Church and Dwight Essay

A. Executive Summary1. Summary statement of the riddle church run & Dwight, more commonly known by its sucker light upon Arm & Hammer, has held a positive lead in the sodium hydrogen carbonate fruit mart for everyplace clx years with roughly 99 part of all consumer fruits in sign of the zodiacs within the unify States. However, in regularize to put forward produce and diversity eyepatch maintaining a steady make headwayability rate of three five sh be per year, the family has expanded uses of sodium bicarbonate crops so that it is no longer the only reduce. The acquisition of a various(a) group of consumer liftths in transnational foodstuffs has been viewed as a viable option to sustain the profitability strands hale into the 21st century (Wheelen & Hunger).2. Summary statement of the recommended solution Since church building and Dwight is a relation backly small comp all, when compared to competitors in household and individualised care harvest -feastion markets they must recognize the challenges of growing gross revenue through acquisitions to promote return and free-enterprise(a)ness within those markets. church & Dwight must incorporate additional acquisitions of solid strike outs and products in order to grow market share through an expansion of product greenbacks into a variety of personalised care, deodorizing and cleaning, and dry wash products as wellspring as specialty chemicals, animal nutrition, and specialty cleaners (Wheelen & Hunger). In addition, to maintain its blank s chiliad in the world market place, church service & Dwight must expand into international markets and gain footholds in product markets through acquisition of manufacturing assets. Simply shipping domesticated product lines everywhereseas is cost prohibitive. Foreign manufacturing assets impart take product recognition by local consumers in foreign countries and markets.B. The SituationAfter 160 years, church & Dwight is a gi ant in the household domestic product market with brand name recognition more commonly associated with Arm & Hammer products. However, this achievement in the market only nets $2.5 jillion in annual sales worldwide. The companys brand portfolio includes over 80 popular brands and competes for market share with another(prenominal)wise giants including Colgate-Palmolive, Clorox, and proctor & Gamble, which rush combined sales of over $100 billion. The company has to a fault expanded over the olden 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 core of specialty products primarily based on its successful sodium bicarbonate line of products. It currently holds 75% of the sodium bicarbonate market share. Expansion in the domestic markets has be successful be author of the companys pristine balance mainsheet. Growth into the foreign markets has proven more challenging than domestic markets. Foreign market net sales in 2009 were only $393 jillion compared to domestic net sales of $1.8 billion (Cook). II. ANALYSISA. Analysis of the Situation1.Management The Church & Dwight Company has keep a tradition of slow and steady lead with a solid focus on semipermanent goals. The steadiness of the companys leadership can be primarily attributed to the fact that 25 portion of dandy common stock is owned by descendants of the companys original cofounders, a tradition that stretchs today. In addition, the management of the company over the past 160 years has been handed vote out 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 rivet leadership style has enabled Church & Dwight to over go up likely leveraged buy-outs and hostile takeovers with a series of calculated actions and savvy vexation decis ions. These actions allowed the notice of directors and management to amend the companys charter and allowed shareholders four votes per share.The board of directors was also re-structured into classes, in which from each one class serves staggered three-year terms (Wheelen & Hunger). In addition to staggering the tenure of the directors, the company initiated employee severance agreements with appoint officials, providing a severance package agreement to provide a safety net should any of the board member positions be terminated by a hostile takeover or leveraged buy-out by an uncalled-for suitor. By providing these lucrative packages for senior management, many were able to stay with Church & Dwight. This allowed for continuity of leadership styles, mickle and mission focus. Because of this steadfast devotion to principles, steady growth over the years has occurred, identifying Church & Dwight as a Cash Cow, using the Boston Consulting Group (BCG) Growth-Share Matrix. However , as the company focuses more on international markets and enters other dominance avenues of growing product lines, it will surely recoup itself labeled as a Star. 2.Operations Church & Dwight have peacefully existed over the past 60 years with sustained growth and profitability because it closely held the market in the palm of its hands as other companies searched for ways to enter the household and personal care product lines.As a result of the constant crushs in emerging markets, Church & Dwight has come to the realization that they have major challenges to overcome if they are to compete with other giants in the industry and continue to thrive. As the company gains a stronger market share in the international consumer products, the growth and profitability example will continue well into the future. However, Church & Dwight also recognize they must roost vigilant to readily and adequately deal with Porters Five Forces Bargaining power of suppliers affright of unseasone d entrants Threat of substitute products or run 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 affiliate retailer is abnormal by unforeseen supply scope issues, like increased fuel prices, then those costs throughout the company whitethorn be affected to stay competitive.In addition, Church & Dwight are well aware of the economic situations that may affect their get by customers who may reduce distribution of products in which sales may decline, or adversely affect the monetary performance of the company (Craigie). There was never historically a threat of tender-sprung(prenominal)fangled entrants into the sodium bicarbonate market prior to 1970. However, since the company has developed new product offerings and other established consumer brands, they now feeling the same competition 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 always considered high, as well, because consumers might engage a substitute item, if it is cheaper. This is a problem for any company. Bargaining power of buyers (customers) is generally a modal(a) concern as consumer happiness 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 science by consumers of any potential cuting of standards to decrease prices will typically drive loyal customers away.Finally, challenger among existing firms (competitors) is high as competitors try to achieve great market shares to grow potential profit shares. Church & Dwight has in an enviable position to profit from its dominant niche in the sodium bicarbonate products market since it controlled the primal raw material used in its production (Wheelen & Hunger). 3.Marketing The Church & Dwight marketing dodging has been fairly 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 heretofore more important. As a result, marketing 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 satisfy those demographics. As the company expands globally, markets for one region could also be convenient by other regions as production opportunities allowed greater cost-effec tiveness. Unfortunately, attempts to enter international markets have met with limited success, in all probability for two reasons (1) lack of name recognition and (2) transportation costs (Wheelen & Hunger). Finally, the company began a ground-breaking marketing ladder by airing commercials for condoms on prime-time television. This shock strategy increased its marketing strength 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 quality or customer satisfaction could cause a back-lash resulting in reduced sales around the world.Therefore, product marketing is essential to reinforce brand name recognition so consumers never forget the val ue and quality 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 negatively impact the overall monetary 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 Flow grew to a record level of $401 million (Craigie). Perhaps even more significant to investors is the written report that earnings per share grew 23% and dividends on investments increased by 35 percent (Craigie). In contrast to the growing profits and expenses, the company also jettisoned noncore assets for the first time, including five domestic and international consumer product brands acquired durin g the 2008 Del Laboratories transaction (Wheelen & Hunger). This posturing of assets will enable a financially sound 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 even greater revenue and sales. Finally, the CEO remains focused on building a portfolio of strong brands with sustainable competitive advantages and the long-term objective is to maintain the companys track record of delivering outstanding TSR (Total Shareholder Return) relative to that of the S&P 500 (Wheelen & Hunger). 5.Administration Church & Dwight enjoys a sound management strategy. It incorporates 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% increase, while reducing our total headcount by 5%, resulting in higher revenue per employee than all of our major competitors (Wheele n & Hunger). While it may appear unsympathetic to the employee perspective, technological advancements allow for increased productivity in various aspects of manufacturing and labor 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 ut intimately respect for both consumer and employee. The following is the companys published Ethical Standards The reputation and virtue of Church & Dwight Co., Inc. are valuable 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 go oning the Companys business in a manner that demonstrates a commitment to the highest standards of integrity. Specifically, we encourage among Company personnel a culture of honesty, business and mutual respect. Additionally, we provide guidance to help C ompany 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 superior. 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, Church & Dwight have virtually cornered the market by retentiveness 85 percent of it. b.Weaknesses A potential weakness within the company is the overextension of branding into many other product lines. Until 1970, it produced and sold only two consumer products Arm & Hammer Baking Soda and a dry wash 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 inferior product or service can cause a negative reputation, impacting the overall brand. Therefore, brand recognition should continue to be the focus when researching future products or investment avenues to ensure the quality of the product/service in the name of the company. immaculate corporations have gone away because of a negative connotation to its brand name in the look of consumers. c.Opportunities The possibilities are endless 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 running plays to remain leaders in their respective niche. There are always going to be threats to its business operations, products, services, and reputation. Therefore, current evaluation of partnerships, agreements, consumer satisfaction, quality of production, quality of service, etc. is always continuing. Without a continuous evaluation process, companies may find th emselves 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 take household product manufacturer 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 nonionized into three reportable segments Consumer Domestic, Consumer International and Specialty Products (SPD) (Craigie). The company currently produces 80 different product lines, in which eight 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 development (Church & Dwight). In add ition, the company is focused on goals to develop differentiated products with new and distinctive features, increased convenience 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 aerodynamic to reduce inefficiencies including product research and development to identify new uses/markets for an existing product (Wheelen & Hunger). Unfortunately, constant insistency from global competitors seek to enter domestic and international markets, as well as an overall suffering economy, is creating an atmosphere where continued growth must be developed through new opportunities for expansion into new geographical markets, new products/uses, all whil e 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 cutting 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 exchange 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 functional efficiencies in their supply chains.3.As Church & Dwight enjoy a considerably large loyal customer base, competing with monitor lizard & Gamble and ot her 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 available to them.III. SYNTHESISA. election 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 cultural differences in market universes, cultural differences in marketing strategies, and language barriers requiring new brand names more suitable for local languages/cultures. With low population growth rates and househ olds 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. other 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 and services to its affiliates and partners. This option would also allow greater operational efficiencies and translate into lo wer costs for Church & Dwight and lower prices for consumers.B. Recommendations and ConclusionsAs Church & Dwight look to satisfy competitive pressures while put away reeling from the recent economic crisis, the following recommendation 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 rationalize their breadth of product offerings, more changes may be considered (Wheelen & Hunger). Therefore, the best recommendation for Church & Dwight at this point in time would be to implement 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 investment required to grow already established footholds in foreign countries to manufacture and transport new pro duct 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 bring in cultural differences and expectations in product innovations.Understanding why a specific culture or washout chooses one brand over another is key to identifying potential aspects of a new product line that would be warmly received in another country rather than simply pushing an American-made product brand on a culture that has no experience w ith the product or whose name may have a derogatory meaning 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.