oscar mayer case study

3. The Oscar Mayer Company
•An American meat and cold
cut production company .
•Owned by Kraft's Food
Group .
•Known for its Hot Dogs,
Bologna, Bacon, Ham and
Lunchables products.
Philosophy: “ There’s always a better way”

4. TIMELINE: OSCAR MAYER COMPANY
1883:
Oscar F. Mayer &
Gottfried Mayer
founded the company
in Chicago.
1971:
Oscar Mayer Company
went public & was
listed on Newyork
stock exchange.
1989:
Merger with Kraft
Food, Inc.
1936:
WienerMobile makes
its debut.
1979:
Louis Rich Inc. was
acquired.

5. Characters in the case
MarcusMcGraw:
•22 years career with
Oscar Mayer Foods
•President for the
last 4 years.
Eric Stanger:
•Vice President of
Oscar Mayer brand.
Jim Longstreet:
•New member of
Direct Management
Team.
•Brought into new
product hit rate.
Jane Morely:
Director of Finance &
Planning.
MikeMcTiernan:
•Founder of
McTiernan
Consultation Firm.
Rob Goodman:
•Category Manager
at Louis Rich.

6. STRATEGY OF MARCUS MCGRAW
 Hire McTiernan, Consultation firm for market research
and planning advises.
 Invite ideas from trusted managers.
 Go through the memos.
 Develop own To-Do list.

7. Case scenario
 McTiernan Corp., sent a research report to Marcus
McGraw.
 McGraw is waiting responses from four of his most
trusted managers, from different departments.

8. major challenges
 Increasing popularity of healthy products with less fat
and salt content.
 Increasing demand on products that are more
convenient to cook and easy to consume.
 Overall red meat consumption has decreased while
white meat demand has dramatically increased within
last five years.

9. Memo 1
Rob Goodman (Category Manager)
Louis Rich- White Meat Product Line
Suggestions:
1. “Switch to Rich Campaign”
 Boosting up brand awareness by heavy advertising.
 Emphasis on advantages of white meat over red.
2. Introducing the string of new products.

10. Memo 2
Jane Morely (Director of Finance & Planning)
Suggestions:
1. Healthy and convenient products.
2. Acquisition of small companies.
 Chicken Rite, Inc. – Low cal. Chicken salad.
 Turkey Time Ltd. – Readymade frozen Sandwiches.
 Crabbies, Inc. – Simulated Shell fish products.

11. Memo 3
Jim Longstreet (Newest member of Direct Management
team)
Suggestions:
1. Zappetites
 Meeting consumer trends of :
 The change in trend from sit-down meals to on-the –go
handheld portable meals.
 With the explosive growth of microwave ovens, the associated
need of the products that fit “frozen food” category.
2. Lunchables
 In substitution to the same homemade meals 5 days a week.
 Will include sliced lunch meats, cheese & crackers, condiments,
and a chocolate treat.

12. Memo 4
Eric Stanger (VP of OM Brand)
Suggestions:
 Six Urgent Actions
 Price cut by 10 cent per package on lead top 3 OM products.
 Increase the advertising budget by $25m.
 Re-institute the Wienermobile promotional campaign.
 Formulate a low fat & salt line.
 Focus on rationalizing & capacity utilization in OM brand.
 Enliven Oscar Mayer Brand.

13. Questions & Answers related to the case:

14. Q.1
In the beginning of the case McGraw thinks he has “
Never encountered such a complex business
challenge” as the one he currently faces. By the end
of the case, after he has read the ideas listed in the
four memos, McGraw can’t believe he ever thought
the investment issue was “ Going to be hard one”.
What changed the president’s perspective? What
strategic decision making process does McGraw
pursue?

15. A.1
McGraw changed his perspective of the business challenge because:
 He knew that he had a competent and passionate team who had made solid
recommendations relevant to their areas of expertise.
 He need not choose a single option from the pool but can use them to
strategize a mixed agenda by proper budgeting and risk management to
allocate the company resources.
McGraw’s strategic decision-making process is:
 Problem identification via the McTiernan report.
 Situation analysis with managers’ input taking into consideration the cost,
convenience, customer, and competitive analyses.
 Analysis of the proposed solutions.
 Selection of a mix of solutions.
 Preparation of a rough P&L based on selected solutions.

16. Q.2
If McGraw chooses a strategic direction that favours
only one department, What negative effects could
this have on other departments? How can McGraw
mitigate the damage?

17. A.2
 McGraw considered all four of the managers to be highly
competent and believed their suggested solutions were for
the best of the company.
 If McGraw would have chosen the recommendations of
just a one department, he would be risking it all on a single
bet.
 It would have sent wrong signals about the company’s
belief in the diversity of their products and created distrust
among the two organizations of the same parent company.
 He mitigated the damage by not choosing a single option
but using inputs from all the four managers to come up
with a strategic solution.

18. Q.3
What effects is the change in the strength and
weaknesses of competition having on the Oscar Mayer
division? How does this impact the investment
decision?

19. A.3
Accordingly with the new changing competition trends
Strengths:
 More sophisticated manufacturing and marketing skills.
 Stronger financial positions.
 Focus on building value-added brands.
 Market share.
Weaknesses:
 Reduced brand strength.
 Failure to recognize changing consumer preferences in the past.
These have encouraged the OM division to start devising strategies to develop
healthier red meat products, invest in white meat, create new convenience
products, and innovate in order to differentiate themselves.
Impact in Investment decision
OM is increasing investment in Research & Development, Advertising & Promotions
and new human resources and acquiring new firms.

20. Q.4 & Q.5
Absent any resource constraints, which of the four
departmental directions which of the four
department directions do you think is most viable?
Which is the second best strategy? Which is the
least viable?
Given the information in the case, what strategic
course do you think the Division should pursue?

21. Recommended strategic course of action
 Follow the advice of Stagner and rebuild the brand
through price reductions and a larger advertising budget.
 Retake lost market share.
 Regain lost customers.
 Convert competitors customers.
 Help sales force and organization grow the OM brand
with what is already in existence.

22. Once the OM brand has been re-established, follow
Longstreet’s ideas and introduce new product lines.
It is important to continue to grow the OM brand with
healthy, affordable and relevant products for a fast
paced society.

23. Once the brand has been established and new
product lines have hit,
Follow Jane Morely’s advice and look into
acquiring small companies.

24. Q.6
Which of Jim Longstreet’s new product ideas is less likely
to succeed? Why?
A.6 Jim Longstreet suggested on launching two new
product lines Zappetites and Lunches.
Lunchables is least likely to succeed because of the
following:
 It is covering a very narrow target customer base.
 The price of Lunchables is more as compared to Zappetites.
 Time required to prepare is more than Zappetites.

25. Questions ?