Sealed Air Corporation (HBS 9-582-103) case analysis
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1. What are the problems?
Market leadership and technological innovation have marked Sealed Air's participation in the U.S. protective packaging market. Several small regional producers have introduced products, which are less effective than Sealed Air's but similar in appearance and cheaper. The company must determine its response to this new competition. The company is faced with a difficult choice of choosing from a range of feasible options ranging from doing nothing to introducing a new product. This has raised product line management issues, particularly cannibalization, and affords the opportunity for the development of a marketing plan for any new product introduction. The timing of launch and any change in policies for Air Cap…show more content… Here market share of Sealed Air was 22% and declining.
The learning from this endeavor can be used in the European markets.
GAFCEL not only competed on price basis but also on quality (quote '....made a "decent product" in Hauser's estimation'). SA could leverage its high quality production facilities. Another relevant parallel would be - In Germany and France uncoated manufacturers with better production facilities were eating into SA's market share.
The other option of reducing price or distributor's margin (to match GAFCEL's offering) may have a detrimental impact on the bottom line.
Distributor Truckload Price 3/16 in ½ in
GAFCEL $31.63 $36.03
Air Cap $43.50 $65.35
In this case we have taken the minimum price offered by Air Seal.
SA could also consider entering the food packaging industry.
4. If so, what marketing program would you propose for uncoated?
It should launch uncoated products matching SO-22 (3/16in) and LO-22 (1/2in) offerings of GAFCEL. It should further launch a product in the 5/16in category so that it attacks its competitors from all fronts and may also help in capturing any untapped market potential.
3/16 in ($) 5/16 in ($) 1/2 in ($)
Distributor Truck Load 30.5 32.5 35
SA Dollar Margin 11.5 12.5 14
These products should be marketed under the umbrella brand of SA. But an identity distinct from Air Cap should be created. Since like the European markets, New York