Spectrum Brands Holdings Inc.s Analysis

Table of Contents

Introduction
General Macro Environment Analysis
Five Forces Analysis
Conclusion
References

Introduction

Spectrum Brands Holdings, Inc. is a company dealing with home essentials, the purpose of which is to improve their customers quality of life at home, including their meals, their appearance, and caring for their pets. The company proclaims that it uses the customers insight to further its innovations. The companys important aim is growth, with it aiming to export its goods all over the world by strategic acquisitions and natural expansion.

As already stated above, Spectrum Brands Holdings, Inc. deals with its customers life at home. To this end, it divides its product into several categories (Our Brands, n.d.). The first one is the homes safety, which includes locksets, builders hardware, and plumbing. The second category includes special products for a customers garden, as well as repellents. The products from the third category provide caring after pets with food or grooming necessities, while the fourth category deals with care after a customers appearance and includes gel, shavers, or combs.

General Macro Environment Analysis

Political factors do not influence Spectrum Brands much, as it does not risk invasion, with most of its locations situated in the USA. Other locations include Australia, Canada, and Germany which are secure as well. Being situated in these prosperous countries means that Spectrum Brands only faces limited corruption. However, there are still political complications, including the consequences of the COVID-19 pandemic. A recent strife with the U.S. Department of Justice is important as well (Spectrum Brands Statement, n.d.). The latter case, according to its reaction, seriously hindered Spectrum Brands business attempts.

Among the economic factors, Spectrum Brands itself lists its indebtedness. It is enough to have an impact on financing its capital needs and expansion. Social factors are the companys strong suit, with the employees generally being satisfied. The company has a good work environment, with 91% of its employee reviews being positive, and it holds the second and third ranks in Gender and Diversity among the five main actors of its sphere (Spectrum Brands competitors, n.d.). Still, the company cares about the public possibly perceiving its products as unsafe, and wishes to prevent it.

The most dangerous environmental threat the company faces is pollution, which is especially characteristic of Australia. The company itself takes climate change and natural disasters into consideration as well. At present, the legal situation presents little problem for the company. However, it is still wary of possible changes to tariffs, trade, depression, or inflation. The cost and effect of new legal proceedings or laws may directly influence some of the companys interactions with consumers.

Five Forces Analysis

Currently, Competition in the industry is the most dangerous Force the company has to face. In the group with four of its direct competitors, Spectrum Brands only holds the fifth position in pricing, NPS, product quality, and customer service. This last position in four of the grades shows that Spectrum Brands is currently losing to the competition. In addition, the company regards the potential of new entrants into the industry as high, calling the entry rapid and easy for new firms (Spectrum Brands Statement, n.d.). Therefore, this Force presents a high level of threat as well.

The Power of suppliers may be qualified as high, as Spectrum Brands holds high standards for its suppliers and selects them carefully. For example, the suppliers must present their materials 100% on time, react to any complaints immediately, and look for possibilities for cost reduction. As for the Power of customers, the situation is inconsistent. On the one hand, the company makes it its mission to focus on customer satisfaction. On the other hand, the companys globalist strategy makes the customers relatively weak at influencing it, as they are replaceable by customers from other markets. Thus, the Threat of substitute products is relatively high for Spectrum Brands Holdings, Inc. With it holding low positions in comparison to the competition, as well as being wary of new entrants into the market, it is very possible that, if it remains stagnant, customers may choose different products.

In terms of its organizational chart, while some of the companys higher management is universal, including Human Resources, Counsel, Supply Chain, and the CEO and the VPs, there are representatives of the separate productions. For example, David Albert deals with Home & Personal Care Appliances, John Pailthorp is the President of Global Pet Care, and Tim Goff is the President of Hardware and Home Improvement. This structure simplifies leadership over the different kinds of the companys products, makes them relatively independent from the CEO, and makes use of their competence in their chosen field of production.

The firms business-level strategy includes a priority on reinvestment in innovation and marketing. The companys Global Productivity Improvement Program allows for multimillion-dollar savings by improving operational efficiencies. With the suppliers having direct instructions to try and find ways to cut costs, it is safe to say that Spectrum Brands aims to make its products cheaper. It works well with its main intent for international expansion, as the population abroad is mostly poorer than in the countries the company currently operates. Therefore, the firms corporate-level strategy is rapid expansion, for which the company seeks to purchase and incorporate other brands within itself.

Conclusion

Thus, the companys current aims to expand internationally and cut costs are clear. However, the companys weakness compared to the competitors, as well as its conflict with the Department of Justice, must be taken into consideration. By focusing its attention on foreign markets, the leadership of the company may fail to act on its current shortcomings and lose the American market, which is the most prosperous market in the world.