Rayovac Corporation is contemplating expanding its rechargeable batteries line.
This would be a shift from the alkaline disposable batteries.
The market for batteries is growing due to the increased popularity of high drain devices such as laptops and cameras.
Traditional alkaline batteries account for 70% of the market in Canada.
Rayovac needs answers to several questions before making this strategic decision. Initially, it was called The French battery Company. Currently, Rayovac is the market leader in wearable hearing aids.
If they make the investment, will the company grow to be the market leader in this product line? Will the company have enough cash to execute the strategy? In the years 1930-1988, Rayovac concentrated on manufacturing batteries for consumer products such as radios, flashlights and computer clocks.This growth should be achieved with minimal sacrifice of profits from existing products. Growth in the rechargeable batteries segment will ultimately lead to decline in the alkaline battery segment.Rayovac is committed to environmental sustainability. The company aims at creating safe environments and minimizing damage by recycling and reusing.Heavy technology users use batteries for high-drain gadgets, replace batteries frequently and purchase impulsively.Medium technology users purchase based on price replace their batteries less often and use low- drain gadgets.The medium users compose the bulk of battery markets.However, the heavy users would be the ideal consumers of rechargeable batteries.In 1990, the company shifted its focus to Heavy Duty and Industrial products. Despite this fact, Rayovac continued to develop and bring to market different chargers for the rechargeable batteries.The company secured 20% of the rechargeable batteries market.Currently, the company is the third largest battery maker, after Duracell and Energizer.Like all profit-making organizations, Rayovac is interested in maximizing its return on investment.