Evaluate Rayovac’s most recent acquisitions- United Industries & Tetra Holdings. Does the generic strategy at Rayovac differ depending on the product line? If so, why, if not should it?
Rayovac’s acquisitions of United Industries and Tetra Holding played an important role in expanding their economies of scale. Before these acquisitions, Rayovac was mainly dealing with battery merchandises within the United States and in some overseas nations. Their generic strategy influenced Rayovac into venturing in pet supplies. This strategy does not differ depending on the product line. This is because differing with a product line was going to limit the economy of scope at Rayovac. Acquiring United Industries and Tetra Holding enabled Rayovac to spread particularly fixed costs over a huge number of units including the new companies. Therefore, the company was able to use their effective influence in Asia to advertise more about its new customers thus increasing sales as well as the annual revenue. By tailoring the generic strategy not to differ depending on certain product lines will enable Rayovac to continue to increase its economies of scale thus reaching out to more customers with more products.
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Is there a relationship between Rayovac’s geographic and product diversification? Does diversification create value at Rayovac? If so, how?
There is a notable relationship between Rayovac’s geographic and product diversification. It is evident that Rayovac has a serious influence in Europe and Asia. The pet supplies market in Europe was estimated at $4 billion which attracted the attention of Rayovac. This was an opportunity for them to diversify their product line to elevate their annual revenue. Also, Tetra Holdings had a significant market share in Europe of about 40% while Japan was 20%. These two companies were dominating the European and Asian market in a unique niche which was nothing close to Rayovac’s product line. Therefore, the company sought diversification by acquiring United Industries and Tetra Holding. They would use their influence in Asia to advertise pet supplies to this untapped market as well as strengthen the brands of these two companies in Europe.
