Spectrum Brands
A Strategic Analysis
TABLE OF CONTENTS
INTRODUCTION 1
WORLD MARKET 1
CORPORATE HISTORY 1
GROWTH STRATEGY 2
SPECTRUM AND UNITED INDUSTRIES 2
GROWTH STRATEGY 2
SPECTRUM BRANDS 3
MANAGEMENT 3
STRATEGY 3
RELATED DIVERSIFICATION 3
UNRELATED DIVERSIFICATION 4
MARKETING 5
MANUFACTURING, RAW MATERIALS, DISTRIBUTION, AND SUPPLIERS 10
CONSOLIDATION EFFORTS 10
RAW MATERIALS 11
DISTRIBUTION AND SUPPLIERS 12
SPECTRUM BRANDS FINANCES 12
SALES 12
INCOME 13
PROFITABILITY RATIOS 13
LIQUIDITY RATIOS 14
LEVERAGE RATIOS 15
ACTIVITY RATIO 16
SHARE PRICE 17
RECOMMENDATIONS 18
REFERENCES 19
INTRODUCTION
Spectrum Brands (SPC) is a global branded consumer products company with seven major product lines including Rayovac consumer batteries, Tetra pet supplies, Remington electric shaving, grooming and personal care products, VARTA portable lighting, Vigoro lawn care, Sta-Green lawn and garden, Repel, Hot Shot, and Spectracide household insect control. After acquiring United Industries from Thomas H. Lee (THL) the Boston based private equity firm in 2005, Rayovac (ROV) changed its name to Spectrum Brands and started trading on the New York Stock Exchange (NYSE) as “SPC”.
World Market
The worldwide market sector in which Spectrum competes is estimated to be US$300 billion1. The worldwide market for batteries alone is estimated at US$50 Billion2. Worldwide dog and cat food sales stood at US$45.12 billion, a 4.9% increase over the previous year3. The market for grooming consumer product is about 16 billion4. Spectrum also competes in the $8 billion 5 consumer lawn and garden market.
Corporate History
Rayovac Corporation is the third leading U.S. manufacturer of alkaline storage batteries and the market leader in other battery categories such as hearing aids, computer backup, heavy duty, lantern, and keyless entry. Rayovac's roots reach back to 1906, when entrepreneurs James B. Ramsay, P.W. Strong, and Alfred Landau joined forces to create the French
TABLE OF CONTENTS
INTRODUCTION 1
WORLD MARKET 1
CORPORATE HISTORY 1
GROWTH STRATEGY 2
SPECTRUM AND UNITED INDUSTRIES 2
GROWTH STRATEGY 2
SPECTRUM BRANDS 3
MANAGEMENT 3
STRATEGY 3
RELATED DIVERSIFICATION 3
UNRELATED DIVERSIFICATION 4
MARKETING 5
MANUFACTURING, RAW MATERIALS, DISTRIBUTION, AND SUPPLIERS 10
CONSOLIDATION EFFORTS 10
RAW MATERIALS 11
DISTRIBUTION AND SUPPLIERS 12
SPECTRUM BRANDS FINANCES 12
SALES 12
INCOME 13
PROFITABILITY RATIOS 13
LIQUIDITY RATIOS 14
LEVERAGE RATIOS 15
ACTIVITY RATIO 16
SHARE PRICE 17
RECOMMENDATIONS 18
REFERENCES 19
INTRODUCTION
Spectrum Brands (SPC) is a global branded consumer products company with seven major product lines including Rayovac consumer batteries, Tetra pet supplies, Remington electric shaving, grooming and personal care products, VARTA portable lighting, Vigoro lawn care, Sta-Green lawn and garden, Repel, Hot Shot, and Spectracide household insect control. After acquiring United Industries from Thomas H. Lee (THL) the Boston based private equity firm in 2005, Rayovac (ROV) changed its name to Spectrum Brands and started trading on the New York Stock Exchange (NYSE) as “SPC”.
World Market
The worldwide market sector in which Spectrum competes is estimated to be US$300 billion1. The worldwide market for batteries alone is estimated at US$50 Billion2. Worldwide dog and cat food sales stood at US$45.12 billion, a 4.9% increase over the previous year3. The market for grooming consumer product is about 16 billion4. Spectrum also competes in the $8 billion 5 consumer lawn and garden market.
Corporate History
Rayovac Corporation is the third leading U.S. manufacturer of alkaline storage batteries and the market leader in other battery categories such as hearing aids, computer backup, heavy duty, lantern, and keyless entry. Rayovac's roots reach back to 1906, when entrepreneurs James B. Ramsay, P.W. Strong, and Alfred Landau joined forces to create the French
References: 1 http://biz.yahoo.com/ic/323.html yahoo finance. Retrieved on March 11, 2007 2 3. http://www.petfoodindustry.com/ViewArticle.aspx?id=20330 Retrieved on March 11, 2007 4 5. Scotts 2007 annual report -http://library.corporate-ir.net/library/98/983/98364/items/273925/Scotts%20A-R_2007.pdf) Retrieved on March 11, 2007 6 7. http://www.answers.com/topic/thomas-h-lee-co?cat=biz-fin Retrieved on March 11, 2007 8 9. "Rayovac Corporation" International Directory of Company Histories, Vol. 39. St. James Press, 2001. Reproduced in Business and Company Resource Center. Farmington Hills, Mich.:Gale Group. 2008. 10. http://www.spectrumbrands.com/corpinfo/history.htm Retrieved on March 11, 2007 11 12. http://finance.google.com/finance?cid=7212371 Retrieved on March 11, 2007 13 14 http://www.spectrumbrands.com/corpinfo/history.htm Retrieved on March 11, 2007 15 http://www.answers.com/topic/rayovac-corp?cat=biz-fin Retrieved on March 11, 2007 16. http://phx.corporate-ir.net/phoenix.zhtml?c=75225&p=irol-newsArticle_Print&ID =621539&highlight= Retrieved on March 11, 2007 17 (10K 2005, 2006 and 2007) 24. http://www.answers.com/topic/rayovac-corp?cat=biz-fin Retrieved on March 11, 2007 25 (Spectrum 2007 annual report page 14) 28 http://www.petfoodindustry.com/ViewArticle.aspx?id=20330 Retrieved on March 11, 2007 29(http://www.hss.uts.edu.au/public_communication /student_work/cranberry_ad.pdf) 30 . (2006 annual report) 31