Question

what are the key forces in the general and industry environment that affect campbell’s choice of strategy? case study compbell’s soup

Answer 1

Answer:

from the case study compbell's soup

Part I

Major issues in the case:

• Campbell is struggling to expand in the international markets. After a failure in Russia, an entry into the Chinese market is being planned.
• Global economic volatility has put pressure on the costs.
• Strategy needed to develop the brand to match the changing tastes and market competition.
• Product mix strategy is to be reworked.

Part II

1. Campbell is in the packaged food industry. It's main competitors are Nestle, Kraft Foods, General Mills and Heinz
2. The key forces in the business environment that affect the choice of strategies for Campbell are:

• ​​​​​Rivalry: Competition from well established large companies with global presence and variety of product lines.
• Market segment: changing tastes and preferences between the young and the older age consumers.
• Globalisation: Increase in demand for packaged food in emerging markets.
• Economic cycle: Recession in 2008 leading to a downturn, followed by increase in commodity prices putting pressure on costs for the industry.
• Distribution: Large retailers with expansive storage space are growing fast.
• Mergers and acquisitions have become common in the industry.

3. Internal resources that give competitive advantage to Campbell:

• ​Established Brand: as a pioneer in soups and vegetable beverages, Campbell has a strong brand equity in the North American market.
• Finance: Even though growth has slowed down, Campbell has a competitive EPS, margins and a stable current assets position.
• Product development: Campbell has developed original and unique recipes across its product lines and has the competency to respond to change in customer tastes.

4. How to compete and remain top:

• Campbell can compete by expanding to new emerging markets like China, where the demand is multi fold compared to USA.
• Differentiation strategy: Campbell can focus on differentiating its products from competitors by reinforcing its quality, uniqueness and brand equity. Emphasis on nutrition and organic could be made in the products.

5. Strategies of Campbell:

• Corporate strategies: The company has pursued mergers and acquisitions to expand its market. Strategic alliance with Coco Coal to share bottling assets have been made.
• Business strategies have included product line expansion in beverages and snacks, tapping new distribution channels like supermarkets and drug stores.
• International strategies include launching business in Russia and planning entry into China after conducting a detailed market study.

6. Factors leading to Campbell's successful branding:

• The history of Campbell and its longevity in the industry has created a highly visible and recognisable brand equity.
• Innovating new recipes and in the soup and being flexible and agile to changing tatstes in the market.
• Taking the risk of tapping newer markets in the emerging economies has expanded brand presence for Campbell
• Retaining uniqueness with pioneering products like vegetable beverages

PART III

Recommendations for the future

• ​Since there is a growing trend for healthy food and preference for high nutrition value, Campbell must focus on recipes that support healthy food.
• Apart from supermarkets and traditional distribution channels, Campbell can tap online and mobile app based food delivery services.
• Localise the products in the international markets to cater to local tatstes and preferences, while retaining the unique brand identity.