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Presented by
Nikhil kumar
 Symptom :- Decline in Profitably & Cash
Crunch
 Tactical problem:- Whether to use plastic
packaging or continue with Gl...
External environment: -
1. Competitors switching to Plastic
packaging
2. Continuous rise in the fuel price
3. Customers c...
Internal environment
Extensive growth through acquisition.
Strong Brand Image
Quality assurance department resisting f...
Creamy, refrigerated salad dressing
contribute 60% of its revenue.
At third position with a market share of
21% in US.
...
Particulars Switching Cost
2 Descrambler + 2 Induction seal
process equipment + Shelving in
Warehouse
$7,50,000
Write- off...
Plastic Glass
Loading of jar can be automated Manual loading was needed
Foil seal on top more robust Plastic wrapping on t...
 OPINION:-
Glass considered as gold standard in packaging
Glass is better than plastic ( Bloggers Opinion)
Transition ...
1. Continue with its 13oz. Glass jar Offering
 Staple goods
• 16% premium
2. Come up with 12oz. Plastic jar
- 1.5 million...
3. Come up with 13oz. Glass jar with
12oz. Product offering
- $1,000,000 saving
- No Initial investment
- No effect on con...
- Communicate to distribution channel about
quantity reduction.
- Adjustment in operation for quantity.
- Advertisement fo...
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Litehouse foods : the glass dielema

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case analysis

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Litehouse foods : the glass dielema

  1. 1. Presented by Nikhil kumar
  2. 2.  Symptom :- Decline in Profitably & Cash Crunch  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
  3. 3. External environment: - 1. Competitors switching to Plastic packaging 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.
  4. 4. Internal environment Extensive growth through acquisition. Strong Brand Image Quality assurance department resisting for plastic packaging Machinery designed for glass jar packaging Low warehouse capacity
  5. 5. 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.
  6. 6. Particulars Switching Cost 2 Descrambler + 2 Induction seal process equipment + Shelving in Warehouse $7,50,000 Write- off due to transaction $1,00,000 Upfront investment in molds $1,00,000 Marketing Costs $4,50,000 Total $14,00,000 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 to 12oz.
  7. 7. Plastic Glass 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 layers high 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 oxidation Less rapid oxidation Increases efficiency of truck Space remains empty due to weight constraints
  8. 8.  OPINION:- Glass considered as gold standard in packaging Glass is better than plastic ( Bloggers Opinion) Transition will not have significant savings in operation expense  Assumptions 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
  9. 9. 1. Continue with its 13oz. Glass jar Offering  Staple goods • 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)
  10. 10. 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
  11. 11. - Communicate to distribution channel about quantity reduction. - Adjustment in operation for quantity. - Advertisement focused on Quality.

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