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Before we begin The Rechargeable Battery Opportunity APSC 598X Case Study PresentationThe University of British Columbia, Vancouver BC

Saqueib Khan ~ Nasir Ali Khan ~ Pulkit Sharma ~ Deepansh Chaudharymore for your !POWERMONEYOutlineIntroduce the case studyFramework of analysisMarket Background and AnalysisMarket Strategy Identification and AnalysisSales Strategy AnalysisConclusion

Powers Your Fun!3IntroductionUnderlying ForcesDemand Increasing energy consumptionHousehold batteries: exponential growthIncreased popularity of high-drain devicesSupply Firms seeking to meet the demandInnovationTechnology Push

Powers Your Fun!Innovation: improve current battery technologyTechnology push: Introduce rechargeable batteries4IntroductionMarket Opportunity Alkaline Batteries70% of total battery market in CanadaRelatively flat growthFocus of major competitors for next 5-10 yearsRechargeable Batteries10% of total battery market in CanadaMinimal focus of major competitors

Powers Your Fun!Alkaline batteries: competitors tried to stay ahead by finding the next big idea

Rechargeable: major competitors fear that it would cannibalize sales of their existing products

5IntroductionRayovac Battery DivisionA division of Spectrum Brands CanadaSpectrum Brands: a global consumer products company owing a variety of brand name productsBob Falconi VP of sales and marketing for Spectrum BrandsDuracell: worked for 16 years and became VP of salesPrior to Rayovac: worked for Pure Energy Battery Corp which introduced a revolutionary rechargeable alkaline battery systemPowers Your Fun!Bob Falconi - Industry experience: 27 yearsKey point: Falconi knows that, with effective marketing, the rechargeable battery market could likely grow within North America as it had in Europe.

6IntroductionCreate competitive advantage in alkaline segment

OR

Proceed with rechargeable batteries strategyFalconis Ultimate DecisionPowers Your Fun!IntroductionRayovacs GoalsMaintain positive return on investmentsMinimal cannibalization of existing productsBecome market leader in proposed segment

Powers Your Fun!FRAMEWORK OF ANALYSISAnalysis FrameworkPowers Your Fun!Market background &AnalysisMarket BackgroundBattery MarketIn 2005, the overall battery market in Canada is approximately $300 millionAlkaline segment 70%Rechargeable segment 10%Other battery chemistries (including zinc) 20%Alkaline is the dominant household battery chemistryManufacturers need to be involved in the alkaline segment in order to be an important player in this industryPowers Your Fun!Market BackgroundHeavy UsersDescriptionFamiliesTechiesEstimated Total Sales$ 200 Million$ 75 MillionDisposable IncomeLowHighType of DevicesNot High-DrainHigh-DrainDecision FactorPrice and ValueImpulsiveQuantityManyFewReplacement FrequencyLowHighPowers Your Fun!Market Background

Rayovac's Canadian Market SharePowers Your Fun!Market BackgroundRayovac's Global Net Sales (Percentage) (Exhibit 5)Powers Your Fun!Market BackgroundRayovac's Global Net Sales (US$ 000s)(Exhibit 6 incorporated in Exhibit 5)

Powers Your Fun!Market AnalysisObjectivesPerform a structural analysis of the battery industryAssess and evaluate Rayovacs competitive position currently and in rechargeable battery marketIdentify competitive strategy to meet the opportunities and threats in Rayovacs external environmentProvide meaningful insight when performing SWOT and other applicable analysis

Powers Your Fun!Market AnalysisPower of BuyersCompetitive RivalryPower of SuppliersThreat of New EntrantsThreat of SubstitutesPowers Your Fun!The model of the Five Competitive Forces wasdeveloped by Michael E. Porter in his bookCompetitive Strategy: Techniques forAnalyzing Industries and Competitors in 1980.

Porter identified five competitive forcesthat shape every industry and every market.These forces determine the intensity ofcompetition and hence the profitability andattractiveness of an industry.

The objective ofcorporate strategy should be to modify thesecompetitive forces in a way that improves theposition of the organization.

NOT analyzing the internal strengths and weaknesses of an organization

The term 'suppliers' comprises all sources forinputs that are needed in order to providegoods or services.

The term buyer comprises both distributers and end consumers

18Market AnalysisPower of suppliersHow 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? Discussion: In your groups, identify the factors which strengthen or weaken the dominance of suppliers in the rechargeable batteries market?00:0100:0200:0300:0400:0500:0600:0700:0800:0900:1000:1100:1200:1300:1400:1500:1600:1700:1800:1900:2000:2100:2200:2300:2400:2500:2600:2700:2800:2900:3000:3100:3200:3300:3400:3500:3600:3700:3800:3900:4000:4100:4200:4300:4400:4500:4600:4700:4800:4900:5000:5100:5200:5300:5400:5500:5600:5700:5800:5901:0001:0101:0201:0301:0401:0501:0601:0701:0801:0901:1001:1101:1201:1301:1401:1501:1601:1701:1801:1901:2001:2101:2201:2301:2401:2501:2601:2701:2801:2901:3001:3101:3201:3301:3401:3501:3601:3701:3801:3901:4001:4101:4201:4301:4401:4501:4601:4701:4801:4901:5001:5101:5201:5301:5401:5501:5601:5701:5801:5902:00Powers Your Fun!Market AnalysisPower of suppliers

StrongWeakTeam 1Team 2Team 3Powers Your Fun!Market AnalysisPower of buyersHow 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? Discussion: In your groups, identify the factors which strengthen or weaken the power of buyers ?00:0100:0200:0300:0400:0500:0600:0700:0800:0900:1000:1100:1200:1300:1400:1500:1600:1700:1800:1900:2000:2100:2200:2300:2400:2500:2600:2700:2800:2900:3000:3100:3200:3300:3400:3500:3600:3700:3800:3900:4000:4100:4200:4300:4400:4500:4600:4700:4800:4900:5000:5100:5200:5300:5400:5500:5600:5700:5800:5901:0001:0101:0201:0301:0401:0501:0601:0701:0801:0901:1001:1101:1201:1301:1401:1501:1601:1701:1801:1901:2001:2101:2201:2301:2401:2501:2601:2701:2801:2901:3001:3101:3201:3301:3401:3501:3601:3701:3801:3901:4001:4101:4201:4301:4401:4501:4601:4701:4801:4901:5001:5101:5201:5301:5401:5501:5601:5701:5801:5902:00Powers Your Fun!Market AnalysisPower of buyers

IncreaseDecreaseTeam 1Team 2Team 3Powers Your Fun!Market AnalysisThreat of new entrant(s)How likely is it that competition will increase with new entrants? 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 battery market?

00:0100:0200:0300:0400:0500:0600:0700:0800:0900:1000:1100:1200:1300:1400:1500:1600:1700:1800:1900:2000:2100:2200:2300:2400:2500:2600:2700:2800:2900:3000:3100:3200:3300:3400:3500:3600:3700:3800:3900:4000:4100:4200:4300:4400:4500:4600:4700:4800:4900:5000:5100:5200:5300:5400:5500:5600:5700:5800:5901:0001:0101:0201:0301:0401:0501:0601:0701:0801:0901:1001:1101:1201:1301:1401:1501:1601:1701:1801:1901:2001:2101:2201:2301:2401:2501:2601:2701:2801:2901:3001:3101:3201:3301:3401:3501:3601:3701:3801:3901:4001:4101:4201:4301:4401:4501:4601:4701:4801:4901:5001:5101:5201:5301:5401:5501:5601:5701:5801:5902:00Powers Your Fun!Market AnalysisThreat of new entrant(s)

IncreaseDecreaseTeam 1Team 2Team 3Powers Your Fun!Market AnalysisThreat of substitute(s)What is threat that customers will switch to different products? 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. 00:0100:0200:0300:0400:0500:0600:0700:0800:0900:1000:1100:1200:1300:1400:1500:1600:1700:1800:1900:2000:2100:2200:2300:2400:2500:2600:2700:2800:2900:3000:3100:3200:3300:3400:3500:3600:3700:3800:3900:4000:4100:4200:4300:4400:4500:4600:4700:4800:4900:5000:5100:5200:5300:5400:5500:5600:5700:5800:5901:0001:0101:0201:0301:0401:0501:0601:0701:0801:0901:1001:1101:1201:1301:1401:1501:1601:1701:1801:1901:2001:2101:2201:2301:2401:2501:2601:2701:2801:2901:3001:3101:3201:3301:3401:3501:3601:3701:3801:3901:4001:4101:4201:4301:4401:4501:4601:4701:4801:4901:5001:5101:5201:5301:5401:5501:5601:5701:5801:5902:00Powers Your Fun!Market AnalysisThreat of substitute(s)

Team 1Team 2Team 3Powers Your Fun!26Market AnalysisCompetitive RivalryHow 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? Discussion: In your groups, identify the factors which affect the competitiveness of the rechargeable battery market

00:0100:0200:0300:0400:0500:0600:0700:0800:0900:1000:1100:1200:1300:1400:1500:1600:1700:1800:1900:2000:2100:2200:2300:2400:2500:2600:2700:2800:2900:3000:3100:3200:3300:3400:3500:3600:3700:3800:3900:4000:4100:4200:4300:4400:4500:4600:4700:4800:4900:5000:5100:5200:5300:5400:5500:5600:5700:5800:5901:0001:0101:0201:0301:0401:0501:0601:0701:0801:0901:1001:1101:1201:1301:1401:1501:1601:1701:1801:1901:2001:2101:2201:2301:2401:2501:2601:2701:2801:2901:3001:3101:3201:3301:3401:3501:3601:3701:3801:3901:4001:4101:4201:4301:4401:4501:4601:4701:4801:4901:5001:5101:5201:5301:5401:5501:5601:5701:5801:5902:00Powers Your Fun!Market AnalysisCompetitive Rivalry

Team 1Team 2Team 3Powers Your Fun!Marketing strategy identification&AnalysisMarketing Strategy IdentificationFormation of Generic Marketing StrategySources of competitive advantage Product differentiationLowest cost producer Competitive scope of the market Target a wide marketFocus on a very narrow market

Powers Your Fun!Need to analyze to aspects according to Porter30Marketing Strategy AnalysisShould Rayovac focus on cost leadership or product differentiation? Why? 00:0100:0200:0300:0400:0500:0600:0700:0800:0900:1000:1100:1200:1300:1400:1500:1600:1700:1800:1900:2000:2100:2200:2300:2400:2500:2600:2700:2800:2900:3000:3100:3200:3300:3400:3500:3600:3700:3800:3900:4000:4100:4200:4300:4400:4500:4600:4700:4800:4900:5000:5100:5200:5300:5400:5500:5600:5700:5800:5901:0001:0101:0201:0301:0401:0501:0601:0701:0801:0901:1001:1101:1201:1301:1401:1501:1601:1701:1801:1901:2001:2101:2201:2301:2401:2501:2601:2701:2801:2901:3001:3101:3201:3301:3401:3501:3601:3701:3801:3901:4001:4101:4201:4301:4401:4501:4601:4701:4801:4901:5001:5101:5201:5301:5401:5501:5601:5701:5801:5902:00Powers Your Fun!Marketing Strategy AnalysisAdvertising and promotion projections20062007200820092010Volume strategy 10%9%7.5%6%6%Niche strategy7%7%6%6%5%Rayovac Canada Rechargeable Battery Market Share projections20062007200820092010Volume strategy 25%30%35%40%45%Niche strategy20%20%20%20%20%What are the advantages of Niche & Volume strategies with respect to rechargeable batteries?Powers Your Fun!Marketing Strategy AnalysisWhat are the advantages of Niche & Volume strategies with respect to rechargeable batteries?00:0100:0200:0300:0400:0500:0600:0700:0800:0900:1000:1100:1200:1300:1400:1500:1600:1700:1800:1900:2000:2100:2200:2300:2400:2500:2600:2700:2800:2900:3000:3100:3200:3300:3400:3500:3600:3700:3800:3900:4000:4100:4200:4300:4400:4500:4600:4700:4800:4900:5000:5100:5200:5300:5400:5500:5600:5700:5800:5901:0001:0101:0201:0301:0401:0501:0601:0701:0801:0901:1001:1101:1201:1301:1401:1501:1601:1701:1801:1901:2001:2101:2201:2301:2401:2501:2601:2701:2801:2901:3001:3101:3201:3301:3401:3501:3601:3701:3801:3901:4001:4101:4201:4301:4401:4501:4601:4701:4801:4901:5001:5101:5201:5301:5401:5501:5601:5701:5801:5902:00Powers Your Fun!Marketing Strategy AnalysisWhat are the advantages of Niche & Volume strategies with respect to rechargeable batteries?NicheVolumeTeam 1Team 2Team 3Powers Your Fun!Marketing StrategyCompetitive AdvantageCompetitive ScopeLow CostHigher CostBroadOverall Cost LeadershipDifferentiationNarrowCost FocusDifferentiation FocusPowers Your Fun!SALES strategy AnalysisSales Strategy DiscussionWhat could be the potential obstacle(s) towards our distribution strategy through these channels?

00:0100:0200:0300:0400:0500:0600:0700:0800:0900:1000:1100:1200:1300:1400:1500:1600:1700:1800:1900:2000:2100:2200:2300:2400:2500:2600:2700:2800:2900:3000:3100:3200:3300:3400:3500:3600:3700:3800:3900:4000:4100:4200:4300:4400:4500:4600:4700:4800:4900:5000:5100:5200:5300:5400:5500:5600:5700:5800:5901:0001:0101:0201:0301:0401:0501:0601:0701:0801:0901:1001:1101:1201:1301:1401:1501:1601:1701:1801:1901:2001:2101:2201:2301:2401:2501:2601:2701:2801:2901:3001:3101:3201:3301:3401:3501:3601:3701:3801:3901:4001:4101:4201:4301:4401:4501:4601:4701:4801:4901:5001:5101:5201:5301:5401:5501:5601:5701:5801:5902:00Powers Your Fun!Sales Strategy DiscussionObstaclesMass Merchandisers Traditional GroceryHardware/automotive/drugPowers Your Fun!ConclusionLast 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?Powers Your Fun!ConclusionConduct a benchmarking study of the market hold of current product line.Think of ways in which our competitors can outperform usExplore ways of promotion.Technological / competitive edge

Powers Your Fun!

Questions ??????Powers Your Fun!Chart10.350.350.20.1

Column1

Sheet1Column1Duracell (35%)35%Energizer (35%)35%Rayovac (20%)20%Other (10%)10%To resize chart data range, drag lower right corner of range.

Chart10.340.230.150.10.10.06

Global Market Share

Sheet1Global Market ShareMass Merchandisers (34%)34%Traditional Grocery (23%)23%Membership Clubs (15%)15%Hardware/Automotive (10%)10%Drug (10%)10%All Others (6%)6%To resize chart data range, drag lower right corner of range.