Rayovac 2010 Annual Report Download - page 29

We participate in very competitive markets and we may not be able to compete successfully, causing us to
lose market share and sales.
The markets in which we participate are very competitive. In the consumer battery market, our primary
competitors are Duracell (a brand of Procter & Gamble), Energizer and Panasonic (a brand of Matsushita). In
the electric shaving and grooming and electric personal care product markets, our primary competitors are Braun
(a brand of Procter & Gamble), Norelco (a brand of Philips), and Vidal Sassoon and Revlon (brands of Helen of
Troy). In the pet supplies market, our primary competitors are Mars, Hartz and Central Garden & Pet. In the
Home and Garden Business, our principal national competitors are Scotts, Central Garden & Pet and S.C.
Johnson. Our principal national competitors within our Small Appliances segment include Jarden Corporation,
DeLonghi America, Euro-Pro Operating LLC, Metro Thebe, Inc., d/b/a HWI Breville, NACCO Industries, Inc.
(Hamilton Beach) and SEB S.A. In each of these markets, we also face competition from numerous other
companies. In addition, in a number of our product lines, we compete with our retail customers, who use their
own private label brands, and with distributors and foreign manufacturers of unbranded products. Significant new
competitors or increased competition from existing competitors may adversely affect our business, financial
condition and results of our operations.
We compete with our competitors for consumer acceptance and limited shelf space based upon brand name
recognition, perceived product quality, price, performance, product features and enhancements, product
packaging and design innovation, as well as creative marketing, promotion and distribution strategies, and new
product introductions. Our ability to compete in these consumer product markets may be adversely affected by a
number of factors, including, but not limited to, the following:
• We compete against many well-established companies that may have substantially greater financial and
other resources, including personnel and research and development, and greater overall market share
than us.
• In some key product lines, our competitors may have lower production costs and higher profit margins
than us, which may enable them to compete more aggressively in offering retail discounts, rebates and
other promotional incentives.
• Product improvements or effective advertising campaigns by competitors may weaken consumer
demand for our products.
• Consumer purchasing behavior may shift to distribution channels where we do not have a strong
presence.
• Consumer preferences may change to lower margin products or products other than those we market.
• We may not be successful in the introduction, marketing and manufacture of any new products or
product innovations or be able to develop and introduce, in a timely manner, innovations to our
existing products that satisfy customer needs or achieve market acceptance.
Some competitors may be willing to reduce prices and accept lower profit margins to compete with us. As a
result of this competition, we could lose market share and sales, or be forced to reduce our prices to meet
competition. If our product offerings are unable to compete successfully, our sales, results of operations and
financial condition could be materially and adversely affected.
We may not be able to realize expected benefits and synergies from future acquisitions of businesses or
product lines.
We may acquire partial or full ownership in businesses or may acquire rights to market and distribute
particular products or lines of products. The acquisition of a business or of the rights to market specific products
or use specific product names may involve a financial commitment by us, either in the form of cash or equity
consideration. In the case of a new license, such commitments are usually in the form of prepaid royalties and
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