Before we begin

Think
Tanks

Your own teams

Discussion
Time

2 minutes

Discussion
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

MORE

POWER

FOR YOUR

MONEY !

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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Fun!

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

Fun!

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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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Fun!

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

Fun!

FRAMEWORK OF
ANALYSIS

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Fun!

Analysis Framework
Market
Analysis

Marketing
Strategy

Ultimate
Decisio
n

Sales
Strategy

MARKET BACKGROUND
&
ANALYSIS

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Fun!

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

Fun!

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Fun!

Market Background
Rayovac's Canadian Market Share

Duracell (35%)
Energizer (35%)
Rayovac (20%)
Other (10%)

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Fun!

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

2003
2004

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Fun!

Market Background
Rayovac's Global Net Sales (US$ 000s)
Thousands

(Exhibit 6 incorporated in Exhibit 5)

$700.00
$600.00
$500.00
$400.00
$300.00
$200.00
$100.00
$0.00

2003
2004

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Fun!

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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Fun!

Market Analysis
Threat of New Entrants

Power of
Suppliers

Competitive
Rivalry

Threat of Substitutes

Power of
Buyers

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Fun!

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?

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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?

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Market Analysis
Power of suppliers
Strong
Tea
m1

Tea
m2
Tea
m3

Weak

Fun!

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Fun!

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?

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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 ?

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Market Analysis
Power of buyers
Increase
Tea
m1

Tea
m2
Tea
m3

Decrease

Fun!

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Fun!

Market Analysis
Threat 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?

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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?

Powers Your

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

Tea
m2
Tea
m3

Decrease

Fun!

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Fun!

Market Analysis
Threat of substitute(s)
What is threat that customers will switch to different
products?
What are substitute products and how effective are
they?

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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

Fun!

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Fun!

Market Analysis
Competitive Rivalry
How much competition is there in the market?
How many competitors are there?

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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

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Market Analysis
Competitive Rivalry
Tea
m1

Tea
m2
Tea
m3

Fun!

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

Fun!

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Fun!

Marketing Strategy Analysis

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

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Fun!

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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Fun!

Marketing Strategy Analysis

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

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Fun!

Marketing Strategy Analysis

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

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Marketing Strategy

Low Cost

Higher Cost

Broad

Overall Cost
Leadership

Differentiation

Narrow

Competitive Scope

Competitive Advantage

Cost Focus

Differentiation Focus

SALES STRATEGY
ANALYSIS

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Fun!

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
Merchandiser
s
Traditional
Grocery
Hardware/
automotive/
drug

Fun!

CONCLUSION

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Fun!

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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Fun!

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.
4. Technological /
competitive edge

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Questions ??????

Fun!