Gillette's Acquisition of Duracell
Key Issues
The Gillette Company was founded in 1901 in a small office in Boston. Since its departure, Gillette has positioned itself as one of the most recognizable brands not only through their safety razor blades, but also through corporate diversification. This included the acquisition of a number of major companies, most recently Duracell. Prior to this acquisition, the Duracell Corporation had been the leading producer of alkaline batteries in the United States and maintained consistent growth in revenues from 1991-1996. Since their purchase of Duracell, their stock price has fallen 45% to a low of $34. The issue for Gillette is to determine if they can promote the profitable growth of their acquisition.
Decision Criteria
The main criteria that will be used to evaluate the key issues Duracell is currently facing, is weather Gillette 's acquisition does in fact create a good synergy between the two companies (Gillette & Duracell). A synergy can be defined as the working of two things together, to produce an effect that 's greater than their individual parts. Therefore, one must evaluate whether the acquisition was actually in the company 's best interest. This is tied into the second decision criteria, growth. Gillette needs to ensure that the growth of their company, as well as their new acquisition, Duracell 's growth remains profitable. Prior to the acquisition of Duracell, Gillette had been experiencing a consistent growth of 17% per year for the previous six years and was the industry leader in the personal shaver industry.
Analysis
External: The external environment in which Duracell is operating holds many interesting characteristics, which we can use and analyze in order to see how Duracell compares to the competition. Porters 5 forces of competition illustrate a very useful outline for us to analyze the current competition in the battery industry. Duracell holds a competitive advantage with resources available to
The Gillette Company was founded in 1901 in a small office in Boston. Since its departure, Gillette has positioned itself as one of the most recognizable brands not only through their safety razor blades, but also through corporate diversification. This included the acquisition of a number of major companies, most recently Duracell. Prior to this acquisition, the Duracell Corporation had been the leading producer of alkaline batteries in the United States and maintained consistent growth in revenues from 1991-1996. Since their purchase of Duracell, their stock price has fallen 45% to a low of $34. The issue for Gillette is to determine if they can promote the profitable growth of their acquisition.
Decision Criteria
The main criteria that will be used to evaluate the key issues Duracell is currently facing, is weather Gillette 's acquisition does in fact create a good synergy between the two companies (Gillette & Duracell). A synergy can be defined as the working of two things together, to produce an effect that 's greater than their individual parts. Therefore, one must evaluate whether the acquisition was actually in the company 's best interest. This is tied into the second decision criteria, growth. Gillette needs to ensure that the growth of their company, as well as their new acquisition, Duracell 's growth remains profitable. Prior to the acquisition of Duracell, Gillette had been experiencing a consistent growth of 17% per year for the previous six years and was the industry leader in the personal shaver industry.
Analysis
External: The external environment in which Duracell is operating holds many interesting characteristics, which we can use and analyze in order to see how Duracell compares to the competition. Porters 5 forces of competition illustrate a very useful outline for us to analyze the current competition in the battery industry. Duracell holds a competitive advantage with resources available to