COLGATE PALMOLIVE

HISTORY

Colgate Palmolive was established by William Colgate in 1806

A global consumers products company with a diverse product portfolio.

ABOUT COLGATE PALMOLIVE

Household and Personal Products

Oral care Personal care Home care Pet Nutrition

Industry Products Household Products • Laundry Detergent • Cleaners • Fabric Conditioner

Personal Products • Hair care • Deodorant• Soap

Financials

Competition

Proctor and Gamble o Differentiatoro Price Leadershipo Reducing COGSo Divestiture – focus brands

(80 Products/ 90 % of sales)o Innovation

Kimberly Clarko Differentiator (Professional

Products )o Ex: Work Gloves/ Tissues o Divestiture of health care

productso Focus on professional ,

consumer care , consumer tissue

o Environmental Sustainabilityo Innovation.

Clorox Differentiator (Concentrating

Health and Wellness ) Environmental Sustainability Divestiture (Auto Care ) Innovation Diversification of suppliers Cleaning (bleach ) and

House Products.

Strategies and Factors

Business Level Strategy o According to Michael Porter ‘s Business level Strategy one would

consider Colgate – Palmolive to be a DIFFERENTIATOR .• Name Brand Strategy • Large Number Of Products• Innovative

o The Miles and Snow Strategy would classify Colgate – Palmolive as both a defender and prospector which means they consider Colgate – Palmolive be an ANALYZER

• Always advancing current products • Efficient

Corporate Level Strategy o Related Diversification

• Many in store brand names Hill ‘ s science Diet Pet Food Colgate Toothpaste Palmolive Dish Soap

• Many products are similar in raw materials .

Distinctive Competence o Diversified geographic operationo Leading market positiono Large product and brand portfolioo Continuous Improvement .

Critical Success Factorso Offering high quality products at a lower price o Positive Environmental Valueso Offers a variety and depth of products catering to every buying

group

Stakeholder Stakeholder Employees Directors Local Communities Customers( End Users ) Distributors Suppliers Business Partners.

Strengths/Opportunities

Opportunities

How will we use our strengths to take advantage of our opportunities.

O1: Increase in disposable income O2: Asian Market Expansion under Developed nations.03 : Increased in societal standardO4 : Increased pet industry spending

StrengthsS1: Expansive Global Presence S2: Large Market PresenceS3: diverse Product LinesS4: Purchasing PowerS5: Inventory Turnover

Maxi-Maxi Strategy1. Colgate – Palmolive should use

its affluence to expand into more foreign markets , and grow it s global brand

2. Expanding the company’s product line to include more pet care item as well as re branding one its current products .

S/O Implementationo Using it s already established global company, Colgate –

Palmolive needs to focus its efforts on expanding its reach to the emerging small towns and cities that are currently arising in Asia. The increased demand for these areas provides an excellent opportunity for growth and expansion efforts. If the company acts quick, they will be able to gain a majority share in these currently developing areas. and have a foot held when the population increases and expands Colgate products in this areas will be offered in smaller , refillable sizes , and vale packs to make products more affordable and attainable for this market.

o Colgate – Palmolive already has a wide range of dog food products available , all with a scientific feel to the names , But none with a large share of the market .

S/o Evaluation o Within one year of expanding, the company will measure the sales

after the implementation of its products . Since this will be a new area of expansion, previous sales number will be unavailable for the specific area .In order to measure the effectiveness of the market expansion , Colgate – Palmolive will have to use the data from similar markets in order to measure their reach in these new areas.

o The change in name and increased advertising for the “new” dog food product should cause a jump in sales for the new product , and the toys and treats associated with the new name should grow as well .In order to determine the change in amount of profit from these new items , its necessary to compare previous year profit to the ones after rebranding .Colgate – Palmolive s line is recommended since it will provide a better idea of the market share act of the rebranded product line.

Strengths/Threats

Threats

How will we use our strengths to minimize our threats ?

T1 : Economic Barrier T2 : Unstable Political Structure .T3 : CompetitionT4 : Legal and Regulatory RisksT5 : Low Barrier to entry.T6 : Political Instability

Strengths S1 : Expansive Global presence S2 : Large Market Presence S3 : Diverse Product Lines S4 : Purchasing Power S5 : Inventory Turnover

Maxi – Mini Strategy1. Colgate – Palmolive Should

continue to grow it s expansive global presence and expand into more countries to minimize its threats of political unstable countries.

2. Colgate – Palmolive should capitalize on its diverse product line to continue to beat the competition in innovative products.

S/T Implementation.o Since Colgate - Palmolive is a market leader and it has the assets

to grow and expand , it should increase it s global network into newly developing countries and new economies. Expanding into multitude of countries mitigates the risk it experiences through diversification . Colgate – Palmolive has the capital and the expertise to expand into these markets and use a combination of existing products and market – specific offerings to develop a presence there.

o In addition , the development of new and innovative products can occur concurrently with this market expansion due to exposure to new markets. It would be profitable for Colgate – Palmolive to invest in new product development , especially in developing countries.

S/T Evaluationo New Markets provide research and development

opportunities .Expansive demographics to learn new market dynamics from and acquisitions that can bring new talent and intellectual capital into capital into the organization .

o Hedging risk through multiple investments in variety of markets will help ensure progressive and stable growth, despite risky political environments and changing public policies in certain developing countries. All of these factors contribute to the success of a global expansion strategy for Colgate-Palmolive, allowing it to minimize risk while developing its innovative product line and increasing its competitive advantage and market stability .

Weakness/Opportunities

Opportunities

How will we minimize weaknesses by taking advantage of opportunities ?

O1 : Increase in disposable Income.O2 : Asian market Expansion – under Developed Countries.O3 : Increase in societal Standard.O4 : Increased pet industry spending .

WeaknessW1 : High debt to – equityW2 : Product RecallW3 : Dependence on International Markets .

Mini – Maxi Strategy 1. Increase focus on U.S.

markets , especially the pet industry , to lessen damage if international market decline.

2. Use increased revenue from the rise in the disposable and societal standard in the U.S. to retain earnings and pay debt.

W/O Implementationo Continue striving for international growth, but focus on having

the U.S. market represent a larger percent of total sales in order to minimize risk. This can be achieved by expanding the product line in the U.S., especially the pet food sector.

o The risk in societal standard for health and beauty will increase demand for personal care products. This ,in addition to customers having more disposable income to spend on the products, indicates that Colgate – Palmolive ‘s sales will most likely grow in the future .The company could then use the profits to build equity for the ue of future expense and rely less on debt.

W/O Evaluationo Aim for percentage of net sales to be at least 10% higher for

North America than other market within Colgate – Palmolive . Total sales should continue growing for all segments.

o Colgate – Palmolive should have lower debt –to- equity ratios in the future. Even though they are using the debt to fund growth , they should be closer to half their current DTE.

Weakness/Threats

Threats

How will we minimize our weaknesses to combat against

our threats ?

T1 : Economic Barriers T2 : Unstable Political Structures.T3 : CompetitionT4 : Legal an Regulatory RisksT5 : Low Barrier to Entry

W1 : high debt to equityW2 : Product RecallW3 : Dependence on International Market.

Mini – Maxi Strategy1.To battle the threat of legal and regulatory risks, Colgate Palmolive should institute product quality controls as well as task force to properly an efficiently handle product recalls.

W/T Implementationo The increase in class action lawsuits and mass torts against

companies has increased a threat and weakness within Colgate - Palmolive . In order to effectively minimize the threat from public with Colgate – Palmolive should

• Keep a tighter control over their supply chain,.• Utilize a product quality campaign • Create a Public Representation task force to efficiently handle recalls without

public harm.o Colgate Palmolive’s Dependence on international markets has

created a dependence on a country ‘s stability and government .To protect against losing assets abroad from unstable governments Colgate Palmolive should

• Create more products within the host countries.• Withdraw assets from high risk areas and diversifying assets over several

different countries .

W/T Evaluationo To keep a greater control over the supply chain Colgate Palmolive

should acquire producers as well as move factories from abroad to their host countries .• Quality Programme

Create a quality task force within each country to have an effectively control on product quality.

Random checks an supplier and producers to minimize risk of product deficiency .

o International Dependence Strategy.• Create a campaign to move more production back into stable countries

such as U.S. , U.K. , Western Europe , Etc.• Ingrain company into countries through public goodwill programmes such

as environmental responsibility and promotional advertising and giveaways.

• Remove factories and production from high risk areas such as the middle east , sub – Saharan Africa , Central America, and South America (ex : Somalia, Syria , Honduras )

These slides are prepared by P.V.S. SAATTHVIK from Avinash College Of Commerce , Hyderabad in a Marketing Internship under the guidance of Prof. Sameer Mathur , IIM Lucknow