Colgate Swot free essay sample

Running Head: WS1 CP Paper WS1 CP Paper Amy Eckley Applied Marketing Management 541 Indiana Wesleyan University Colgate-Palmolive’s Mission Statement As a Company that strives to be the best truly global consumer products company, we are committed to doing business with integrity and respect for all people and for the world around us (Profile of Colgate-Palmolive, 2011). Strengths Product Diversification Colgate-Palmolive is a diversified company with products in many categories including oral care, personal care, home care and pet nutrition (Quelch, Laidler, 1993). The diversified product portfolio serves as a strength as it minimizes risk by not putting all of their ‘eggs in one basket’ and maximizes growth opportunity by having expanded business operations and markets to serve. Toothpaste Market Share As the global market leader in Oral Care, the company holds now 44. 7% of the global toothpaste market share (Colgate-Palmolive company (cl), 2011), which is a large portion of the market. In 2006, the Company also acquired Tom’s of Maine, a niche natural toothpaste company, which added to their marketshare (Kotler, P. We will write a custom essay sample on Colgate Swot or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Keller, K. , 2009). Global Presence Colgate-Palmolive is one of the global leaders in Consumer Products and sells its widely recognized products in more than 200 countries in the world (â€Å"Colgate. com,†). The ability to sell in a large number markets is a strength as it provides opportunity to earn more revenue. In fact, over three-fourths of their revenue comes from outside of the US. (Colgate-Palmolive company (cl), 2011) Innovation Another strength is the Company continues to invest in RD and as a result develops innovative new products such as Hill’s Prescription diet, Palmolive Nutra-Fruit, and 12-hour germ fighting toothpaste (â€Å"Colgate. om,†). In 2011, they introduced Colgate Sensitive Pro-relief toothpaste, which offers faster relief to those who suffer from tooth sensitivity (Colgate-palmolive introduces new, 2011). World Outreach Efforts Colgate-Palmolive is very involved in outreach programs, which help people and communities around the world. For example, since 1991, the company has run Bright Smiles, Bright Futures, which educates kids about oral health. These programs work to build respect for the Company as well as further brand recognition and use of the products. This program has reached 80 countries and a half a billion children (Annual Report, 2011). Global Recognition Awards In the last 10 years, Colgate-Palmolive has earned numerous recognition for being a top employer (â€Å"Colgate. com,†). Most recently, in 2010, Fortune Magazine named the company as one of the 100 best companies to work for (â€Å"2010 100 Best Companies†, 2011). This is a strength in that they are able to attract top talent to run the business, which serves as competitive advantage. Weakness Declining Stock Price In 2010, the Stock Price declined 2% overall compared to 2009 (Annual Report, 2011. ). Shareholders pay close attention to these trends when considering stock purchases and this could have a negative impact on investor interest. Reliance on Oral Care Colgate Palmolive has a high reliance on their oral care products, which increases risk should the market change significantly in that category. Oral care accounts for 33% of Colgate-Palmolive’s total sales (â€Å"Colgate. com,†). Declining Sales Sales in the Pet Nutrition Division of Colgate Palmolive, which accounts for 14% of all sales, declined 2. % in 2010. Sales also declined in Latin America, Europe and South Pacific in 2010. Sales declined 1. 5% in Latin America and 1. 5% in Europe/South Pacific. These regions account for 48% of total sales. Declining sales are a weakness, especially when the decline is impacting 62% of total sales (Annual Report, 2011. ). Slow Innovation Colgate-Palmolive, when compared to Proctor Gamble, innovates new products at a much slower rate that its competitors. Proctor Gamble spends 2 billion on Research Development each year while Colgate-Palmolive spends $500 million (Annual Report, 2011). Efficiency Colgate-Palmolive has a significant number of formulas, complex and costly logistics and packaging – all of which impacts their ability to invest funds in new product development or marketing (Annual Report, 2011). Opportunity Educating Consumers Colgate-Palmolive has the opportunity to build consumption by education people about better oral and personal hygiene. For example, Asia and India are opportunities for personal care (Annual Report, 2011). Increase Marketing Efforts The Company has the opportunity to increase marketing efforts to gain further market share. While they currently advertise, they can work to ensure they are utilizing all types of media including emerging social media and phone applications. Additional Innovation Colgate-Palmolive, like every company, has an opportunity to continually innovate through Research and Development efforts and additional consumer research. Additional innovation will drive additional market share, further earnings potential and consumer interest. Cost Savings The Company has an opportunity to remain competitive to the market by realizing cost savings opportunities through restructuring initiatives. This could include facility shut-downs and workforce reductions. Gain Market Share in Skin Cleansing and Home Care According to Colgate’s 2011 goals, they have an opportunity to become a stronger global competitor in skin cleansing, leading in liquids a successful in other large personal care categories. They also have the opportunity to become a stronger regional leader in selected Home Care categories (Company performance, 2011). Threat Consumer Product Goods Competition Colgate-Palmolive has fierce competition with Proctor Gamble, as they produce the biggest portfolio of products in the household and personal care industry. PG’s products are similar to Colgate-Palmolive and are a threat (Quelch, Laidler, 1993). Colgate-Palmolive has many other competitors, especially in household care such as Clorox and Kimberly-Clark. (Wikipedia) Counterfeit Products In 2007, counterfeit Colgate toothpaste imported from China was found to be contaminated with a poisonous chemical, diethylene glycol, which caused several people to become ill in the US. (â€Å"Fake Colgate Recalled,† 2007). This is a threat as it could occur again and cause damage to the brand. Economic Instability Due to rapid expansion in Latin America, the company is overly dependent on growth in that region making the company highly vulnerable to Latin America economic slowdown and market saturation. This is true for Mexico as well, where Colgate holds 80% of the market share of the toothpaste market (Annual Report, 2011). Retail Changes The rise of low priced, large retailers, such as Walmart, have exerted their power over their suppliers, demanding certain specifications for product and negotiating lower (Byron, 2011). Private Label Growth With the current economic challenges, private or store label brand have become more popular in large retailers such as Walmart and Target. These products are growing in popularity as they are of lower cost and earn higher profit margins (Byron, 2011). References 2010 Best Companies to Work For. (n. d). Retrieved from http://money. cnn. com/magazines/fortune/bestcompanies/2010/full_list/ Byron, E. (2011, July 28). Colgates Margins to Test Its Pricing Strategy. Wall Street Journal Eastern Edition. p. C1. Retrieved from EBSCOhost. Colgate. com. (2011, August 3). Retrieved from http://www. Colgate. com Colgate-Palmolive. (2011). Wikipedia. Retrieved August 4, 2011, from http://en. wikipedia. org/wiki/Palmolive_(soap) Colgate-Palmolive. (2011). 2010 Annual Report. New York, NY. Colgate-Palmolive Introduces New Sensitive Toothpaste. (2011, March 8). Financial News, Retrieved from http://www. finchannel. com/index Colgate-Palmolive company (cl). (2011, August 3). Retrieved from http://www. wikinvest. com/stock/Colgate-Palmolive_Company_(CL) Company Performance. (2011, August 2). Retrieved from http://www. colgate. om/app/Colgate/US/Corp/Livingourvalues Fake Colgate Recalled Over Poisoning Concerns. (2007, June 14). Retrieved from http://www. foxnews. com/story/0,2933,282273,00. html Kotler, P. Keller, K. (2009). A Framework for Marketing Management (4th ed). Upper Saddle River, NJ: Pearson Prentice Hall. (Original work published 2001) Profile of Colgate-Palmolive. (2011, August 2). Retrieved from http://www. company-statements-slogans. info/col gate-palmolive. htm Quelch, J, Laidler, N. (1993). Colgate-Palmolive Company: The Precision Toothbrush. Harvard Business Review, 9-593-064, 1-24. .