Chad Eckerlin
 The world’s largest maker and marketer of branded
consumer lawn and garden products
 Reported $3.14 billion in net sales
 Operates primarily in North America,
 along with businesses in Europe and Asia Pacific
 An Ohio Corporation
 Resulted in the 1995 merger of The Scotts Company and
Stern’s Miracle-Gro Products, Inc.
 Divided into 3 Segments
 Global Consumer “Do it yourself”
 Lawn Care
Net Sales $3.14 Billion
 Gardening and Landscape
7%
 Home Protection
9%
 Outdoor Living
Global Consumer
 Global Professional
Global Professional
 Commercial Nurseries
Scotts LawnService
84%
 Greenhouses
 Specialty crop growers
 Scotts LawnService “Do it for me”
 Residential/Commercial lawn care in United States
 2ND largest U.S. lawn care service business
 Government manipulation
of currency and other
international regulations
 Compliance with
environmental and other
public health regulations
 Exchange Rates
 FIFRA
 Higher Rates of inflation
 U.S. EPA
than in the U.S.
 Difficulty obtaining
distribution and support
 Less protection of
intellectual property under
foreign laws
 Food Quality Protection
Act
 Regulations in the EU
 Regulations in Canada
 Fluctuating Prices of Certain
Raw Materials
 Urea
 Resins
 Fuel
 Sphagnum peat
 Grass seed
 Wild Bird Food Components
 Adverse Weather Conditions
 Soil Conditions
 Reduced Discretionary Spending
 High Unemployment
 Urbanization
 Shift to apartment living
 Decline in construction of new
houses
 Decline in size average of yard
 Declining Consumer Confidence
 Consumers wanting to meet neighbors expectations
of lawn
 Brand Loyalty
 Potential New Customers
 Research and Development
 Web 2.0
 Blogging
 Reviews
 E-Commerce
 The ability to shop online
 Perceived value of
Convenience
 Social Networking
 Facebook
 Twitter
 LinkedIn
Factor
Trend
Evaluation
Impact (1 = low; 5 =
High)
Rank in terms
of Importance
Political
•Government manipulations of currency
•Environmental regulations
•International regulations
•Regulations in EU
•Regulations in Canada
• Opportunity
•Threat
•Threat
•Threat
•Threat
•5
•5
•5
•5
•5
2
Economic
•Fluctuating Raw Material Prices
•Adverse Weather Conditions
•Reduced Discretionary Spending
•High Unemployment
•Drought
• Decline in construction of new houses
• Decline in size average of yard
• Urbanization and shift to apartment living
•Opportunity/Threat
•Opportunity
•Threat
•Threat
•Opportunity
• Threat
• Threat
•Threat
•5
•4
•5
•4
•5
•5
•4
•5
1
Social
•Declining Consumer Confidence
•Consumers wanting to meet neighbors
expectations
•Threat
•Opportunity
•3
•4
3
Technological
•Web 2.0
•E-Commerce
•Social Networks
•Opportunity
•Opportunity
•Opportunity
•2
•2
•2
4
 High competitive market
 Internationally
 Regionally
 Locally
 Low start-up costs
 Lawn Care Service
Industry
 Distribution Channels
 Need of suppliers
 Compliance with health
regulations
 FIFRA
 U.S. EPA
 Food Quality Protection
Act
 Regulations in the EU
 Regulations in Canada
 Already Established Brand
Loyalty/Awareness
 Trusted Brand Name
 Research and Development
 Financials
 Market Share Leaders
Nature of Barrier
Extent of Barrier
Supply-side of economies of scale
High
Demand-side benefits of scale
High
Capital Requirements
Low
Incumbency advantages independent of
size
High
Customer-switching costs
Low
Unequal access to distribution channels
High
Restrictive Health Regulation Policy
Very High
 Rely on numerous vendors in United States and
Europe
 Negotiation of contracts with favorable terms directly
with vendors
 Entered into arrangements to partially mitigate the
effect of fluctuating direct and indirect fuel costs
 420,000 gallons of fuel
 62,000 tons of urea
 Rely heavily on third-party manufactures
 Decreased control over production process and quality
control
 Substitute manufactures may not be available
 Significant Customers
 The loss of any of these
customers could have a
material averse effect on
their financial condition
Global Consumer Segment
Home Depot
Lowe's
Walmart
25%
47%
28%
 Buying Power is STRONG
 No Contract Industry
 Price Negotiation
 Economic downfall = Price > Quality
 Significantly dependent upon key retailers
 Increasingly sensitive to deterioration in the financial
condition
 Negatively affected by changes in the policies of their
retailers, such as
 inventory destocking
 limitations on access to shelf space
 price demands
 The threat of substitutes is HIGH...
 Budgeting and fixed income customers may rather
spend money on other expenditures
 Put it towards monthly bills
 Activities on weekends
 Social Events
 Savings
 Entertainment
 Compete against private-
label as well as branded
products
 Internationally
 Primary Competitors
 Spectrum
 Brands
 Bayer AG
 Bayer AG
 Central Garden & Pet
 Compo GmbH
Company
 Enforcer Products
 Green Light Company
 Lebanon Seaboard
Corporation
 Westland
Horticulture
 Variety of local
companies
 Price Discounts
 Financial Resources and Research Departments
 Advertising
 Product Innovation
 Product Quality
 Brand Strength (Trademarks, Patents and Licenses)
 Service Improvements
 Supply Chain Competency
 Relationship with Major Retailers
 Field Sales Support
Factor
Evaluation
Intensity of Rivalry
Strong Force(High demand in service,
seasonal, small start-up costs)
Buyer Power
Strong Force (Users choose
price over quality. Retailers:
inventory destocking,
limitations on access to shelf
space, price demands)
Supplier Power
Strong Force(Having to negotiate
contracts with major vendors)
Threat of Substitute Products
Strong Force ( Due to consumers willing
to spend luxury expense on other
expenditures)
Threat of New Entrants
Strong Force(unlimited amount of small
local services)
 Demand is driven by consumer income and commercial
real estate construction. The profitability of individual
companies depends on anticipating demand for various
types of plants, and an efficient distribution system.
Large operators have economies of scale in distribution.
Small operators can compete successfully by raising
specialty plants or serving a local market
Spectrum
Brands
Bayer AG
Central Garden &
Pet Company
The Scotts MiracleGro Company
Product Line Sales
$ 341 (million)
$6.8 (€ million)
$683.1 (million)
3.14 (billion)
Sales Growth
19%
4.9 %
• - 5.6%
5%
Segment Net Income
(million)
$ 40
$1.4 (€ million)
$53
212.4
Generic Strategy
•Reaching a
broad array of
household
insecticides:
• Spiders
• Roaches
• Ant Killers
• Etc.
•Improving quality of
fruit and vegetables
•Improving plant
traits
•Safeguarding
Harvests
•Global Support for
Farmers
•Offering both
premium and valueoriented branded
products
•Producing Wal-Mart
Private Label Brands
•Helping consumers
obtain the lawn they
want
•Improving
consumers gardens
•Helping protect
homes from insects
•Enjoying outdoor
living experience
Spectrum Brands
Bayer AG
Central Garden
& Pet Company
The Scotts
Miracle-Gro
Company
Key
Products/Services
•Rodenticides
•Herbicides
•Plant foods
•Herbicides
•Fungicides
•Insecticides
•Seed Treatments
•Grass seed
•Wild Bird Feed
•Insect control
•Lawn and Garden
Care Products
•Decorative
Outdoor Patio
•Lawn Care
•Gardening and
Landscape
•Home Protection
•Outdoor Living
•Horticulture
•Lawn Service
Key Brands
•Cutter
•Repel
•Hot Shot
•Spectracide
•Prosaro
•Stratego
•Aviator
•Xpro
•Luna
•AMDRO
•Ironite
•Wal-Mart Private
Label Brands
•Sevin
•Smart Seed
•Scotts
•Turf Builder
•Miracle-Gro
•Ortho
•Roundup
Key Customers
•Wal-Mart
•Home
Improvement
Centers
•Mass
Merchandisers
• Hardware Stores
• Grocery Stores
• Drug Chains
•Farmers
•Breeders
•Growers
•Food Trade
• Wal-Mart
• Home Depot
• Lowe’s
•Price Sensitive
Customers
•Global Consumer
•Global
Professional
•“Do it for me”
Consumers
• Home Depot
•Lowe’s
•Wal-Mart
Marketing Focus
Sales Distribution
Observation
Spectrum
Brands
•Perceive value of alternative for
consumers who want products that are
comparable to but sold at lower prices
than premium-priced insecticide
brands. Focused on a broad range of
insecticides.
• United States
•Spectrum Brands based marketing
efforts towards a specific problem
“Insecticide” by offering various
insecticide products
• Global Consumer
Bayer AG
•Development, production and
marketing of a wide range of products for
the green industry, garden care, nonagricultural pest and weed control, as
well as seeds and traits for food trade
and farmers.
•Global
• Bayer AG is a very diverse company that
offers products based on technology,
health care, and crop science
• Global Professional
• Global Consumer
Central
Garden &
Pet
Company
•Premium products are focused on
meeting consumer needs through
product performance, innovation,
quality, upscale
packaging and retail shelf placement.
Value products are focused on
promotion of the quality and efficacy of
value brands at a lower cost.
•United States
• Central Garden & Pet Company offers
premium products and value products
• Global Consumer
• Differentiates with outdoor decorations
and Pet Supplies
The Scotts
MiracleGro
Company
• Leading manufacturer and marketer
of branded consumer lawn and garden
products, with products for
professional horticulture as well.
Focusing more attention towards global
consumer segment.
• Global
• The Scotts Miracle-Gro Company
reaches each segment in the lawn care
industry:
• Global Consumer
• Global Professional
• Lawn Service
Competitive Advantage
Spectrum Brands
• Discounted Price
• Product Packaging and Design Innovation
• Perceived Product Quality
• Insecticides
• Diverse Business Portfolio
Bayer AG
• Intensive Research and Development
• Farmers Globally
• Food Trade
• Diverse Business Portfolio
• Product Development
• Innovation
•Strong Financial Backing
Central Garden & Pet Company
• Premium and Value Brands
• Wal-Mart Product
• Quick Response to Preferences
• Product Placement
• Private Label Products
The Scotts Miracle-Gro Company
• Brand Name Recognition
• Creative Marketing, Promotion and Distribution
• Intensive Research and Development
• Global
• Brand Loyalty
•Brand Awareness
• Product Features and Enhancements
•Strong Financial Backing
Spectrum Brands
Bayer AG
Central Garden & Pet
Company
The Scotts MiracleGro Company
Product Scope
•Broad range of
insecticides
•High Quality
•Relative Low Cost
•Exterminate Insects
•Environmentally Safe
•Herbicides
•Fungicides
•Insecticides
•Seed Treatment
•Non-agriculture pest
and weed control
• Safety
• Quality Control
•Broad Range of
Products with price
variances of quality
•Home Protection
•Outdoor Living
•Lawn Care
•Gardening and
Landscape
•Home Protection
•Outdoor Living
•Horticulture
•Lawn Service
•High Quality
Geographic Scope
•North America
•Europe
•North America
•Asia/Pacific
•Latin
America/Africa/Middle
East
•North America
•North America
•Canada
•EU
•Asia/Pacific
Core Competence
•Household Insect
Control
•Well known products
throughout other
market segments
•Health Care
•Crop Science
•High Tech
•Research and
Development
•Premium and Value
Brand Products
•Outdoor Decorative
•Pet Food Industry
•Retailer Relationship
•Manufacturing
•Marketing
•Retailer Relationships
•Research and
Development
•Brand Awareness
 Regional Operating Offices
 Getting “Closer” to the
consumer
 Reaching distinct needs in
various regions
 Research and Development
 Advancements of old products
 Customer Orientation
 Reaching different
demographics
 Hispanics
 Retirees “Snow Birds”
 Higher Prices of Raw Materials
 Condensing the market size
 Higher Barriers to get in
 Demand for Underdeveloped
Countries
 Droughts
 Adverse Weather Conditions
 Demand in Seed and Crop
Market
 Double Digit increases in
people growing vegetables by
region
 Decrease in retailer store
expansions
 Major retailers focusing on
increasing same store sales
 Regionally Relevant
 Differentiating product labels
Spectrum Brands
Bayer AG
Central Garden and
Pet Company
The Scotts MiracleGro Company
Characteristics of
People/Organizations
•Family
•Gardener
•Lawn Cultivator
•Farmers
•Gardeners
•Professional
Harvesters
•Adults over 55 years
old
•Empty Nesters
•Baby Boomers
•Hispanics
•“Snow Birds” Retirees
•Family
•Professional
•Land Cultivator
Purchase/Use Situation
•Prevent Insecticides
•Cheap Purchase
•Quick decision
•Brand loyalty
•Similar to an
Insurance Expense
•Safety
•Harvest Control
•Long Purchasing
behavior
•Price Negotiation
•Quick Decision
•Cheap/Premium
Purchase
•Luxury Expense
•Brand Loyalty
•Fertilize and Weed
Control Lawn
•Purchasing behavior
involves research, time
Users’ Needs and
Preferences for Product
Characteristics
•Price > Quality
•Brand Awareness
•Product Similarity
•Product Similarity
•Quality
•Research and
Development
•Seed Control
•Product Similarity
•Price=Quality
•Brand Awareness
•Product Similarity
•Quality > Price
•Brand Awareness
Spectrum Brands
Bayer AG
Central Garden and
Pet Company
The Scotts MiracleGro Company
Characteristics of
people/Organizations
•United States
•Wal-Mart
•Drug Stores
•Retail Stores
•Farmers
•Scientists
•Food Trade
•Food Quality Control
•Global
•Home Centers
•Mass merchants
•Independent nurseries
•Hardware Stores
•Wal-Mart
•Home Depot
•Lowe’s
•Lowe’s
•Home Depot
•Wal-Mart
•Regionally Disbursed
•High Profits
•Global
Purchase/Use Situation
•Stock shelves
•Brand Awareness
•Lower Cost Option
•Insecticides
•Low Volume
•High Volume
•Brand Awareness
•Research and
Development
•Underdeveloped
Countries
•Stocked Shelves
•High Volume
•Quick change of
preference
•High and Low Cost
Option
•High Volume
•Stocked shelves
•Brand awareness
•Seasonal
•Lawn and Garden
Retailers
Users’ needs and
preferences for product
characteristics
•Price
•Broad features of
insecticides
•Safe Harvesting
•Quality
•Price =Quality
•Differentiation
•Outdoor Decorative
•Outdoor living
specialization
•Quality
•Desired Features
•Service Requirements
SMG
Bayer AG
Central Garden
and Pet Company
Spectrum Brands
 Social Media doesn’t appear to be a factor within this
industry when reading past annual reports.
 I consider social media a huge factor within this
industry due to the high power of the buyer.
 Could have an adverse impact on reputation or vise versa
through:
 Reviews
 Comments
 Blogs
 Twitter Feed
 The Scotts Miracle-Gro Company faces competition
from key competitors that already fill a niche with
several other industries.
 Segmentation is a huge factor.
 Spectrum Brands: Focusing on the Insecticide aspect of the
market while touching base on other industries.
 Bayer AG: Playing a huge role in the trending consumer
education of vegetable growing and crop science, while
maintaining R&D of health care.
 Central Garden and Pet Company: Focusing on the price
sensitivity of consumers, offering both premium products as
well as value products. In doing so, they are pertaining to
their niche as well in the pet food industry.
 The Scotts Miracle-Gro Company should not take
lightly of any of these competitors.
 The following are all key factors that play a huge role
within this industry.
 Research and Development
 Funding
 Supplier Relationships
 If The Scotts Miracle-Gro Company does not change
it’s strategy model with trends in this industry we may
see a new market leader!
Retail Centric Philosophy
(Past)
 Respond to the needs of
retail partners
 Drive growth through
retail channels
 Improve market share
 Continue to be a best-inclass supplier
Regional Model (Present)
 To develop plans, programs
and products that are
specifically focused on the
distinct needs of gardeners
in various regions
throughout the United
States





Florida
Texas
California
Illinois
New York
3,500.00
3,000.00
2,500.00
2,000.00
Net Sales
1,500.00
Gross Profit
1,000.00
500.00
0.00
10'
09'
08'
07'
06'
3,000.00
2,500.00
2,000.00
2010
2009
1,500.00
2008
1,000.00
2007
2006
500.00
0.00
Global
Consumer
Global
Professional
Scotts
Lawnservice
Corporate &
Other



We will Gro by…

Focusing on core business

Extending reach into new markets

Providing products for garden-inspired lifestyles

Using knowledge about consumers to better
serve their needs
We will Excel by…

Developing a high-performance culture

Driving innovation in all areas

Forging stronger relationships with retail
partners

Strengthening infrastructure

Demonstrating corporate responsibility
We will Win by…

Creating a dynamic, productive workplace

Increasing market share

Enhancing shareholder value

Making a positive difference in communities
North America
International
Scotts LawnService
Corporate & Other
8%
6%
15%
71%
 Support North American sales force
 Expand relationship with the
consumer
 Radio and print media
 Launching state-of-the-art
Website
 Online community for gardeners
 Strengthening efforts in NASCAR
Global Consumer
Global Professional
Scotts LawnService
Corporate & Other
6%
8%
 Upgrade technology platform and
provide more globally uniform
process
 Regionalized manufacturing and
distribution footprint
10%
76%

Driving brands with consumers


Building on a history of innovation


Further assist retail partners
Global Consumer
Global Professional
Scotts LawnService
Corporate & Other
8%
5%
Driving out costs with supply chain


Invest in game-changing innovation
Leveraging sales force


Continue to invest in further
strengthening the relationship with
the consumer
Transform supply chain platform in the
U.S.
12%
Driving growth platforms

Develop and leverage the proprietary
technologies in Global Professional
business
75%
 Determinate Smith & Hawken
 Focus on core consumer business
 “Old School” Lessons
 Marketing
 Innovation
 “Feet on the street”
 Advertising Investment
8%
5%
Global
Consumer
Global
Professional
9%
 Increased spending over 13%
 Seasonal Sales Force
 30% more in store hours
 “Local” Opportunity

Regional offices in Florida, Texas,
and California
78%
Scotts
LawnService
Corporate &
Other
 Reaching Hispanic Consumers




West and Southwest Regions
Partnership with Los Angeles’ Chivas USA
Hispanic TV Advertising
Spanish Version Website
 Essentials for “Snowbirds”

Marketing program that educates these
homeowners on the core products best
suited to get their lawns, homes and
gardens in shape for the winter season.
9%
7%
Global
Consumer
Global
Professional
 Consumer Education

Partnered with Martha Stewart Living
Omnimedia and The Home Depot to
educate tens of millions of consumers
 Regionally Relevant
 Label change
 Local knowledge
84%
Scotts
LawnService
Global Consumer
Global
Professional
Scotts
LawnService
 The Market is highly
competitive and many
competitors sell their
products at lower prices
 Higher Cost
 Leading manufacturer and
marketer
 Most recognized brand
names in the industry
 Home Centers
 Mass Merchandisers
 Warehouse Clubs
 Hardware Chains
 2,500 full-time and
seasonal in-store
associates
 Nurseries
 Garden Centers
 Food and Drug Stores
 Distributors and
Common Carriers
 North America
 Strategically Placed
 Europe
 UK, Canada, France,
Germany
 Regional Supply Chain
 Manufacturing and distribution strategies
 Leverage growing media’s low-cost model to store and
distribute fertilizer regionally along with growing media
products
 Rationalize the 3rd party mixing warehouse network
 Invest in regional fertilizer and liquids production capacity
Ortho
Roundup
 More new product launches in
 Roundup Pump n go
2009 than any year in Ortho’s
103 year history
 Focusing on the eco-minded
consumer
 Strengthening core weed and
insect businesses
 New advertising campaign
 Successful entrance into
rodenticide category
 $100M category
 No category leader
most successful new
product launch
 Extended Control
 Poison Ivy Tough Brush
 Europe
 Product Development
 Regional Relevant
 New Products
 Improved Products
 Innovation
 Research and
Development
 Find niche in each
region
 Product Label Change
Resource
Description
Benefits
Product
• With such a wide variety of solutions to
all problems relating with the lawn, they
are able to establish a broad variety of
consumers to help with their lawn needs.
• Touching every aspect of the lawn and
garden market
• Trusted brand
• Brand Loyalty
• Perceived value of quality
Retail Partners
• Home Depot
• Lowe’s
• Wal-Mart
• Bringing over 80% of the Global
Consumer segment with just these three
retail partners.
Partnerships
• Cincinnati Reds
• Chivas’
• Martha Stewart
• National TV recognition with
professional organizations such as
Cincinnati Reds, and Chivas’. Martha
Stewart is a great partner with educating
consumers about their lawn.
• Branching out to other consumers
nationally
Inbound logistics
• Urea
• Resins
• Fuel
• Sphagnum Peat
• Grass Seed
• Wild Bird Food Components
Production
• All products containing pesticides must comply with FIFRA and be
registered with the U.S. EPA and similar state agencies before they can
be sold or distributed.
• Product Quality
• Order Fulfillment
• Quality Expectation
Outbound logistics
•Ordering
• Order Fulfillment
• Emergency Load
•Inventory Management
• Transaction Management
• On Time Delivery
Marketing & Sales
• Account Management
• Pricing
• Invoicing
• Understanding the value of the product
• Understanding what customer needs
Strength (Internal)
• Brand Name
• Track Record of Innovation
• Field Sales Force
• Supply Chain
• Management Team
• Research and Development
• Advertising
Weakness (Internal)
• High Overhead Costs
• Product Recall
• Discontinued Operations
• Environmental Costs
• Pending Legal Proceedings
Opportunity
(External)
• Government manipulations of currency
• Fluctuating Raw Material Prices
• Adverse Weather Conditions
• Drought
• Consumers wanting to meet neighbors expectations
• Web 2.0
• E-Commerce
• Social Networks
Threat (External)
• Environmental regulations
•International regulations
•Regulations in EU
•Regulations in Canada
• Reduced Discretionary Spending
•High Unemployment
• Decline in construction of new houses
• Decline in size average of yard
• Urbanization and shift to apartment living
• Declining Consumer Confidence
 The growth of SMG over the past decade was based on
retail partners. Since about two-thirds of sales in the
United States are generated by just three major
retailers, success was dependent upon the ability to
drive growth through their channels, improve market
share, and continue to be the best-in-class supplier.
 Future success can no longer be based solely on a
retail-centric philosophy. Nearly all of the retail
partners around the world are now focused on growing
by increasing same-store sales, not by new store
expansion.
 With increased expenditures of R&D and Marketing
and advertising, SMG will have the ability to become
innovative to enhance product features and provide a
strategy within each region, becoming more relevant
to consumers.