SGMT 3000 Lecture Notes - Lecture 1: Duracell, Spectrum Brands, Sg-43 Goryunov

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New ceo (james kill) was to create a turnaround plan for the duracell division: the division was going nowhere for four years. Gillette found that running duracell was tougher than they thought. After 1997, the growth rate of duracell went downhill: went into the negatives in 2000. Energizer also experienced a similar situations: after 1997, growth became negative. Went back to around 1% in 2000. Basically, the largest 2 players in the battery industry were suffering. What went wrong: the top two were pursuing a differentiation strategy and competing against each other. Kept replacing models with longer lasting ones": rayovac kept prices low. A lot of people who buy batteries don"t care much about how long it is going to last if the price is high, they just want it immediately. It would not make sense to go from differentiation to cost leadership: customer"s will perceive the company as losing value.

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