Cottle-Taylor Strategic Position - Case Study Example

Showq Alghamdi, 0662914 Cottle Taylor: Expanding the Oral-Care Group in India Cottle Strategic Position Cottle-Taylor (Cottle) Company is a Philadelphia-headquartered company that produces over 200 products to serve three diverse consumer-product categories, including oral care, home care (dishwashing and laundry products), and personal care (deodorants, soaps, and lotions.) products. After several decades of operation, the company realized the significance of new-product developments and geographic expansion of its market into foreign markets. The company viewed these factors as the key drivers for its growth and success hence spread its branches and market into global operations within four geographic divisions, including Latin America, North America, Europe, Africa, and the Greater Asia (Gupta, 2015). By 2009, Cottle Company accrued revenues worth $11.5 billion, and its products were sold in over 200 nations worldwide. Approximately 50% of the revenues came from the business’ emerging markets. However, to meet its customers’ demands, the company maintains its manufacturing and business operations only in about 80 countries. The company believes in the provision and supply of quality products across the globe in order to cope with the competitive market and emerge the victor amongst its competitors. Currently, Cottle strives to strengthen its market base and presence within the Middle-East nations. This paper thereby analyses the company’s endeavors to market its oral care products and strengthen or broaden its market base in India (Jason, Jindal & Seth, 2014). It thereby considers the regional market challenges within India, as well as the possible alternatives and strategies for the challenges.For the success of its operations and product sales, the company must then consider the regional challenges within India between urban and rural consumers, as well as their willingness, ignorance, or reluctance to adopt the modern approaches to dental care (Quelch&Zalosh, 2012). A business strategy is the main focus of every organization’s practice and the one that organizations use to gain a competitive advantage. It is use to attract customers, strike out a market position, and achieve the objectives of the organization. Cottles situation of is not bad, and it just needs to follow its strategy and change a few things such as differentiation of its products. A review of Cottle strategy can help it to diagnose few problem areas that are present in the company. There is a need for alternative solutions. The strategic issues for Cottle will be discussed in order to craft alternative business solutions. Cottle-Taylor’s strategy is to gain fast growth in the emerging markets because of the potential stiff competition in the Indian market. The Cottle strategy was to increase advertising and promotional spending. Cottle applied the strategy it employed in Thailand to develop the Indian market. The expected growth was 25 percent to 30 percent by 2010. Before entering into the Indian market, Cottle reviewed its strategic plan and integrated it in its business operation. The strategy to increase the advertising budget could help Cottle to realize success in the Indian market. Porter Five Forces Competition between the existing players Competition in the oral care products industry in India is rather stiff. There are a number of oral care products providers that are operating in India such as Hinda-Daltan, SarIndia, and Aspire Oral Care Pvt. Ltd. Most of Cottle’s competitors had diversified their services prior to Cottle’s entry in India. They managed to gain market share by offering low priced products. With loyal and personalized customers, it makes it difficult for new companies to penetrate the market. Potential new entrants Presumably, the barrier for the new entry in the oral care products industry is low. As long as a company can offer low priced products and convince the target market of their benefits, it could easily enter the market. The business objective of increasing the advertising budget is realistic because the demand for oral care products is rising at a high rate. However, Cottle would face competition from the small business organizations (new entrants) with products tailored to local needs of oral care products. Substitutes Substitute oral care products are many. Rural residents have also been found to substitute highly priced commercial products with traditional products such as ash and neem plant twigs among others. Innovative products are the key to making oral care product providers profitable. In India, traditional products and low priced products from competitors are the most appropriate substitutes. Buyers Power Due to the nature of the economic status of many Indians, there is low buyer-bargaining power. However, there is a possibility of higher seller-buyer collaboration, and this may pose a real challenge for Cottle because of the collaboration of consumers and its competitors who offer low priced products. Suppliers’ Power The suppliers’ power remains moderate. SWOT Analysis Strengths Broad Market base Cottle has a broad foreign market which acts as a pillar to its global business. The evidence to this broad market is its 50% revenues ($5.7) that were realized from its emerging market. This also shows its potential to expand into emerging markets. Rural and urban recognition Cottle is recognized in urban areas and it is gradually getting recognized even by the rural dwellers because of its innovative products Frequent innovations Cottle keeps on innovating new products thus gaining strength over its competitors because of its differentiated products Strong local market Cottle has a strong local market in India accounting for over 46% of total sales. In 2009, Cottle recorder $70.1 million in sales from India. This has boosted Cottle local operation and global expansion. Diverse consumer base, teenagers, children Weaknesses Failure to hide new innovation from competitors who utilize it to their advantage Cottle’s core weakness is failure to conceal its new innovations from its competitors who copy the company’s innovations to maximize their competitive advantage. Opportunities The company can expand to rural markets and increase demand Cottle can target the wide Indian population that lives below poverty line with low priced products. Cottle can target the price-sensitive rural customers with low priced products. High demand for oral care in the emerging markets The company’s accomplishment has been ascribed to oral care in the emerging markets. These emerging markets are in Asia and Africa. Cottle has an opportunity to expand its operations in the countries it has not ventured- in Asia and Africa to augment its revenues even further. Population growth rate Though India has mounted population control campaigns, population is still growing at a considerable rate and Cottle has a fair opportunity to add revenue from India’s sales. Increased knowledge Many Indians have become educated and knowledgeable through oral care and dental hygiene campaigns that have been going on. This augments the probability of selling more commodities to this market segment. This will widen the market base and increase the revenue base for Cottle. Distribution through Dentists Cottle has been targeting dentists to help it sell its battery-operated toothbrushes in India and Thailand. Partnership with dentists has given Cottle a good opportunity because dentists can recommend these toothbrushes to their patients as well as others. This is an effectual circulation channel for battery-operated toothbrushes. Threats Low demand from rural population There has been a low demand for Cottle products because the rural community had been used to brushing their teeth with traditional materials such as black salt, tobacco, ash, neem twigs, and charcoal. Competition from other companies, for example, SarIndia and Hinda-Daltan Cottle faces stiff competition from companies that had entered the Indian market prior to its entry and had introduced low priced toothpaste, toothpowder, and toothbrushes. Aggressive competition from other established oral care product companies such as the Hinda-Daltan, SarIndia, and Aspire Oral Care Pvt. Ltd. poses a threat to Cottle. Hinda-Daltan, SarIndia, and Aspire Oral Care P. Ltd. share competition through the production of similar oral care products as the Cottle’s. Rising Inflation In 2009, there was a rise in inflation which threatened to bring businesses down. This prompted Cottle to increase the price f toothbrush by 20% and this may reduce the demand for its products. Alternative Strategic Plans for Cottle-Taylor Strategy 1: Overall low-cost provider strategy Cottle should strategize on how to obtain customers and increase revenue in existing markets of North America, Europe, Latin America, and Greater Asia/Africa with an objective of achieving further growth in the existing markets. Its should also focus on low-cost strategy because this strategy can help improve the competitive position, efficiency, and productivity. Finally, it should have a broad differentiation strategy in order to diversify growth. The predicted outcomes of this strategy could be gaining market share, expanding market demand, gaining customer loyalty, obtaining a good position in the market and reputation among customers. Broad differentiation strategy can help it enter related new markets, develop new markets, and enter new emerging markets. Strategy 2: Competent Marketing Plan (IMC) The IMC strategy can help Cottle to build and expand its market share. The objective of this strategy is to create awareness, opportunities, market share, customer base, and company’s brand. Cottle can also enter into strategic alliances with other oral care product providers in India in order to raise its capability and capacity and also to enable it gain a position in the niche market. Through strategic alliances, Cottle can gain higher productivity and revenue and, raise its capability and capacity Strategy 3: Joint-Venture and Acquisitions Joint-ventures and acquisitions have become popular in today’s business environment. The strategy to acquire and merge with existing oral care product providers can help Cottle to launch and expand its business operations in India. Joint ventures and acquisitions can help Cottle obtain higher efficiency and productivity. It can also obtain experienced personnel from other firms to stimulate innovation. This can raise the position and capability of Cottle, generate higher productivity and revenue, and open broader opportunities. Implementation and Recommendations The strategy implementation is very important to an organization. The Cottle India cannot realize good outcomes if the implementation is weak. The implementation and execution has to be realistic and practical. The first step towards implementation would be to enhance its organizational structure in order to increase its capability. It should have a practical organizational structure in order to enhance its internal capacity and capability. This report suggests the recruitment of new talents for key positions who can drive innovative initiative. This can help Cottle to increase its competitiveness in India. Cottle should also have a specific and competent marketing division in place that can execute the integrated marketing communication (IMC) plan. Competent personnel with knowledge of local people in needed in order to build brand awareness among the local people. The best media platforms for promotional activities include radio, TV, and newspapers. The second campaign phase should be for the daily brush users. The Cottle India should also promote the ideas and awareness of oral care through: (i) the provision of free sample oral products to at least a member of a family (Quelch&Zalosh, 2012). (ii) Provision of total packages of oral care products at discounted rates to at least boarding schools or schools with hostel facilities. (iii) Offering high profit margins to retail shops for every sold product.(iv) Collaboration with the Indian indigenous companies that produce traditional oral care items. (v) Using mobile-vans with salespersons who move from door to door to sell the oral care products and give offers. References Gupta, S. (2015).Cottle Taylor- Expanding the oral group in India. Retrieved on 19the March, 2015 from http://www.scribd.com/doc/144106160/Cottle-Taylor-Expanding-the-Oral- Group-in-India#scribd Jason, Y., Jindal, K. & Seth, M. (2014).Cottle Taylor: Expanding the oral care group in India. Retrieved on 18th March, 2015 from http://www.net/Beast666manas/cottletaylor- expanding-the-oral-care-group-in-india Quelch, J. A. &Zalosh, A. (2012).Cottle-Taylor: Expanding the oral care group in India. Harvard Business Review, 4350, 1-12. Read More