Running head: BUSINESS ANALYSIS CASE STUDY 1
BUSINESS ANALYSIS CASE STUDY 17
Abstract
The Campbell Soup Company was begun in the late 1860s as a partnership for canning vegetables, especially tomatoes. The company continued to grow, and it was an early adopter of radio and magazine advertising, which helped to promote Campbell Soup to new heights as one of the most well-known and loved American brands. After the turn of the millennium, there was a slowdown in growth. Over the past decade and more, despite the company’s giant size and revenues of $8 billion per year, revenues were lagging, losses were becoming the main return on investments in new strategies, and new products were failing. This situation did not occur overnight, but rather it was a changing environment along with discoveries of unethical behavior by the company. The turning point for Campbell Soup, and its downfall, was the repeated use of deception in marketing the taste, freshness and health of its products. This paper provides an overview and analysis of the case.
Introduction
The Campbell Soup Company was begun in the late 1860s as a partnership for canning vegetables, especially tomatoes (Shea & Mathis, 2002). Anderson & Campbell set up their operations in Camden, New Jersey, where there was a significant manufacturing presence, but their marketing was focused on images of gardens and fresh food (Shea & Mathis, 2002). In 1876 Anderson left the partnership, and many of Campbell’s relatives joined the venture (Shea & Mathis, 2002). Canned foods were still an emerging product form in America, however their popularity was growing as was the capacity to transport and distribute products over a vast area, even nationally (Shea & Mathis, 2002). The company continued to grow, and it was an early adopter of radio and magazine advertising, which helped to promote Campbell Soup to new heights as one of the most well-known and loved American brands (Shea & Mathis, 2002). The company went public in 1956 (Shea & Mathis, 2002). Campbell Soup continued to grow and expand it s product lines int eh latter half of the twentieth century, including the introduction of meals that could be prepared using soup as a base, rather than just selling the soup for soup (Shea & Mathis, 2002). After the turn of the millennium, there was a slow down in growth. Over the past decade and more, despite the company’s giant size and revenues of $8 billion per year, revenues were lagging, losses were becoming the main return on investments in new strategies, and new products were failing (Wiener-Bronner, 2018). Shareholders, of which descendants of the original founders represented about half of all shares, were at odds with more focused activist investors, and efforts were diverted into board level debates and battles, rather than corporate needs (Wiener.
1. Running head: BUSINESS ANALYSIS CASE STUDY
1
BUSINESS ANALYSIS CASE STUDY
17
Abstract
The Campbell Soup Company was begun in the late 1860s as a
partnership for canning vegetables, especially tomatoes. The
company continued to grow, and it was an early adopter of radio
and magazine advertising, which helped to promote Campbell
Soup to new heights as one of the most well-known and loved
American brands. After the turn of the millennium, there was a
slowdown in growth. Over the past decade and more, despite the
company’s giant size and revenues of $8 billion per year,
revenues were lagging, losses were becoming the main return on
investments in new strategies, and new products were failing.
This situation did not occur overnight, but rather it was a
changing environment along with discoveries of unethical
behavior by the company. The turning point for Campbell Soup,
and its downfall, was the repeated use of deception in marketing
the taste, freshness and health of its products. This paper
provides an overview and analysis of the case.
Introduction
The Campbell Soup Company was begun in the late 1860s as a
partnership for canning vegetables, especially tomatoes (Shea &
2. Mathis, 2002). Anderson & Campbell set up their operations in
Camden, New Jersey, where there was a significant
manufacturing presence, but their marketing was focused on
images of gardens and fresh food (Shea & Mathis, 2002). In
1876 Anderson left the partnership, and many of Campbell’s
relatives joined the venture (Shea & Mathis, 2002). Canned
foods were still an emerging product form in America, however
their popularity was growing as was the capacity to transport
and distribute products over a vast area, even nationally (Shea
& Mathis, 2002). The company continued to grow, and it was an
early adopter of radio and magazine advertising, which helped
to promote Campbell Soup to new heights as one of the most
well-known and loved American brands (Shea & Mathis, 2002).
The company went public in 1956 (Shea & Mathis, 2002).
Campbell Soup continued to grow and expand it s product lines
int eh latter half of the twentieth century, including the
introduction of meals that could be prepared using soup as a
base, rather than just selling the soup for soup (Shea & Mathis,
2002). After the turn of the millennium, there was a slow down
in growth. Over the past decade and more, despite the
company’s giant size and revenues of $8 billion per year,
revenues were lagging, losses were becoming the main return on
investments in new strategies, and new products were failing
(Wiener-Bronner, 2018). Shareholders, of which descendants of
the original founders represented about half of all shares, were
at odds with more focused activist investors, and efforts were
diverted into board level debates and battles, rather than
corporate needs (Wiener-Bronner, 2018). The turning point for
Campbell Soup, and its downfall, was the repeated use of
deception in marketing the taste, freshness and health of its
products.
Organization Type and Strategies
Campbell Soup Company is a multinational manufacturer of
household products, with a focus on ready to eat soups. Despite
3. its large size and the wide distribution of products,
manufacturing takes place in the United States, and the primary
market is the domestic American household consumer market
(Shea & Mathis, 2002). The most popular products, chicken
noodle soup, tomato soup and cream of mushroom soup, account
for a majority of sales (Wiener-Bronner, 2018). The industry is
currently undergoing a massive upheaval driven by cultural
change and emerging preferences (Cardello, 2018). While
overall the ready-made food market is growing in America and
globally, multinational food manufacturing companies are
getting a smaller and smaller share of this market while
emerging small producers of fresh or non-mass produced foods
are taking this share while expanding the market (Cardello,
2018). Assumptions have held for decision makers in the food
manufacturing for decades, such as the idea that people go to
supermarkets, and to some extent “blindly toss their products
into the grocery cart” (Cardello, 2018, n.p.). This true of
Campbell Soup Company, but also their major competitors One
important reason for the failure to adapt is that the
competencies of ready-made food manufacturers is mass
producing food, and this cannot work with the distribution
needs of fresh prepared and small-batch ready-to-eat food
(Cardello, 2018). The industry is in crisis, with most of the
chief executive officers (CEOs) including the CEO of Campbell
Soup Company, terminated in just the last few years (Cardello,
2018).
Table 1: Sales trends in decline (Singh, 2018)
Key Players and Industry
There were many kinds of stakeholders in the ready-made and
condensed soup market. These include regulatory bodies like
the Federal Trade Commission and the Food and Drug Agency,
consumers of soup, competitors, distributors and retailers.
Organizations that are not usually considered central to the
industry that have been gaining importance are the public health
agencies and authorities and non-governmental organizations
4. (NGOs) involved with health concerns (Phillips-Connolly &
Connolly, 2017).
The industry itself is becoming less dense, and less dominated
by established multinational players (Phillips-Connolly &
Connolly, 2017). There is an increasing number of very small
niche market soups with small regional distribution, and many
of these become new entrants at the national level. The main
approach has been the use of fresh foods, with some of these
requiring refrigeration of the soup and higher spoilage risks for
retailers and consumers. Because of this, the other large
multinational such as Progresso and Lipton continue to be major
competitors, but the real threat has been the local and niche
market substitutes.
Figure 1: Market share dominance in a declining market (Scout
Finance, 2016)
The Campbell Soup Company was begun in the late 1860s as a
partnership for canning vegetables, especially tomatoes. The
company continued to grow, and it was an early adopter of radio
and magazine advertising, which helped to promote Campbell
Soup to new heights as one of the most well-known and loved
American brands. After the turn of the millennium, there was a
slowdown in growth. Over the past decade and more, despite the
company’s giant size and revenues of $8 billion per year,
revenues were lagging, losses were becoming the main return on
investments in new strategies, and new products were failing.
This situation did not occur overnight, but rather it was a
changing environment along with discoveries of unethical
behavior by the company. The turning point for Campbell Soup,
and its downfall, was the repeated use of deception in marketing
the taste, freshness and health of its products.
Competitors
Competition in the domestic ready-made soup industry includes
corporate giants such as General Mills, Unilever, Nestle and
Kraft Heinz, as well as smaller producers that have becomes
established in niche areas, often with a health focus. One
5. example of this is Amy’s Kitchen, which has been making clean
food with green characteristics such as vegan and GMO free for
about three decades. General Mills is the maker of Progresso
soup, a leading canned brand that competes directly with
Campbell’s Soup brands. These companies also compete on the
basis of ready to eat snacks. Kraft Heinz is another major player
in the ready to eat food category, although it is dwarfed by the
market share of General Mills, which is only a fraction of the
size of the Campbell Soup Company market share. Unilever is a
company based in Europe, with dehydrated soups that compete
as a substitute canned soups. Nestle is somewhat similar to
Unilever in that the soup brands are focused on a European
market, and dehydrated. New niche markets have developed in
relation to canned soup, including the organic, GMO free line of
Amy’s Kitchen, which is small, but it has been growing for
several decades.
Problems and Issues
False health claims
The American Heart Association (AHA) earns revenue to
support their cause by selling product endorsements (Messerli,
Rimoldi and Bangalore, 2017). These endorsements are intended
for products that meet the criteria of heart healthy foods or
meals (Messerli et al., 2017). In 2013 the endorsement of the
AHA resulted in claims of fraudulent activity and deception by
both organizations (Messerli et al., 2017). The issue was the
sodium content of the soups (Messerli et al., 2017). The AHA
requirement for endorsement as a low sodium meal required a
maximum level of 140 milligrams (mg) of sodium, but the
Healthy Request soups which were endorsed under the program
had over 400 mg per serving, and non-endorsed Campbell Soup
products had more than 800 mg of sodium per serving (Messerli
et al., 2017). Campbell Soup Company was developing a
distinctly sinister character in terms of the repeated themes of
deception and marketing false claims.
Previous deceptive practice scandals
This was not actually the first time that Campbell Soup
6. Company had been caught in the act of deception. In the late
1960s it was Campbell Soup Company that was targeted by the
FTC in relation to the use of marbles in the soup during
marketing photography (Thorson & Duffy, 2015). The marbles
were used to prop of the ingredients in the soup, which would
otherwise fall to the bottom. By having the ingredient chunks sit
on the marbles, they were lifted out of the soup making it look
healthier and heartier (Thorson & Duffy, 2015). This event was
considered a major turning point, and a landmark case in
marketing standards and the identification of deception
marketing practices (Thorson & Duffy, 2015).
The Campbell Soup Company had also been caught before in
relation to false health claims, as previously this had occurred
in the late 1980s. As part of their marketing efforts, the
company began making claims in relation to its soup as part of a
healthy diet, and a means of avoiding heart disease and cancer
(Andrews, Burton & Netemeyer, 2000). In fact, these claims
angered the National Cancer Institute, who had never approved
or endorsed the products but were quoted in marketing material
related to the description of a healthy lifestyle and diet (Andrew
et al., 2000).This caught the attention of the Federal Trade
Commission (FTC), who further investigated the claims in
relation to preventing heart disease. Campbell Soup Company
had claimed that since the soups were low in fat, the soup met
the healthy lifestyle guidelines that were stated as part of a diet
to avoid cancer and heart disease (Andrews et al., 2000). The
FTC did not agree, and specifically pointed to the high sodium
content of the soup as evidence that the soups were not healthy,
and not part of healthy diet. This was in 1989, almost twenty
five years before, and yet the company was still continuing to
try the same tricks and games. Consumers, however, are far
more sophisticated today, and they have a better understanding
of nutrition and nutrition labels.
Negative health impacts of product
Public health agencies such as the Centers for Disease Control
and Prevention (CDC) and local public health authorities have
7. increasingly promoted healthier lifestyles, including a healthier
diet, as a means of promoting health and wellness (Rehm,
Monsivais & Drewnowski, 2015). Campbell Soup Company
products contain high levels of salt, monosodium glutamate
(MSG) which has been implicated in allergies, sensitivity,
blindness and child hyperactivity, and often simply the word
flavoring without further information. Campbell Soup products
do not, however do much to meet a persons nutritional needs,
with no nutritional value being more than 5%, and that criteria
being fat (Campbell’s, n.d.). Vitamins and minerals for nearly
all soups are zero, with the best ones having as much as 2% of
the daily requirement for iron (Campbell’s, n.d). This is not a
product that can meet anything more than the calorie needs of
an individual. This is especially important in the context of the
products that are marketed to children, of which there are many,
most of them adorned with Disney cartoon characters and
attractive packaging (Campbell’s, n.d).
Table 2: Nutrition information for Incredibles 2 soup
Nutrition Facts
About 2.5 Servings Per Container
Serving size
1/2 Cup (120mL) Condensed Soup
Amount per serving
Calories
60
% Daily Value*
Total Fat
2g
3%
Saturated Fat
0.5g
3%
Trans Fat
0g
9. 60mg
0%
*The % Daily Value (DV) tells you how much a nutrient in a
serving of food contributes to a daily diet. 2,000 calories a day
is used for general nutrition advice.
(Campbell's, n.d.)
According to this nutritional information, a child would have to
eat 50 servings of soup in order to meet their recommended
daily requirements of iron, but in so doing they would ingest
about ten times the daily requirement of sodium. This is
obviously hypothetical, but a more realistic situation where
soup is provided for each meal, three times a day, would reveal
that soups such as this could contribute to the malnourishment
of children, as well as nay health impacts of the high level of
sodium.
Changing consumer tastes
Today consumers do not want canned soup that looks like it
came from forty years ago, they want fresh food which is
minimally processed, and possible organic or made with non-
genetically modified ingredients (Cardello, 2018). This is the
increasing trend, and it cannot really be stopped (Cardello,
2018). Overall, canned soup does not really represent a good
value to consumers, especially since dehydrated soup is much
cheaper. There is also growing interest in making homemade
meals, and homemade soup has an even lower cost. People are
turning away from processed foods and the lifestyle that it
represents, and the tin can meal is outdated and past its prime.
SWOT Analysis
Strengths
The main competencies of the Campbell Soup Company are in
manufacturing and marketing. Campbell Soup was an early
adopter of two innovations in the late 19th century; mass
production of food and mass marketing. The company was able
to adapt through the twentieth century as radio, magazines and
then television became the primary drivers of media advertising.
The company adopted leaner production processes, and was able
10. to find new efficiencies and marketing angles that fulfilled
American desire for more flavors and novelty. Campbell Soup
Company has been phenomenally successful in this regard for
well over 120 years. Another strength is the brand recognition
and the sentimentality response of many older Americans who
remember the height of Campbell Soup Company marketing
campaigns.
Weaknesses
Consumers do not want to eat food in a can, and they are
seeking healthier alternatives. The current offerings are high in
sodium and preservatives, but without nutrition in the form of
protein, vitamins, or minerals. Further, Campbell Soup
Company has been deceptive in relation to health and claims,
and this creates mistrust. Even if the company were to try to
create healthier alternatives, the public is unlikely to believe
them. The overall greatest weakness of the company, however,
is that they want to solve their problems through questionable
marketing practices, rather than accommodating the change in
consumer tastes, preference and nutritional needs.
Opportunities
The opportunities for Campbell Soup Company are limited. The
past bad behavior, in combination with decreasing product
relevance, means that not only is Campbell Soup not going to
grow, it is competing for maintenance of its share of a declining
industry. The main opportunity today is entry into the ready
made fresh food market, however the highly centralized and
manufacturing focus of the company is not well set up for such
an enterprise. Any real opportunity for Campbell Soup
Company should be taking advantage of the infrastructure and
the expertise which the company has developed, rather than
abandoning it. While interest in the products of Campbell Soup
Company is waning, there is likely to be increasing interest in
the manufacturing capacity and processes as emerging
companies try to attain scale and growth. This may be a
lucrative market for Campbell Soup, especially if packaged
along with marketing development and other strengths. For new
11. companies that have a hit product, the lack of skills and
knowledge in relation to Campbell Soup Company’s core’s
strengths could result in the failure of production and sales
growth initiatives. This could certainly be a win-win scenario
for Campbell’s and the companies that have displaced them in
the market.
Threats
The threat for Campbell Soup Company and similar firms is the
interest in healthy diet and lifestyles. This movement is in
generally not interested in processed and mass manufactured
food, particularly since this is where the high sodium and
processed foods which are a danger to health tend to cluster. In
addition to low fat and low sodium, consumers expect health
and nutrition from their food. It is expected that food should
fulfill some of the recommended daily allowance of proteins,
vitamins and minerals which are needed for good health. Even if
Campbell Soup Company were to lower the sodium content of
their soups to a reasonable, low sodium level, it would not
change the fact that it did not have nutrition, and the current
product is not going to be able to overcome this barrier which is
central to new consumer purchasing patterns.
Ethical Considerations
Ethical considerations that have not been a priority for
Campbell Soup Company might have prevented the scandals, the
lack of trust, and the inability of the company to make the
transition to modern consumer preferences. While it is easier in
some ways to understand the use of marbles to prop up the
ingredients, it is difficult to forgive the persistent fraud in
relation to health claims, and even the presentation of their soup
as a healthy meal. From a Christian perspective, there are many
concerns with the past behavior of Campbell Soup Company in
relation to deceptive practices, but also in relation to not
fulfilling the needs of people who need soup in the first place.
Decisions were always made to support sales, and not the
people buying the products. This is indicative of selfish and
greedy behavior. The American people should have been able to
12. trust Campbell Soup Company, and they have been let down.
There is therefore concern that if Campbell Soup Company were
to provide outsourcing services for scaling up production of
food for emerging producers, they would transmit these faulty
values in relation to health, community and honesty.
Evaluation and Assessment
It is easy to blame Campbell Soup Company for the fraud and
deception that drove their marketing, without attention to the
actual health or nutrition value of their products. It is important,
however, to realize that this was not an isolated issue. In fact, it
was the norm across the industry. In terms of ethics, the focus
does not need to be a set of standards and principles which can
allow for companies to conduct their own self-assessment of
ethical and moral behavior, but that can also provide a reference
point when claims against a company are made, or when fraud
in marketing is discovered. A history of progression in relation
to marketing, claims, deception and time reveals that ultimately
the best enforcement comes from education and aware
consumers, rather than rules, regulations and lawyers. Food
with poor performance in terms of nutrition per serving has
become irrelevant for much of the population, and perhaps that
is appropriate penalty to be paid.
Implementation Plan
Implementation of a plan to serve emerging ready to eat food
producers begins with marketing research and a marketing plan.
While Campbell Soup Company has an extensive skill set in
Business to Consumer distribution and marketing, the Business
to Business model may initially present some challenges.
Finding an initial partnership to highlight the benefits for
thriving new companies would be a good way to build a
storyline and portfolio of success stories that create interest for
other companies. In this way, Campbell Soup Company could be
increasing its manufacturing and production capacity, all of
which occurs during the United States, within the next few
13. years. It would help to support small brands to become bigger
brands, and in this way Campbell Soup Company can take its
rightful pension of sorts for building the industry in the first
place- as a mentor and production outsourcing service to the
very competition that has created the downfall of an era.
Closing
Summary
The main solutions for Campbell Soup Company are to wind
down operations and minimize costs as the industry declines, to
completely transform their product and processes to meet new
taste and nutrition preferences, or to pivot their business based
on a new angle. While there are new possible areas for
marketing, such as focusing on niche areas of canned food
production such as for hurricane and emergency kits, overall the
products are not in everyday use in American households, and
preparations should be made for decline. The competency in
manufacturing and efficiency in flavor marketing and
development might be a new area where Campbell Soup
Company could provide services directly to other food
manufacturers, especially the growing population of small,
niche market products that are becoming increasingly popular.
Recommendations
The strength of Campbell Soup Company could become the
outsourcing service to the emerging and niche area foods as
they find a broader market. Soup in a can is not in demand, at
least not Campbell’s products. While the new and fresher
version of ready-made foods are intentionally the opposite of
mass produced products, there are still aspects which could
become more viable on a large scale with the addition of
preservation in a bottle, jar or other format. Further, small
market restaurants and ready to eat foods that are interested in
expanding with a product line that builds on their in-restaurant
branding are likely to be interested in complete services that
take the product from the kitchen to the supermarket shelves,
virtual or physical. There are few alternatives, except for
14. winding down operations. No one wants old, canned food.
Logical conclusion
Companies which mass produce ready to eat foods have shown
poor ethical decision making skills n their decisions for half a
century. Many people will in fact feel that given the level of
deception and fraud against the American public, as evidenced
by over $100 billion in sales over the past century for what
amounts to a food with no nutritional value that consists of
water, salt and flavorings. Every company, however, should be
given a chance to make things right, and to target a better
approach to their operations. Ideally however, Campbell Soup
Company would pass on valuable knowledge in relation to its
marketing and manufacturing capacity without transmitting its
questionable values as a company.
References
Andrews, J. C., Burton, S., & Netemeyer, R. G. (2000). Are
some comparative nutrition claims misleading? The role of
nutrition knowledge, ad claim type and disclosure
conditions. Journal of Advertising, 29(3), 29-42.
Cardello, H. (2018). 5 Ways Big Food Companies Can Make
America (And Themselves) Healthier Forbes. Available from:
https://www.forbes.com/sites/hankcardello/2018/09/17/5-ways-
big-food-companies-can-make-america-and-themselves-
healthier/#47d718e35313
Messerli, F. H., Rimoldi, S. F., and Bangalore, S. 2017. Salt,
tomato soup, and the hypocrisy of the American Heart
Association. The American journal of medicine, 130(4), 392-
393.
Phillips-Connolly, K., & Connolly, A. J. (2017). When Amazon
ate Whole Foods: big changes for Big Food. International Food
and Agribusiness Management Review, 20(5), 615-622.
Rehm, C. D., Monsivais, P., & Drewnowski, A. (2015). Relation
between diet cost and Healthy Eating Index 2010 scores among
15. adults in the United States 2007–2010. Preventive medicine, 73,
70-75.
Rhea, M. E., and Mathis, M. 2002. Campbell Soup Company.
Arcadia Publishing.
Scout Finance. (2016). Campbell’s Soup in a Bubble? Seeking
Alpha. Available from:
https://seekingalpha.com/article/3989173-campbell-soup-bubble
Singh. A. (2018). Campbell’s Soup has been hit the worst.
Market Realist. Available from:
https://articles2.marketrealist.com/2017/09/campbell-soup-has-
been-hit-the-worst/
Thorson, E., & Duffy, M. (2015). Marbles in the Soup and
Crushed Volvos. Persuasion Ethics Today, 286.
Wiener-Bronner, D. (2018). Feud over Campbell Soup's future
could break up the 149-year old soup company. CNN Business,
October 28, 2018. Available from:
https://edition.cnn.com/2018/10/27/business/campbell-proxy-
fight/index.html
Socialization
To begin the process of socialization, having a clear
understanding of the definition of nursing is essential. We know
what nurses do, but how do we define nursing? Why is defining
nursing important? To answer this last question, defining
nursing is important for several reasons:To differentiate nursing
from other professions.To define our practiceTo provide
guidelines for nursing educationTo make nursing visible to the
public and policy makers
While there may be multiple definitions of nursing from
professional organization and state boards of nursing, similar
characteristics can be found in all of them.
The American Nurses Association offers the following
definition:
Nursing is the protection, promotion, and optimization of health
and abilities, prevention of illness and injury, facilitation of
healing, alleviation of suffering through the diagnosis and
16. treatment of human response, and advocacy in the care of
individuals, families, groups, communities, and populations.
Knowing what nursing is, supports your move into the nursing
role. Socialization is the process of internalizing knowledge,
skills, attitudes and other concepts needed to function in a role.
You have been socialized into your current role. However, after
graduating with your BSN, there will be another socialization
process as you take on the broader role of the nurse with a BSN.
Another way of describing the socialization process is Patricia
Benner’s (1984) novice to expert stages. Some of you may be
familiar with Benner’s work through your facilities clinical
ladder. Socialization of the professional nurse involves
developing your knowledge and skills and interacting with other
nurses who act as mentors. Throughout the education process,
students encounter a variety of socializing agents, including
faculty, classmates, colleagues and other healthcare
professionals, patients, and family, who subsequently contribute
to the formation of a professional self-identify (Lai & Lim,
2012, p. 32).