ArmandHammerStrategicAudit

1、Arm and Hammer Strategic AuditBUAD 455- Strategic ManagementBy: Jeremy W. NewellProfessor: M. Goreishi Ph.D.April 5, 2007IA. History and Background Information about Church & Dwight Co. Inc.Arm and Hammer is a brand name owned by Church & Dwight Co., Inc. Arm and Hammer is a product containi

2、ng sodium bicarbonate based products, more commonly known as baking soda. Arm & Hammer brand name can now be found on a variety of consumer products in 95% of U.S. households. After the product was introduced in 1878 Arm and Hammer became a fundamental item on the pantry shelf for Americans. Arm

3、 and Hammer baking soda has been transformed from a product used for baking, to a product used for cleaning and deodorizing primarily. A time table of significant events is shown as follows:Exhibit 1- Time Table of Significant Events1846Arm and Hammer Baking Soda was introduced to the public for use

4、 in baking.1867Austin Church retires and his two sons form Church & Co. They introduce the familiar hammer logo.1888Church & Co. Introduced trading cards that promoted the importance of preserving the environment.1896A merger created Church & Dwight Co. Inc.1927First full page ads ran in

5、 national magazines like Good Housekeeping, promoting the kitchen and personal care uses of Baking Soda.1970Church & Dwight introduces the first non-phosphate detergent promoting care for the environment. The company was also the sole corporate sponsor of earth day this year.1972Church and Dwigh

6、t introduce the idea of Baking Soda in your refrigerator and freezer to keep food fresh.1975Church and Dwight Co. bring its marketing in-house1980Church and Dwight introduce Arm & Hammer laundry detergent and they become best sellers.1981-2007Arm & Hammer introduces Carpet Deodorizer, and an

7、 array of other household products2001Church and Dwight Co. acquires USA Detergents Inc. and many other companiesI. Current SituationA. Current Performance1. Third Quarter sales rose 11.8% in 20062. Recent acquisitions have helped broaden market share and increased sales3. Company eared $38.7 millio

8、n, or 57 cents a share, in third quarter of 2006, compared with $34.6 million, or 51 center per share one year ago4. 2006 Third Quarter revenue rose 17.1% compared to 1 year agoB. Strategic Posture1. MissionAt Church & Dwight our aim is to provide principles of management practice, leadership an

9、d training by which our company can provide safe and effective products for their household, commercial, institutional and industrial customers and consumers. We are committed to advancing human health, and environmental quality, social well-being and economic growth.2. Objectives· To increase

10、sales in U.S. markets· To acquire new businesses to help increase sales revenue· To Focus on consumers, customers, suppliers, and competitors· To protect the environment with baking soda products3. Strategies· Effective Leadership through: Energizing High energy and passion; able

11、 to energize group/team to achieve stretch objectives Entrepreneurial Visionary and courageous; bold, intelligent risk-taking. Enable Improves the performance of others through coaching/mentoring; removes barriers, provides the right resources· Analytical and Strategic Thinking: Think analytica

12、lly and thoughtfully about the business, identify and solve problems, be “on top” of his/her area of responsibility and competitive environment. Identify strategies that build advantage· Acquire new businesses through acquisitions and mergers4. Policies· Sustainable development through cre

13、ating a balance between the economic, environmental and social aspects of business· Commitment to the enhancement of human health and quality of life through the safe and effective formulation, production and sale of products and ingredients that provide desirable benefits for household, commer

14、cial, institutional customers and consumers· Commitment to provide for a healthy and safe workplace· Commitment to conducting operations in an environmentally responsible manner while striving to sustain the goals of the companyII. Corporate GovernanceA. Board of Directors· T. Rosie A

15、lbright - Retired President Carter Products Division Carter-Wallace, Inc., Director since Nov. 2004· James R. Craigie - President and Chief Executive Officer Church & Dwight Co., Inc., Director since 2004· Robert A. Davies, III Chairman Church & Dwight Co., Inc., Director since 199

16、5· Rosina B. Dixon, M.D. - Physician and Consultant Director since 1979· Brad Irwin President Cadbury Adams U.S.A. LLC, Director since Nov 2006 · J. Richard Leaman, Jr. - Retired President and Chief Executive Officer S.D. Warren Company, Director since 1985 · Robert D. LeBlanc -

17、Consultant, retired President and Chief Executive Officer Handy & Harman, Director since 1998 · Robert A. McCabe Chairman, Pilot Capital Corporation Director since 1987· Dwight C. Minton Chairman Emeritus Church & Dwight Co., Inc., Director since 1965· Lionel L. Nowell, III -

18、Senior Vice President and Treasurer PepsiCo, Inc.Director since 2003, Ravi K. Saligram - President International Aramark Corporation, Director since Aug 2006 · John O. Whitney - Lead Director Professor Emeritus of ManagementColumbia Business School, Director since 1992B. Top Management· Ro

19、bert A. Davies, III - Chairman · James R. Craigie - President and Chief Executive Officer · Jacquelin J. Brova - Vice President Human Resources · Mark G. Conish - Vice President Global Operations · Steven P. Cugine - Vice President Global New Product Innovation · Matthew T.

20、Farrell - Vice President Finance and Chief Financial Officer · Bruce F. Fleming - Vice President Chief Marketing Officer · Susan E. Goldy - Vice President, General Counsel and Secretary · Adrian J. Huns - Vice President, President: International Consumer Products · Joseph A. Sipi

21、a, Jr. - Vice President, President and Chief Operating Officer Specialty Products Division · Paul Siracusa, Ph.D. - Vice President Global Research & Development · Louis H. Tursi, Jr. - Vice President Domestic Consumer SalesIII. External Environment: Opportunities and Threats (SWOT)A. S

22、ocietal Environment1. Economical Trendsa.) Downturn in U.S. economy- Threat (MerrillL)b.) Upturn in World economy- Opportunity (MerrilL)c.) Interest rates unstable and climbing- Threat (MSN Money)2. Technological Trendsa.) Baking soda is good for pollution control- Opportunity (City of Norman)b.) Em

23、ergence of wide use of internet to purchase consumer goods- Opportunity/Threatc.) New uses for sodium-bicarbonate are being explored- Opportunity3. Political-Legal Trendsa.) Acquisitions of other companies becoming common- Opportunity4. Socio-cultural trendsa.) Consumers want safe cleaning products-

24、 Opportunityb.) Consumers are more concerned with the health of the environment- Opportunityc.) Consumers want to be clean and keep their homes free from germs- Opportunity/ThreatB. Task Environment1. The industry competition is driven by the consumers desire to keep their homes clean and themselves

25、 clean. Consumers want to be free of disease and have fresh smelling clothing, refrigerators, breath, and homes. Consumers want to look good also. Laundry detergent companies fight over who can get stains out of clothing the best. These factors do vary globally. Underdeveloped countries are less int

26、erested in keeping everything around themselves clean and free of dirt. Underdeveloped countries are meeting needs lower on the hierarchy of Maslows needs.2. Five competitive forcesa.) Threat of new entrants- Low because the market is saturated with competitors.b.) Bargaining power of buyers- The ba

27、rgaining power of buyers is high because there are so many choices for consumers. There are at least 10 different types of toothpaste on the supermarket shelves.c.) Threat of substitute products- This is high for many of Church and Dwight Co.s products such as laundry detergent and toothpaste. But t

28、he threat of substitute products is low for anyone looking for a baking soda based product because Arm & Hammer is the leader in this forte.d.) Bargaining Power of suppliers- This is low because for Arm & Hammer has so many competitors selling very similar products.e.) Rivalry among competit

29、ors- Rivalry is high in the household cleaning products segment. There are many substitute products and prices are relatively low among all of them. Exhibit 2- External Factor Analysis SummaryKey External FactorsWeightRatingWeighted ScoreCommentsOpportunitiesUpturn in World economy .104.1.41Entering

30、 new global market could help increase salesBaking soda is good for pollution control .103.30Consumers concerned about pollution will use Arm & HammerEmergence of wide use of internet to purchase consumer goods .053.2.16Selling products on Amazon could prove to help salesNew uses for sodium-bica

31、rbonate are being explored .052.3.115Baking soda is the main ingredient and new uses could prove beneficialAcquisitions of other companies becoming common .053.15Church & Dwight is diversifying through acquisitionsConsumers want safe cleaning products.053.3.33Baking soda is safe and Arm & Ha

32、mmer uses itConsumers are more concerned with the health of the environment.103.3.165Environmentally friendly cleaning product are becoming more popularThreatsDownturn in U.S. economy .1540.6People have less disposable incomeInterest rates unstable and climbing .103.20.32People owe more and more to

33、credit card companies, therefore they are buying the cheapest products availableEmergence of wide use of internet to purchase consumer goods .1530.45Other companies can use the internet as a way to sell their products if Arm & Hammer is not available onlineConsumers want to be clean and keep the

34、ir homes free from germs.102.5.25Consumers may turn to harsh ant-bacterial cleaning products instead of natural baking sodaTOTAL SCORES1.003.25IV. Internal Environment: Strengths and WeaknessesA. Corporate Structure1. Church and Dwight company is operating under a centralized structure. Although the

35、 Church and Dwight co. has acquired several other companies, they are still operating under a centralized structure. The company has many vice presidents for its various departments and product lines, but all of these vice presidents report to one president who in-turn reports to the board of direct

36、ors.2. The structure of the company is understood by everyone in the corporation. The Church and Dwight website shows the corporate structure very clearly.3. Since Church and Dwight is expanding its product lines, they could benefit from a decentralized structure. The company has not been very succe

37、ssful in overseas markets and this could be improved by decentralizing.4. Other competitors of Church and Dwight are also operating as a centralized structure. B. Corporate Culture1. The corporate culture is well defined for Church and Dwight Company. Church and Dwight principles can be seen here.2.

38、 THE KEY SKILLS & BEHAVIORS THAT HELP CHURCH AND DWIGHT SUCCEED LEADERSHIP (5 ES)a.) Energizing High energy and passion; able to energize group/team to achieve stretch objectives.b.) Entrepreneurial Visionary and courageous; bold, intelligent risk-taking.c.) Edge Makes tough calls but is right m

39、ost of the time. Effective in direction setting.d.) Execution Delivers commitments and results consistently on time and with quality.e.) Enable Improves the performance of others through coaching/mentoring; removes barriers, provides the right resources.f.) ANALYTICAL & STRATEGIC THINKING:Thinks

40、 analytically and thoughtfully about the business, identifies and solves problems, is “on top” of his/her area of responsibility and competitive environment. Identifies strategies that build advantage.g.) COLLABORATION AND TEAMWORKDevelops productive working relationships within/and across functions

41、 and business units that builds trust. Finds win-win solutions, rather than playing win-lose. h.) COMMUNICATIONWrites and/or speaks persuasively and concisely in ways that build commitment.i.) FUNCTIONAL MASTERYHas necessary skills to perform at a high level consistently within his/her business func

42、tion. These will differ by department.C. Corporate Resources1. Marketing- Church and Dwight has successfully used the 4 Ps of marketing. They have low prices compared to the competition. They have products in all the major retail outlets. They have a product that people need to use every day. And th

43、ey promote their product well through TV, magazine, and other advertisements. They also sponsor Earth Day events each year.a.) Church and Dwight Co. focuses on consumers, customers, suppliers, and competitors. Applies ideas insights, plus sees the “big picture” to strengthen their competitiveness. T

44、hey look for opportunities to collaborate with outsiders to help leverage their strengths “Act Local, Think Global”.2. FinanceDIRECT COMPETITOR COMPARISONChurch and DwightClorox Co.Proctor and GambleUnilever, Privately HeldIndustryMarket Cap:3.37B9.64B198.79BN/A508.40MEmployees:3,6557,600138,000N/A1

45、.53KQtrly Rev Growth (yoy):22.00%3.50%7.60%N/A8.70%Revenue (ttm):1.95B4.74B73.60BN/A1.17BGross Margin (ttm):39.19%42.68%51.92%N/A27.94%EBITDA (ttm):335.56M1.10B18.23BN/A61.96MOper Margins (ttm):13.69%17.45%20.75%N/A-1.28%Net Income (ttm):138.93M455.00M9.52BN/A392.06Ka.) Church and Dwight is a small

46、company in comparison to the other two shown above. Amazingly their growth in Revenue is outstanding compared to the others. This could be because of their recent acquisitions of some of their other competitors. Church and Dwights revenue is very good for the number of employees that they have. Alth

47、ough it is much lower than Proctor and Gamble, Proctor and has 50 times more employees and a lot more assets to manage. Relative to the competition Church and Dwight has some work to do. Acquiring more companies and diversifying their products as they have been doing recently will bring their revenu

48、e up and get them closer to Clorox Company. Church and Dwight is running efficiently as a whole right now.3. Research and Developmenta.) Analytical & strategic thinking: thinks analytically and thoughtfully about the business, identifies and solves problems, is “on top” of his/her area of respon

49、sibility and competitive environment. Identifies strategies that build advantage.b.) Creativity & innovation: consistently generates new ideas, thinks outside of the box, while remaining strategically focused. Thinks in terms of possibilities, not limitations.c.) Collaboration and teamwork: develops productive working relationships within/and across functions and business units that builds trust. Finds win-win solutions, rather than playin