Strategic Analysis of Campbell's Soup Company Paper Example

Paper Type:  Case study
Pages:  7
Wordcount:  1755 Words
Date:  2022-12-20

Introduction

Campbell's Soup Company (Campbell's) is a leading producer of a variety of food products arraying from healthy beverages, snacks, soups, to simple meals. Despite its dominant global presence, the company currently faces the prominent challenge of declining condensed soup market in the U.S. At the same time, Campbell's is experiencing unusually slow growth in its global market. The Campbell's Soup Company was chosen for this study because it represents multinational enterprises that face difficulty in the global market due to low conformity to the dynamic demands of the information age market. As such, this study analyzed the current market situation and established that the shrinking canned food market in the United States is a result of consistent health behavior change campaigns leading to changing customer preference from highly processed foods to fresh farm produce. At the same time, the global market has stagnated due to the existence of many alternatives with innovative and diverse products, giving buyers of packed food products high bargaining power. Hence, it is recommended that Campbell's introduces new products that meet the market demands for fresh food through cafeteria servings. This move should be accompanied with intensive market research and advertising to change attitude of consumers towards the company's products. Alternatively, the organization can focus on strengthening its core enterprise by eliminating the unhealthy food elements like calories, salt, and fats. Lastly, Campbell Soup Company should as well enhance its global research marketing abilities and introduce foods that meet the cultural and international set standards.

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Campbell's is an old player in the world processed food industry, having been founded more than 150 years ago. The company offers a wide range of products in five product lines namely, soups, Swanson, sauces, beverages, and baked foods. However, its sauces and soups divisions account for 75 per cent of its total revenue (Ramsier, 2015). Campbell's enjoys the benefits of brand recognition. For instance, the red, as well as the white label, is recognized in the food industry. In particular, this is a fundamental strength for Campbell Soup Company because it increases its sales and profitability.

Campbell's has considerable production capabilities. The reason is that it has adequate facilities as well as machinery that is designed around market considerations and customer trends. Besides, the firm has more than 40 international production facilities across the globe. At the same time, the organization has a focused organizational structure, which helps in the core competencies as well as its growth. Last but not least, the firm has the substantial financial strength and is known to possess sound objectives as well as a profitable food organization.

Moreover. The food service industry is booming in recent times. Notably, the current market would support about $300 billion in revenue. Similarly, Pacific Rim expansion enables Campbell Soup Company to use Arnott and LTD to develop a presence there. Also, the organization offers fortune foods technology, which includes a container to kettle technology enabling for penetration into the foodservice market. Lastly, the firm has the opportunity for international expansion. In this case, it has a growth potential that is greater as compared to the declining domestic market. Nevertheless,s Campbell's currently has a crucial threat to its growth and competitive power. The firm faces a declining domestic canned soup market. Research indicates that the organization experiences approximately 40 per cent reduction as far as the canned soup is concerned. Besides, the company also struggles with slow global expansion at the moment.The main cause of these problems is believed to be the growing customer preference of natural and fresh food products. Due to health awareness and chronic disease prevention concerns, many households are shifting from consumption of all kinds of processed food products towards fresh farm produce.

Porter's Five Forces

Customer power (HIGH): The bargaining power of buyers is high because of the existence of many alternatives with innovative and diverse products (Porter, 1996). Food-processing firms are forced to lower prices in case clients think that the costs are expensive because customers tend to opt for alternatives that are relatively cheaper than the company's products.

Supplier Power (MODERATE): Because of inflation, the overall price of materials has been heightened. Therefore, Campbell's buys high-quality ingredients produced by local farmers. For instance, in the year 2016, Campbell launched its supply diversity scheme to raise its supplier scope as well as to make sure that the supplier base demonstrates the covered market. Competitive rivalry (HIGH): The food processing firms compete on taste, production innovation, product benefits, price, quality, as well as health aspects, to mention a few (Porter, 1996). As a multinational food processing organization, the firm has competition globally, nationally, as well as locally. The high competition is partly attributed to similarities in products offered by food processing firms. Hence, the company capitalizes on its well-recognized soup products, and the capability to keep low production expenses to weaken the competition from the generic soup products. For example, the firm makes profits despite pricing its soup brands from 20 to 25 per cent higher as compared to the available generic brands because it maintains a high-quality level. Thus, Campbell has to continue producing superior and healthy foods to differentiate itself from its competitors. The main competitors of Campbell's are General Mills, Blue Apron, Seneca Foods, John B. Sanfilippo & Son, and Heinz Kraft. Competition is very high in the current global food market. According to Ramsier (2015), to acquire a competitive edge in the marketplace, Campbell's has been investing in research and development to understand the dynamics of different environments, as well as client preference. At the same time, Campbell's has improved its technical support scheme to maintain its market share and acquire a competitive edge.

The threat of new entrant (LOW): the international processed food market has large established players that dominate the industry. Campbell's together with its main rivals pose high entry barriers because of their huge capitals. What is more, smaller firms in the field face difficulties in obtaining supermarket shelf space on their shelves, which offer priority to established firms that are in a position to cater for the associated promotion expenses and generate a considerable degree of client demand. On the same note, the staggering market growth degree for the industry leads to the acquisition between firms and this leads to considerable barriers to entry. The threat of substitutes (MODERATE): The level of competition from companies in other market segments that provide substitute foods is substantial. For instance, Dunkin Donuts engages itself in the foodservice sector, and Campbell Soup Company is in the food manufacturing and processing field, yet the former serves soup as the latter sells soup (Porter, 1996). Therefore, clients can opt for Dunkin Donuts and obtain similar soups that Campbell offers.

SWOT Analysis

Strengths

The company enjoys the benefits of brand recognition. For instance, the red, as well as the white label, is recognized in the food industry. In particular, this is a fundamental strength for Campbell Soup Company because it increases its sales and profitability. On the same note, the organization has considerable production capabilities. The reason is that it has adequate facilities as well as machinery that is designed around market considerations and customer trends. Similarly, the firm has more than 40 international production facilities across the globe. What is more, the organization has a focused organizational structure, which helps in the core competencies as well as its growth. Last but not least, the firm has the substantial financial strength and is known to possess sound objectives as well as a profitable food organization.

WeaknessesCampbell's has many weaknesses leading to its dwindling market performance. The first weakness of the firm is lack of innovation, whereby it is slow to come up or even acquire the best technological innovations. The second one is poor research and development strategies.

The company has a weakness in international market research, which includes poor analysis in comprehending global food preferences as well as tastes. Hence, it faces a decline in canned soup market in the U.S, (Ramsier, 2015). The third weakness is shrinking global expansion.

The company struggles with slow global expansion (Reuters, 2019). It is unfortunate that Campbell's soup sales continue to decline because of the organization's inability to comprehend differing ethnic preferences as well as tastes in multi-cultural surroundings not forgetting foreign preparation approaches.

Opportunities

The food service industry is booming in recent times. Notably, the current market would support about $300 billion in revenue. Similarly, Pacific Rim expansion enables Campbell Soup Companyto use Arnott and LTD to develop a presence there. Also, the organization experiences fortune foods technology, which includes a container to kettle technology enabling for penetration into the foodservice market. Lastly, the firm has the opportunity for international expansion. In this case, it has a growth potential that is greater as compared to the declining domestic market.

Threats

Due to health awareness and chronic disease prevention concerns, more and more Americans are shifting from consumption of all kinds of processed food products towards fresh farm produce. This is why the organization experiences significant reduction in demand for canned foods (Ramsier, 2015). Also, Campbell's growth is threatened by the new market trend characterized by growing consumption away from home. The percentage of meals consumed outside homes has heightened, and about 45 per cent of all available food products are consumed away from home (Ramsier, 2015). In addition, the company faces heightened private brand labeling making clients shift towards low priced alternatives.

Benchmarking

Campbell's will examine several top firms in the food processing industry in some factors, such as supply chain, workplace, consumers, sustainability, as well as technology to understand the expected trends in the sector. What is more, the organization must highlight many underlying ways as well as approaches that businesses use to implement their objectives and choose initiatives not forgetting vital past achievements.

In terms of community, the organization should concentrate on nutritional as well as environmental programs by collaborating with various non-profit firms and high education institutions to carry out comprehensive research and development for innovative goods. Additionally, it should collaborate with professionals in the food industry to come up with creative as well as innovative solutions to protect the environment (Henry, 2008). In this case, the firm's benchmark best practices must promote nutritional as well as hunger elimination programs. Also, the company should work on promoting micronutrient goods to attend low-income families as well as come up with environmental initiatives.

In workplace terms, Campbell's should provide job chances for individuals with disabilities as well as mitigate lost-time injury rate. The organization should focus on various areas including making sure of the diversity of the workforce and bringing a wide array of talents...

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Strategic Analysis of Campbell's Soup Company Paper Example. (2022, Dec 20). Retrieved from https://proessays.net/essays/strategic-analysis-of-campbells-soup-company-paper-example

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