WD 40 Case B Essays

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UVA-OB-0765

WD-40 COMPANY:
THE SQUEAK, SMELL, AND DIRT BUSINESS (B)

Garry Ridge, the new president and CEO of WD-40 Company, based in San Diego,
California, faced the challenge of bringing his company from four decades of reliance on a single, strong brand into a new era as a multiproduct, global company. Ridge and his executives were determined to achieve growth in both new products and markets, so they turned, as they had in the past, to a strategy of growth by related acquisition. In 2000, they acquired Australia’s
Sovol brand of heavy-duty hand-cleaning product lines. The following year, they bought Global
Household Brands and expanded their market into grocery distribution with X-14, 2000 Flushes, and Carpet Fresh. Through mid-2002, management continued to shop with the purchase of
Heartland Corporation, owner of SpotShot carpet cleaner.
Despite those purchases and WD-40’s reputation, the company’s earnings failed to climb in the years between 1998 and 2001. The durability of its brand recognition was never questioned: Even the 2002 EquiTrend brand study—a nationwide cross-section of 35,869 randomly selected consumers answering a Harris Interactive Internet survey—rated WD-40 the fifth-best-known brand in the country. WD-40 was ranked ahead of Crayola Crayons and
Reynolds Wrap Aluminum Foil (see Exhibit 1 for survey results). Such was the climate that
Ridge faced, and he already knew that he needed to do more than just buy more companies.

Brand Fortress
Things had to change, and Ridge decided to start with the company’s vision. He began asking some difficult questions: What was its vision? What did success look like? Where did it want to go? How should executives communicate the vision to employees and consumers? They wanted the vision to be very clear and concise, not something overly complicated or hard to remember. After some deliberation, the executive group settled on “going from a brand fortress to a fortress of brands.” “The idea,” Ridge recalled, “was that WD-40 was a brand fortress—a brand that was very well accepted in the consumer’s mind. The WD-40 product was bought over and over again, and, through that, it created sales, revenues, and profits that few could compete with.” This case was written by Gerry Yemen with assistance from Batten Fellow Marcia Conner, under the supervision of
Professor James G. Clawson, Darden School of Business. It was written as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. Copyright  2002 by the University of
Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an e-mail to sales@dardenbusinesspublishing.com. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Darden School Foundation. Rev. 12/06.

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UVA-OB-0765

To implement that strategy, Ridge needed more brands of the quality and strength of
WD-40. He believed the way to develop them was to focus on the underlying values that had built the original brand. “We went on with that and we said, ‘Okay, what are the values within the organization, and what are the things we think about?’ Values within the organization always existed, but they had never really been collected, communicated, explored or thought about in depth.” Two…