This presentation focuses on the Strategy that Oscar Mayer adopted to decide whether to acquire a new business or come out with a new product

1. MM Presentation
Group 3:
Dhaval Reema
Aakriti Rohan B
Ruhul C Pramay
Dipshanka Vineet

2. History
Founded in
1883 by Oscar
F. Mayer and
Gottfried
Mayer
Wiener mobile
makes its debut
in 1936
Oscar Mayer
listed on NYSE
in 1971
Louis Rich Inc.
was acquired in
1979
Oscar Mayer
was acquired
by General
Foods
Corporation in
1981
Philip Morris
purchased
General Foods
in 1985
Kraft Foods
merged with
General Foods
in 1989

3. *The images used in slides 4 to 7 are only for illustration and the
persons shown in images have no association with Oscar Mayer

4. Memo 1
“Switch to Rich” campaign – Increasing the brand awareness of LR
products
Introducing a string of new products like LR Turkey Bacon and The
Great Roast Turkey & Gravy
Rob Goodman, Louis Rich Category Manager

5. Memo 2
Acquisition of smaller companies that offer healthier and more
convenient products:
• Chicken Rite Inc.
• Turkey Time Ltd.
• Crabbies Inc.
Jane Morley, Director of Finance & Planning

6. Memo 3
Introduce new products to target a new category of consumers:
• Zappetites (miniaturized Pizza slice, burger, tacos etc)
• Lunchables (pre-packaged ready-to-eat meals that include
sliced lunch meats, crackers, condiments and chocolate treat)
Jim Longstreet, Member of Direct Management Team

7. Memo 4
Revive the Oscar Mayer brand by:
• Increase in spending on advertising and promotion including
reinstitution of the Wienermobile promotional programme
• Focus on R&D to formulate a low fat & salt line
• Price cut on top 3 Oscar Mayer products
• Focus on rationalization and capacity utilization in Oscar Mayer
brand
Eric Stanger, VP of Oscar Mayer Brand

8. Question 1
The following events changed McGraw’s perception:
• The fact that he got diverse opinions from all his managers gave him an
opportunity to analyze the growth projections of all the verticals of the
company in the coming years.
• Also the memo from his long time colleague and friend Eric Stanger reminded
him how they had overcome difficulties in the past which motivated him.
Strategic Decision Making Process of McGraw:
McGraw decided that he need not choose a single option from all the
recommendations. He thought of further analyzing all the four recommendations
and finally taking a call on how to strategize keeping in mind the future
profitability and growth prospects.

9. Question 2
1. Negative effects if it favors Oscar Mayer:
• They will miss the new product category which is expected to capture
50% market of the entire meat industry in the coming years.
• They will be pumping resources in a category that has been showing
declining trends since the last few years which will not give them
adequate Returns.
2. Negative effects if it favors Louis Rich:
• They will be ignoring the crux of the company which is a major revenue
generating segment which accounts for 82% of their total profit.
• If Louis Rich fails to capture the market and the company doesn’t focus
on Oscar Mayer products then they will lose their revenue generation
channel, which may impact the future plans and create a cash crunch in
the near future.

10. Mitigation Strategy:
• The strategy should be balanced in favor of both the SBUs as one
business is in the maturity stage which is acting as a cash cow for the
company and the other is at a nascent stage which has a huge potential
in the coming future.
• Also, It would send wrong signals about the company’s belief in the
diversity of their products and create distrust among the two
organizations of the same parent company.
• So the company should basically balance and focus on both the verticals.

11. Question 3
Strengths:
• Huge market share (30.9%)
• Strong financial position
• Dedicated and focused team
Weaknesses:
• Reducing brand strength
• Failure to identify change in consumer preferences.
• Incompetent R&D
Impact on Investment Decision:
• Focus on R&D of Oscar Mayer products
• Focus on acquiring new companies and getting into new product categories
• Focus on advertising and promotion

12. Question 4 & 5
Acquire Crabbies Inc
Revive Oscar Mayer Brand
Enter into new product
category
Boost up advertising of Louis
Rich

14. Question 6
Lunchables is least likely to succeed because of the following reasons:
• Focus only on a single category of customers (Working Mothers)
• Zappetites being on-the-go hand-held portable grazing meals will be
preferred over Lunchables that are sit-down meals
• Daily consumption of non homemade food may not be preferred by some
• As the company has failed in a similar category before (Stuff’ n Burgers) so
the consumers might be a little reluctant to purchase a similar product from
the same company