Symptom :- Decline in Profitably & Cash
Tactical problem:- Whether to use plastic
packaging or continue with Glass Packaging
Strategic Problem:- Whether to maintain the
Brand Value and sustainability or Shift its
focus to extensive growth plan to increase
sales by 78% in next five year
External environment: -
1. Competitors switching to Plastic
2. Continuous rise in the fuel price
3. Customers concern about environment
4. Rise in Ingredients costs
5. Contradictory report about the impact of
plastic and glass on environment.
Extensive growth through acquisition.
Strong Brand Image
Quality assurance department resisting for
Machinery designed for glass jar
Low warehouse capacity
Creamy, refrigerated salad dressing
contribute 60% of its revenue.
At third position with a market share of
21% in US.
Plastic allowing 0.60 per jar price
advantage at retail level.
Retail salad dressing represented $3billion
market in 2011 having 3% annual growth.
Cash crunch due to acquisition.
Particulars Switching Cost
2 Descrambler + 2 Induction seal
process equipment + Shelving in
Write- off due to transaction $1,00,000
Upfront investment in molds $1,00,000
Marketing Costs $4,50,000
They can save $5,00,000/year on logistic on current diesel price.
They can save $1,000,000/year due to reducing the weight to 13oz
Loading of jar can be automated Manual loading was needed
Foil seal on top more robust Plastic wrapping on top sometimes
lead to stoppage of line
Can be stacked only 2-3 layers high Stronger and can be stored 5 to 6
No breakage risk Breakage risk was there (.25%)
Less downtime and waste Compared to plastic downtime is more
Quieter & Lighter Heavier
Permeability allows more rapid
Less rapid oxidation
Increases efficiency of truck Space remains empty due to weight
Glass considered as gold standard in packaging
Glass is better than plastic ( Bloggers Opinion)
Transition will not have significant savings in operation
Plastic packaging is the guarantee towards company 5
year growth and performance goal
Plastic might impact the quality or safety of the product
According to DOUG PET can recycled multiple times
1. Continue with its 13oz. Glass jar Offering
• 16% premium
2. Come up with 12oz. Plastic jar
- 1.5 million cost saving per year
- 1.4 million initial investment
- Brand association with quality
- Direct relationship between glass and product quality
- Scientific reason (Oxidation)
3. Come up with 13oz. Glass jar with
12oz. Product offering
- $1,000,000 saving
- No Initial investment
- No effect on consumer perception(Brand image)
- Environment friendly
- Communicate to distribution channel about
- Adjustment in operation for quantity.
- Advertisement focused on Quality.