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Campbell Soup Company: Case Study

Campbell Soup (Campbell) brand is strongly associated with high-quality convenience food products, such as soup, healthy beverages and baked snacks. It is a US New Jersey based global manufacturing company that is well-established in its domestic market. At the same time, the sales of its canned soup are declining, which is the reason behind the organization’s development in terms of increasing the supply of different types of soup as well other food categories, namely bakery. Among others, the enterprise owns two major biscuits brands, including Australia-based Arnott’s and Pepperidge Farm, originated in the US. It has also made acquisitions that have further extended its share in the biscuits market and introduced its business in the baby food market. In addition, Campbell’s manufacturing facilities are available in China, Belgium, Canada, Germany, Indonesia, Sweden, Malaysia and Mexico. The paper will conduct the SWOT analysis of the company’s activities. It will suggest a successful strategy for its further development and outline its key performance indicators.

SWOT Analysis “Campbell Soup”

Strengths

Campbell is a company known for its great innovative capacity. In fact, it has introduced mobile trends into nearly every aspect of its business performance during its entire existence. The firm uses the innovative overland flow method of treating wastewater at its manufacturing plants in Paris, Texas, Napoleon and Ohio. Furthermore, it has been able to rapidly react to the increasing challenges of the market by constantly introducing new products, such as Soup at Hand portable soup product or Chunky and Select microwaveable product line. In addition, Campbell has developed a strong marketing policy. It has been frequently improving the means of advertising and refreshing its products’ design and appearance. The company’s system of gravity-fed shelving is installed at the rapidly increasing number of national retailers. It has been credited for enhancing the soup aisle and developing the category, which had a vastly positive impact on the shopping experience. Finally, the organization’s strategy has proved to be very successful in gauging customer expectation and satisfaction (Campbell Soup Company, 2014).

Weaknesses

Despite the slight decrease in the overall expenses, the company’s market share in soup production steadily declines. It went from 60% in 2007 down to 49% in 2009 (Campbell Soup Company, 2012). Campbell’s simple meals, soup, and beverages sales continued to drop in 2014 both domestically and internationally. An increasing number of private labels enter the market fighting for their share by providing high quality products at lower prices. Furthermore, the business faces stiff competition against such international giants as Nestle and General Mills’ Progresso. Moreover, the recent years were associated with the development of the alternative retail grocery channels, including dollar stores, club stores, drug stores and internet-based retailers. The trend is expected to continue in the future. This creates specific challenges for the firm, as it is largely focused on the traditional retail grocery trade (Campbell Soup Company, 2012).

Opportunities

In the recent years, two major consumer groups have contributed to the rise of a more health-conscious trend. Currently, the younger generations are increasingly inclined to buy low-calorie products and the “on the go” meals. At the same time, the diet of the older age groups is associated with health-consciousness by means of limited sodium intake, which helps avoid the risk of aliments. To this end, the company’s central product categories, such as bakery and soups, have a widely spread reputation of being healthy. They have a competitive advantage with respect to the further development of the health-oriented trend, including the lines of existing and developing Healthy Request and Select Harvest soups. Moreover, Campbell has launched and expanded a leading sodium reduction program that has significantly reduced the content of sodium in the company’s condensed soups (Campbell Soup Company, 2010).

Threats

The main category of Campbell’s soups continues facing intense competition against large businesses, such as General Mills’ Progresso, and private label brands introduced by such companies as Wal-Mart. The organization steadily looses its market shares in this segment. Furthermore, its other categories have failed to produce significant profits. In the environment of shifting consumer habits, such as convenience food industry, the company will be challenged in terms of constantly enhancing its products and minimizing their costs to retain the client portfolio and keep up with the competitors. Moreover, the firm is subject to multiple local and international food safety laws, tax regulations, environmental standards, and currency exchange risks that put an extensive pressure on Campbell’s operations. Should it break some of the requirements, it will face the risk of fines, sanctions, and even asset seizures.

Strategy

In order to achieve success in terms of sustainable competitive advantage, Campbell has to develop a defendable position in food processing industry. The main goal of the company must become finding the way of dealing with the agents of competition, which will enable it to generate a superior investment return. In particular, Campbell must use its strengths and become even more innovative in terms of providing customers with superior quality and valuable services. The company has constantly focused on producing high quality healthy and nutritious food through developing its major simple meals brands. Its latest plans include enhancement of its lines with new products, further sodium reduction, introduction of modern packaging, and better result-oriented marketing (Campbell Soup Company, 2010)

Today, the increasing number of consumers becomes concerned with healthy nutritional foods. To this end, Campbell can take advantage of its large research capacity. It has already introduced the condensed soup line and the ready-to-serve products. It has made many improvements that enabled it to outperform most of its rivals in the important condensed soup category.

It is important to remember that the low-sodium products are vital for the company’s long-term success, given that the majority of its customers belong to the generation of baby boomers. Their diet most frequently comprises of low sodium products. The existing condensed soups products in the market stand as those with the highest sodium content. Therefore, the firm’s low-sodium production has established itself at an important step against many rivals. The perspective of the preferences of the younger generations makes it reasonable for Campbell to also focus on several other aspects, such as low-calorie soups, in order to increase its market share through healthier offerings targeting health-conscious consumers. Although the company is committed to the quality ingredients, it may be suggested that it would improve the flavors of its offerings to attract the clients. In addition, it can further enhance the design of its existing soup products given the aggressive rules of the modern advertisement.

Furthermore, Campbell runs four product lines having expanded its products by offering microwavable soups for the convenience of the customers. To this end, it is clear that it is a diversified company that has been employing a related diversification multiproduct strategy to diversify its business activities and expand the market share. It has used much of its diversified production and engineering support capacity to supply the customers with good taste, quality and convenient food. For this purpose, it has invested much effort into the department of research and development, engineering systems, and product development, which are essential for operating high quality manufacturing. In addition, the organization has tried to apply unrelated diversification strategy. In particular, its former CEO McGovern acquired several companies specialized in different types of business aiming at getting a quick access to new products and markets instead of focusing on the food products alone. It can be argued that the reason behind Campbell’s failure to generate large profits by applying the unrelated diversification strategy lies in the fact that the company never changed its approach to the management of its central product division. Moreover, the top-managers failed to implement firm means of financial control to successfully run the internal capital market of the business. To this end, the new CEOs decided to put an end to the diversification strategy and reduce the level of diversification by employing the related constrained strategy to generate value by means of operational relatedness. The latter is associated with transferring core competencies leading to a competitive advantage and engaging in a value chain analysis, which is necessary for identifying the opportunities to distribute the skills among similar value chains and transfer activities. Campbell must enhance its condensed line and pay more attention to accelerating the performance of the existing portfolio, specifically in the US soup market, which would contribute to the long-term growth (Campbell Soup Company, 2010).

Through the means of value-creating external development, the company uses its product lines to increase its presence in the market. For example, the recent acquisition of Ecce Panis, a manufacturer of artisan bread, has facilitated the development of the firm’s Campbell’s Baking and Snacking branch. This operation has allowed Campbell to position itself in the rich artisan bread market. In addition, given that the foreign population in the United States is likely to continue growing, it may be recommended for the company to consider developing products that would be associated with the ethnic background of the new immigrants. The depth of its product line could be potentially extended with respect to the vast number of various tastes in the current and future American society.

Furthermore, one can suggest that Campbell needs to enhance its mission statement to show direction to the company with respect to its new challenges. It is essential for establishing long-term goals and formulating strategies. This is particularly important given that the food processing market has highly competitive future. Moreover, the firm needs to determine its concerns, philosophy and an understanding of a competitive advantage across all areas and divisions of business to successfully implement the mission statement.

In addition, the realization of a successful strategy is linked to improving the organizational structure, means of allocating resources, decision-making and information processing, as well as managing human resources. The latter includes such areas as the reward system and leadership. In general, there are many management activities necessary for implementing the strategy, establishing strategic progress monitoring and achieving ultimate goals of the company.

In terms of marketing promotion, one can argue that Campbell has improved its position concerning the production of a line of nourishing and healthy products. The line itself comes in various versions. In addition, its depth has been enlarged. Each product is represented in a multitude of suitable flavors and sizes. The brand offers all kinds of valuable products for its targeted consumers. Besides, the packaging is also organized for both multiple and single purchasing of items. It also reaches an accurate perception of the customers. The company uses famous athletes to convey its marketing messages of a healthy lifestyle.

Products’ pricing within the brand name is consistent with their positioning. This enables the company to ensure that the clients do not have to pay extra money to eat healthy. Moreover, Campbell’s products are usually priced a little higher than those of the company’s major competitors, which create a perception that they are of a higher quality. The company operates in the elastic market. To this end, it successfully applies special event promotional strategies to remain competitive. It also offers discounts on specific seasonal items, as well as during holidays. Furthermore, it implements complementary strategies to convey the promotional message assuring the highest quality of the brand’s goods.

The company’s distribution is intensively arranged across the entire range of geographic locations in the US and several foreign countries. It creates its supply channel by cooperating with wholesalers and retailers. However, such profitable concept today is being challenged by the alternative means of the modern retail trade. To this end, the company needs to work on transcending its traditional concept of distribution.

The overall effectiveness of the firm’s marketing strategies has made it a recognized premium brand within the market. Compared to the major competitors, Campbell focuses on interacting with the public by means of sweepstakes, giveaways, and trainings. Such efforts are contributing to its reputation of socially responsible business.

Key Performance Factors

To monitor Campbell’s progress in the light of the outlined strategy, a “balanced scorecard” could be suggested for defining the company’s annual objectives, as well as measuring its overall and specific performance. In particular, four key measurement areas could be applied with respect to the firm’s financial, strategic, marketplace, and operational objectives. The economic sustainability can help observe Campbell’s success in establishing a healthy financial profile capable of enhancing the company’s value for the shareholders. Furthermore, the company’s strategic goals can be tracked by understanding not only whether certain indexes are achieved, but also how they are achieved. To this end, one of the key performance factors is the firm’s commitment to the corporate social responsibility and sustainability metrics, its waste, water and energy reduction objectives, as well as safety and ethics compliance. The enhancement of the mission statement with respect to the emerging challenges must be realized across Campbell’s divisions and strategic planning processes. It must include the cultural component, such as the needs of people with complex national backgrounds, as its individual performance objective. The progress of the company in providing customers with nutrition and wellness choices can be measured through both financial and nutritional means. Finally, source separation and recycling data can be used to identify the organization’s achievements in terms of implementing its related constrained strategy of generating value by means of operational relatedness (Puckett, 2015).

Conclusion

The paper has conducted a SWOT analysis for Campbell Soup Company. It has argued that the firm is well-established in the domestic and partially international markets. Its inexhaustible capacity for innovation has made it face many challenges associated with the previous stages of market development. Nonetheless, today, the situation is different. The overall sales of the company have been steadily decreasing in the recent years. The new phenomena of American social life, as well as the stiffing competition make it reasonable and necessary to search out new ways of addressing the emerging issues. To this end, there was developed a strategy with respect to the strengths and weaknesses of the company and various means of its positioning in the market. In fact, one can claim that the company has good chances to survive in the changing business environment. However, to increase its share in the food processing market, several radical changes are needed. Nonetheless, it is most likely that most of them would be grounded on the strong sides that Campbell already has. At the same time, certain things have to be done in a truly modern way, such as changing the retail trade strategy. Finally, a “balanced scorecard” approach is recommended to be used to measure the company’s performance in terms of achieving its financial, strategic, marketplace, and operational objectives.

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