Battery Industry Essay example

941 Words Oct 15th, 2012 4 Pages
Case Preparation For Discussion (Gillette)

1. Central problem/issue in case: The main problem is that, since its acquisition, Duracell has become a drain on the financial performance of Gillette. The board needs to decide what should be done to turn Duracell around and restore Gillette to a dependable financial performer.

2. How is the battery industry (you can use five forces analysis to answer this question)? Has it been changing? If yes, how? Overall, the industry is very attractive. New entrants realize the potential of snagging a piece of a highly profitable industry that produced $5.2 billion in revenue and $807 million operating margin. Threat of new entrants is low, as the capital requirements and technology
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Each introduction was accompanied by a pricey advertising campaign that was designed to win new customers and hopefully gain market share.

4. Why was Gillette unable to achieve the same success in batteries that it had been able to achieve in shaving products? Gillette is very good at using their knowledge and expertise in each of their segments to create related, diversified products to fit the needs of their consumers. They use what they already know, the resources and capabilities that they already have, to grow horizontally within each segment by creating a wider range of products and services for the consumer. For their personal grooming segment, they have expanded from simply razors to shaving cream and deodorants. They have been unable to find a way to do the same within their portable power segment, in which Duracell is the only company. In order to gain financially, they need to discover a way to expand the capabilities of Duracell.

5. If you were James Kilt, what strategic actions would you take? I would look for ways to expand the portable power segment, which includes Duracell. Perhaps using Duracell in all of Gillette’s electronic products, such as the electric-powered toothbrushes, electronic razors, or coffee makers. Also, a possibility is to perhaps create an exporting agreement to electronic goods producers to use Duracell batteries in their products as they are sold. Another

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