Church & Dwight: Time to Rethink the Portfolio? A case report prepared for MG 495 Business Policy Essay

perform & Dwight is a major maker of ho utilizehold and personal intersection points, including the popular girdle & hammer pit on with well-known labels comparable Aim, Brillo, Nair, Oxi-Clean, and more than more. Their trusted A & H trademark appears on a broad range of consumer and specialty outputs exchange around the instauration. In 2011, the Company achieved a agree gross gross gross revenue of 35%. Over the recent decade, the Company delivered an annual TSR of approximately 19% to its sh atomic number 18holders, signifi kindletly part than the 1% TSR of the S & P vitamin D linage index during the same period, (Wheelen & Hunger, 2012, p. 35-2). However with the magnetise of separate companies wanting the same food food market piece, church building & Dwight is facing slightly market arguing issues. The queen-sizegest challenge, which the political party is facing is keep backing constant branch.The come with grow consumer products portfolio ov er 70 pocks into the animated collective structure eyepatchcontinuing to scout for sunrise(prenominal) avenues for app curioage. This is no escaped task as it competes for market sh be with such(prenominal) formidable consumer products powerhouses as Colgate-Palmolive, Clorox, and Procter & run a risk, commanding combined sales revenue of over $100 billion. As the worlds largest manufacturer and marketer of atomic number 11 bicarbonate-based products, perform & Dwight had, until recently, achieved consistent set aboutth in sales and lolly. The encumbrance trading of the bon ton beness the turnout of sodiumbicarbonate.The participation tried to expand its different products falls, which is non an easy task. Despite the challenging trade environment, the methodicalness envisi peer littled that in 2012 they will deliver 9-10% earnings per manage branch through go along downhearted revolve about on the 10 key argonas that contributed to their superior TS R results over the past 10 old age. In recount to achieve their goal, they targeted, complete sales growth of 3-4%, 25-50 basis arrests of gross margin expansion, maintaining strong merchandise disbursement at approximately 13% of net revenue, and move tight anxiety overhead costs. The attach to believes that ingrained sales growth will be impelled by the outstanding pipeline of unsanded products and continued strong market support of Power Brands.THE powerJohn Dwight founded church service & Dwight Inc. Co. and now is one of the roughly conquestful companies that produces and manufactures personal c ar products. When the political party was formed, it was not as big as it is now however, the growth of the connection has been indisposed and becalm. The product line of perform & Dwight is diversified and consists of the personal care products.This has helped it to compete with companies care Unilever and P & G. Although the growth of the association has been slow and steady, the club has faced a few problems to succeed and this is the savvy that the competition by the family has not been up to par (Wheelen & Hunger, 2012, p. 35-2). The competitors of perform & Dwight are Unilever and P&G. These deuce are the giants in the industry and in read to compete with them Church & Dwight will squander to gear wheel up and ensure that the reputation and awareness of the society is created.The caller-up nookie attribute overmuch of its success to the fact that it had gruelling on the production and sales of sodium bicarbonate. Strong family maintain has shielded focal point from the problems of defending the ships caller-out from takeover attempts. The company has successfully interpreted a commodity chemical, branded it, and marketed it to the point where it dominates the market. It has subsequently crackingized on consumer intuition and loyalty to the ramification & HAMMER brand by introducing multiple consumer products on a lower floor this logo. As the dominant producer and marketer of sodium bicarbonate products, Church & Dwight has faced especial(a) competition in its primary markets and successfully entered the markets with other(a) consumer products employ a low price system with express advertising expenditures.The company has gained a steady growth over the years and have to expand several(prenominal) consumer products. They have several company acquisitions imputable(p) to its grand revenues over the years. But Church and Dwight just wish other companies face several challenges along the way. A challenge against leveraged buy-outs and hostile takeovers is eminent. It is in addition experiencing head on collision with giant competitors such as Procter & Gamble and Colgate-Palmolive. In spite of all of these challenges it transformed into much larger competitor not only crossways a broader range of products but also in geographic territory. As a result, in give to maintain its contin uous growth in some(prenominal)(prenominal) interior(prenominal) and world(prenominal)ist subject area the company postulate to have the best schema in place. source Cook, Roy A. pp, 35-1-12II. ANALYSISA. Analysis of the property Management Church & Dwight Company has continued a tradition of slow and steady leadership with a solid focus on long-term goals. The stability of the companys leadership domiciliate be attributed to the fact that 25 pctage of outstanding common stock is owned by descendants of the companys captain cofo chthonians, a tradition that continues even today. 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 typeset of Chief Executive Officer in 1995 to an outsider, Mr. Robert A. Davies, troika (Wheelen & Hunger, 2012, p. 35-2). Being focussed on their leadership behavior has enabled Church & Dwight to overcome likely leverage d buy-outs and hostile takeovers with a series of calculated actions and savvy business decisions.These actions allowed the room of directors and management to amend the companys ingest and allowed shareholders four votes per share. The room of directors was also re-structured into classes, in which to each one class serves staggered terzetto-year terms (Wheelen & Hunger, 2012, p. 35-3). In addition to stupefying the tenure of the directors, the company initiated employee gap agreements with key officials, providing a severance package agreement to abide most type of security in the event a board member position is terminated by a hostile takeover or leveraged buy-out by an unwanted owner. By providing these lucrative packages for senior management, many an(prenominal) were able to stay with Church & Dwight.In applying the The capital of Massachusetts Consulting Group Growth Share Matrix, the company throw out be classified as a notes Cow (wordpress.com) because accordi ng to the pecuniary statements of Church & Dwights from 2007 to 2009, net sales and pro tot ups continued to grow relative to the many acquisitions made by of the company. In October 2004, Church & Dwight purchased four brands from Unilever, it completed the acquisition of Carter-Wallaces consumer brands. While SPINBRUSH was purchased from Procter & Gamble in 2005. Furthermore, when compared to its major competitors, the company realized higher sales growth evaluate from 2003 to 2005. 2. Operations Church & Dwights growth dodging relied on finding naked as a jaybird uses for sodium bicarbonate. introductory to the acquisition spree, the companys profits were derived from this product.The company soon began using an overall family branding scheme to penetrate the consumer markets place in the United States and Canada. Also, 85% of the baking soda market was determineled by the build and pound sterling brand, By capitalizing on its easily recognisable brand name, logo, and e stablished merchandise channels, Church & Dwight move into such related products as laundry detergent, carpeting cleaners and deodorizers, air deodorizers, toothpaste, and deodorant/antiperspirants. (Wheelen & Hunger, 2012, p. 35-6). Rivalry among quick firms (competitors), is inevitable as competitors try to achieve great market shares to grow potential profit shares. To avoid industry competition, Church & Dwight also have a in truth solid core of specialty products (Wheelen & Hunger, 2012, p 35-9).The Growth of an analyzer normally occurs through market penetration. Church & Dwight Inc. usher out be classified as an analyzer organization because according to Miles and Snows Cellular Organization model the company operates in two types of product-market domains, one relatively stable, the other changing, (referenceforbusiness.com).This strategy worked very well in allowing the company to enkindle a variety of products using only one brand name. 3. Marketing With establis hed US and western European markets make saturation, manufacturers are actively prosecute growth overseas. Church & Dwight Inc. sales are concentrated in United States and Canada where funnel it through book merchandisers such as Walt-Mart, supermarkets, wholesale clubs and drugstores (Wheelen & Hunger, 2102, pp.35-7).Even-though the companys merchandise expenses for 2009 were $353.6 million, an increase of $59.5 million or 20% as compared to 2008, Church & Dwight are bent on reaching a all-encompassing range of people. This widely 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 satisfied by other regions as production opportunities allowed greater cost-effectiveness. Having raw(a) stable consumer products and expanded detergent assignings they found themselves in direct competition with the big players in the market. Church & Dwight wants to move into the worldwide market but have been met with limited success.Two achievable reasons for this are 1) lack of name recognition, and 2) recognition problem. The GE Business Screen used to perform business portfolio analysis on the strategic business units s lead be of great use in order to boost the companys market share, ( merchandisemixhub.com). in that respectfore, as the company expands and acquires more product lines bearing the leg & dog pound brand, the potential for substandard quality or customer dissatisfaction could cause negative impact on sales.Therefore, product marketing is essential to reinforce brand name recognition so consumers neer immerse the value and quality of a companys name and its product lines. Finance The pecuniary health of Church & Dwight can be characterized as being a mixed jut out. Investors earnings in the subject increased to 23% and dividends on investings increased by 35%. It is highlighted b y the strong upward vogue in net profit margins and return on equity. However,when attention is turned to other key ratios, the picture becomes cloudy. Both the current and quick ratios have drifted downward. In addition, the inventory turnover ratio, after showing some improvement, has also drifted downward. Overall, a brief review of the pecuniary ratios listed indicates that on that point continues to be room for improvement. However, the five domestic help and world(prenominal) consumer product brands acquired during the 2008 Del Laboratories transaction (Wheelen & Hunger, 2012, p. 35-5).According to the BCG Growth-Share Matrix, the characteristics of Stars are high-share, high-growth, but limited cash flow due to investment required to maintain growth, however, successful Stars go on to become Cash Cows business/product that have a high share but slow growth. They tend to generate a very positive cash flow, most of which can be used to develop other businesses/products, ( strategicmanagementinsight.com), which will be beneficial for a company like Church & Dwight. Being the worlds largest producer and marketer of sodium bicarbonate-based products, Church & Dwight Co. Inc was able to maintain a steady growth in both sales and earnings.For the past 30 years, the average company sales have increased by 10-15% per year (Wheelen & Hunger, 2012, pp.35-3 5). It is safe to conclude that since the CEO remains focused on building a portfolio of strong brands with sustainable competitive advantages and the long-term target area is to maintain the companys track record of delivering outstanding TSR (Total shareholder Return) relative to that of the S&P 500 (Wheelen & Hunger, 2012, p. 35-2), the financial status of Church & Dwight continues to grow as it has historically achieved modest gains from year to year, with hopes of even greater revenue and sales.5. Administration, especially Human Resources The Companys leadership at the top has remained a signific ant earmark of the company. The Boards of directors are structured into three classes with four directors in each class serving staggered period of three year term (Wheelen & Hunger, pp.35-2). This strategy has given the board the needed control to maximize the its output to do inviolable the shareholders. Because of its continuous characterisation to would-be suitors the company has entered into an employee severance agreement with key officials. It provides pay up to two times the individuals highest salary and bounty plus benefits for two years.As the company widens its coverage into the consumer products in early 2000s, the changes in its key force-out was noticeable by injected a pool of executives with wide range of experience in marketing and international background from known organizations such as Spalding Sports institution wide, Johnson & Johnson, FMC and Carter-Wallace (Wheelen Hunger, pp.35-3). The composition of its board of directors did not escape the changes that the company has implemented on its management. On the 10-member board, four have served for 10 years or more and sixer members served for five years or less. Two women served on the board with age ranging from 50 to 74 and the other six members are younger than 60 (Wheelen & Hunger, 2012, pp.35-3). 6. deck outa. Strengths Church & Dwight Company has many strengths with brand recognition being the top of the list. It is also the only producer of ammonium bicarbonate and potassium carbonate in the US. Another strength is that it has an in-house marketing strategy which very effective in marketing majority of its consumer products. close to 25 percent of the outstanding shares of common stock are owned by descendants of the companys cofounders. The company controls approximately 75 percent of the sodium bicarbonate production in the US.They control 85% of the baking soda market. Extensive consumer brand name recognition and loyalty (in 95 percent of U.S. households) which allo ws the company to promote multiple products using a single brand name. C & D has an painful anti-takeover defenses including board of directors with staggered terms of office and voting rights that are weighted in favor of long-term shareholders. The irresponsible of the production of novel materials, the manufacturing and processing facilities, and the primary marketing functions allows the company to price its products below those of competitors thus creating a barrier to entry. And last but not the least(prenominal) they have the ability to build value by effectively implementing cost savings strategies when acquiring other companys consumer brands. b. Weaknesses Church & Dwights major weakness is overextended in their branding of the sleeve and Hammer products. Even-though the company enjoyed success domestically, in the international arena where growth was more product driven and less marking sensitive, the company was less experienced, (Wheelen & Hunger, 2012, p. 35-7), showing a slight lack of financial strength in their balance sheet, hindered expansions internationally. The primary focus on the strengthen & Hammer brand name has left the company with a void in product forwarding experience that may be needed in a highly competitive consumer products field or international expansion. Also, their inability to determine the strategic fit for Specialty Products Division into overall company trading operations is hurting the company.Top management turnover was also a problem for the company. C. Opportunities The potential expansion into international markets is of great importance. If stricter laws are enacted it will favor the company as expanded uses of companys elemental raw materials for pollution control and potable water applications will be closely monitored. In addition, in that respect is the possibilities of using paint as a husking compound and an industrial cleaner based on the low abrasion qualities and environmental safety of sodium bicarbonate. The diversification of product line to include other related consumer products using both the Arm & Hammer brand as well as other brand names similar to The Dial Corp. acquisitions can also be explored. The company should expand the use of sodium bicarbonate-based products to meet demands for environmental safety. The acquisitions of consumer product brands and/or companies. turn out use of sodium bicarbonate for self-propelling parts cleaning systems to replace current resultant based systems.d. Threats Some threats includes competitors with greater marketing and financial strength entering the companys traditional markets. Operating in many mature markets with limited growth potential. New or increased domestic production of the companys basic raw materials by other potential producers. The issue of potential consumer confusion through overuse of the family branding line acknowledgment strategy which could eventually weaken the Arm & Hammer brand name. Also , retaliatory competitor reactions as the company enters into new consumer product markets that have been reign by major players such as Procter & Gamble, Colgate-Palmolive, Unilever, etc. And the substitutes for current product constitutes threats for Church & Dwight company.e. Products or operate Church & Dwight consists of several acquisitions that cater to almost 95% of all US Households. It has types of products the household and personal care products. The company has several Brand names, Arm & Hammer, Trojan, Oxiclean, SPINBRUSH, rootage Response, Nair, ORAJEL, XTRA, to name a few. These products range from dentifrice, chemical instrument to absorb or neutralize odors and acidity, a kidney dialysis element, a blast media, an environmentally friendly cleaning agent, a swimming pool pH stabilizer, and pollution control agent (Wheelen & Hunger, 2012, pp.35-7/9). B. Problem DefinitionThe problems presented in this sequel study is evident that Church & Dwight really of nece ssity to make changes especially in the area of its expanded consumer products. The acquisition of several companies may have brought grand revenues but having several line of product baron have a Brobdingnagian negative impact. electric potential marketing problem may arise when company own products will be placed along with its well-known brand name and confuse consumers. This situation can also lead to a injury of marketing pull.The companys overall corporate objectives were (1) to maintain a steady growth by staying focus on long term goals (2) to provide best result to shareholders (3) to continue seeking new uses of its core products (4) to maintain and keep cost under control (5) to enter the international market and continually seeking for opportunity for growth. If the goals cannot be met then Church and Dwight Co. Inc. may be constantly vulnerable buyouts and takeovers. It can also lead to prejudice of market share both from domestic and international market.2. If t he problems are reverse and done properly then the leadership in the market will be maintained and realizable loss of revenue will be prevented. The objective of entering the international market may offer a better opportunity for continuous growth.3. There are several reasons that this problem is eminent. First is that both market has its saturation point where products matures after reaching its peak. The company must always be fudge on adapting to this continuous cycle of change.The search for new uses of its products must never stops. It should always explore better ways of improving the life of the consumers bit maintaining and protect the environment. Second, new product and competitor will always emerge and will not be taken down easily without a good fight. The company should always maintain their effective marketing strategy to be able to survive the continued meshing for market share. Third is that limitless opportunity for growth in international market will not com e easy as battle there would be unpredictable. The focus for long-term goals should always be on the mind of its key executives for this will be the foundation of their success. III. SYNTHESISA. ALTERNATIVE SOLUTIONSThe alternative solutions are that the company should tow the family branding line extension strategy in order to introduce new products (especially sodium bicarbonate-based products) such as skin care, soaps, mouthwashes, lotions, and antacids in order to gain increased market exposure and economies of scale. Recent launches of products such as chewing mumble with baking soda are testing this strategy. Expand the limited advertising program for current respite market products to retain and gain market share. hike up products carrying the Arm & Hammer logo as being environmentally safe. Resources should be directed to testing and development new brands to lessen dependence on the Arm & Hammer brand due to the possibility of loss of its present customer appeal. Since t he companys consumer products are competing in mature markets with limited growth potential, the opportunities acquirable although the environmental safety of its chemical products should be tapped. For example, pollution control, water purification, circuit board cleaning, and industrial paint stripping.Generate new chemical product applications requiring stripped promotional support while pass opportunities for fast sales growth. Explore the opportunity of forming joint ventures with abroad companies to gain access to the necessary experience and capital to succeed in international markets. Select targeted international locations to successfully penetrate and use as a laboratory for refining international growth opportunities. persist to lower costs of production and distribution to reverberation competitive threats from new entries in the low-cost end of product offerings such as detergents. Acquire company consumer products/brands in order to gain access to international markets and the marketing expertise. B. RECOMMENDATIONS AND SOLUTIONSThe best solution for C & D company is to retain the best products within its comprehensive while considering the best projection of revenue that it can generate. Time factor out for the company should also be considered for them to know when to retain or let go of a non-core asset. Timely decision making of its top management will be a factor in maintaining its annual revenue at steady growth. The key decision makers would play a live role in this area. The continuous seeking of new uses sodium bicarbonate will still be very effective for the company in years to come that is why the focus on this should never be lost. The present global market is offering a much bigger area to be explored especially in Asian countries.Therefore, further recommendations for Church & Dwight for would be to implement the first alternative, delving into new product lines both in domestic markets and even greater exploration of inte rnational markets.The injection of key decision makers with extensive marketing experience abroad would be important in penetrating the global market. This selection would be advantageous because of the limited financial investment required to grow already established footholds in foreign countries to manufacture and transport new product lines. Church & Dwight will be continuously challenged due to new entrants.To minimize this they should always be onward all the time. Environmental issues will also be a major factor for them. Therefore complying with existing environmental rules and regulations while promoting its products is a very good strategy. In conclusion the ultimate goal of achieving huge revenue while maintaining cost of operation as low as possible has always initiatory with Church and Dwight Co. Inc.This company, backed with 160 years of marketing and production experience will have a much clear brighter path of success as long as they continue to focus on their long term goals. Understanding various cultures and overcoming societal barriers will help 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 determine cultural differences and expectations in product innovations. And finally, this recommendation provides a potential solution to increase sales while growing market share and staying ahead of the competition. elongationGE-McKinsey Matrix. (2013). 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