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Questions and Answers
What is the average annual spending on batteries for heavy users?
What is the average annual spending on batteries for heavy users?
- $250 (correct)
- $500
- $100
- $25
Which of the following groups are considered heavy users of batteries?
Which of the following groups are considered heavy users of batteries?
- Light users
- Families with children (correct)
- Techies (correct)
- All of the above
What is the approximate market size of the family segment in Canada?
What is the approximate market size of the family segment in Canada?
- $100 million
- $75 million
- $25 million
- $200 million (correct)
What is a key characteristic of the family segment in terms of their battery purchasing habits?
What is a key characteristic of the family segment in terms of their battery purchasing habits?
Which of the following is NOT a typical device that families would buy batteries for?
Which of the following is NOT a typical device that families would buy batteries for?
What is the average income range for techies?
What is the average income range for techies?
What is a key characteristic of techies in terms of their battery purchasing habits?
What is a key characteristic of techies in terms of their battery purchasing habits?
Compared to families, techies tend to have
Compared to families, techies tend to have
What percentage of Rayovac's sales are distributed in North America?
What percentage of Rayovac's sales are distributed in North America?
What is the combined market share of Duracell and Energizer in the global market?
What is the combined market share of Duracell and Energizer in the global market?
What percentage of the Canadian market is held by Rayovac?
What percentage of the Canadian market is held by Rayovac?
Which of the following best represents the global market share held by "Other" battery manufacturers?
Which of the following best represents the global market share held by "Other" battery manufacturers?
What is the approximate share of the global battery market captured by Rayovac?
What is the approximate share of the global battery market captured by Rayovac?
Which geographic region, according to Exhibit 3, generates the largest portion of Rayovac's sales?
Which geographic region, according to Exhibit 3, generates the largest portion of Rayovac's sales?
Based on Exhibit 4, what is the market share difference between Duracell and Energizer in the Canadian market?
Based on Exhibit 4, what is the market share difference between Duracell and Energizer in the Canadian market?
What is the combined market share of Rayovac and "Other" players in the global battery market?
What is the combined market share of Rayovac and "Other" players in the global battery market?
What was the market share of companies like Panasonic, Sony, Sanyo, and Kodak in the global battery market?
What was the market share of companies like Panasonic, Sony, Sanyo, and Kodak in the global battery market?
Which of these factors contributed to the reluctance of North American consumers to purchase rechargeable batteries?
Which of these factors contributed to the reluctance of North American consumers to purchase rechargeable batteries?
What was the main reason for the lack of growth in the rechargeable battery market?
What was the main reason for the lack of growth in the rechargeable battery market?
Why did the market leaders, Duracell and Energizer, not promote rechargeable batteries?
Why did the market leaders, Duracell and Energizer, not promote rechargeable batteries?
What was the approximate profit margin on a single rechargeable battery?
What was the approximate profit margin on a single rechargeable battery?
What percentage of the North American battery market did rechargeable batteries represent in 2004?
What percentage of the North American battery market did rechargeable batteries represent in 2004?
What core competency did the market leaders lack in the rechargeable battery sector?
What core competency did the market leaders lack in the rechargeable battery sector?
In 2004, how much did the market leaders approximately make in profit from selling one alkaline battery?
In 2004, how much did the market leaders approximately make in profit from selling one alkaline battery?
What was Rayovac Corporation's net sales for the year ended September 30, 2002?
What was Rayovac Corporation's net sales for the year ended September 30, 2002?
What was the amount of Rayovac Corporation's restructuring and related charges for the year ended September 30, 2003?
What was the amount of Rayovac Corporation's restructuring and related charges for the year ended September 30, 2003?
What percentage of Rayovac Corporation's net sales in 2004 was attributable to cost of goods sold?
What percentage of Rayovac Corporation's net sales in 2004 was attributable to cost of goods sold?
What is the change in operating income from 2002 to 2003?
What is the change in operating income from 2002 to 2003?
What was Rayovac Corporation's income from continuing operations before taxes in 2003?
What was Rayovac Corporation's income from continuing operations before taxes in 2003?
What was the total amount of operating expenses for Rayovac Corporation in 2004?
What was the total amount of operating expenses for Rayovac Corporation in 2004?
What was Rayovac Corporation's gross profit margin in 2003?
What was Rayovac Corporation's gross profit margin in 2003?
What was Rayovac Corporation's net income for the year ended September 30, 2002?
What was Rayovac Corporation's net income for the year ended September 30, 2002?
What was the impact of discontinued operations on Rayovac Corporation's net income for the year ended September 30, 2004?
What was the impact of discontinued operations on Rayovac Corporation's net income for the year ended September 30, 2004?
During which year did Rayovac Corporation experience the highest operating income?
During which year did Rayovac Corporation experience the highest operating income?
What is the amount of cash and cash equivalents held by Rayovac Corporation at the end of 2003?
What is the amount of cash and cash equivalents held by Rayovac Corporation at the end of 2003?
What is the total amount of "Deferred charges and other" reported on the balance sheet for both 2003 and 2004?
What is the total amount of "Deferred charges and other" reported on the balance sheet for both 2003 and 2004?
What is the percentage change in total assets from 2003 to 2004?
What is the percentage change in total assets from 2003 to 2004?
What is the amount of "Other" current liabilities reported for the year 2004?
What is the amount of "Other" current liabilities reported for the year 2004?
What is the difference in 'Long-term debt, net of current maturities' between 2003 and 2004?
What is the difference in 'Long-term debt, net of current maturities' between 2003 and 2004?
What is the total amount of 'Employee benefit obligations, net of current portion' reported for the year 2003?
What is the total amount of 'Employee benefit obligations, net of current portion' reported for the year 2003?
What is the amount of 'Debt issuance costs' reported on the balance sheet for the year 2004?
What is the amount of 'Debt issuance costs' reported on the balance sheet for the year 2004?
What is the difference in total shareholder's equity between 2003 and 2004?
What is the difference in total shareholder's equity between 2003 and 2004?
What is the total amount of "Receivables" at the end of 2004?
What is the total amount of "Receivables" at the end of 2004?
What is the difference in the amount of "Goodwill" between 2003 and 2004?
What is the difference in the amount of "Goodwill" between 2003 and 2004?
Which of these options are correct about the total amount of "deferred income taxes" held by Rayovac Corporation at the end of 2003 and 2004? (Select all that apply.)
Which of these options are correct about the total amount of "deferred income taxes" held by Rayovac Corporation at the end of 2003 and 2004? (Select all that apply.)
What is the total amount of "Intangible assets, net" reported on the balance sheet at the end of 2003?
What is the total amount of "Intangible assets, net" reported on the balance sheet at the end of 2003?
What is the percentage change in total liabilities between 2003 and 2004?
What is the percentage change in total liabilities between 2003 and 2004?
What is the total amount of current liabilities at the end of 2004?
What is the total amount of current liabilities at the end of 2004?
Which of these options are correct about the total amount of "Minority Interest" held by Rayovac Corporation? (Select all that apply.)
Which of these options are correct about the total amount of "Minority Interest" held by Rayovac Corporation? (Select all that apply.)
What was the percentage growth in global battery sales for Duracell in 2004?
What was the percentage growth in global battery sales for Duracell in 2004?
What was the approximate global profit for Energizer in 2004?
What was the approximate global profit for Energizer in 2004?
Which of the following statements accurately describes the North American battery sales of Duracell and Energizer in 2004?
Which of the following statements accurately describes the North American battery sales of Duracell and Energizer in 2004?
What was the difference between Duracell's and Energizer's global battery sales in 2004?
What was the difference between Duracell's and Energizer's global battery sales in 2004?
Which company had a higher percentage growth in global battery sales in 2004?
Which company had a higher percentage growth in global battery sales in 2004?
Flashcards
Light users
Light users
Consumers who spend $25 or less on batteries annually.
Heavy users
Heavy users
Consumers who spend $250 or more on batteries annually.
Family segment
Family segment
A market group of couples with children spending on batteries, totaling around $200 million.
Techie segment
Techie segment
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Purchasing behavior
Purchasing behavior
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Consumer demographics
Consumer demographics
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Battery usage categories
Battery usage categories
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High-drain vs low-drain devices
High-drain vs low-drain devices
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Battery Market Competitors
Battery Market Competitors
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Market Share of Competitors
Market Share of Competitors
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Rechargeable Battery Market
Rechargeable Battery Market
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Consumer Reluctance Factors
Consumer Reluctance Factors
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Lack of Market Leadership
Lack of Market Leadership
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High-Drain Devices
High-Drain Devices
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Market Leaders' Hesitation
Market Leaders' Hesitation
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Profit Margins Comparison
Profit Margins Comparison
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Rayovac Sales Distribution
Rayovac Sales Distribution
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North America Market Share
North America Market Share
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Europe/Rest of World Share
Europe/Rest of World Share
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Latin America Market Contribution
Latin America Market Contribution
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Duracell Market Share
Duracell Market Share
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Energizer Market Share
Energizer Market Share
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Rayovac Global Market Share
Rayovac Global Market Share
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Other Brands Market Share
Other Brands Market Share
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Duracell Battery Sales
Duracell Battery Sales
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Energizer Battery Sales
Energizer Battery Sales
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Overall Parent Company Sales
Overall Parent Company Sales
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North America Battery Sales
North America Battery Sales
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Profit Comparison
Profit Comparison
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Net Sales
Net Sales
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Cost of Goods Sold (COGS)
Cost of Goods Sold (COGS)
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Gross Profit
Gross Profit
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Operating Expenses
Operating Expenses
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Operating Income
Operating Income
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Interest Expense
Interest Expense
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Income Tax Expense
Income Tax Expense
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Income from Continuing Operations
Income from Continuing Operations
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Net Income
Net Income
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Loss from Discontinued Operations
Loss from Discontinued Operations
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Current Assets
Current Assets
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Total Current Assets
Total Current Assets
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Goodwill
Goodwill
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Intangible Assets
Intangible Assets
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Current Liabilities
Current Liabilities
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Total Liabilities
Total Liabilities
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Long-term Debt
Long-term Debt
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Shareholders' Equity
Shareholders' Equity
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Retained Earnings
Retained Earnings
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Common Stock
Common Stock
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Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income
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Minority Interest
Minority Interest
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Debt Issuance Costs
Debt Issuance Costs
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Deferred Income Taxes
Deferred Income Taxes
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Prepaid Expenses
Prepaid Expenses
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Study Notes
Rayovac Corporation - Rechargeable Battery Opportunity
- Rayovac, a division of Spectrum Brands, was facing challenges in growing its battery division in 2005.
- The household battery market was experiencing growth, driven by high-drain devices like digital cameras.
- Rechargeable batteries were gaining popularity in Europe, but not in Canada, due to consumer perception concerns.
- Rayovac could either compete directly with established brands or target the market from a niche perspective.
Household Battery Market
- The household battery market included standard sizes like AAA, AA, C, D, and 9-volt.
- Sales of these batteries grew globally due to the increasing use of electronic devices.
- The majority of household batteries were alkaline chemistry.
- Heavy users spent significantly more annually on batteries compared to light users.
Consumer Segments
- Light users typically spend less than $25 annually on batteries, mostly for low-drain devices.
- Heavy users spend over $250 annually, mostly for high-drain electronic devices.
- The techie segment includes younger, technology-oriented consumers who often prefer to purchase a new battery or charger more frequently due to high drain devices and needs.
Rayovac
- Rayovac, founded in 1906, was a significant player in the global market for consumer batteries, especially in hearing aid batteries.
- Its product line comprised alkaline batteries for the household segment.
- Rayovac had attained a 14% global market share and a 20% Canadian market share in 2005.
- The company acquired other brands or companies to strengthen its presence and offer a broader range of products.
Competitive Landscape
- Duracell and Energizer dominated the market due to brand recognition, relationships with distributors, and broad portfolio.
- These companies had significant market share (39% and 35% worldwide respectively).
- Both companies used various marketing strategies, including large advertising budgets
Rechargeable Batteries
- The rechargeable battery market was small and fragmented in 2004, representing just 5% of the North American market and 10% of the Canadian market.
- Several factors hindered consumer adoption of rechargeables, including initial cost, inconvenience of recharging, and lack of knowledge.
- NiMH rechargeable technology was improving, offering performance advantages over alkaline batteries.
Opportunity
- Rayovac needed a strategy to compete with market leaders.
- The rechargeable segment offered a possible niche market for Rayovac.
- Bob Falconi needed to quickly form a decision on how to proceed with either a "volume" or a niche "strategy" focusing on a targeted approach.
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