Essay/Term paper: Colgate

Essay, term paper, research paper:  Management

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