Energizer Holdings SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

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Threat

1. Impact on business by exchange rates, currencies: Energizer Holdings international operations can be impacted due to currency fluctuations. Approximately half of the sales arise from the international market. Impact of hyper-inflation, currency fluctuation in certain economies specially where there is a limit to convert the local currency can also risk the financial wellbeing of the company. The assessment of Energizer holdings is done on a currency neutral basis. The strengthening of US dollars against most currencies can impact the sales of Energizer products adversely impacting the segment profit. There are legal and regulatory constraints can also pose problem to obtain intellectual property rights. Hedging can also impact the profit position of the company. The US China trade ware can also take a toll on the market share of Energizer holdings in the Asian markets. The fluctuations in exchange rates causes increase in importing of raw materials and also increases export competitiveness as the products will now be priced higher than the locally manufactured products to maintain profit margins. The foreign currency exchange loss decreased from $8.1 million to $5.2 million from the year 2018 to 2019, the sales (revenue) of goods also increased from $1797.7 million to $2494.5 million in the same year but the net income has gone down to $226 million from $98.4 million due to increase in interest to be paid by the company on the new loan term debt being raised by the company. If the loan amount would not have increased significantly the decrease in loss due to exchange rate fluctuation would have resulted in positive impact on the net income in the financial statements.

2. Launch of premier products by competitors and national roll out of private labels: Competition impacts the existing market share and the current business strategy being followed by Energizer Holdings. It leads to reduction in profit margin. With national roll out of private labels and key competitors launching premium products will impact the current profitability of Energizing Holdings. The ability of compete depends upon the spending in R&D, marketing, promotion and sales budget. The company with greater financial strength will have a higher negotiating leverage. The competition may have less production and R&D expenses with higher profit margins. It becomes very crucial to compete with global competitors in price sensitive markets. The competition is highly fragmented with diverse competitors by markets, including private-label. The law and regulations prohibit competitors from fixing prices. If Energizer cannot continue to develop new products in a timely manner, market them at favorable margins, and maintain attractive performance standards in our existing products, they may not be able to compete effectively with its competitors. The risk of competitors introducing new products with better technology and at attractive prices is high as it is continuously evolving segment.

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Product disposal issues and water waste effluents: Energizer Holdings is putting an effort to develop a sustainable environment by adopting corrective measure. It is educating its customers is responsible consumption of its products. The company is able to understand that in order to sustain in the future it cannot ignore the environmental concerns. As the company deals with hazardous chemicals the treatment of water effluents, waste and composting is important. Many governments are now providing incentives to promote environment responsibility; Energizer Holdings can promote these initiatives within the firm. As the concentration is increasing in protecting environment and more stringent regulations on disposable products which impacts the environment, companies are more focused on how to come up with innovative offerings leading to increase in more expenditure in the research and development. The company is working toward landfill-free manufacturing facilities. Across all its international manufacturing sites, approximately 42% of all waste generated is recycled, food wastes of 112,523 pounds from the company headquarters goes for land composting and it’s also tracking its water consumption to reduce wastage. The major focus of Energizer Holdings in environment sustainability is waste, water and composting. It is working toward landfill-free manufacturing facilities. Across all its international manufacturing sites, approximately 42% of all waste generated is recycled. And in the United States, our largest facilities - located in Asheboro, North Carolina - recycle approximately 90% of all waste per year. For conservation of water Energizer tracks the water usage and has done technology improvements to reduce water usage and recycle wash water at one of its production facilities, saving over half a million liters of water per month.

2. Initiatives to reduce the impact of products on the environment: Organizations globally are looking at ways to bring out sustainable products to their customers. Energizer as a leading global player has promoted the responsible consumption of its products. In batteries segment, Energizer was the first to develop mercury and cadmium free alkaline household batteries with no-leak guarantee. Energizer also went on to develop high performance primary and rechargeable batteries made from recycled post-consumer batteries. It also transitioned its flash lights to LED bulbs to extend the life of the lights and reduce customer waste disposal. Energizer has expanded its product portfolio to auto care segment and is leading the change by developing car wipes and car odor absorption bags made with 100% non-toxic bamboo charcoal. Energizer has also managed the chemicals in the products which have led to reduction of 17,275 pounds of methanol and 30 tons of methylene chloride from air conditioning refrigerant production in 2017. It has also helped to save 60 gallons of water per vehicle every year as per the report in 2017 and used recycled materials in packaging and display. Energizer is also committed to finding a plastic-free packaging solution for all of the battery products by the end of 2020, which will then get rolled out in phases.