Colgate toothpaste in Asia
1. Identify the major strategic and ethical issues faced by Colgate in its partnership with Hawley and Hazel.
In 1985, Colgate purchased a fifty percent ownership of the company Hawley and Hazel, a leading manufacturer of toothpaste in Singapore, Taiwan, China, Malaysia, and Thailand, in order to gain a foothold in the Asian market. This was an important business decision as Colgate felt Hawley and Hazel had valuable strategic assets, such as brand loyalty, customer relationships, distribution systems, and production systems (Hill, 2014, p. 224). It was easier and less of a capital risk for Colgate to acquire the firm in order to establish a presence in Asia without having to spend the resources to build their own manufacturing plant. This was sound thinking as Colgate had a well-established reputation in the European markets, and the company saw an excellent opportunity to form a partnership with Hawley and Hazel to expand their market share and sales.
The main product of Hawley and Hazel, “Darkie” toothpaste initiated the ethical uproar faced by Colgate. The product logo, fashioned after comedian Al Jolson, who used to paint his face black during his comedy routines, was considered by many minority and civil rights groups in the United States to be racist and inappropriate.
2. What do you think Colgate should have done to handle the situation? Justify your answer.
Colgate was so anxious to expand their holdings that they neglected to consider the implications of the product and the ramifications of the acquisition. Colgate should have conducted an in-depth study to evaluate the positives and negatives that the product offered prior to completing the merger. When it formed the partnership with Hawley and Hazel, Colgate did not take into consideration what the views of home consumers would be regarding foreign products and markets. Unfortunately, the company neglected this aspect of business operations to the detriment of consumer loyalty at home.
3. Is it possible for Colgate and Hawley and Hazel to change the toothpaste’s advertising without sacrificing consumer brand loyalty? Is that a possible reason for Colgate’s not responding quickly to domestic complaints?
Unfortunately, the company was reactive to the situation instead of proactive. If Colgate had done a proper evaluation at the onset of the merger, they would have possibly initiated a campaign that utilized public relations, various advertising mediums, and sales to promote the product in the home and foreign markets.
What we conclude from our research that there’s no single organization free from facing complications and difficulties. Each and every organization face few or many strategic problems. Johnson & Johnson had a problem with one of their products, and they were smart in handling that problem to keep the company on the safe side without letting it effect it negatively. It is very important to act quickly to fix the problem before many consumers notice.
The actor dressed as a dentist boldly asserts, “Only Colgate Total has an antibacterial ingredient.” The simple statement without a source does not logically convince adults who think about the fact that other brands probably contain a different antibacterial ingredient. The brand attempts to provide additional logic, but this too has no clear basis. The man states, “Only Colgate Total reduces plaque by up to 98% and gingivitis by up to 88%.” These statements appear in text on the screen, but lack any listed sources or studies that could support the claim. Without another brand to compare Colgate Total to or studies proving the superior effectiveness of the toothpaste, many educated viewers could see that the commercial has no real scientific basis or supported logic behind its brazen claims, leaving the audience feeling as if Colgate simply provided them with a pretty face that will provide no real
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b. What is the essential ethical issue here? (In your own words, write out a one-sentence summary of the ethical issue as it arises in the type of situation being described here.)
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Cadbury Schweppes (CS) is one of the biggest international beverage and confectionary companies in the world with a market capitalisation of £10 billions. With approximately 200 years of history, Cadbury and Schweppes mergence in 1969 granted themselves the position of one of the 10 Global leaders in Food. The company emp...
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On the following report, customers’ needs analysis, five forces analysis and complementors, companies’ performances as well as the potential impacts on expected changes in the cosmetics retail industry will be discussed in detail.