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Discussio

n Time

2 minutes

Discussio
n Format

Each group contributes 2 points


New speaker from the group
every time

Criticism
& Debate

Contextual concerns shall be


entertained
Provide evidence from the case
study

Your own teams

Think
Tanks

Before we begin

MORE POWE FOR YOUR


MONE
R
!
Y
The Rechargeable Battery
Opportunity
APSC 598X Case Study Presentation
The University of British Columbia, Vancouver BC

SAQUEIB KHAN ~ NASIR ALI KHAN ~ PULKIT SHARMA ~


DEEPANSH CHAUDHARY

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Outline
Introduce the case study
Framework of analysis
Market Background and Analysis
Market Strategy Identification and
Analysis
Sales Strategy Analysis

Conclusion

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Introduction
Underlying Forces
Demand Increasing energy consumption
Household batteries: exponential growth
Increased popularity of high-drain devices

Supply Firms seeking to meet the


demand
Innovation
Technology Push

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Introduction
Market Opportunity
Alkaline Batteries
70% of total battery market in Canada
Relatively flat growth
Focus of major competitors for next 5-10 years

Rechargeable Batteries
10% of total battery market in Canada
Minimal focus of major competitors

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Introduction
Rayovac Battery Division
A division of Spectrum Brands Canada
Spectrum Brands: a global consumer products
company owing a variety of brand name
products

Bob Falconi
VP of sales and marketing for Spectrum Brands
Duracell: worked for 16 years and became VP
of sales
Prior to Rayovac: worked for Pure Energy
Battery Corp which introduced a revolutionary
rechargeable alkaline battery system

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Introduction
Falconis Ultimate Decision
Create competitive advantage in alkaline segment

OR
Proceed with rechargeable batteries strategy

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Introduction
Rayovacs Goals
Maintain positive return on investments
Minimal cannibalization of existing
products
Become market leader in proposed
segment

FRAMEWORK OF
ANALYSIS

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Analysis Framework
Market
Analysis

Marketi
ng
Strategy

Ultima
te
Decisi
on

Sales
Strategy

MARKET
BACKGROUND &
ANALYSIS

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Market Background
Battery Market
In 2005, the overall battery market in
Canada is approximately $300 million
Alkaline segment 70%
Rechargeable segment 10%
Other battery chemistries (including zinc)
20%

Alkaline is the dominant household battery


chemistry
Manufacturers need to be involved in the
alkaline segment in order to be an important
player in this industry

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Market Background
Heavy Users
Description

Families

Techies

$ 200 Million

$ 75 Million

Low

High

Type of Devices

Not High-Drain

High-Drain

Decision Factor

Price and Value

Impulsive

Many

Few

Low

High

Estimated Total
Sales
Disposable Income

Quantity
Replacement
Frequency

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Market Background
Rayovac's Canadian Market Share

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Market Background
Rayovac's Global Net Sales
(Percentage)
70%
(Exhibit
5)
60%
50%
40%
30%
20%
10%
0%

2003
2004

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Market Background
Rayovac's Global Net Sales (US$ 000s)
(Exhibit 6 incorporated in Exhibit 5)
$700,000.00
$600,000.00
$500,000.00
$400,000.00
$300,000.00
$200,000.00
$100,000.00
$0.00
2003
2004

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Market Analysis
Objectives
Perform a structural analysis of the battery
industry
Assess and evaluate Rayovacs
competitive position currently and in
rechargeable battery market
Identify competitive strategy to meet the
opportunities and threats in Rayovacs
external environment
Provide meaningful insight when
performing SWOT and other applicable
analysis

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Market Analysis
Threat of New
Entrants

Power of
Suppliers

Competiti
ve Rivalry

Threat of Substitutes

Power of
Buyers

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Market Analysis
Power of suppliers
How much power do suppliers hold?
How many suppliers are there and what market
share do the largest suppliers hold?
How distinctive are each suppliers products?
How straightforward is it for the customer to
switch to another supplier?

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Discussion: In your groups, identify the


factors which strengthen or weaken the
dominance of suppliers in the rechargeable
batteries market?

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Market Analysis
Power of suppliers
Strong
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m1
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m2
Tea
m3

Weak

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Market Analysis
Power of buyers
How much power is held by the customer?
How many customers are there and how many
customers does a typical player have?
How much market share do the largest
customers account for?
What alternatives do customers have?

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Discussion: In your groups, identify the


factors which strengthen or weaken the
power of buyers ?

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Market Analysis
Power of buyers
Increase
Tea
m1
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m2
Tea
m3

Decrease

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Market Analysis
Threat of new entrant(s)
How likely is it that competition will increase with
new entrants?

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What are the barriers to entry? Knowledge,


technology, distribution network, brand?
How much would it cost a new entrant to enter
market and how quickly would this investment
pay back?

Discussion: In your groups, identify the


factors which increase or decrease the
threat of new entrants in the rechargeable

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Market Analysis
Threat of new entrant(s)
Increase
Tea
m1
Tea
m2
Tea
m3

Decrease

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Market Analysis
Threat of substitute(s)
What is threat that customers will switch to
different products?

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What are substitute products and how effective


are they?
How straightforward is it for customers to
switch products?

Discussion: In your groups, identify how a


substitute for a presently existing
rechargeable battery brand, pose a threat.

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Market Analysis
Threat of substitute(s)
Team 1

Team 2

Team 3

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Market Analysis
Competitive Rivalry
How much competition is there in the market?
How many competitors are there?
How much market share does each competitor
hold and how strong are competitor brands?
How easy is it to win new customers?

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Discussion: In your groups, identify the


factors which affect the competitiveness of
the rechargeable battery market

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Market Analysis
Competitive Rivalry
Tea
m1
Tea
m2
Tea
m3

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MARKETING
STRATEGY
IDENTIFICATION
&
ANALYSIS

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Marketing Strategy Identification


Formation of Generic Marketing
Strategy
Sources of competitive advantage
Product differentiation
Lowest cost producer

Competitive scope of the market


Target a wide market
Focus on a very narrow market

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Marketing Strategy Analysis


Should Rayovac focus on cost leadership or
product differentiation? Why?

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Marketing Strategy Analysis


What are the advantages of Niche & Volume
strategies with respect to rechargeable
batteries?
Advertising and promotion projections
2006

2007

2008

2009

2010

Volume strategy

10%

9%

7.5%

6%

6%

Niche strategy

7%

7%

6%

6%

5%

Rayovac Canada Rechargeable Battery Market Share


projections
2006

2007

2008

2009

2010

Volume strategy

25%

30%

35%

40%

45%

Niche strategy

20%

20%

20%

20%

20%

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Marketing Strategy Analysis


What are the advantages of Niche & Volume
strategies with respect to rechargeable
batteries?

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Marketing Strategy Analysis


What are the advantages of Niche & Volume
strategies with respect to rechargeable
Niche batteries?
Volume
Tea
m1
Tea
m2
Tea
m3

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Marketing Strategy
Competitive Advantage
Com
peti Broad
tive
Sco
pe Narro
w

Low Cost

Higher Cost

Overall Cost
Leadership

Differentiation

Cost Focus

Differentiation
Focus

SALES STRATEGY
ANALYSIS

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Sales Strategy Discussion


What could be the potential obstacle(s) towards
our distribution strategy through these
channels?

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Sales Strategy Discussion


Obstacles
Mass
Merchandis
ers
Traditional
Grocery
Hardware/
automotive
/
drug

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CONCLUSION

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Last BUT not the least


Ron,
What do you recommend
as another set of criteria,
if any, applicable to
decision making towards
Rayovacs entry in
rechargeable battery
market?

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Conclusion
1. Conduct a
benchmarking study
of the market hold of
current product line.
2. Think of ways in
which our
competitors can
outperform us
3. Explore ways of
promotion.

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