Gillette Acquisition Of Duracell Essay - 1724 Words

Industry: Portable power industry in the US The acquisition of Duracell was seen as many as a smart move. Analyst, shareholders, executives, had high expectations with this merger. Unfortunately, this acquisition created several problems for Gillette since their main goal of profit maximization was not being accomplished. Main issues: †¢ Should Gillette divest Duracell? †¢ Is Gillette using the appropriate strategies to deal with the big and small competitors? †¢ Stock prices are decreasing considerably External Analysis Industry Structure †¢ Dry cell batteries industry generated US$ 2.6 Billion in US domestic sales in 2000. †¢ 75% of all alkaline battery sales were impulsive purchasing. †¢ AA size batteries accounted†¦show more content†¦Thus, it would increase the demand for low price batteries, giving a competitive advantage to big players such as Rayovac and Energizer whose prices are lower than Duracell. Technological segment †¢ More efficient and durable batteries are needed to satisfy the requirements of new technology developments. †¢ Other types of batteries such as the high drain lithium ones are becoming popular due to the increasing use of electronic devices. †¢ Constant research and development is critical to succeed in this industry Global segment †¢ Even though the analysis for this case is explicitly for the industry within the US, there is a huge potential market in developing countries for alkaline batteries since the use of these is still quite low. Legal Segment †¢ There is a intense rivalry among the big players of this industry. There have been some legal processes involving cases such as false advertising claims and patent infringement. Demographic segment †¢ The case did not mention any battery consumption patterns. However, batteries in general are consumed by a large number of people in the US, regardless of age, sex, religion, ethnicity, etc. For example, lower income people would prefer less expensive batteries, and young people would prefer nickel – containing and lithium – ion batteries which are preferred for laptops, digital cameras, and other electronicShow MoreRelatedGillette Energy Drain : the Acquisition of Duracell1834 Words   |  8 PagesIndustry: Portable power industry in the US The acquisition of Duracell was seen as many as a smart move. Analyst, shareholders, executives, had high expectations with this merger. Unfortunately, this acquisition created several problems for Gillette since their main goal of profit maximization was not being accomplished. 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