The solution to the Toothbrush and Toothpaste Debate

The blog, Merger Challenge: Unite Toothbrush, Toothpaste, by Brian Mulligan poses a very interesting question at the end of the blog. How can two companies that seem perfect for each like Oral-B and Crest work together when their business strategies are so different? The differences are that Oral-B has to re-locate all their employees to Cincinnati, Oral-B favoring meetings while Crest favored memos and Crest liking deliberate moves while Oral-B liking quick decisions. Brian brings up a good point because these differences between the companies can ultimately ruin them if they are not worked out and fixed.

I think that both companies need to swallow their pride and management needs to work out a solution that works for both of them. The only solution I can think of for these companies is to try things and see what works and what fails. Both companies need to be open to new ideas and change because merging completely changes their business plan. Oral-B and Crest merging together seems like a very smart idea because their products go hand in hand. It’s kind of like Walmart and McDonald’s working together. Both Walmart and McDonald’s offer cheap products and there are always available at your convenience. I am sure Walmart and McDonald’s management teams have their differences about how to operate their company but they were able to get past them to be successful. I know this blog was written about 4 years ago and both companies are still in business so that means they were able to work it out. I guess with time and learning from mistakes, both companies were able to find a business strategy that worked best for both of them. I searched for both companies on the internet and it seems like they market both products together well. I am glad they were able to work it out and put their differences aside. I will be able to sleep tonight knowing that they worked it out. I figured another solution to this problem would to just use mouth wash and forget toothbrushes and toothpaste.

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2 Responses to The solution to the Toothbrush and Toothpaste Debate

  1. Jordi says:

    Is there no business press coverage of the post-merge situation? You can search google news, or use the lexis-nexis or proquest databases through Bucknell to get access.

    You hear alto about corporate “culture” differences in mergers. Personally, I want to know more because I am a little dubious that corporate cultures are as embedded or strong as “real” cultural differences like between the Ogoni people in the Shell-Nigeria case and other ethnicities I Nigeria, or the Ogoni and the Managers from Shell from Europe or N America.

  2. Brian Mulligan says:

    First, the comments above are great and it’s exciting to know that a post I did over four years ago is still applicable today. Also, after three years with a global company in financial services has given me a very different perspective on how corporate cultures can be very strong. There are challenges associated with integrations. Especially with financial services over the past three years during the financial crisis, there has been significant consolidation of major financial services companies. For example, Morgan Stanley/Smith Barney, Merrill Lynch/Bank of America and Wells Fargo/Wachovia were significant mergers. These consolidations have massive challenges. They have benefits like building scale into the business by spreading fixed costs across a larger revenue base.

    My mind goes straight to the Bank of America and Merrill Lynch “merger”, which was a forced marriage due to the financial crisis. An interesting read, “Crash of the Titans: Greed, Hubris, The Fall of Merrill Lynch and the Near-Collapse of Bank of America”, outlines the storied history of Merrill Lynch, which brought Wall Street to Main Street through their financial advisors, and the construction of a world class investment bank. Merrill’s wealth management business was considered the crown jewel of wealth management in the Americas. Imagine being a 20-year plus employee of Merrill Lynch and then being forced to join a mass, consumer bank like Bank of America. They both provide very similar services like Oral-B and Crest, but have very different cultures. The intangible costs of cultural integration can be astounding. I think there are more complexities and challenges to bring a two businesses together. The economic/business benefits may not outweigh the cost of integration and legacy issues. Look at Bank of America’s stock price, which is down 52.02% YTD vs. the S&P 500 is down 3.79%. Even JPM (-23.96%) or Citi (-37.85%) have outperformed Bank of America during 2011.

    To Jordi’s point, the geographic differences present the same challenges about how to conduct business, but it’s a different experience since the geographic cultural differences are ingrained as part of our upbringing. In a corporate merger, you either start drinking the Kool-Aid of the new combined firm or find another job. You cannot change who you are and how you were brought up. I think that your Exxon example is something that all global companies deal with on a day-to-day basis, but the gap in cultural differences and understandings are shrinking due to increased information flow and communication. The fact that I can chat with a person in Switzerland or Shanghai on video chat in real-time is amazing.

    Great commentary and thanks for the posting

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