Case Analysis Outline Campbell
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CASE ANALYSIS OUTLINE
Case 19 - Campbell
I.
Company Overview – (Executive Summary)
a.
Brief history
Campbell Soup Company, first established in 1869, is the world’s largest producer of soup. The founders, Abram Anderson and Joseph Campbell, established the canning and preserving company,
however over the past 140 years of existence, the company does a lot more than just make soup.
The family members of the inventor of condensed soup and former Campbell President John T. Dorrance, controlled Campbell Soup up until 1954, when the President and CEO William Murphy advised them to go public with the company.
Before Douglas Conant took over as CEO and turned Campbell into one of the finest performers in the food industry, the company was weak and was losing consumers after CEO David Johnson left Campbell in 1998.
In January 2001, Conant was appointed CEO and director of the Campbell Soup Company. He has substantial experience in the processed- and packaged-food industries before joining the Campbell's team.
b.
Brief discussion of challenges they are facing at the time of the case
II.
Industry Analysis
a.
Define the industry
What is it?
Campbell Soup Company operates in the packaged food industry. The industry is made up of a variety of products such as beverages, ready-to-eat meals, pasta, noodles, sauces, condiments, and various other products. Campbell has a diversification of products in the package food industry, they split their products into three categories: America’s Simple Meals and Beverages, Global Biscuits and Snacks, and Campbell Fresh. What is the structure of the industry? (Fragmented or Consolidated)
The package food industry, and entire food industry, is a consolidated industry. The industry has a lot of big players that control most of the market such as Campbell Soup Company, Nestle, The Kraft Heinz
Company, General Mills Inc, Kellogg Company, and many more. These companies all offer consumers a diverse product line that includes most of the products that make up the industry.
What are the basic needs the package food industry provides to the customers?
The package food industry provides a source of food for consumers. Industry is extremely important as food is one of the basic needs humans need to live. Package food also allows consumers to preserve food for longer time at a commodity price. So, consumers can save tons of money buying packaged foods at a low price that lasts longer than unpackaged foods.
b.
Porter’s Five Competitive Forces Model of Analysis
– (See text Exhibit 2.5, page 57) Analyze each of the 5 Forces, for each choose the factors that you identify as most important to
analyze.
Threat of New Entrants-
The threat of new entrants is low for Campbell’s. The food packaging industry is an extremely difficult market to enter. One reason for this difficulty is the economic resources needed to enter the market competitively. In 2019 alone, “Campbell Soup Company reported costs and expenses of some 7.13 billion U.S. dollars worldwide” (Statista, 2020). With the costs it takes to compete within the food packaging industry, a large barrier is created with new entrants.
Campbells and their existing competitors have also differentiated themselves with the research and development they put into their products. Before entering the Russian and Chinese soup market, “Campbell sent its marketing teams to study the local markets…on how Russians and Chinese ate soup and how Campbell could offer something new.” (McGRawhill). New entrants cannot compete with the research and development of these existing companies creating a barrier of entry for them.
Another barrier of entry for new entrants is the strict control the established businesses have over the channels of distribution. Campbells and their competitors have strong relationships with all supermarkets and wholesalers that purchase their products. These relationships make it extremely difficult for new entrants to enter the market as they cannot reach the same number of consumers. Intensity of Rivalry among established competitors
Rivalry amongst established competitors is a high threat for Campbell’s. The threat is high as Bargaining Power of Buyers with Campbell Soup Company-
The Campbell Soup Company has two main buyers: supermarkets and wholesalers. These two parties do not have much bargaining power with Campbell’s and other companies within the market. One reason is product differentiation within the market is high. This means that switching to an alternative company that produces the same product is difficult for consumers as there are few to no alternatives. So, bargaining power of buyers is low as switching products is difficult in this industry.
Supermarkets and wholesalers also lose bargaining power due to the quality of products that Campbell’s produces. Campbell’s brand has a lot of loyalty with its consumers for the quality of products that they produce. So, buyers are not price sensitive Bargaining Power of Suppliers
Threat of Substitute Products
III.
General External Environment Analysis: Opportunities and Threats (See text Exhibit 2.2, page 45) Choose and analyze three of the environments. For each choose the factors that you identify as most important to your analysis.
Economic Forces- people are dining out more
Global Forces (This can be absorbed in other Forces)
Technological Forces
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