore of a companys name and its product lines. 4.Finance Initially, the companys domestic markets have proven successful. However, in keeping pace with competition in expanding product line markets, acquisition of assets has taken place, which could prejudicially involve the overall financial picture if profitability is not maintained. In 2009, Church & Dwights performance worldwide achieved an increase in sales of 4 percent organic sales increased 5 percent, gross profit margin increased 44 percent while global marketing expenses only increased 20 percent and the Net Cash range grew to a record level of $401 million (Craigie). Perhaps still more significant to investors is the report that earnings per share grew 23% and dividends on investments increased by 35 percent (Craigie). In contrast to the growing sugar and expenses, the company also jettisoned noncore assets for the first time, including five domestic and international consumer product brands acquired during the 2008 Del Laboratories transaction (Wheelen & Hunger). This posturing of assets will enable a financially give out balance sheet in the future.Therefore, the financial status of Church & Dwight continues to grow as it has achieved modest gains from year to year, with hopes of correct greater revenue and sales. Finally, the chief executive officer remains focused on building a portfolio of strong brands with sustainable competitive advantages and the long-term objective is to maintain the companys rails record of delivering outstanding TSR (Total Shareholder Return) relative to that of the S&P vitamin D (Wheelen & Hunger). 5.Administration Church & Dwight enjoys a sound management strategy. It incorpo range affiliates through agreements to sell its products. In addition, the former CEO, Mr. James R. Cragie, stated We have added $1 billion in sales in the past five years, a 72% i ncrease, while lessen our total headcount by 5%, resulting in higher(prenominal) revenue per employee than all of our major competitors (Wheelen & Hunger). While it may appear unlikeable to the employee perspective, technological advancements allow for increased productivity in various aspects of manufacturing and struggle allowing for greater productivity without the added expense of additional manpower.Church & Dwight also continue to operate with an ethical employment code in keeping with todays expectations of utmost respect for both consumer and employee. The following is the companys published Ethical Standards The reputation and integrity of Church & Dwight Co., Inc. are rich corporate assets, vital to the Companys success. Each Company employee, including each of the Companys officers and general managers and each Company director, is responsible for conducting the Companys business in a manner that demonstrates a loyalty to the highest standards of integrity. Specifica lly, we encourage among Company personnel a culture of honesty, accountability and mutual respect. Additionally, we provide guidance to help Company personnel recognize and deal with ethical issues. Finally, we have provided mechanisms for Company personnel to report unethical conduct. dishonest or unethical conduct or conduct that is illegal will constitute a violation of these Standards and are grounds for disciplinary action (Church & Dwight).6.SWOTa.Strengths The Church & Dwight Company has many strengths, with brand recognition being their greatest. In fact, Arm & Hammer continues to be their greatest asset and strongest product on the market today the little yellow box is in over 95 percent of all households across the country. The sodium bicarbonate product line has proven itself for over 160 years with uses in baking, cleaning, and deodorizing, and as an added ingredient for things like drain openers and neutralizing agents. While there may be other similar products, Chur ch & Dwight have virtually cornered the market by holding 85 percent of it. b.Weaknesses A potential impuissance within the company is the overextension of branding into many other product lines. Until 1970, it produced and sell only two consumer products Arm & Hammer Baking keynote and a laundry product marketed under the name Super Washing Soda (Wheelen & Hunger). The company enjoyed success domestically, but in the international arena where growth was more product-driven and less marking sensitive, the company was less experienced (Wheelen & Hunger).Therefore, they relied on acquisitions and management changes to improve its international footprint and reach. With ever-expanding product lines, suppliers, and retailers, the potential for an outclassed product or service can cause a disallow reputation, impacting the overall brand. Therefore, brand recognition should continue to be the focus when researching future products or investment avenues to ensure the fiber of the prod uct/service in the name of the company. Entire corporations have gone away because of a negative connotation to its brand name in the eyes of consumers. c.Opportunities The possibilities are sempiternal as Church & Dwight continue to pursue additional product lines in household, personal care, specialty, and international products. Future expansion in acquisitions and assets may prove more advantageous as potential consumer products become even more attractive to increase the profitability as the manufacturing base is expanded around the globe. Perhaps in 20 years, we may have cars manufactured by Church & Dwight, as well.d.Threats The primary threat to Church & Dwight is competition. Competitors have an even greater market share and larger marketing campaigns to remain leaders in their respective niche. There are always going to be threats to its business operations, products, services, and reputation. Therefore, ongoing evaluation of partnerships, agreements, consumer satisfact ion, quality of production, quality of service, etc. is always continuing. Without a continuous evaluation process, companies may find themselves outsmarted, out-marketed, out-produced, and out of a job. Church & Dwight have done a great deal in maintaining a very loyal customer base through evaluations of consumer trends and ensuring affiliates maintain the highest standards to retain the reputation as the leading household product maker 7.Products or Services Church & Dwight continue to produce some of the most widely known household care products.These products are based on differences in the nature of their uses and organized into three reportable segments Consumer Domestic, Consumer International and durability Products (SPD) (Craigie). The company currently produces 80 different product lines, in which octonary major brands make up a total of 80 percent of its business (Craigie). The most famous of the companys products is Arm & Hammer Baking Soda. As a company focused on quality and innovation, Church & Dwight has a discreet marketing team focused solely on new product ontogeny (Church & Dwight). In addition, the company is focused on goals to develop differentiated products with new and distinctive features, increased thingamajig and value, and engaging outside contractors for research and development activities (Church & Dwight).B. Problem Definition1.The Church & Dwight case study identified a corporate problem needing to continue expansion in products and services, while presenting a consistent operating profit and increasing market shares of the household product industry. Expenses were continually evaluated and streamlined to load inefficiencies including product research and development to identify new uses/markets for an existing product (Wheelen & Hunger). Unfortunately, constant pressure from global competitors seeking to enter domestic and international markets, as well as an overall poor economy, is creating an atmosphere where move growth must be developed through new opportunities for expansion into new geographical markets, new products/uses, all while striving to control increasing transportation costs.2.In order for Church & Dwight to retain its position as the leading household product manufacturer, it must continue to provide outstanding customer service, excellence in product quality, invest in in the altogether edge technology to remain a viable resource for consumers, as well as developing new uses for its primary product line to ensure customers remain satisfied with the product, as promised. In addition, expanding its share of other household product opportunities and innovations will be key to any future growth. Yet another opportunity for Church & Dwight to grow is in the business-to-business swop market for suppliers, manufacturers, distributors, and retailers to use. By providing this service to its affiliates and partners, they would be able to achieve greater operational efficiencies in thei r supply chains.3.As Church & Dwight enjoy a easily large loyal customer base, competing with Proctor & Gamble and other industry giants to get customers to switch competitors is no easy task. However, with any challenge comes greater innovation and new ideas. Relationships with suppliers, manufacturers and other retailers allow for greater efficiencies in costs by consolidating orders, developing greater discounts on shipping costs, or even creating greater financial incentives for affiliates to increase sales and customer satisfaction rates by increasing consumer awareness of the quality and reliability of services and products uncommitted to them.III. SYNTHESISA. Alternative SolutionsBrand recognition for ARM & HAMMER brand products has already been established within the domestic markets of the United States. International markets continue to challenge emerging companies due to ethnical differences in market populations, cultural differences in marketing strategies, and langua ge barriers requiring new brand names more suitable for local languages/cultures. With low population growth rates and households in international markets, increasing transportation costs, and intense competition and higher commodities costs, manufacturers are turning to new and innovative processes to increase their share of the household product markets.For example, rising gas prices are a concern since it directly contributes to increased production costs. In response, household and personal care product companies are making efforts to stimulate sales in varying ways, such as entering new markets, creating new product segments, strengthening strong brand image, acquiring businesses, targeting market audiences, and increasing advertising budgets. Another alternative could be to develop joint-business ventures with suppliers, manufacturers, distributers, and retailers. The benefit to this option would be to streamline production and sales and allow the ease of marketing products an d services to its affiliates and partners. This option would also allow greater operational efficiencies and translate into lower costs for Church & Dwight and lower prices for consumers.B. Recommendations and ConclusionsAs Church & Dwight examine to satisfy competitive pressures while still reeling from the recent economic crisis, the following passport and solution is presented in hopes of reducing expenditures and continuing company growth through new product development and market expansion. Expanding into new markets with major competitors jockeying for shelf space and retailers seeking to edit out their breadth of product offerings, more changes may be considered (Wheelen & Hunger). Therefore, the best pass for Church & Dwight at this point in time would be to carry out the first alternative, delving into new product lines both in domestic markets and even greater exploration of international markets. This option would be advantageous because of the limited financial inves tment required to grow already established footholds in foreign countries to manufacture and transport new product lines. In addition, by improving upon past successes and avoiding past mistakes, a sound marketing campaign could attract additional consumer traffic to its existing retailers and product outlets.Arm & Hammer also has premier brand recognition within the United States, which would look to use its large customer base to compete against Proctor & Gamble or Colgate-Palmolive, and Clorox. Finally, to satisfy any shortcomings in this solution, it is further recommended that Church & Dwight initiate an aggressive marketing strategy incorporating foreign experts in business and marketing development to identify focus groups to better understand cultural differences and expectations in product innovations.Understanding why a specific culture or race chooses one brand over another is key to identifying potential aspects of a new product line that would be warmly veritable in an other country rather than simply pushing an American-made product brand on a culture that has no experience with the product or whose name may have a derogatory centre in their language. This option could also allow Church & Dwight to market potentially less expensive alternatives to Proctor & Gamble or other foreign corporations specializing in household products in another country or region. This recommendation provides a potential solution to increase sales while growing market share and staying ahead of the competition.ReferencesChurch & Dwight, Co. Inc. (web). Churchdwight.com. Retrieved on April 8, 2012 from http//www.churchdwight.com/index.aspx Craigie, J. R. (February 24, 2010). Church & Dwight co., inc. 2009 annual report Churchdwight.com. Retrieved on April 8, 2012 from http//www.churchdwight.com/PDF/AnnualReports/2009-CDH-Annual-Report.pdf Wheelen, T. L., & Hunger, J. D. (2012). Strategic management and business policy toward global sustainability. (13th ed., pp. 19-20). New York, NY Pearson Hall.