Case 35 – Church & Dwight: Time to Rethink the Portfolio?
A case report prepared for MG 495 Business Policy
(Spring II Term)
Michael XXXXXXXXXX April 8, 2012
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CASE 35 – CHURCH & DWIGHT: TIME TO RETHINK THE PORTFOLIO? I. INTRODUCTION A. EXECUTIVE SUMMARY 1. Summary statement of the problem: Church & Dwight, more commonly known by its brand name “Arm & Hammer,” has held a commanding lead in the sodium bicarbonate product market for over 160 years with virtually 99 percent of all consumer products in households within the United States. However, in order to promote growth and diversity while maintaining a steady profitability rate of 3-5 percent per year, the company has expanded uses of sodium bicarbonate products so that it
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In addition, the management of the company over the past 160 years has been handed down from generation-to-generation until recently when Dwight C. Minton passed on the position of Chief Executive Officer (CEO) in 1995 to an outsider, Mr. Robert A. Davies, III. (Wheelen & Hunger, p. 35-2, 2012). This focused leadership style has enabled Church & Dwight to overcome potential leveraged buy-outs and hostile takeovers with a series of calculated actions and savy business decisions. These actions allowed the board of directors and management to amend the company’s charter and allowing shareholders four (4) votes per share. The board of directors were also re-structured into classes in which each class served staggered three-year terms (Wheelen & Hunger, p. 35-2, 2012).
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In addition to staggering the directors tenure, the company initiated employee severance agreements with key officials, providing a severance package agreement to provide a “safety net” should any of the board member positions be terminated by a hostile takeover or leveraged buy-out by an unwanted suitor. By providing these lucrative packages for senior managers, many were able to stay with Church & Dwight and allowed for continuity of leadership styles, vision and mission focus. It is because of this steadfast devotion to principles that have promoted steady growth over the years that we find Church & Dwight identified previously as a “Star” but more recently labled a “Cash Cow” using
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4- The committee and Ms Beckel decided to include a religious studies curriculum in the program. The principal approved of it. However, Ms Wright one of the community members did not. She threatened to show up at the committee meeting with the media. On the day of the meeting, Ms Wright showed up with a placard protesting the use of the bible in public schools.
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