Crown Cork& Seal Five Forces Analysis Essay

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Five forces Analysis of Crown Cork& Seal in 1989 Part1. Competition analysis of metal container industry Bargaining power of suppliers 1. There are only three major aluminum suppliers, Alcan Aluminum, Alcoa, Reynolds Metal. They have obtained strong power by dominating and controlling the primary aluminum and aluminum production market. They are more concentrated than metal container industry. 2. These aluminum producers control huge aluminum resource so that the can manufacturer cannot put threat of backward integration. In contract, the aluminum producers are able to put threats of forward integration, just as Reynolds Metal integrated into aluminum cans. Conclusion: aluminum producers can exert a good deal of…show more content…
Plastics are light and convenient handling, achieving widespread customer acceptance. In general, plastic packing growths fast and posts significant threats of substitution to cans 2. Glass is competing steadily with cans in beer market. Conclusion: the metal cans face significant threats from substitutes. The intensity of competitive rivalry: 1. Products are not much differentiated, so there is intensive price competition. 2. The low-entry barrier and the threats of substitutes put a cap on prices 3. The great deal of bargaining power of supplier and customers cut down the margin of metal can manufactures. 4. The capacity is excess, the demand for cans is below the potential supplies. 5. The rising material and labor costs further shrink the profit margin 6. The metal container industry approach maturity, indicating the growth is slowing. Conclusion: the competition in metal container industry is very intense. Part2: Competitive advantages of Crown Cork & Seal The competitive advantages of Crown Cork& Seal come from customer-orientation strategy and international expansion strategy. First of all, Crown is customer-oriented in almost all aspects of business. For example, Crown’s technology strategy focuses on enhancing the equipment and product line specifically to meet customer’s need, rather than on basic research. Their
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