Essay/Term paper: Colgate palmolive

Essay, term paper, research paper:  Economics

Colgate Palmolive


With a continuous expansion in it's product line, Colgate-Palmolive is
taking on the look of one of the most stable stocks on the exchange. Colgate
has a wide variety of products sold around the globe including, Colgate
Toothpastes, Speed Stick Deodorants, Ajax Surface Cleaner, and Hill's Science
Diet foods for house pets.
Colgate was founded in 1806 in New York City on Dutch Street by William
Colgate as a starch, soap and candle business. Colgate produced soaps and
perfumes or the next 67 years and then in 1873, they introduced their first
toothpastes, which were aromatic toothpastes. Then 13 years later, they
introduced the first dental creme packaged in collapsible tubes similar to those
used today. After 104 years of being in business on Dutch Street, the largest
tenancy on record in New York City the entire Colgate organization moved to
Jersey City. In 1928 Colgate made its greatest merger of all time with the
Palmolive-Peet Company and in 1953 took on its present name of Colgate-Palmolive.
By 1967 Colgate-Palmolive was on a roll with sales passing the 1 billion dollar
mark. In the years after, Colgate began acquiring major companies and expanding
its product line with the purchases of Hill's Pet Products in 1976, the Mennen
Company in 1992 and in 1993 acquired the liquid soap brands of S.C. Johnson.
Before the purchase of Mennen Co. in 1992, Colgate Palmolive had no major
presence in the deodorant industry. With the purchase of Mennen Co. they held
16% of the deodorant market but had to compete with Proctor and Gamble, who held
26% of the market with products such as Sure, Secret and Old Spice.
After the purchase of Mennen Co., which was easily purchased without resist
for $670 million in cash, Colgate-Palmolive held 16% of the deodorant market
with their Speed Stick and Lady Speed Stick deodorants, which are now the
leading in world wide sales of deodorants. They also now own products under the
Baby Magic name such Skin Bracer and Baby Magic Foot.

Powder.
In 1976 , Colgate-Palmolive acquired Hills Pet Products Inc. Since the
foundation of this company in 1948, they have committed themselves to the health
and welfare of dogs and cats. Today, Hill's Pet Nutrition Inc. is one of the
leading pet food manufactures and is revolutionizing the pet food industry with
its Prescription Diet products used by veterinarians to manage such conditions
as obesity, heart disease, kidney disease and many others. Hill's Pet Products
also manufacture Hill's Science Diet food.
Hill's Pet Products has not always been a success. When it was founded in
1948 by Mark Morris it grew very slowly in it's specialty foods and attempted to
enter into other areas of pet care such as flea baths and aquarium supplies. It
was taken over a number of times but it seemed to be more of a loss rather than
gain. In 1976 Colgate-Palmolive acquired it, attracted by it's Science Diet
brand. Colgate revolutionized Hills Pet Nutrition by marketing not through
supermarkets but through veterinarians and through pet food stores as the
Prescription Diet product line. Since Hills Pet Nutrition was acquired they
have had an increase in annual sales from $40 million to $832 million and now
make up 11% of Colgate sales.
After the takeover of Mennen Co. the price of Colgate-Palmolive Co. rose
from 49.13, the 1991 high, to 60.63, the 1992 high. Their sales also increased
by 947 million from 6060 million in 1991 to 7007 million in 1992. The net income
also increased drastically from $125 million to $477 million. And lastly, the
takeover increased the number employed by Colgate-Palmolive from 24,900 to
28,800.
Through mergers and divestitures Colgate-Palmolive has grown from a small
shop on dutch street to a major stock on the NYSE. Mergers and divestitures are
economically wise because they allow for the larger more dependable companies to
take another company's products and turn them on the right path, such as Hills
Pet Products Inc. The government should not be allowed to regulate them because
mergers allow for a more dependable product. Mergers and divestitures help
competition between major companies and also bring more money in for the
investor through dividends. Although this may cause unemployment, it does help
the economy.

Bibliography:

Financial World-June 20,1995 p 58 "Top Dog-How Hills Pet Nutrition became one
of the all-time stars in the Colgate stable" Colgate-Palmolive via
Internet Money Online via Internet Chicago Tribune-Feb. 14, 1992