Church & Dwight’s has a functional structure consisting of James R. Craigie as Chairman and CEO followed by ten Executive Vice Presidents (EVP) leading various field of business within the company. The corporate strategy is to continue to lead their competitors in Total Shareholder Returns (TSR). This can be accomplished by maintaining their strong position domestically while increasing the companies geographical mix internationally. The company also looks to increase in international expansion to take advantage of a larger global market that is poised to add substantial growth the company as a whole.
Church & Dwight “approach business analytically and thoughtfully, identifying strategies that create an advantage and solve problems” (Church & Dwight, n.d.) The company has transformed itself from primarily a U.S. business to global player with approximately 17% of sales coming from foreign markets (Church & Dwight). The structure of Church & Dwight is well aligned to meet the challenges of both their domestic and international strategies.
Of the companys ten EVP’s, four of the officers handle the Global aspects of the company. Susan Ott leads as EVP of Global Human Resources. She is new to this position having been there since June,2014. Her past experience was as the Chief Human Resources Officer for Associated Wholesale Grocers (AWG) and prior to that was the Senior +-Director, Human Resources Global Supply Chain at Clorox (Church & Dwight) She also has a great deal of mergers and acquisition experience domestically as well as globally (Church & Dwight). Mark G.
Conish is the EVP of Global Operations. He has been with the company since 1975 and has held his current position since 2007 as he transitioned from VP of Global Operations starting in 1999 (Church & Dwight).
Steven P Cugine is the EVP of Global New Products Innovation and has been since July 2007 after holding several positions since 1999 (Church & Dwight). Paul A Siracusa, Ph.D. is the EVP of Global Research and Development since 2007. Paul has previous experiences with companies such as Playtex Products Inc., Reckitt & Coleman plc (Church & Dwight). 2007 saw several changes in management structure. This is not the desire of Church and Dwight as they encourage longevity in all areas of the company. However, the current officers and strategy appear to be aligned well to follow through the goal to provide solid TSR.
The corporate culture of Church & Dwight is a learning environment where open communication and the freedom to take risks drive the team to a high performance. This is furthered with the understanding that everyone at all levels should be engaged as they all share in the responsibility of the overall performance of the company. The culture of Church & Dwight seems to coincide with their strategy. According to Morningstar, n.d., Church & Dwight rank eighth overall when rated among their other competitors. Complacency will not move a company forward. While they are always looking to innovate and invent, the company has been trying to acquire established brand name companies to add to the Church & Dwight portfolio that can quickly impact revenue and provide TSR.
Operations Management is skilled in several areas such as supply chain management and logistics. Church & Dwight is currently working on a co-op program rotating management to allow them to gain the experience needed to move the company forward.
Human Resource division is dedicated to the placement of the best suit the company by the continued development for further success. Church & Dwight’s HR department work in relation with the companys work teams to insure that people management practices create maximum impact (Church & Dwight)
Church & Dwight’s products range from Household Consumer Products to the Personal Care industry as well as Specialty Products that lead the world in bicarbonate products. They have considered themselves to “a standard of quality and environmental responsibility since 1846” (Church & Dwight). They tend to follow the product development strategy of developing new products for the industry or market The Household Product Line includes items such as baking soda, deodorization, fabri care, household cleaners, wood care and pet care. Personal Care products include deodorants, eye care, fertility, hair removal, nasal care, oral care, pregnancy and ovulation, vitamins and first aid. Their Specialty Products Division includes bicarbonate products for use in food (for human consumption), pharmaceuticals, as commercial and industrial cleaning agents, as animal nutrition. The options and style and size of the products vary from product to product.
For example ARM & HAMMER brand alon has over 110 different products that cover cleaning, deodorizing, oral care and pet care. The oral health care brand Orajel has over 30 products related to adult and child oral care. L’il Critters and Vitafusion deal with the gummy vitamin market incorporating over 70 products to suit customers needs. The brand First Response has 9 products related to pregnancy, ovulation and fertility. Trojan Brand Condoms offer over 60 options in relation to healthy sex. Nair hair remover products offer over 20 options. The Specialty Products Division incorporates bicarbonate and carbonate based products that are used for pharmaceuticals, food, personal & health care as well as water treatment and industrial uses. The size and quantities greatly vary as they range in powder form from ounces to tons. ARIMEX is the brand that is taking ARM & HAMMER baking soda out of the home and being used as an industrial abrasive cleaner with over 50 varieties as well as services that administer the blast cleaning.
Church & Dwight have distribution centers strategically located to provide transport of their product goods. Most notably would be the 1.1 million sq. ft. manufacturing and distribution center in York, PA. This new site allows them to grow the fabric care business, support future acquisitions and share in the industry lead in low-cost production and distribution (Church & Dwight). The location is about 100 miles from Philadelphia, PA where port are available for international shipping. Other distribution centers are strategically located across the U.S. in locations such as Washington, California, Minnesota, Texas, Ohio and New York.
To handle inventory control, Church and Dwight have teamed up with Terra Technology to help manage their inventory. “By sensing demand, we can now more accurately predict what our customers will order” (Terra Technologies,n 2014).
One of Church & Dwight’s most successful promotional campaigns was with their recently acquired Trojan brand condoms. This of course was controversial but effective. Trojan brand condoms has been a U.S. leader in the industry for many years controlled 71% of the market (Wheelen, 2015). Church and Dwight brands and their products advertise through many various media channels such as Print, TV, and Digital. Currently Church & Dwight gained publicity with their collaboration with Major League Baseball Properties (MLBP). ARM & HAMMER and OxiClean became the Official Laundry Detergent and Stain Remover of MLB. This along with team partners the New York Yankees, Minnesota Twins and Cincinnati Reds. “This partnership allows us to combine the power of two great American icons to reach families in a new way,” said Jim Craigie (Church and Dwight).
The Return on Equity (ROE) is a strong measure of how the company creates value for its shareholders. The simple formula is ROE = net income / shareholder equity. However this formula can be misleading to investors as key areas may be left out of the equation. The following is the DuPont ROE Formula in relation with Chruch & Dwights 2009 financials. Data is in millions. ROE=Net IncomeNet Sales* Net SalesTotal Assets*Total AssetsTotal Equity ROE=243.52520.9*2520.93118.4*3118.41601.8(Church & Dwight Annual Report, 2009) ROE=Profit Margin * Total Asset Turnover*Leverage Factor
Since 2005 Church & Dwight’s ROE had decreased from 17% to 14.6% in 2008. The 15.2% for 2009 represent the first increase in the last 5 years a positive sign for the company. This is a measure of the profit that Church and Dwight has made with the funds that the shareholders had invested. Interestingly this percentage is nearly the same as the percent of sales that Research and Development contributed to total sales. Considering the economic turmoil that was taking place in 2009, the company made great strides to showcase the first ROE increase in five years. Given their current strategy, Church & Dwight are positioned well to begin to show steady growth in ROE in the future. By 2013, the company has brought ROE back to 17.1%.
In 2009, Church & Dwight spent about $55.1 million on Research & Development (Statista, 2014). This results in a R&D Intensity of 2.19%. As a comparison, Proctor & Gamble’s R&D expenditures for 2009 were $1.8 billion and resulted in a R&D Intensity of 2.4% (P&G, 2010). Church & Dwight launched a new R&D Vision called 4DRD which means the four dimensions of research and development that are discover, develop, deliver and delight (Sustainability Report, 2009). In this report Paul Siracusa, EVP Global Research & Development explains Church & Dwight is engaged in four areas of research to develop new products. Church & Dwight is on the Board of the Center of Particle and Surface Sciences (CPaSS). The goal with CPaSS is to research particulate and surfactant systems while maintaining an environmental footprint. Continue to research of green surfactants technology.
Maintain their involvement in The Sustainability Consortium as well as the Sustainable Packaging Coalition (SPC). The R&D mix of Church & Dwight is a mix of product development, process technology and basic research. The bulk of their leverage among competitors it the control of the material sodium bicarbonate. This has been the primary base for products with Church & Dwight since 1846 and is focused on extensively with their R&D Department in. Church & Dwight’s vision is working and is positioned to provide growth for the company in the future. In 2009, the R&D department contributed to about $400 million in sales representing over 15% of total sales for that year.
The information Systems at Church & dwight are geared to expedite communications and collaborate with management teams to coordinate with other IT and Supply Chain teams, lead integrated design workshops to ensure successful delivery of integrated solutions as well as ensure the development of functional and technical documentation. (Church & Dwight Analysis of Competitive Advantage
While competition amongst Church & Dwight and their competitors are strong in relation to consumer goods and household products we will conduct a VIRO analysis on what separates them from their competition. Sodium bicarbonate (baking soda) has been the backbone material of the company. It is rare that anyone can name another brand of baking soda other than ARM & HAMMER.
The products produced by Church & Dwight that are derived from sodium bicarbonate are a value to its customers in its versatility. The competitive advantage is definitively with Church & Dwight as they are the leading producer in the North America. Church and Dwight produce nearly 125,000 tons a year and represent approximately 18% of that market. While Church and Dwight lead the manufacture and production of sodium bicarbonate domestically, there is stronger competition internationally. This is one of the issue that has made international sales challenging. It is costly for others imitate to the standards of Church and Dwight.
Because of how much they manufacture over their competitors that are able to keep production cost low and as a result offer their product at lower prices than most competition. Currently, Church and Dwight are in a great position to exploit this resource as they are mining for a material called Ttona that they can extract the materials needed to manufacture sodium bicarbonate here in the U.S. The mine that they are currently working out of what is believed to be a 200 billion ton deposit that could produce enough sodium bicarbonate to meet demands for thousands of years.