Colgate-Palmolive-Managing-International-Careers

HarvardBusinessSchool9-394-184May24,1994Colgate-Palmolive:ManagingInternationalCareersColgate-PalmoliveCompany,aleadingconsumerproductscompanywithrevenuesofmoreProfessorPhilipM.Rosenzweigpreparedthiscaseasthebasisforclassdiscussionratherthantoillustrateeithereffectiveorineffectivehandlingofanadministrativesituation.Copyright©1994bythePresidentandFellowsofHarvardCollege.Toordercopies,call(617)495-6117orwritethePublishingDivision,HarvardBusinessSchool,Boston,MA02163.Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,usedinaspreadsheet,ortransmittedinanyformorbyanymeans—electronic,mechanical,photocopying,recording,orotherwise—withoutthepermissionofHarvardBusinessSchool.than$7.1billionin1993,wasbestknownforbrandssuchasColgatetoothpaste,Palmolivedishwashingliquid,Ajaxcleanser,IrishSpringsoap,andHill’sScienceDietpetfood.1Thecompany(sometimescalledC-P)wasalsorecognizedforitscomprehensiveapproachtointernationalcareerdevelopment.Throughoutitshistory,Colgate-Palmolivehadreliedheavilyonexpatriatestoestablishandmanageforeignsubsidiaries,andinthe1980sdevelopedanexplicitpolicyregardinginternationalassignments.By1993,ithad170expatriatesinkeymanagementpositionsallovertheworld.Internationalexperiencewasconsideredcentraltocareerdevelopment,andvirtuallyarequirementforanyoneaspiringtoseniormanagement.Bytheearly1990s,however,anincreasingnumberoftalentedyoungmanagerswerebecomingreluctanttoacceptinternationalassignments,oftenbecausetheirspouseshadcareersoftheirownandcouldnoteasilymoveabroad.Asdual-careerfamiliesbecamemoreandmorecommon,C-Pbegantoreconsideritsapproach.Perhaps,somesuggested,greatereffortsshouldbetakentoaddresstheconcernsofdual-careerfamilies.Otherswonderediflessemphasisshouldbeplacedoninternationalexperienceasaconditionforadvancement.Bythespringof1994,managersatColgate-Palmolivewerethinkingcarefullyaboutwhethertoadjusttheirapproachtowardinternationalcareerdevelopment.Colgate-PalmoliveCompanyBackgroundColgate-PalmolivewasoneofAmerica’sfirstmajorconsumerproductscompanies.Ittraceditsrootstotwofirmsfoundedinthe19thcentury:ColgateandCompany,basedinNewYorkCity,wasthenation’sleadingtoothpastemanufacturer,andthePalmolive-PeetCompanywasaprominent1.Colgate,Palmolive,Ajax,IrishSpring,Hill’s,andScienceDietareregisteredtrademarksofColgate-PalmoliveCompany.1FortheexclusiveuseofT.SATOThisdocumentisauthorizedforuseonlybyTakuyaSatoinInternationalManagementSpring2011taughtbyDavidMethefromApril2011toOctober2011.394-184Colgate-Palmolive:ManagingInternationalCareerssoapmakerbasedintheMidwest.In1928thetwofirmsmergedtoformColgatePalmolive-PeetCompany,andin1953thepresentnameofColgate-PalmoliveCompanywasadopted.Followingthe1928merger,Colgate-PalmoliveprosperedintheUnitedStatesandexpandedabroad.Bythelate1930s,thefirmhadsubsidiariesinseveralEuropeancountries,aswellasinArgentina,Brazil,India,Mexico,SouthAfrica,andthePhilippines.In1938,foreignsalesaccountedfor28%ofcompanyrevenuesand41%ofitsprofits.Overthenext23years,underthedirectionofpresidentE.H.Little,C-PconsolidateditspositioninEuropeandfurtherdevelopeditspresenceinLatinAmericaandAsia.BythetimeLittleretiredin1961,C-P’sproductsweresoldin85countriesaroundtheworld.Overseasactivitieshadgrowntomorethan53%ofcompanysalesandaccountedforfully78%ofprofits.AdescriptionoftheColgate-Palmolive’sinternationalexpansionisdetailedinExhibit1.Duringthe1970s,Colgate-Palmoliveundertookaseriesofacquisitionsandbecameamorediversifiedcompany.Revenuesgrewto$4.9billionby1984,butprofitslagged.UndertheleadershipofReubenMark,CEOsince1984,thecompanydivestedseveralbusinessesandfocusedonfiveproductlines:personalcare,oralcare,householdsurfacecare,fabriccare,andpetdietarycare.AlistofmajorbrandsisprovidedinExhibit2.AlthoughColgate-Palmolive’sstrategyshiftedduringthe1970sand‘80s,asitacquiredandthendivestedseveralcompanies,itscommitmenttoastronginternationalpositionneverwavered.C-PcontinuedtofoundnewsubsidiariesinLatinAmerica,Africa,andAsia,includinginseveralpopulouscountriessuchasChina,Indonesia,andPakistan.Inthelate1980sC-PenteredEasternEurope,settingupsubsidiariesinPoland,Hungary,Russia,Romania,andtheCzechRepublic.Intheearly1990sitexpandedmanyofitsexistingsubsidiaries,startingtomanufacturetoothpasteinChinaandTanzania,enlargingitsbarsoapfactoryinThailand,andproducingdetergentsandbleachinMalaysia,Thailand,andthePhilippines.In1992,Colgate-PalmoliveacquiredMennen,aprivatefirmbestknownforitslineofdeodorantproducts.BolsteredbytheMennenacquisition,worldwidesalestopped$7billionforthefirsttime(seeExhibit3forasummaryoffinancialperformance).TheacquisitionalsoshiftedC-P’sproductmixfurthertowardpersonalcare,asshowninExhibit4,andreinforcedthecompany’spresenceinLatinAmerica,whereMennenhadasizeablemarketshare.2Internationalsalesweremoreimportantthanever,accountingforalmosttwo-thirdsof1993revenue,withEuropecontributing27%,LatinAmericaat21%,andAsiaandAfricaat17%,asshowninExhibit5.ManagingInternationalExpansionColgate-Palmolivehadconsistentlytakenameasuredapproachtowardenteringforeignmarkets.Initiallyitenteredanewcountrybyimporting