ARM & HAMMER
Arm & Hammer is a pervasive brand in United States as more than 95% of households in United States have been using its products under different brand names. That clearly defines its magnanimous corporate position. Arm & Hammer core strategy has been to sell products in different markets that are linked by common carbonate or bicarbonate technology. This was quite helpful for the company at the beginning but as the time passed by, the growth of 15% annually started to become static which raised concern at the higher management devising a new strategy to steer company out of the looming crisis.
To give an overview of whole situation, sales became stagnant as company’s strategy ...view middle of the document...
It has many brands that are used in different purposes. We can divide them into three categories, such as specialty chemicals, animal nutrition, and specialty cleaners.
a) In specialty cleaners its brands are used in cleaning, deodorizing, neutralizing odors and acidity, medicine (for dialysis), swimming pool, textiles and for tanning purposes.
b) In animal nutrition, its products are used as antacid for cattle, as a catalyst to increase milk production and in poultry as to increase feed efficiency.
c) In specialty cleaners, Arm & Hammer has ARMEX Blast Media compound which is quite good in removing paints and tar from metals without damaging or reacting as a corrosive material. It has also teamed up with Safety Kleen to come up with ARMAKLEEN which bring out aqueous based cleaners instead of solvent base; excellent for cleaning chip boards and other sensitive computer hardware material having a great appeal in the industry. Safety Kleen’s 2800 strong sales force around the country recommend Church & Dwight’s aqueous based cleaners over solvents which not only increased its sales but also made people aware of the best product available in the market apart from solvents. This gave a hidden benefit of advertisement.
Raw Material Extraction
Arm & Hammer controls 2/3rd of the Sodium Bicarbonate raw material production in US and that gives it a good bargaining position. It was also the only producer of Ammonium bicarbonate and Potassium Carbonate.
Investment of $15 million has been done so far in Dental Care Gum for Arm & Hammer under different products such as Topol, Viadent, Checkup, Zact and Tom’s of Maine. It has acceptability in market due to its natural ingredient, which is baking soda. This earns it recommendation by dentists and hygienists.
Big acquisitions by Arm & Hammer placed it straight away in competition with other brands such as P&G, Lever Brothers & Clorox. Acquisitions were of USA detergents, Dial & Carter& Wallace.
Recognition in Foreign Land
Arm & Hammer is not well recognized in foreign countries and that gives a negative effect on its sales. Main reason is that it does not possess a distributor who has its network strong enough in Europe, Asia and African markets. DeWitt international may be of some respite to the company but when we assess long-term strategy, it is one of the biggest weaknesses that keep Arm & Hammer contained inside US.
Transportation costs outside US; supplying and marketing outside increases costs by 40%-45% which is 5-10% inside US driving down profit margins and making it unfavorable to market product outside US.
Sodium Bicarbonate is excellent in taking lead out from drinking water. It can also be coated into pipes and prevent lead entering into water. In this form, there is a huge opportunity as it can be sold to those countries where there is a high content of lead in the drinking water.