Merger of (Wo)Manhoods:
Does anyone else find it strange that the Protcer & Gamble/Gillette merger is being framed as P&G (which makes Ivory Soap, Pringles Chips, Iams Cat Food and Hawaiian Punch among others) getting into the “Man” business? Sure we all know Gillette razors but they also make Oral B toothbrushes and Duracell batteries which, last I looked, were free of gender. If I were to rewrite the lead, it would say something like this…
Proctor & Gamble, one of the world’s leading manufacturers of household goods, recently beset by declining stock price and eroding brand loyalty, has agreed to acquire Gillette, another giant of consumer hygiene products recently beset by declining stock price and eroding brand loyalty.
Isn’t that the business story here? That consumer products is a mature industry, wracked by Wal-Mart, bulk purchasing, generic products and declining brand loyalty and that merger is a natural if panicked response to that (see the major record labels)? Leave gender out of it. It bespeaks a lack of imagination.
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8 Replies to “Merger of (Wo)Manhoods:”
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Intesting take, although I’m not sure where you get that P&G and G are beset with declining stock price and brand loyalty, or that this is a panicked response – both companies seem to be doing really, really well. Take a look at their stock charts. Also, according to that article, Gillette has 72% of the market share for razors – that’s incredible, especially considering that its a high margin business. If anything, the market’s demand for companies to grow endlessly drives deals like this – yeah, Gillette makes products besides razors, but those products are the bulk of their business, so it’s an attractive complement to P&G. G’s major products won’t compete with anything P&G already makes, they’ll be able to get rid of a bunch of people to push margins, and they’ll (according to what I’ve read) spend a bunch of Gillette’s money to stave off stock dilution. I think the real story is that these behemoth companies are driven by public markets to become even bigger behemoths, expanding their markets, consolidating, cutting costs, without much consideration for consequences beyond share price.
Intesting take, although I’m not sure where you get that P&G and G are beset with declining stock price and brand loyalty, or that this is a panicked response – both companies seem to be doing really, really well. Take a look at their stock charts. Also, according to that article, Gillette has 72% of the market share for razors – that’s incredible, especially considering that its a high margin business. If anything, the market’s demand for companies to grow endlessly drives deals like this – yeah, Gillette makes products besides razors, but those products are the bulk of their business, so it’s an attractive complement to P&G. G’s major products won’t compete with anything P&G already makes, they’ll be able to get rid of a bunch of people to push margins, and they’ll (according to what I’ve read) spend a bunch of Gillette’s money to stave off stock dilution. I think the real story is that these behemoth companies are driven by public markets to become even bigger behemoths, expanding their markets, consolidating, cutting costs, without much consideration for consequences beyond share price.
The coverage I read in the New York Times said both companies have had a run of bad quarters lately. THe brand thing came from a piece James Surewicki did in Wired about the “Death of Brands.” I probably should have linked to both.
The coverage I read in the New York Times said both companies have had a run of bad quarters lately. THe brand thing came from a piece James Surewicki did in Wired about the “Death of Brands.” I probably should have linked to both.
Oh, no big deal – from what I read it sounded like they were both doing pretty well, but that was based on stock price, not quarterly results. At any rate, I hate this kind of consolidation, especially when one of the goals is to get rid of ‘redundant resources.’
Oh, no big deal – from what I read it sounded like they were both doing pretty well, but that was based on stock price, not quarterly results. At any rate, I hate this kind of consolidation, especially when one of the goals is to get rid of ‘redundant resources.’
Meaning: People with jobs and families to support.
Meaning: People with jobs and families to support.