Campbell Case Analysis

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Campbell’s Soup Company Case by Dan Barrett
Chuck Hensley

Mgt 5320 Organizational Theory & Behavior
Dr. Ron Stephens
April 11, 2001


The Campbell’s Soup case covers a period of time from 1980 through approximately 1994. During this time two CEO’s with differing business strategies and organizational structures led the company. In the case and under the direction of the first CEO Gordon McGovern, the most important problem was his over-diversification of the company that led them away from their core competencies. McGovern created a complicated hybrid organizational structure that resulted in a lack of inter-divisional communication, increased conflict and competition for
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The Campbell U.S.A., Bakery and Confectionery, and International Grocery divisions were designed to improve communication and share technology between businesses of similar products and geographical areas as well as provide more emphasis on international business. He required new products to exploit strengths, core competencies and organizational capabilities as well as have the potential to achieve his financial objectives. Additionally, he wanted to focus on global marketing of company strength capabilities followed by installation of low-cost corporate business systems to support the SBU’s. Finally, improved asset utilization was required to maximize return to stockholders. Johnson planned to offset divestitures with acquisitions of higher margin businesses with growth potential. This was mainly intended to add brands and infrastructure to support growth of international business. Johnson’s growth strategy concentrated on growing sales of core brands, increasing U.S. market share of core brand categories, and increasing penetration of foreign markets. This strategy was guided by four corporate level strategic principles: □ The primary purpose of the corporation is to build shareholder wealth. □ Exploit Campbell’s brand power - focus on core brand strengths. □ Empower employees by encouraging individual risk-taking, teamwork and rewards based on results. □ Preserve the company’s independence - resist

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