The Rayovac Corp is known to be the largest manufacturer and marketer of consumer battery in the world. The business is selling batteries for different household as well as commercial uses. Furthermore, the product lines of Rayovac consists alkaline batteries, in all standard sizes to be able to effectively compete in the highly saturated but profitable household market. The purpose of the company is to be the number one choice of the customers in the battery and rechargeable battery market in the world. Their purpose is to provide quality and standard batteries that would provide and satisfy the needs of the market in terms of a new trend of energy from both household and industrial use.
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 Battery Company6. They also manufacture flashlights and other miscellaneous items. The company has played a leadership role in the U.S. battery industry since the early 1900s. During early 1990’s Rayovac lagged behind competitors like Duracell and Energizer due to aggressive advertising and marketing campaigns by the competitors. In 1996 Thomas H. Lee Group bought the company for US$200 Million7 and reorganized the management to become again, a dominant market player. THL group took Rayovac (ROV) public in 1997 under the turnaround Chief Executive Officer (CEO) David A Jones and THL kept a 25% stake in the new company8. In the same year under Jones’ leadership Rayovac launched its “Maximum Alkaline” line of batteries. At that time alkaline batteries accounted for $2.5 billion of a $4.6 billion dollar U.S. battery market. Maximum was Jones’ value-based alternative answer to the premium-priced Duracell and Energizer batteries. Rayovac sold them at 10 to 15 percent less while offering the same performance 9.
Strengths
One of its strength of Rayovac Corp is its being a very profitable company, in both its domestic and international branches. In addition, Rayovac is a global brand established upon a reputation of quality products and services with branches in different regions. In addition, the key strength of the company include their unique management style and technological infrastructure. The strategies used by the Rayovac include intensive strategy, which aims to competently position and promote their battery products in North America and other parts of the region. To improve financial performance, the company sees to it that they utilise all their resources in a manner that will be beneficial to enhance the performance of the company.
Weaknesses
According to the given case, one of the perceived weaknesses of Rayovac is their inability to outgrow their competitors like Duracell and Energizer which dominates the market, especially North American market in terms of prices. In addition, one of the weaknesses of the Rayovac is their inability to market efficiently their new battery products in the market.
Rayovac implemented a merger and acquisition (M&A) strategy to grow the business internationally. Businesses included in the M&A strategy include the 2002 acquisition of European-based battery maker VARTA’s consumer battery business, the 2004 acquisition of 85% share in Ningbo Baowang, a Chinese battery manufacturing facility to lower production cost, and Microlite S.A., a Brazilian battery manufacturer to extend its operations into South America. In a mixed mode diversification attempt in 2003, Rayovac acquired Remington Products Company, LLC10.
In 2005, Rayovac which spun off from THL, acquired United Industries from THL for 1.2 Billion dollars13. The $1.2 billion deal was financed with $406 million in stock, $70 million in cash and assumed a debt of $880 million from United Industries. In 2005, Rayovac changed its name to Spectrum Brands and started trading on NYSE as “SPC”14.
