Global Household Brand Essay

Executive summary After a review of the â€Å"Global Household Brand† article, I was assigned the task of reviewing your business and to provide a well-detailed critique on global households’ brands. I will develop a strategy; identify the likely cause of the company’s financial woes. The major factor on the poor financial performance of the company is that of competitive strategy and differences in operational effectiveness. Ineffective management strategies have led the company to lose lots of profit (Michael E, 1998). Its lack of a clear strategy on how to effectively compete with big marketers has made it either to exit the market or to end up in the financial mess.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     The company must continuously improve the level of its operational effectiveness, and income must be increased and regulated. Sustainable performance will largely be dependent on global household brand having a strategic position (Tony P, 2000). There is need to evaluate consumers’ trend.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Company and Industry Overview Global household brands has lost the image she built as a leading producer and marketer of a variety of â€Å"niche† dentifrice products that includes polident, powdered aspirin, household cleaning brands among a few others to company characterized with lack of customers and loss making one. The company initially thrived on venturing in new markets and exiting them when the competition became a little bit stiff. The restructuring of the company together with other measures to bring a change in the financial fortunes of the company have only helped to worsen the situation.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   However, the firm has intention of reinventing itself to turn around its fortunes so as to be competitive and generate revenue in a continuous and sustainable manner. In the mid 1990s, when various big marketers such as Clorox, S.C Johnson, and Arm and Harmer began competing against global household brand’s 2000 flush automatic toilet bowl cleaners, X-14 mildew as well as soap scum removers and carpet fresh carpet refreshers, the company decided to exited the group of products due to their inability to gain substantial market share.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   During this period the company was not anywhere close to the red line, actually it was worth around $1.5 million. The exit made by global households brand did not seem to affect its profitability within the markets. The items it dealt with were in areas considered less competitive which enabled her to rake in high amounts of profits on their line up to branded products. During the period 1995-98 the profits started to drop by about 10-15% per annum.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Their potential to stay at least in the market was waning. The sale of their brands as well as the hiring and restructuring their management executive did not seem to over turn the events. Eventually after global household brand had had their sales drop from $130million to $ 70 million they decided to hire Goldman Sachs to sell their brand of products. After about one and a half years with Goldman at the helm, the sales figures were not anywhere near $100 that Goldman had promised. The deterioration in the sales figure was as a result of lack of competitive marketing strategy and difference in operation effectiveness. This was in spite of the company being given the green light about their customers respect for their brands of products. Analysis In the mid 1990s the company was worth about $1.5 billion. In the period 1995 to 1998 the sales of the firm was falling at a rate between 10 and 15% per annum. This in effect demonstrates the ability of the company to generate high profits. During the late 1990s onwards the firm did not efficiently output. The consistent drop in the sales figure was a testimony to this. In spite of all the changes and various measures the firm was taking, it was still not able to generate the projected profit margins. Despite the fact that the consumers have greatly respected their brand of products it was not able to capitalize on this factor to turn into huge profits. Strengths Consumers for its high quality of products very well recognize global households brands. This in addition to the mature nature of the household cleaning products industry is a plus for the company. The company is also much leveraged in the industry. The company also has a superior marketing V.P with such attributes as unique talents and is also very experienced as well as brilliant strategies. This is in addition to the talented R and D director it has on its board. All these factors will aid the management in turning around the fortunes of the firm. With all these talent and experience at their disposal the company would be starting from a vantage position in its path to recovery. The industry also seems to be very mature meaning the future of the company with its continued operations is bright. Weaknesses The firm has not effectively and in most cases deliberately not considered heavily investing in advertising and marketing to compete with her competition. The new operations manager also seems to be having a bad inter personal relationship with other employees within the firm. Global sales department has not met its past targets. Opportunity Trends The general trend within the industry seems to be in favor of household cleaning products. The overview of the general industry seems to suggest that it is leveraged and that household cleaning products industry is mature. This presents the company with the chance to exploit and increase its revenue. The maturity of the company shows that if it can invest largely without so many risks involved as uncertainty. Competitive Analysis Such companies like Clorox, S.C Johnson among others seem to be the greatest competition for the firm. They have heavily invested in their marketing strategies and in the end endeared themselves to their customers. Strategic options Global households, has been constantly pioneering various ranges of products over the past years. Before the entry of the big marketers it was the seen as the pioneer of household cleaning products. In addition to this, it has produced quality products. In fact, a recent survey suggests that most customers acknowledge the high quality of their products. The strategy of quitting and finding a new brand of products has been its main stay and now that it has run out of options and its very existence is threatened it must consider other options (Michael E, 1998). Since global households brand has come to the acknowledgment that it has to alter its business strategy so as to keep alive in the industry, it has few options left. First, it can adopt the differentiation strategy. This would require global household brand to build customer loyalty. In order to accomplish this, it has to position its products as well as services in unique ways that would appeal to the customers. In other words, the products will seek to be better than those of its competitors. The second option that the business may explore is that of focus strategy. This alternative takes into account the heterogeneity of many markets and industries. As such, there exist a lot of various customer segments with varying needs, wants as well as characteristics. The basic principle under this strategy is to put emphasis on selecting one segment(s), identify customers with special needs, interests and wants among other things and approach them. Global households brand could also employ the third option of horizontal integration. Under this strategy will be selling its products in various markets. In order to acquire the market coverage, it will have small subsidiary firms created. This would enable it compete with compete with its competitors effectively. Recommendations Within the last few years, global household brand has undergone a number of drastic changes. It has been forced to sell part of its brands, and almost the banks are about to call the loans given to it. One of the primary reasons global households has failed to meet its sales target is its inability to effectively market and appeal to the market. This is what her competition have done and thereby edged her out. Since the competitors have done the marketing really well, GHB has to effectively market itself or just face the possibilities of winding up. The second problem facing the company has been that of management. The manager has to learn to develop interpersonal relationship with his juniors. Alternatively, the New CEO or management team should meet people who worked at the Block drug before and find out what really problem was. This would enable them to have a better understanding of the firm’s woes as well as its triumphs. The management should also approach the financing Bank, and talk them out of calling the loans on the investors. Finally the $5million should be reduced with picked interest       References: Michael E. Porter, on competition, 1998, Harvard Business School Press Tony Proctor, 2000, Strategic Marketing: An introduction, Rout ledge. Alfred D. Chindler, Peter Haqstom, Orjan Solvell, 1999, the Dynamic Firm. The role of technology, strategy, organization, and regions, Oxford University Press.