This document provides a summary and analysis of Hormel Foods Corporation. It begins with a brief history of the company starting in 1891 and discusses its evolution over time through acquisitions. The document then analyzes Hormel Foods at the corporate level, including its mission statement, diversification strategy, financial performance, and key business segments. It finds that Hormel Foods' Refrigerated Foods segment is most successful, accounting for around 50% of sales. The document recommends Hormel Foods consider acquiring a top vegetarian/vegan company to further diversify. In summary, the document provides an overview of Hormel Foods' corporate strategy and financials, finding it has been successful through balanced diversification and
The document discusses competitors for Complan, Revlon, and Hit brands. For Complan, major competitors include Horlicks, Boost, Bournvita, Pediasure, and Maltova, with Bournvita having the largest market share of 40%. Revlon faces competition from Procter & Gamble, Avon, Estee Lauder, L'Oreal, and Unilever. Godrej Lal Hit has over 80% market share for cockroach killer sprays, competing against Baygon, Mortein, and Good Knight brands.
This document provides an overview of Colgate-Palmolive's marketing strategies. Key points include:
1) Colgate focuses on strong retailer relationships and tailoring its product assortment and merchandising to each store.
2) Innovation is a key strategy across new product development, business processes, and marketing.
3) Colgate uses integrated marketing communications including traditional, digital, and promotional activities to connect with consumers.
Lululemon is a brand known for high-quality yoga apparel. It differentiates itself by focusing on women and cultivating a sense of community in its stores. The brand has expanded beyond yoga to include other athletic apparel but could better segment its brand architecture. Lululemon uses high-performance fabrics and emphasizes function, style, and customer service. It positions itself as a luxury activewear brand and communicates its brand through elements like its logo and reusable shopping bags promoting wellness messages. The brand relies more on interactive marketing like in-store classes than traditional advertising.
PepsiCo is a global food and beverage company headquartered in the United States. It owns popular brands like Pepsi, Lay's, Doritos, Gatorade, and Tropicana. The company was formed in 1965 through the merger of Pepsi-Cola and Frito-Lay. PepsiCo has over 150,000 employees worldwide and annual revenues of around $29 billion. It manufactures and distributes products through direct store delivery and other go-to-market systems. While it faces competition from other beverage and snack companies, PepsiCo has established strong brands and distribution networks.
Sales and Distribution - Colgate PalmoliveRohan Telang
- Colgate Palmolive was founded in 1806 and is headquartered in New York, producing oral care, personal care, and household products. It established operations in India in 1937 and began manufacturing in 1967.
- The company sells products through a sales hierarchy, with distributors receiving a 35% margin who sell to wholesalers at 11-12% margin and retailers at 10% margin.
- Distributors place weekly orders twice with Colgate Palmolive and receive no preset targets, wholesalers order weekly once, and retailers order weekly from distributors.
This document provides a project report on Colgate-Palmolive Ltd. It includes an introduction to the company, its history dating back to the 1800s, details on its marketing mix including product, price, place and promotion strategies. It also includes a BCG matrix analysis, SWOT analysis and STP analysis of Colgate's business and products. The project was submitted by five MBA students and provides a comprehensive overview of Colgate-Palmolive's business in 3 pages.
The document is a project report on a gap analysis of Amul ice creams in the metro market of West Bengal. It was conducted from June to August 2014. The primary objective was to analyze Amul's retail network and understand retailer views on supply chain, issues, and suggestions for better penetration. Competitors' activities were also examined. Research methods included questionnaires with retailers and secondary data from distributors. Key findings were that Amul has high awareness but average coverage, while competitors like Kwality Walls have larger market share due to policies like providing free refrigerators to retailers. The report provided an analysis of Amul and competitors in the target market.
Engro Foods recently introduced a new lassi brand called Omung Lassi in mid-June 2012. Omung Lassi comes in two flavors, Namkeen Taskeen and Methi Masti, and is sold in tetra paks for Rs. 15. Engro Foods promotes Omung Lassi through various media and targets teens and youngsters all over Pakistan. While Omung Lassi currently faces no direct competitors, Engro Foods should consider expanding into new markets and product variants to maintain growth and market share.
The document discusses competitors for Complan, Revlon, and Hit brands. For Complan, major competitors include Horlicks, Boost, Bournvita, Pediasure, and Maltova, with Bournvita having the largest market share of 40%. Revlon faces competition from Procter & Gamble, Avon, Estee Lauder, L'Oreal, and Unilever. Godrej Lal Hit has over 80% market share for cockroach killer sprays, competing against Baygon, Mortein, and Good Knight brands.
This document provides an overview of Colgate-Palmolive's marketing strategies. Key points include:
1) Colgate focuses on strong retailer relationships and tailoring its product assortment and merchandising to each store.
2) Innovation is a key strategy across new product development, business processes, and marketing.
3) Colgate uses integrated marketing communications including traditional, digital, and promotional activities to connect with consumers.
Lululemon is a brand known for high-quality yoga apparel. It differentiates itself by focusing on women and cultivating a sense of community in its stores. The brand has expanded beyond yoga to include other athletic apparel but could better segment its brand architecture. Lululemon uses high-performance fabrics and emphasizes function, style, and customer service. It positions itself as a luxury activewear brand and communicates its brand through elements like its logo and reusable shopping bags promoting wellness messages. The brand relies more on interactive marketing like in-store classes than traditional advertising.
PepsiCo is a global food and beverage company headquartered in the United States. It owns popular brands like Pepsi, Lay's, Doritos, Gatorade, and Tropicana. The company was formed in 1965 through the merger of Pepsi-Cola and Frito-Lay. PepsiCo has over 150,000 employees worldwide and annual revenues of around $29 billion. It manufactures and distributes products through direct store delivery and other go-to-market systems. While it faces competition from other beverage and snack companies, PepsiCo has established strong brands and distribution networks.
Sales and Distribution - Colgate PalmoliveRohan Telang
- Colgate Palmolive was founded in 1806 and is headquartered in New York, producing oral care, personal care, and household products. It established operations in India in 1937 and began manufacturing in 1967.
- The company sells products through a sales hierarchy, with distributors receiving a 35% margin who sell to wholesalers at 11-12% margin and retailers at 10% margin.
- Distributors place weekly orders twice with Colgate Palmolive and receive no preset targets, wholesalers order weekly once, and retailers order weekly from distributors.
This document provides a project report on Colgate-Palmolive Ltd. It includes an introduction to the company, its history dating back to the 1800s, details on its marketing mix including product, price, place and promotion strategies. It also includes a BCG matrix analysis, SWOT analysis and STP analysis of Colgate's business and products. The project was submitted by five MBA students and provides a comprehensive overview of Colgate-Palmolive's business in 3 pages.
The document is a project report on a gap analysis of Amul ice creams in the metro market of West Bengal. It was conducted from June to August 2014. The primary objective was to analyze Amul's retail network and understand retailer views on supply chain, issues, and suggestions for better penetration. Competitors' activities were also examined. Research methods included questionnaires with retailers and secondary data from distributors. Key findings were that Amul has high awareness but average coverage, while competitors like Kwality Walls have larger market share due to policies like providing free refrigerators to retailers. The report provided an analysis of Amul and competitors in the target market.
Engro Foods recently introduced a new lassi brand called Omung Lassi in mid-June 2012. Omung Lassi comes in two flavors, Namkeen Taskeen and Methi Masti, and is sold in tetra paks for Rs. 15. Engro Foods promotes Omung Lassi through various media and targets teens and youngsters all over Pakistan. While Omung Lassi currently faces no direct competitors, Engro Foods should consider expanding into new markets and product variants to maintain growth and market share.
This document provides information about a marketing project report submitted by Akash Rana for his M.Com degree. The 3-page report includes an introduction, objectives of the study, and outlines of subsequent chapters on the history of soft drinks in India, Pepsi's organizational structure and distribution channels, and a conclusion with suggestions. It received approval from his project guide and the principal of his college. The report aims to study Pepsi's distribution channel in fulfillment of his degree requirements. It outlines the scope, methodology and limitations of the research project.
Cadbury Dairy Milk is the market leader in India's competitive chocolate industry, holding a 71% market share. The document discusses Cadbury's brand positioning and marketing strategies in India. It provides an overview of Cadbury's company profile and history in India since 1947. It then outlines the research methodology and objectives to analyze consumer preferences, perceptions, and behaviors regarding Cadbury chocolate brands compared to competitors like Nestle and Amul.
The document provides an overview of the Indian oral care market and Colgate's position and strategies within it. Some key points:
- Traditional oral care methods like neem sticks are still commonly used in India, with low toothpaste consumption and a shortage of dentists.
- Colgate and Hindustan Unilever dominate the organized toothpaste market with over 85% share.
- When faced with aggressive competition from cheaper local brands, Colgate launched its own cheaper brand, Colgate Cibaca, which gained 50% of the discount segment market share within a year.
- A history of Colgate is given, from its founding in 1806 selling soap and candles to becoming a global consumer
project of hindustan coca cola beverages pvt. ltd copyjadav vishal
This document is a project report on the sales and distribution management of Coca Cola in India. It provides background on Coca Cola's history starting in 1886, its entry into India in 1993, and current operations in India. The Coca Cola system in India includes Coca Cola India Pvt Ltd, a company owned bottling entity, 13 licensed bottling partners, over 7,000 distributors and 2.2 million retailers across India. It discusses Coca Cola's products, promotional strategies, distribution channels, pricing, recruitment, training, warehousing, and competitors in India such as PepsiCo and Parle Agro.
Study of distribution channel strategy of pepsico for the positioning of the ...Nity Niharika
This document appears to be a dissertation submitted by Anil Kumar Mishra to Mangalmay Institute of Management & Technology in 2009-2011 about PepsiCo's distribution channel strategy for product positioning in Varanasi, India. The dissertation includes sections on the objectives of studying PepsiCo's distribution strategy, a literature review on the company's history and operations in India, and a proposed research methodology. It indicates the dissertation will analyze PepsiCo's marketing initiatives and policies in India with a focus on its partnership management and distribution network.
Scope of mlm and franchising in colgate palmoliveDipanway Bhabuk
Multi-level marketing involves recruiting salespeople who become a leveraged sales force and earn commissions on sales. Franchising involves selling territory rights to franchisees and providing various distribution and support services via contract for a fee. The document discusses Colgate Palmolive's distribution network and why multi-level marketing and franchising are not suitable options given its market leadership, established traditional channels, and highly defined distribution system.
Colgate Total uses an indirect distribution channel involving dentists, drug stores, grocery stores, large retail stores, and department stores to reach consumers across many geographic areas. Key distribution activities include transportation via truck, rail, water and air. Promotion of Colgate Total involves advertising through television commercials, magazines, radio, billboards and dental office ads. Promotional strategies include coupons, rebates, in-store displays and demonstrations to induce trial of the new product.
Customer Relationship Management Of Olpers Milk Of Engro Foods Ltd ...Khawaja Naveed
Customer relationship management involves carefully managing detailed customer information to maximize loyalty. Engro Foods uses CRM to identify best customers, improve account management, build individualized relationships, and provide customers with high quality service. They interact with customers through various marketing activities like road shows, rural events, and free samples. Engro also increases customer value through promotions, ads, and social events. Key strategies to improve the customer base include enhancing growth opportunities, increasing longevity of relationships, and reducing customer defection by differentiating products and building strong brand loyalty.
This document discusses the history and branding of the Subway restaurant chain. It outlines key elements of the Subway brand such as its original name and logo, founding vision, and goals of serving quality food and excellent customer service. The document also analyzes Subway's brand portfolio, awareness, positioning, personality, marketing strategies, and crisis management response to a controversial ingredient. It provides recommendations for improving Subway's brand positioning and associations to maintain its image as a healthy fast food option.
The document discusses Himalaya Drug Company's efforts to reposition its herbal bath soap brand. It conducted a customer perception survey to understand how to reposition the brand. The survey found that Himalaya soap users highly value youthful skin, fragrance, and freshness. However, the brand lacks in creating a strong identity and sense of belonging. The document proposes repositioning Himalaya soap to focus on its key functional benefit of providing fresh, youthful skin through natural herbs. It recommends developing a brand identity strategy centered around this positioning, using celebrity endorsements, and promoting reasons for customers to switch from competitors.
Coca Cola Summer Internship Report " Retailers Satisfaction With Coca Cola"Nishant Singh
This document analyzes retailer satisfaction with Coca-Cola distribution in Varanasi, India. It finds that some retailers do not receive deliveries on time or on a consistent schedule. This results in lost sales of up to 2440 units in peak seasons. The document suggests that Coca-Cola improve delivery consistency and work to better understand retailer needs through surveys to increase satisfaction and sales.
- Amul has been marketing milk products in Allahabad since 2006 but wants to increase its market share against competitors.
- A survey of 700 retailers found that only 66% stocked Amul products due to issues like low margins, leaky packaging not being replaced, and some areas not being accessible to distributors.
- The main competitor is Namaste India due to thicker milk and earlier delivery times, though Amul has the highest consumer demand and quality rating.
This document contains the table of contents for a report on Hindustan Coca Cola Beverages Pvt. Ltd. in Tirupati, Chittoor. It outlines the sections to be included such as an introduction, company profile, products and pack sizes, mission, and SWOT analysis. It also acknowledges the support provided by managers at the Coca Cola company and faculty at SVCET College. The introduction provides background on the soft drink industry in India and factors affecting Coca Cola's business.
This document provides an overview and history of Amul, including its vision, mission, and operations. It discusses:
1) Amul was established in 1946 as the Kaira District Co-operative Milk Producers' Union and is now a major dairy brand in India.
2) The Gujarat Cooperative Milk Marketing Federation (GCMMF) is Amul's parent organization and India's largest food products marketing group.
3) Amul's vision is to use high-tech solutions while maintaining Indian values and serve a large market in India and neighboring countries with over 10,000 crores in annual turnover.
This document discusses a study of consumer buying behaviour towards Amul milk in Jaipur, India. The study surveyed 50 consumers to understand awareness of Amul products, factors influencing purchase decisions, and satisfaction levels. Key findings include that most customers purchase Amul milk for self-use and are satisfied with qualities like taste, price, and availability. Ease of purchasing Amul products from nearby retailers also influences consumer behaviour positively. The conclusion discusses Amul's goal to become a leading dairy marketing organization through expanding its product range and distribution network across India and neighboring countries.
Dabur India Limited is a 128-year-old Ayurvedic and FMCG company with a portfolio of over 250 herbal products. It has undergone strategic changes over four phases: initially focusing on Ayurvedic drugs, then expanding product lines and markets, restructuring under professional management to compete globally, and most recently rebranding and focusing on key brands and markets. Dabur now has annual revenues of over $600 million from consumer care, health, and international divisions, with a goal of doubling sales by 2010 through these divisions as well as foods.
Running Head MODULE 6 COMPETITIVE STRATEGIES1MODULE 6 COMPETIT.docxtoltonkendal
Running Head: MODULE 6 COMPETITIVE STRATEGIES 1
MODULE 6 COMPETITIVE STRATEGIES 2
Week 6 Written Assignment-
Competitive Strategies
Author Note
This assignment for Week 6 Written Assignment-Competitive Strategies is being submitted on November 11, 2017, for Christopher Zombas’ B460/MAN4720 Section 01 Strategic Management Fall 2017 course.
In the fast food industry, competitive strategies must be looked at for a business to remain viable. With so many options to choose from how is a company going to get consumers to choose them? Conducting a competitive strategy analysis can help guide a fast food business down the right path for them.
1. Select a different product or service from last week.
The product or service that I have chosen for this assignment is fast foods.
2. Conduct a competitive strategy analysis on the product or service selected using Porter’s General Competitive Strategies (Cost Leadership Strategy, Differentiation, and Focus).
Cost Leadership Strategy-how can a company be able to consistently reduce their costs of doing business?
Differentiation (sometimes easier for companies who are not able to get their costs lower)-how can a company set themselves apart from the competition?
Cost Focus-how can the company use the principles of a low-cost operation to market affordability to a specific market?
Differentiation Focus-a company would want to market a bigger and better solution to a smaller market.
3. Select one of Porter’s Generic Competitive Strategies to develop a competitive edge for your product or service selected, and describe and explain the implementation of that strategy for the product or service selected.
Cost Leadership Strategy-a company would want to maintain low overhead costs and negotiate favorable acquisition costs of supplies. A fast-food company would want to be strategically placed where they can get the most consumers in and also pay the lowest price possible for their materials. They would need to negotiate contracts with their suppliers for the most favorable outcome.
Differentiation-a company would want to research customer needs, design, and develop quality products or services to match those needs and wants. The company would want to effectively market and sell themselves by stressing those differences from their competition.
Cost Focus-a company would want to maintain a low-cost operation which could be done a number of ways, such as possibly only being open during the busiest or peak hours, finding the best suppliers for the cheapest price, buying in large quantities to lower costs, hire well trained or educated staff in order to minimize waste, and not purchasing more than necessary to avoid spoilage.
Differentiation Focus-a company would want to focus on doing one particular thing very well. A fast-food company could focus on having a particular kind of burger such as a healthier option like a vegan burger to stand out from their competition and target their market ...
Engro Foods Limited is a subsidiary of Engro Corporation and is a leading FMCG company in Pakistan. The report analyzes EFL using various marketing models including PESTLE, SWOT, Porter's Five Forces, and the 7Ps of marketing. While EFL has strong brands like Olpers and Tarang, the report finds weaknesses in STP analysis, pricing, promotions, and placements of other brands. It recommends that EFL improve consumer research, streamline processes, specialize in top brands, expand operations beyond cities, and leverage opportunities in frozen foods, halal markets, and value-added exports.
OPENING CASE STUDY WHOLE FOODS, Whole PeopleWhole Foods Marke.docxhopeaustin33688
OPENING CASE STUDY: WHOLE FOODS, Whole People
Whole Foods Market is the largest natural food retailer in the world. With operations located primarily in the United States and also in Canada and the United Kingdom, Whole Foods sells natural and organic food products that include produce, meat, poultry, seafood, grocery products, baked and prepared goods, many drinks such as beer and wine, cheese, floral products, and pet products. The origin of the company dates to 1978 when John Mackey and his girlfriend used $45,000 in borrowed funds to start a small natural food store then named SaferWay. The store was located in Austin, Texas. John and his girlfriend lived in the space over the store (without a shower) because they were "kicked out" of their apartment for storing food products in it.
In 1980, Mackey developed a partnership with Craig Weller and Mark Skiles, merging SaferWay with Weller's and Skiles's Clarksville Natural Grocer to create the Whole Foods Market. Its first store opened in 1980 with 12,500 square feet and 19 employees. This was a very large health food store relative to others at that time. There was a devastating flood in Austin within a year of its opening and the store was heavily damaged. Much of its inventory was ruined and its equipment was damaged. The total losses were approximately $400,000, and the company had no insurance. Interestingly, customers and neighbors helped the staff of the store to repair and clean up the damage. Creditors, vendors, and investors all partnered to help the store reopen only 28 days after the flood. With their assistance, Whole Foods survived this devastating natural disaster.
Whole Foods started to expand in 1984 when it opened its first store outside of Austin. The new store was located in Houston, followed by another store in Dallas and one in New Orleans. It also began acquiring other companies that sold natural foods, which helped to increase its expansion into new areas of the United States. In 2007, it expanded into international markets by opening its first Whole Foods branded store in London, England. (In 2004, it acquired a small natural foods company in the United Kingdom, Fresh & Wild, but did not use the Whole Foods brand until opening its new store in London.) It also acquired one of its major U.S. competitors, Wild Oats, in 2007. It now has more than 54,000 employees in about 280 stores with annual sales of $7.95 billion. Thus, Whole Foods has become a major business enterprise and the most successful natural and organic food retailer in the world.
MANAGING HUMAN CAPITAL
Whole Foods Market has done a number of things right, thereby achieving considerable success. Yet, many people believe that one of the best things it has done is to implement an effective people-management system. Each Whole Foods store employs approximately 40 to as many as 650 associates. All of the associates are organized into self-directed teams; associates are referred to as team members. Each of.
This document provides information about a marketing project report submitted by Akash Rana for his M.Com degree. The 3-page report includes an introduction, objectives of the study, and outlines of subsequent chapters on the history of soft drinks in India, Pepsi's organizational structure and distribution channels, and a conclusion with suggestions. It received approval from his project guide and the principal of his college. The report aims to study Pepsi's distribution channel in fulfillment of his degree requirements. It outlines the scope, methodology and limitations of the research project.
Cadbury Dairy Milk is the market leader in India's competitive chocolate industry, holding a 71% market share. The document discusses Cadbury's brand positioning and marketing strategies in India. It provides an overview of Cadbury's company profile and history in India since 1947. It then outlines the research methodology and objectives to analyze consumer preferences, perceptions, and behaviors regarding Cadbury chocolate brands compared to competitors like Nestle and Amul.
The document provides an overview of the Indian oral care market and Colgate's position and strategies within it. Some key points:
- Traditional oral care methods like neem sticks are still commonly used in India, with low toothpaste consumption and a shortage of dentists.
- Colgate and Hindustan Unilever dominate the organized toothpaste market with over 85% share.
- When faced with aggressive competition from cheaper local brands, Colgate launched its own cheaper brand, Colgate Cibaca, which gained 50% of the discount segment market share within a year.
- A history of Colgate is given, from its founding in 1806 selling soap and candles to becoming a global consumer
project of hindustan coca cola beverages pvt. ltd copyjadav vishal
This document is a project report on the sales and distribution management of Coca Cola in India. It provides background on Coca Cola's history starting in 1886, its entry into India in 1993, and current operations in India. The Coca Cola system in India includes Coca Cola India Pvt Ltd, a company owned bottling entity, 13 licensed bottling partners, over 7,000 distributors and 2.2 million retailers across India. It discusses Coca Cola's products, promotional strategies, distribution channels, pricing, recruitment, training, warehousing, and competitors in India such as PepsiCo and Parle Agro.
Study of distribution channel strategy of pepsico for the positioning of the ...Nity Niharika
This document appears to be a dissertation submitted by Anil Kumar Mishra to Mangalmay Institute of Management & Technology in 2009-2011 about PepsiCo's distribution channel strategy for product positioning in Varanasi, India. The dissertation includes sections on the objectives of studying PepsiCo's distribution strategy, a literature review on the company's history and operations in India, and a proposed research methodology. It indicates the dissertation will analyze PepsiCo's marketing initiatives and policies in India with a focus on its partnership management and distribution network.
Scope of mlm and franchising in colgate palmoliveDipanway Bhabuk
Multi-level marketing involves recruiting salespeople who become a leveraged sales force and earn commissions on sales. Franchising involves selling territory rights to franchisees and providing various distribution and support services via contract for a fee. The document discusses Colgate Palmolive's distribution network and why multi-level marketing and franchising are not suitable options given its market leadership, established traditional channels, and highly defined distribution system.
Colgate Total uses an indirect distribution channel involving dentists, drug stores, grocery stores, large retail stores, and department stores to reach consumers across many geographic areas. Key distribution activities include transportation via truck, rail, water and air. Promotion of Colgate Total involves advertising through television commercials, magazines, radio, billboards and dental office ads. Promotional strategies include coupons, rebates, in-store displays and demonstrations to induce trial of the new product.
Customer Relationship Management Of Olpers Milk Of Engro Foods Ltd ...Khawaja Naveed
Customer relationship management involves carefully managing detailed customer information to maximize loyalty. Engro Foods uses CRM to identify best customers, improve account management, build individualized relationships, and provide customers with high quality service. They interact with customers through various marketing activities like road shows, rural events, and free samples. Engro also increases customer value through promotions, ads, and social events. Key strategies to improve the customer base include enhancing growth opportunities, increasing longevity of relationships, and reducing customer defection by differentiating products and building strong brand loyalty.
This document discusses the history and branding of the Subway restaurant chain. It outlines key elements of the Subway brand such as its original name and logo, founding vision, and goals of serving quality food and excellent customer service. The document also analyzes Subway's brand portfolio, awareness, positioning, personality, marketing strategies, and crisis management response to a controversial ingredient. It provides recommendations for improving Subway's brand positioning and associations to maintain its image as a healthy fast food option.
The document discusses Himalaya Drug Company's efforts to reposition its herbal bath soap brand. It conducted a customer perception survey to understand how to reposition the brand. The survey found that Himalaya soap users highly value youthful skin, fragrance, and freshness. However, the brand lacks in creating a strong identity and sense of belonging. The document proposes repositioning Himalaya soap to focus on its key functional benefit of providing fresh, youthful skin through natural herbs. It recommends developing a brand identity strategy centered around this positioning, using celebrity endorsements, and promoting reasons for customers to switch from competitors.
Coca Cola Summer Internship Report " Retailers Satisfaction With Coca Cola"Nishant Singh
This document analyzes retailer satisfaction with Coca-Cola distribution in Varanasi, India. It finds that some retailers do not receive deliveries on time or on a consistent schedule. This results in lost sales of up to 2440 units in peak seasons. The document suggests that Coca-Cola improve delivery consistency and work to better understand retailer needs through surveys to increase satisfaction and sales.
- Amul has been marketing milk products in Allahabad since 2006 but wants to increase its market share against competitors.
- A survey of 700 retailers found that only 66% stocked Amul products due to issues like low margins, leaky packaging not being replaced, and some areas not being accessible to distributors.
- The main competitor is Namaste India due to thicker milk and earlier delivery times, though Amul has the highest consumer demand and quality rating.
This document contains the table of contents for a report on Hindustan Coca Cola Beverages Pvt. Ltd. in Tirupati, Chittoor. It outlines the sections to be included such as an introduction, company profile, products and pack sizes, mission, and SWOT analysis. It also acknowledges the support provided by managers at the Coca Cola company and faculty at SVCET College. The introduction provides background on the soft drink industry in India and factors affecting Coca Cola's business.
This document provides an overview and history of Amul, including its vision, mission, and operations. It discusses:
1) Amul was established in 1946 as the Kaira District Co-operative Milk Producers' Union and is now a major dairy brand in India.
2) The Gujarat Cooperative Milk Marketing Federation (GCMMF) is Amul's parent organization and India's largest food products marketing group.
3) Amul's vision is to use high-tech solutions while maintaining Indian values and serve a large market in India and neighboring countries with over 10,000 crores in annual turnover.
This document discusses a study of consumer buying behaviour towards Amul milk in Jaipur, India. The study surveyed 50 consumers to understand awareness of Amul products, factors influencing purchase decisions, and satisfaction levels. Key findings include that most customers purchase Amul milk for self-use and are satisfied with qualities like taste, price, and availability. Ease of purchasing Amul products from nearby retailers also influences consumer behaviour positively. The conclusion discusses Amul's goal to become a leading dairy marketing organization through expanding its product range and distribution network across India and neighboring countries.
Dabur India Limited is a 128-year-old Ayurvedic and FMCG company with a portfolio of over 250 herbal products. It has undergone strategic changes over four phases: initially focusing on Ayurvedic drugs, then expanding product lines and markets, restructuring under professional management to compete globally, and most recently rebranding and focusing on key brands and markets. Dabur now has annual revenues of over $600 million from consumer care, health, and international divisions, with a goal of doubling sales by 2010 through these divisions as well as foods.
Running Head MODULE 6 COMPETITIVE STRATEGIES1MODULE 6 COMPETIT.docxtoltonkendal
Running Head: MODULE 6 COMPETITIVE STRATEGIES 1
MODULE 6 COMPETITIVE STRATEGIES 2
Week 6 Written Assignment-
Competitive Strategies
Author Note
This assignment for Week 6 Written Assignment-Competitive Strategies is being submitted on November 11, 2017, for Christopher Zombas’ B460/MAN4720 Section 01 Strategic Management Fall 2017 course.
In the fast food industry, competitive strategies must be looked at for a business to remain viable. With so many options to choose from how is a company going to get consumers to choose them? Conducting a competitive strategy analysis can help guide a fast food business down the right path for them.
1. Select a different product or service from last week.
The product or service that I have chosen for this assignment is fast foods.
2. Conduct a competitive strategy analysis on the product or service selected using Porter’s General Competitive Strategies (Cost Leadership Strategy, Differentiation, and Focus).
Cost Leadership Strategy-how can a company be able to consistently reduce their costs of doing business?
Differentiation (sometimes easier for companies who are not able to get their costs lower)-how can a company set themselves apart from the competition?
Cost Focus-how can the company use the principles of a low-cost operation to market affordability to a specific market?
Differentiation Focus-a company would want to market a bigger and better solution to a smaller market.
3. Select one of Porter’s Generic Competitive Strategies to develop a competitive edge for your product or service selected, and describe and explain the implementation of that strategy for the product or service selected.
Cost Leadership Strategy-a company would want to maintain low overhead costs and negotiate favorable acquisition costs of supplies. A fast-food company would want to be strategically placed where they can get the most consumers in and also pay the lowest price possible for their materials. They would need to negotiate contracts with their suppliers for the most favorable outcome.
Differentiation-a company would want to research customer needs, design, and develop quality products or services to match those needs and wants. The company would want to effectively market and sell themselves by stressing those differences from their competition.
Cost Focus-a company would want to maintain a low-cost operation which could be done a number of ways, such as possibly only being open during the busiest or peak hours, finding the best suppliers for the cheapest price, buying in large quantities to lower costs, hire well trained or educated staff in order to minimize waste, and not purchasing more than necessary to avoid spoilage.
Differentiation Focus-a company would want to focus on doing one particular thing very well. A fast-food company could focus on having a particular kind of burger such as a healthier option like a vegan burger to stand out from their competition and target their market ...
Engro Foods Limited is a subsidiary of Engro Corporation and is a leading FMCG company in Pakistan. The report analyzes EFL using various marketing models including PESTLE, SWOT, Porter's Five Forces, and the 7Ps of marketing. While EFL has strong brands like Olpers and Tarang, the report finds weaknesses in STP analysis, pricing, promotions, and placements of other brands. It recommends that EFL improve consumer research, streamline processes, specialize in top brands, expand operations beyond cities, and leverage opportunities in frozen foods, halal markets, and value-added exports.
OPENING CASE STUDY WHOLE FOODS, Whole PeopleWhole Foods Marke.docxhopeaustin33688
OPENING CASE STUDY: WHOLE FOODS, Whole People
Whole Foods Market is the largest natural food retailer in the world. With operations located primarily in the United States and also in Canada and the United Kingdom, Whole Foods sells natural and organic food products that include produce, meat, poultry, seafood, grocery products, baked and prepared goods, many drinks such as beer and wine, cheese, floral products, and pet products. The origin of the company dates to 1978 when John Mackey and his girlfriend used $45,000 in borrowed funds to start a small natural food store then named SaferWay. The store was located in Austin, Texas. John and his girlfriend lived in the space over the store (without a shower) because they were "kicked out" of their apartment for storing food products in it.
In 1980, Mackey developed a partnership with Craig Weller and Mark Skiles, merging SaferWay with Weller's and Skiles's Clarksville Natural Grocer to create the Whole Foods Market. Its first store opened in 1980 with 12,500 square feet and 19 employees. This was a very large health food store relative to others at that time. There was a devastating flood in Austin within a year of its opening and the store was heavily damaged. Much of its inventory was ruined and its equipment was damaged. The total losses were approximately $400,000, and the company had no insurance. Interestingly, customers and neighbors helped the staff of the store to repair and clean up the damage. Creditors, vendors, and investors all partnered to help the store reopen only 28 days after the flood. With their assistance, Whole Foods survived this devastating natural disaster.
Whole Foods started to expand in 1984 when it opened its first store outside of Austin. The new store was located in Houston, followed by another store in Dallas and one in New Orleans. It also began acquiring other companies that sold natural foods, which helped to increase its expansion into new areas of the United States. In 2007, it expanded into international markets by opening its first Whole Foods branded store in London, England. (In 2004, it acquired a small natural foods company in the United Kingdom, Fresh & Wild, but did not use the Whole Foods brand until opening its new store in London.) It also acquired one of its major U.S. competitors, Wild Oats, in 2007. It now has more than 54,000 employees in about 280 stores with annual sales of $7.95 billion. Thus, Whole Foods has become a major business enterprise and the most successful natural and organic food retailer in the world.
MANAGING HUMAN CAPITAL
Whole Foods Market has done a number of things right, thereby achieving considerable success. Yet, many people believe that one of the best things it has done is to implement an effective people-management system. Each Whole Foods store employs approximately 40 to as many as 650 associates. All of the associates are organized into self-directed teams; associates are referred to as team members. Each of.
This document provides a marketing plan for Hillshire Farms. It includes an executive summary, introduction, chapters on the company's mission/vision/objectives, environment/product evaluation, consumers/target markets, product details, pricing, placement, and promotion strategies. It recommends redesigning the website, instituting a mission statement, differentiating product lines, and increasing financial metrics like return on assets over the next 5 years. It also analyzes Hillshire Farms' sustainability efforts and opportunities in demographic, economic, societal, technological, and competitive areas. The plan aims to help Hillshire Farms appeal more to health-conscious and environmentally-focused consumers.
Brand Audit for IMC 613: Brand Equity Management. Brand Audit reviews overall health of Plum Organic's brand image and includes recommendations on how to strengthen the brand moving forward.
This document provides an analysis of the Chipotle brand. It describes Chipotle as a fast-casual restaurant chain founded in 1993 that focuses on providing "Food with Integrity" using higher quality ingredients compared to traditional fast food. The brand has experienced success and significant growth, opening over 2000 locations across the U.S. However, recent E. coli outbreaks have negatively impacted Chipotle's brand image. The document conducts a comprehensive brand audit and provides recommendations to help position Chipotle as the top brand in its industry.
Hershey Company
Kate Anderson
Jackie Hernandez
Vincent LaPlante
Jennifer Lewin
Michael Sanzari
Thomas Tremblay
Management 480
Dr. Gene Baten
December 5, 2011
Table of Contents
Introduction .................................................................................................................................... 3
Mission Statement .......................................................................................................................... 4
Revised Mission Statement ................................................................................................................... 5
Input Stage ...................................................................................................................................... 6
External Factor Evaluation (EFE) Matrix ................................................................................................... 6
Internal Factor Evaluation (IFE) Matrix ..................................................................................................... 7
Competitive Profile Matrix (CPM) ............................................................................................................. 8
Matching Stage ............................................................................................................................... 9
Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix ................................................................ 9
Strategic Position and Action Evaluation (SPACE) Matrix ....................................................................... 12
Boston Consulting Group (BCG) Matrix .................................................................................................. 14
Internal-External (IE) Matrix ................................................................................................................... 15
Grand Strategy Matrix (GSM) ................................................................................................................. 16
Data Collection Matrix ............................................................................................................................ 17
Decision Stage ............................................................................................................................... 18
Quantitative Strategic Planning Matrix (QSPM) ..................................................................................... 18
Recommendations ........................................................................................................................ 20
Epilogue ......................................................................................................................................... 22
3
Introduction
It all started with a decision by a man named Hershey, which ended up becoming one of
the world’s best known chocolate brand and well-known theme park. Mil ...
This document compares Horlicks and Complan, two popular health drink brands in India. Horlicks is manufactured by GSK and targets children, women, and the elderly. It has 50% market share and is available in over 5 lakh retail outlets. Complan is manufactured by Heinz and targets growing children, athletes, and busy adults. It has 20% market share and is available in over 7 lakh retail outlets. The two brands engaged in advertising wars comparing nutritional claims and prices, with Horlicks positioning itself as more nutritious and less expensive. Comparative advertising is beneficial when providing truthful information to consumers, but not when claims are false or misleading.
This due diligence report provides an overview of Whole Foods Market, Inc. as of June 2012. It summarizes Whole Foods' corporate profile, strategy, management culture, industry, competitors, risks, legal matters, and financial position. Key points include:
1. Whole Foods operates 311 grocery stores in the U.S., Canada, and U.K., focusing on natural and organic products. It sees potential for expansion in new markets.
2. The company employs a decentralized leadership model with collective decision making. It aims to bring health and quality products to local communities.
3. Competition in the grocery industry is increasing, particularly from large retailers launching their own natural/organic lines. Whole
Ferrell, O. C. (2018). Business Ethics Ethical Decision Making & ChereCheek752
Herbalife is a multilevel marketing company that sells nutrition and weight management products through a network of over 2.3 million independent distributors in more than 90 countries. The company has faced accusations that its business model constitutes a pyramid scheme. The document discusses Herbalife's history and product lines, defines direct selling and multilevel marketing, describes Herbalife's compensation plan for distributors, and examines the differences between legitimate multilevel marketing and illegal pyramid schemes.
Stonyfield Organic yogurt seeks to increase sales and market share through a campaign created by Vision Media agency. The campaign aims to reach women ages 34-49 by emphasizing Stonyfield's commitment to sustainability, organic practices, and community initiatives. The objectives are to achieve 80% comprehension and 40% conviction of the Stonyfield brand through advertising across various media channels over 12 months.
Missing pointsAnalyzes the transportation strategy of the comIlonaThornburg83
Missing points:
Analyzes the transportation strategy of the company using examples of the various transportation modes to support the effectiveness of moving products from factories to customers.
Explain: you were able to elaborate on basic transportation, leaving behind inventory and distribution. You need to explain the transportation strategy of the company, which is directly related to their agreements with carriers, and the processes stemming from S&Op..
Analyzes the global challenges that the company faces in its supply chain and discusses risks and associated strategies to minimize the risks.
Explain: it is important to take into account one important factor describing the economic and political factors that can impact the company’s transportation network. Some of these factors are customs, trade compliance and bottleneck in the supply chain. Also, do not forget competitors such as Walmart, Target and Aibaba. Please further explain "market flux" and the risks associated with it.
Analyzes the economic and political factors that can impact the company’s transportation network and relates to future improvements.
Explain: mportant to describe the role of demand forecasting plays in the organization's supply chain strategy including S&Op, and how large is the impact on inventories and the lead time of the supply chain.
Analyzes the role demand forecasting plays in the company's supply chain strategy and supports the analysis with ways to manage challenges of forecasting in times of uncertainty.
Explain: you described the role demand forecasting and missed out on what is the impact in company's supply chain strategy and does not explain its significance or impact. Important to analyze the role demand forecasting plays in the company's supply chain strategy and supports the analysis with ways to manage challenges of forecasting in times of uncertainty.
Analyzes how pricing promotions are used to change demand through relevant examples that demonstrate this strategy.
Explain: you somewhat explained how pricing promotions (such as free shipping) are used, but does not connect the explanation to change demand.
WHOLE FOODS, whole people
Whole Foods Market is the largest natural food retailer in the world with more than 360 stores and approximately $12 billion in annual sales. With operations located primarily in the United States and also in Canada and the United Kingdom, Whole Foods sells natural and organic food products that include produce, meat, poultry, seafood, grocery products, baked and prepared goods, many drinks such as beer and wine, cheese, floral products, and pet products. The origin of the company dates to 1978 when John Mackey and his girlfriend used $45,000 in borrowed funds to start a small natural food store then named SaferWay. The store was located in Austin, Texas. John and his girlfriend lived in the space over the store (without a shower) because they were “kicked out” of their apartment for storing food pr ...
This document provides an overview of Eli Lilly and Company including:
- The company was founded in 1876 in Indianapolis, Indiana and is a global research-based pharmaceutical corporation.
- Key products include Cialis, Cymbalta, Strattera, Humalog, Humulin, and Tradjenta. The company operates internationally across many countries.
- Financial analysis shows the company has experienced an upward trend in stock price since 2009. Competitors include Johnson & Johnson and Pfizer. Ratios show the company has good profitability, liquidity, and asset turnover.
This document provides information about Parle Agro Pvt. Ltd., an Indian beverage company. It discusses the company's organizational structure, leadership, teamwork, and human resource development projects. The company aims to motivate its channel members through various programs and works to reduce conflicts between members through cooperation initiatives. Leadership at Parle Agro focuses on understanding operations at all levels and introducing new brands through strategic planning.
Whole Foods Market faces strategic challenges including increased competition from mainstream grocery stores offering organic options, economic recession diminishing consumer spending, and the perception of high prices hurting sales. To address these issues, Whole Foods must reassess costs, refocus expansion, promote its brand emphasizing quality and value, and balance maintaining its mission while boosting awareness and sales. Whole Foods aims to strengthen its position through major restructuring and generating positive PR during the economic downturn.
Crepes and Co is a new mobile creperie business being launched by five university students in East Lancashire, UK. The business will operate out of a catering van selling crepes, pancakes, and doughnuts. The document provides details on the company ownership and history, products and manufacturing processes, legal requirements, and marketing and financial plans. It establishes the purpose of providing a unique mobile food experience and aims to be a profitable alternative to fast food. SWOT and PESTLE analyses were conducted to evaluate the business's strengths, weaknesses, opportunities, threats, and external factors. The executive summary concludes by outlining the mission to satisfy customers through quality food and values of superior customer experience and passion for the business.
Whole Foods has experienced success over the past decade by establishing itself as the leader in the natural and organic food retailing industry. They currently operate 414 stores across North America and the UK. Their mission and strategies focus on profitability, community involvement, and an organizational philosophy of societal marketing. While demand for natural and organic products has increased industry growth, Whole Foods remains well positioned due to their reputation and loyal customer base. Their marketing objectives center on retaining customer loyalty by providing valuable healthy products and experiences.
This document provides an overview of the organization and culture of SmithKline Beecham, a pharmaceutical company. It discusses the company's history, goals of focusing on customers, innovation, integrity, people and performance. The management style is described as people-oriented and team-based. Human resources practices emphasize credentials and experience. The "Simply Better Way" represents the company's culture of continuous improvement. Labor-management relations are characterized as a partnership with no strikes, and workers participate in company initiatives and communication. Productivity is monitored through performance management systems and collective bargaining agreements.
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2. 2
Table of Contents
Executive Summary.................................................................................................3
Section 1: Corporate-Level
Part 1: Brief history of Hormel Foods Corp (HRL).....................................4
Part 2: Corporate-Level Analysis.................................................................5
Part 3: Financial Analysis ..........................................................................12
Section 2: Business-Level
Part 1: Internal Analysis.............................................................................23
Part 2: External Analysis............................................................................29
Part 3: Overall Business-Level Analysis ...................................................34
Section 3: Ethical Dilemma ...................................................................................35
Section 4: Recommendations.................................................................................38
Appendix................................................................................................................40
References..............................................................................................................47
3. 3
Executive Summary
In 1891, George A. Hormel opened his first slaughterhouse in an abandoned creamery in
Austin, Minnesota. Today, Hormel Foods is now organized into five different business divisions
that provide a wide array of quality meal solutions. “Building upon our heritage of innovation
and quality, together we will elevate the everyday experience by making Hormel Foods the
favorite part of any eating occasion.”6 “Our Way” (mission statement) defines Hormel Foods
definition of business by mentioning their product (food), who will do it (we the employees), and
to elevate the everyday experience (why we do what we do for whom).
Hormel Foods is becoming increasingly diversified to meet the needs of younger
consumers and obtain a nice balance of grocery products. 12 It is clear that by acquiring
Applegate, Hormel Foods gains an organic and natural value-added protein product that is
considered to be concentric diversification. The company is in a strong financial position because
of their balanced approach in everything they do. Steady organic growth contributes to their
success. ROI, ROE, EPS, and dividend payout ratios all see this and investors should take notice
for steady returns. Compared to Tyson and ConAgra Foods, Hormel Foods pays out a higher
percentage of its earnings to dividends.
The Refrigerated Foods business segment has distinctive competencies with a strong
sales team, advertising, customer centricity, and research and development. The generic
competitive strategy pursued by the business is differentiation. The business has a broad market
scope because the products appeal to several different kinds of consumers, however, they are
differentiated from competitors’ product offerings. It is recommended that an acquisition is made
for a top performing vegetarian and/or vegan company. Acquisitions in this category further
diversify Hormel Foods and will add to their balanced portfolio and steady financial growth.
4. 4
Section 1: Corporate-Level
Part 1: Brief history of Hormel Foods Corp (HRL)
In 1891, George A. Hormel opened his first slaughterhouse in an abandoned creamery in
Austin, Minnesota. Being that this was his own meat packing operation after a dissolved
partnership with Albert Friedrich, the company took on the name George A. Hormel & Co. By
1903, Dairy Brand was introduced as its first brand and shortly after they began opening
distribution centers nationwide. More than a million hogs were processed by 1924 annually and
two years later the world’s first canned ham was introduced.1, 2, 3
George’s son, Jay Hormel, became president in 1929. Still guided by his father, Hormel
introduced Hormel Chili in 1935, Dinty Moore Beef Stew in 1936, and SPAM in 1937. Soon, the
US government bought over half of Hormel’s output to supply GIs and Allied forces during
WWII. Thereon out, several new products were introduced and seven presidents managed the
company into the 1990s. Consumer tastes began to shift to poultry. Sensing this, Hormel
purchased Jennie-O Foods in 1986, the nation’s largest privately-owned turkey processor.1, 2, 3
Former General Foods executive Joel Johnson was named president and CEO in 1993. More
than a century later, Geo. A. Hormel began calling itself Hormel Foods to reflect its expansion
into non-pork foods.1 Officially, Hormel Foods Corporation needed to “more accurately reflect
the corporation’s role and industry presence as a diversified consumer-branded marketer of
value-added products.”2 Since the name change, Hormel continued to acquire companies that
met changing consumer tastes. This diversification continued and today Hormel Foods owns
over 32 brands such as Skippy, Muscle Milk, and Applegate. 4 It is now organized into five
different business divisions that provide a wide array of quality meal solutions.5
5. 5
Part 2: Corporate-Level Analysis
1. Does the corporation have a formal mission statement? Does it define the corporation, provide
a vision, and articulate the corporate philosophy? Give examples. If it doesn’t have a mission
statement, explain the impact on the company of not having one (be specific).
“Our Way” replaces the traditional labeling of “mission statement” without
compromising effective elements good statements need. It reads, “Building upon our heritage of
innovation and quality, together we will elevate the everyday experience by making Hormel
Foods the favorite part of any eating occasion.”6 Professor Tina Hoffman mentions that a good
mission statement contains these three elements: definition of business (who, what, why), brief
vision for the future (what you are trying to become), and a statement of values (what the
company stands for). 7 “Our Way” defines Hormel Foods definition of business by mentioning
their product (food), who will do it (we the employees), and to elevate the everyday experience
(why we do what we do for whom). The statement also describes a brief vision for the future.
“Building upon our heritage of innovation and quality” describes what Hormel Foods will
continue to do for the future and “…making Hormel Foods the favorite part of any eating
occasion” tell what they strive for in the future. In addition, “Our Way” is guided by principles
(values) that generate norms (corporate philosophy) in pursuit of its vision and mission. The
principles are: heritage (stewards of the future), integrity (act ethical, honest, and responsible),
and innovation (originate, don’t imitate), philanthropy (contributing to communities in which
they operate), diversity (respecting unique differences), and stewardship (encourage participation
for good).6 Hormel Foods has a successful mission statement that aligns with its values. This
alignment articulates the culture for which they are.
6. 6
2. Is their mission statement appropriate for them? Explain. If it doesn’t have one, write a good
one and explain why yours is appropriate.
Their mission statement is appropriate for them because it defines who they are (stewards
of innovation and quality), describes the need it satisfies (any eating occasion), and identity
(together we will elevate the everyday experience).6 As stated in question one, their mission
statement also aligns with their values. This ensures that the company has a well-defined set of
behavioral expectations that are included in the mission.
3. How vertically integrated is the corporation? If it is vertically integrated, is it pursuing a
strategy of taper or full integration (or both)? Give examples.
Hormel Foods is not fully integrated, but they have strict expectations to aid with that. It
is pursuing a strategy of taper integration through a series of acquisitions and careful monitoring
over suppliers. Hormel Foods owns 38 manufacturing and distribution facilities and 25 sales
offices nationwide.8 Despite the lack of complete control or ownership over several independent
suppliers, they make it clear that suppliers must follow their Supplier Responsibility Principles.
Suppliers agree to principles that protect the dignity of people, environmental responsibilities,
humane animal treatment, and non-corrupt performance. These principles also align with their
mission, vision, and values.10 Figure 1(see appendices) outlines their direct and indirect
responsibilities throughout their supply chain. From animal production to consumption, Hormel
7. 7
Foods understands and prioritizes the impact their supply chain has on their overall sustainability
performance.
4. How diversified is the corporation? If it is diversified, are there gains achieved from
relatedness? Alternately, if the company pursuing unrelated diversification, what benefits or
losses is it experiencing from this approach? Explain.
Hormel Foods is becoming increasingly diversified to meet the needs of younger
consumers and obtain a nice balance of grocery products. More recently, they acquired
Applegate Farms which produces natural and organic prepared meats. As mentioned by Thomas
Day, Group VP of Refrigerated Foods, “When we first began to evaluate our partnership with
Applegate, we were impressed that they hold the number one position in the organic and natural
value-added protein space. We also saw and continue to see great value in the broad appeal that
Applegate has with younger and health conscious consumers. We're confident that this
partnership will expand our breadth of protein offerings and offer consumers the choice that they
look for when they go shopping.”12 It is clear that by acquiring Applegate, Hormel Foods gains
an organic and natural value-added protein product that is considered to be concentric
diversification. Hormel Foods is highly related to the product offerings of Applegate. The
acquisition (with a leading brand) will bring expansion into new product categories involving
natural organic meat products.
Two recent non-meat acquisitions include Muscle Milk maker CytoSport (2014) in a
$450 million deal and Skippy (2013) for $700 million. CytoSport earned a top spot in the $1
billion protein drink category and Skippy ranks as the number two peanut butter in the US.13
8. 8
Although these businesses detract away from the main meat business, they are related as a
grocery offered food product. Muscle Milk allows them to enter the health and wellness industry
whereas Skippy allows them to enter more on-the-go products such as Skippy Singles.14
5. Is the corporation engaged in strategic alliances? If so, discuss the key relationships in terms
of benefits gained by both partners.
Recently, Hormel Foods International President--James Snee, made a statement in
regards to exiting several international joint ventures. In his statement during their 2015 investor
day conference, “...we like to operate the business, we like to be in control of our own destiny…
And so as we think about potential joint ventures, the idea that we would enter into a joint
venture and be a minority partner today for the foreseeable future, we really don't like that. The
idea of entering into a joint venture as a minority partner but having a path to control or a path to
full ownership, is something that we certainly could see ourselves doing for the right
opportunity.”12
Hormel Foods international joint ventures were not as attractive in that it does not
match up with their long term planning. “...we think about, you know, new business and where
we want to go, you know, I don't know that we want to make that type of investment where it has
losses for that period of time, but we certainly could find ourselves in a position where the short
term returns are dilutive to the segment. But as long as we have the long term vision, and a path
to profitability, and a path to sustained profitability, that's how we think about future
opportunities.”12
Snee outlines Hormel Foods current strategy behind their international growth.
In the case of joint ventures, it seems they have halted expansion unless it truly resonates with
9. 9
their plans for sustained profitability. In addition, they see themselves as a bigger player that
would only take upon a joint venture that they could potentially control.
Their Refrigerated Foods segment accounts for 50 percent of their total sales.13
At the end
of fiscal 2014, they dissolved their 2002 joint venture with Cargill Meat Solutions, Precept
Foods. This was a beneficial relationship for both of them because they came together in
response to demand from livestock producers. This allowed them to market branded fresh case
ready beef and pork under the Hormel Always Tender brand.15
The dissolving of Precept Foods
was beneficial for both companies in the long term. Cargill spokesman Mike Martin mentions,
“It was mutually agreed upon by both companies that this would be best for the long term.”16
Their joint venture with Herdez Del Fuerte, MegaMex foods, was announced in 2009 as a
50/50 joint venture to market Mexican foods in the United States. Chairman of the board,
president and chief executive officer at Hormel Foods Jeffrey M. Ettinger mentions, “MegaMex
Foods will have the scale and skill set to establish leadership in Mexican foods and grow the
category. The collaboration should allow us to better serve both the growing U.S. Hispanic
population and the vast numbers of the general population who love Mexican food.”17
Their joint
venture was mutually beneficial because they combined the premier quality of Mexican food
products and brands of Herdez Del Fuerte with the strength of manufacturing and distribution of
Hormel Foods.17
MegaMex Foods syncs with Hormel’s diversified portfolio to offer Mexican
food products and Herdez Del Fuerte to expand into the United States.
Most recently, the company purchased the remaining ownership interest in its Shanghai
Hormel Foods Corporation joint venture. The minority partner, Shanghai Shangshi Meat
Products Co. Ltd. sold 19.29 percent of ownership interest giving the Hormel Foods full
ownership at the end of the second quarter in 2015.20 In their 2015 10Q filing, it is mentioned
10. 10
that this gives them the transfer of land use rights and buildings held by the joint venture.21 Not
much information could be found on how this affected Shanghai Shangshi Meat Products Co.
Ltd. However, Hormel Foods plans to add another 50,000 tonnes to its annual meat processing
capacity in China.22
6. Which division/business is most successful for the corporation? Justify.
The most successful division for Hormel Foods is their Refrigerated Foods segment.
From 2013-2015, this segment produced just about 50 percent of their total sales (See Figure
2).18, 19, 20 The figures are excerpts taken from their 2013-2015 Annual Reports. It is clear that
without this division a great deal of sales would be lost. This segment is also the most successful
because of Hormel Foods acquisition of Applegate. Applegate’s natural and organic products to
fit the growing demand of these attributes. “6 of 10 Millennials focused on healthier eating
habits, up 20% from 3 years ago.”20
7. Which division/business, if any, detracts from the corporation’s success? Justify.
Hormel’s balanced diversification makes it difficult to find a division that detracts it from
their success. One usually offsets the other. However, one division is starting to see changes and
is relying on CytoSport to uplift it. The Specialty Foods segment only accounts for around ten
percent of their sales during 2013-2015.18,19,20 They were also negatively impacted by Diamond
Crystal Brands in this segment and plans to sell a portion of it. “While the business is still
performing acceptably, we feel it no longer fits within our strategic priorities,” Mr. Ettinger said.
11. 11
“We will pursue a sale over the course of the next few months, allowing us to redeploy capital in
investments that better support our growth goals.”23 It seems that steps are already being taken to
ensure that the Specialty Foods segment continues to fulfill its role as a buffer for their meat
products. Without careful monitoring of this segment, it could be the Achilles heel instead.
12. 12
Part 3: Financial Analysis
1. Full Financial Analysis
*Figure 3 (calculations)
The current ratio is a short-term indicator of the company’s ability to pay its short-term
liabilities from short-term assets. In other words, it is how much of current assets are available to
cover each dollar of current liabilities. A healthy business usually has a current ratio between
1.5-2.0. Hormel Foods current ratio was well above this range during 2013 (2.611) and 2014
(2.234). Competitors Tyson Foods and ConAgra Foods were below 2.0. Some reasons for
Hormel Foods high current ratio include the fact that they’ve been acquiring more assets. On
January 31, 2013 the company acquired United States based Skippy peanut butter business from
Conopco, Inc for $665.4 million in cash.18 Using large sums of cash affect working capital which
translates to Hormel Foods higher current ratio during these times. The decline in the current
ratio in 2015 could have been affected by the impairment for the recent decision to sale Diamond
Crystal Brands poor performing divisions. Total assets held for sale equal $114,935 thousands.20
0
0.5
1
1.5
2
2.5
3
2013 2014 2015
Current Ratio
Hormel Foods Tyson Foods ConAgra Foods
13. 13
*Figure 4 (calculations)
Net profit margin shows how much after-tax profits are generated by each dollar of sales.
It shows how well a company converts its revenue into profits. Hormel Foods leads against
competitors Tyson Foods and ConAgra Foods. Their net profit margin has steadily increased
over the past three years. This could be explained by the higher margins obtained by grocery
products, refrigerated foods, and international and other segments. There were positive results in
China with favorable costs of products Spam and Skippy and synergies with CytoSport and
Century Foods also helped improve margins.20 Hormel Foods continues to acquire higher margin
businesses (such as Applegate) and their balanced portfolio contributes to their success. ConAgra
Foods on the other hand experienced a negative net profit margin at -1.6%. The year 2015 was
tough for them because of their recent $1.2 billion quarterly loss in the first quarter after it
knocked down the value of its private label business.30
-3.00%
-2.00%
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
2013 2014 2015
NET PROFIT MARGIN
Hormel Foods Tyson Foods ConAgra Foods
14. 14
*Figure 5 (calculations)
Gross profit margin indicates the total margin available to cover other expenses beyond
cost of goods sold and still yield a profit. Hormel Foods is crushing competitors Tyson Foods
and ConAgra Foods with 16.14% in 2013, 16.8% in 2014, and 19.52% in 2015. It is apparent
that Hormel Foods manages their cost of goods sold really well. This is surprising considering
their acquisition for Applegate for the fourth quarter and CytoSport for the fiscal year. This was
offset by lower pork input costs for the Refrigerated Foods, Grocery Products, and International
& Other segments. Compared to 2014, costs of goods sold decreased 3.8 percent to $7.46 billion
in 2015 compared to $7.75 billion in 2014.20
-5.000% 0.000% 5.000% 10.000% 15.000% 20.000% 25.000%
2013
2014
2015
Gross Profit Margin
ConAgra Foods Tyson Foods Hormel Foods
15. 15
*Figure 6 (calculations)
Better viewed as a measure of management’s efficiency, return on investment measures
the rate of return on the total assets utilized in the company. In other words, the money one
invests into a company and the return one will realize on that money based on the net profit
made. Hormel Foods has a steady return on investment with 10.7 percent in 2013, 11 percent in
2014, and 11.2 % in 2015. This should be a surprise considering the amount of acquisitions made
between these three years, but often their balanced portfolio proves to provide consistency. For
example, fiscal 2014 attributed strong performances from the Refrigerated Foods, Jennie-O
Turkey Store, and International & Other segments to offsetting lower margins in the Grocery
Products and Specialty Foods segments.19
Tyson Foods had a nice jump in return on investment during fiscal 2015 at 5.3 percent
(3.6 percent in 2014). They are a competitor with strong efficiency, and in fiscal 2015 they sold
their Mexico operation for $161 million (as a pre-tax gain) and recorded an impairment for
Hormel Foods
Tyson Foods
ConAgra Foods
-2.00%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2013
2014
2015
Return On Investment
Hormel Foods Tyson Foods ConAgra Foods
16. 16
operations held for sale in China.26 It seems they are looking onward to more efficiency and
leaving markets where they see performance not going so well.
Return on equity measures a company’s profitability by showing how much profit a
company generates with the money shareholders have invested. Hormel Foods and Tyson Foods
both show positive return on equity (shown above). Hormel Foods saw a 10.9 percent change in
shareholders’ investment ending 2015 compared to 2014 (see Figure 9).20 This increase provided
more cash which then translated to acquisitions of successful brands. This is because both
companies manage their profits a lot better. Both companies continue to increase the profit
generated by their increasing shareholder investment. As mentioned previously, the recorded loss
of $1.2 billion has also had a negative impact on ConAgra’s return on equity.
0
5
10
15
20
25
30
35
40
45
50
2 0 1 3 2 0 1 4 2 0 1 5
RETURN ON EQUITY
Hormel Foods Tyson Foods ConAgra Foods
17. 17
Earnings per share is the portion of a company’s profit allocated to each outstanding
share of common stock in dollars per share. This ratio is a good indicator of profitability. Hormel
and Tyson Foods had a steady increase over the past three years and it shows. Both companies
are growing, divesting, but all towards efficiencies. Tyson Foods growth in 2015 found
opportunity in that income from continuing operations increased by $368 million in 2015 to $1.2
billion and they issued an additional 51 million in Class A stock.26 Class A stock includes 24,000
holders and was traded in the NYSE. The sales price increased to $43.78 in the fourth quarter
compared to $43.37 in the first quarter, also attributing to higher earnings per share from more
capital.26 Hormel Foods may have a smaller earnings per share, but it doesn’t mean they are
worse off than Tyson Foods. In all cases, they are on course to continue their year over year
organic growth.20
($1.00) ($0.50) $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00
2013
2014
2015
Earnings Per Share
ConAgra Foods Tyson Foods Hormel Foods
18. 18
*Figure 7 (calculations)
The inventory turnover is a ratio showing how many times a company’s inventory is sold
and replaced over a period. When looking at the line graph above, it is noticeable that Hormel
Continues to keep their inventory turnover around 9 percent. This is interesting considering the
fact that each year an acquisition or divestment was made. For example, for 2014 every business
segment had either an increase or decrease in tonnage for the year and each seemed to cancel the
other out. Their Refrigerated Foods and Grocery Products segments decreased while the in
tonnage while Jennie-O Turkey Store and Specialty Foods increased.20 Tyson Foods’ spike in
2015 can be attributed to their exiting of foreign markets in Mexico and China (as mentioned
previously).
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
2013 2014 2015
INVENTORY TURNOVER
Hormel Foods Tyson Foods ConAgra Foods
19. 19
*Figure 8 (calculations)
The asset turnover ratio is the value of a company’s sales generated relative to the value
of its assets. It is apparent here that Hormel Foods total assets have decreased their asset turnover
to 1.5 in 2015 compared to 1.7 in 2014. All of the acquisitions made have definitely contributed
to this. It is also telling of just how many assets they’ve acquired despite their record breaking
segment operating profit for 2015 (see Figure 9). Tyson Foods had a dramatic decrease in 2014,
this is because of the increase in total assets by 11.8 billion in 2014. Most notably, $8.2 billion of
these assets are from the acquisition of Hillshire Brands Company.25
0.000 0.500 1.000 1.500 2.000 2.500 3.000
2013
2014
2015
ASSET TURNOVER
ConAgra Foods Tyson Foods Hormel Foods
20. 20
The accounts receivable turnover is used to quantify a firm’s effectiveness in issuing
credit and collecting debts on that credit. Only Hormel and Tyson Foods saw a 1 percent change
in 2015. Hormel Foods decreased to 15.25 in 2015 from 16.05 in 2014. They offer various sales
incentives such as prompt pay allowances, will call allowances, spoilage allowances, and
temporary price reductions to consumers. However, credit sales aren’t for just anyone. As
mentioned in their 2015 annual report “Estimates used to determine the revenue reduction
include the level of customer performance and the historical spend rate versus contracted
rates.”20 Hormel Foods is careful when creating promotional contracts. Careful management of
how a company offers credit is vital to maintain accounts receivable turnover. A decrease
doesn’t necessarily mean they are underperforming. In this case, it can mean that tighter controls
are implemented to ensure doubtful accounts aren’t acquired.
Hormel Foods
Tyson Foods
ConAgra Foods
0
5
10
15
20
25
30
2013
2014
2015
Accounts Receivable Turnover
Hormel Foods Tyson Foods ConAgra Foods
21. 21
Visually, it couldn’t look more different between the three companies—the dividend
payout ratio is the percentage of earnings paid to shareholders in dividends. Hormel Foods
contributed similar percentages in 2013-14 at 35 percent. In 2015, the dividend payout ratio
increased to 38.3 percent (see Figure 9), which is difficult to do for a mature business. The
positive increase in segment operating profit also saw an increase in annual dividends. Tyson
Foods steadily declining ratio and it seems that the earnings per share invested are lackluster due
to the huge increase in assets. Such a large amount can increase expenses and eat away at profits.
ConAgra Foods is missing a bar in 2015 because of their negative earnings per share, but it
doesn’t mean they didn’t pay dividends. In 2015 they still paid $425.2 million in dividends,
which was also an increase by 4.3 million in 2014.29
0
10
20
30
40
50
60
70
80
90
2013 2014 2015
Dividend Payout Ratio
Hormel Foods Tyson Foods ConAgra Foods
22. 22
2. Is the corporation in a strong financial position? Explain
The company is in a strong position because of their balanced approach in everything
they do. Inefficiencies are constantly being improved and the ratio analysis tells that story. Their
current ratio fell to 1.69 percent in 2015 compared to 2.23 in 2014. Meaning they are getting
better at paying their short-term liabilities and managing their current assets through offsetting.
They are also profitable considering their rising year-over-year net profit margin and gross profit
margin. This is thanks to the higher margins they have been able to achieve from grocery
products, refrigerated foods, and international and other segments. In addition, compared to
2014, costs of goods sold decreased 3.8 percent to $7.46 billion in 2015 compared to $7.75
billion in 2014.20 Not only are they receiving higher margins, but decreasing their costs as well.
Steady organic growth contributes to their success. ROI, ROE, EPS, and dividend payout
ratios all see this and investors should take notice for steady returns. Compared to Tyson and
ConAgra Foods, Hormel Foods pays out a higher percentage of its earnings to dividends. In most
cases their assets have been offset by divestments such as the Diamond Crystal Brand and
international presence in china, but they need to be careful as their asset turnover starts to
decrease through all the acquisitions being made. They also ensure that they aren’t issuing bad
credit to consumers, also making them more efficient.
Despite issues with the avian flu in the Jennie-O Segment, their balanced portfolio
ensured that it didn’t hurt as bad. They are able to face issues, diversify through acquisition, and
still recover through their (cushion) Specialty Foods Segment and operational successes. Hormel
Foods is managed well financially and is continuing to move towards more synergies and
efficiencies—ultimately giving them their strong financial position.
23. 23
Section 2: Business-Level
Part 1: Internal Analysis
1. Identify the business’ key strengths. Why are these strengths?
The Refrigerated Foods business segment has a strong sales team, advertising, customer
centricity, and research and development. In 4Q15 this segment contributed to 48 percent to
Hormel Food’s total sales, 36% to its total segment operating profit, and a 27 percent profit rise
for their own segment.31 On the retail side, gains were achieved by sales of Hormel refrigerated
entrees, Hormel pepperoni, and Hormel Gatherings party trays. Also, the food-service side sales
were attributed to sales of Hormel Fire Braised meats and Hormel pizza toppings. The
Refrigerated Foods business total tonnage (lbs.) at year ended 2015 was 2,368,805 and 601,857
in the fourth quarter.20 The refrigerated foods business manufactures at a total of 16 production
facilities where procurement of raw materials are added as needed. In total, Refrigerated Foods
offers over ten different brands including the newly acquired Applegate business.
Having a strong sales team contributed to these numbers when considering the vastness
of products found in large retailers. Thomas Day, Group VP of Refrigerated Foods mentions:
“Our sales team has done an excellent job of securing placement that many large retailers across
the country and the consumer feedback has been very, very positive.”12 Alone, Wal-Mart is the
largest customer, accounting for about 15 percent of sales at the end of 2015.13 Their strong sales
team ensures that the Refrigerated Foods products are easy to obtain. Offering these products at
big box retailers is noting within consumer awareness. That’s where the strong advertising comes
in. Rev is a ready-to-eat high protein wrap that has been popular with millennials. Day mentions
that advertising and promotional schedules developed 60-66 percent brand awareness.12 They are
24. 24
also investing in a major advertising campaign that targets those consumers interested in
purchasing natural products. Interestingly, the advertising of natural products wouldn’t be
effective unless they had strong customer centricity. Natural Choice has been positioned to
provide consumers a ‘natural choice’ and the package reflects the contents; natural, fresh, and
simple. Day mentions, “Consumers will see a reduction and the number of ingredients used and
are already telling us that they like the improved flavor of all of these new products. The new
always tender is now available in stores with the declaration that it has now artificial ingredients.
Bottom line, we listened to our customers that have adapted our product line to meet exactly
what they are looking for.”12 The business’ success in customer centricity is that it met the ever
changing consumer demand for natural products and exploited it. Ultimately, their strength in
innovation is led by their research and development to meet their customer’s needs. Research
and development enabled them to discover that customers wanted less ingredients, more natural
ingredients, and products that fit their lifestyle. Rev, as an example, is a product of their strong
research and development which meets their consumers’ needs and advertising capabilities.
2. Identify the business’ key weaknesses. Why are these weaknesses?
The key weaknesses of the business are commodity price risk and reliance on meat based
protein. Commodity price risk is a weakness because it can erode profits. It can do one of two
things, elevate materials cost making it more expensive to manufacture goods or lower input
costs which lead to lower prices in finished goods. In 2015 they attributed lower input costs to
profits, but if the lower input costs continue the price premium cannot be justified when the raw
materials are least expensive, thus, lowering prices to maintain the consumers’ perceived value.
25. 25
Over time the margins will become too thin and the business will no longer take advantage of
lower input costs. Although it may be seen as an advantage monetarily in the short term, the
brand can erode through lower prices. Consumers will expect cheaper prices—making it more
difficult to increase them in the future. In a paper by Leonard M. Lodish and Carl F. Mela titled
“If Brands Are Built Over Years, Why Are They Managed Over Quarters?” Lacoste is
mentioned to have lowered their prices due to what they originally saw as a benefit. They
thought that if they lowered the price and broadened distribution they could penetrate that more
markets. Instead, the brand suffered from consumer pricing cues and profits were eroded.32
Refrigerated Foods needs to maintain their brand through quality and pricing cues. Especially
considering their recent acquisition of Applegate which benefits from a strong brand name and
takes advantage of higher prices.
In 2013 Refrigerated Foods saw an erosion of profits due to higher materials cost as well.
The unit saw a profit decline by 26 percent due to a spike in some raw material costs, particularly
bellies for bacon and trim costs for a number of products, including pepperoni.33 This is very
telling of their biggest weakness; a reliance on meat based proteins. Refrigerated Foods relies on
meat products and if raw materials falter it is easy for them to suffer. Hormel Foods is diversified
enough to recovery if smaller business units don’t perform as well, such as their International
and Other segment. However, in terms of their business that accounts for almost 50 percent of
their sales over the past three years, it is too focused on meat based proteins and could benefit by
diversifying into non-meat protein based products that work well with the same segment.
3. What are the distinctive competencies of the business and how is the business leveraging
them?
26. 26
The distinctive competencies of the business are innovation, research and development,
and advertising. In tandem, these three distinctive competencies work efficiently with each other
and create value for the business and customers. Using the VRIO framework, these competencies
will be evaluated and tell how it is leveraging them.
Value: It begins with research and development. The business carefully researches the
needs consumers have based on their lifestyle and rapidly changing tastes. As research
and development carefully discovers what customers want; products are innovated and
takes advantage of their strength in product innovation. For example, new product
innovation in Refrigerated Foods includes more natural ingredients and healthier options.
By carefully discovering that customers preferred natural ingredients and healthier
options they enhanced their development to meet them. With the careful research made
and product innovation created, advertising benefits because of the focus on the
customer. In turn, by carefully developing methods to maintain quality they develop new
innovations based on it and leverage that against competitors. Their distinctive
competency is synergized and flow together to discover consumers’ needs, develop
products to meet those needs, and continue innovating as they have by tradition. Value is
transferred to the business and consumer through these distinctive competencies.
Rare: It would be very difficult for competitors to copy the business’ distinctive
competencies because they are cross functionally efficient. Developing a system that
allows synergy to happen between R&D, product innovation, and advertising would be
impossible considering it took the business’ time refine and work efficiently.
Inimitable: The complexity would make it really difficult. These distinctive competencies
were not just created overnight but refined over time to process output and create value
27. 27
by continuously working on efficiencies and what specifically works for the organization
based on their resources.
Organization: These competencies are definitely organized in a way to exploit it. The
business leverages its product innovation over its competitors by offering carefully
researched products that are tested and developed to adhere high quality. They are
organized in such a way that R&D leads to product innovation and innovation transfers to
advertising based on the research. The three work together and benefit each other.
4. What is the generic competitive strategy pursued by the business? Explain.
The generic competitive strategy pursued by the business is differentiation. The business
has a broad market scope because the products appeal to several different kinds of consumers,
however, they are differentiated from competitors’ product offerings. The Refrigerated Foods
segment has primarily differentiated by offering more natural products to several types of
consumers. Their Rev wrap, for example, is differentiated as a healthy on-the-go snack with a
focus on protein targeted towards those who are time strapped. Whereas their Hormel pepperoni
is also differentiated as a lower-fat and sodium alternative that can be used in different recipes.
In addition, their recent acquisition of Applegate further differentiated them from the
competition by offering one of the number one brands in natural and organic meat based
proteins.
5. Does the business possess the appropriate distinctive competencies to pursue the generic
competitive strategy identified above? Justify
28. 28
The business does possess the appropriate distinctive competencies to pursue
differentiation because the distinctive competencies create output that allows it to do so. The
company invests heavily in R&D to develop new product innovations and advertising to
communicate the product quality. Through their distinctive competencies they are able to
provide unique and superior value to a broad market scope. In essence, their distinctive
competences are not only synergized to work in tandem—but also synergized to achieve their
generic competitive strategy based on their output. Their output consists meets the needs of a
broad market scope with differentiated products. Their distinctive competencies guide their
generic competitive strategy of differentiation.
29. 29
Part 2: External Analysis
1. Identify the business’ key opportunities. Why are these opportunities?
The business’ key opportunities are in non-meat based proteins. The Refrigerated Foods
segment does not offer an alternative protein based meal solution. Hormel has flaunted the
success of the acquisition with CytoSport’s Muscle Milk, and it’d probably be a good thing to
seek diversification with a similar product offering in this segment. Some sources of protein that
can be incorporated into the Refrigerated Foods segment include: green peas, quinoa, beans,
chickpeas, tofu, chia seeds, and seitan. Many of these are viable protein sources that supplement
vegan and vegetarian lifestyles.34 Approximately five percent of the United States is vegetarian
(close to 16 million people) and about half of them are vegan. More strikingly, the number of
vegans have doubled since 2009 from 2.5 percent of the population; indicating that 7.5 million
people in the US now eat diets that do not include any animal products.35 These numbers are
going to continue to grow, and the Refrigerated Foods segment has an opportunity to supply
ready to eat vegetarian and vegan options. This ties into Hormel’s desire to diversify but also
offer more natural and organic foods. It is also an opportunity to avoid raw material inflation or
lower input costs in the meat industry.
They can also benefit by distributing products into more channels. For example, ready to
eat foods are prime choices for college students who are time strapped. These nutritious meal
solutions should be sold everywhere the hungry people are at. Partnerships with food suppliers
for colleges, cafeterias, or stadiums can increase visibility of the product line and cure the
30. 30
hungry. More distribution is an opportunity because it further diversifies where products are sold
in the Refrigerated Foods segment, not just in grocery stores.
2. Identify the business’ key threats. Why are these threats?
The key threats of the business are elevated raw materials cost and lower input costs in
the meat industry. This segment is too reliant upon meat-based proteins that dramatic cost
changes can affect profitability and sales dramatically. In addition, it should be noted that tastes
change rapidly and this segment has to act quickly to meet the quickly changing demand of
consumers. Meat-based proteins are also highly susceptible to diseases and viruses (see Section 3
for more details) which can create liability and legal issues. Most dire, the reputation of Hormel
Foods can fall when these diseases happen. It is difficult to recovery from diluted brand
reputation due to losing the trust of consumers.
Another threat includes the Refrigerated Foods reliance on grocery store partners. This
segment can be critically affected if retailers are offered newer or improved products at
competitive prices—thus, eliminating the few channels the segment operates in.
3. Is the business as a whole dealing effectively with environmental opportunities and threats?
Explain.
The segment without the assistance of Hormel Food’s diversified portfolio is dealing
effectively with environmental opportunities and threats. Through the recent acquisition of
Applegate, the segment is beginning to take notice of the need for natural and organic products
31. 31
for consumers. In addition, research and development continuously works to deal with these
changing needs. Despite their primary sales in grocery stores, many of their ready to eat products
can be found at convenience stores and gas stations—it is apparent that they are taking their slow
approach of distribution by carefully studying the environment where it fits best. This segment
moves slowly and strategically to carefully ensure that the right decisions are being made. It is
only a matter of time until this segment takes advantage of the opportunities listed above based
on the rapid changes in consumer tastes and also shift in natural products offered by Hormel
Foods. It should be noted that if it weren’t for being a part of the corporate entity of Hormel
Foods, the Refrigerated Foods segment would suffer from commodity price risk. This segment
would not deal with this well on their own due to their reliance on meat-based proteins. So long
as they begin to diversify within this segment (not just the corporation) better results will be
noticed.
4. Apply the five forces model to the industry in which the business is based. What does this
analysis tell you about the nature of competition in the industry?
Firstly, rivalry amongst competitors with the business is incredibly fierce. Tyson Foods,
ConAgra Foods, Smithfield Foods, Nestlé, and Cargill offer products that compete with the
Refrigerated Foods segment. In the refrigerated foods industry, it is difficult to create switching
costs for consumers to try other brands. If consumers wish, they may seek other products to
satisfy their needs.
Second, the threat of new entrants in this industry are possible. In terms of economies of
scale, new entrants would likely need to partner with a company with strong manufacturing to
32. 32
compete with the Refrigerated Foods business. Capital requirements are high because the
industry requires large grocery chain distribution. It isn’t easy to distribute to such a large scale
without huge amounts of capital to push it forward. As mentioned previously, there are very little
incentives for customers to stick with brands. Switching costs in terms of new entrants are very
low, and even niche brands stand a chance to be chosen. New entrants will definitely feel the
pressure of obtaining access to the distribution channels of the Refrigerated Foods segment. The
size would require a lot of capital to obtain. Access to suppliers can be a barrier, but it depends if
the supplier offers a specific type of quality that is hard to achieve and obtain. Otherwise, there
are many suppliers in the food industry. Trade patents can be purchased or licensed in some
cases; however, they are still difficult to work around. The threat of new entrants are mixed. In
some cases, the industry is easy to enter than others.
Threat of substitutes are very high because the food industry can easily offer different
products and services that give the same basic need. The Refrigerated Foods segment faces many
competitors especially with more companies taking notice on natural and organic consumer
preferences. Lastly, the bargaining power with buyers and suppliers are difficult to maintain. The
power dependence that the industry has with buyers and suppliers are based on how many of
them there are. If there are few suppliers, the business would rely more heavily on suppliers;
have less power over them. If there are few buyers, the power shifts to the buyers because of the
business’ reliance on needing many. In addition, nothing stops buyers from buying elsewhere as
they need.
5. In what stage of its life cycle is the industry in which the business is based? Explain.
33. 33
This industry is in the maturation stage of its life cycle. There are few innovations and it
has reached a point where there is hypercompetition. Margins have lowered because of the level
of competition. The industry isn’t in the dying stage because it still serves a basic need that
consumers will continue to utilize. Refrigerated foods are here to stay until new innovations in
how food is purchased at grocery retailers’ change. Innovations are not as radical and products
must stress “new” or “improved” to consumers even though they are minor changes.36 The
growth has slowed in this industry unless a business acquires new companies with new products.
6. What are the implications for the business of being in this stage of the life cycle in terms of the
intensity of competition both now and in the future?
The business will require huge amounts of capital in order to continue to compete. Being
that this business is in the maturation stage, it is constantly competing now and will continue to
compete in the future (if not more). The capital required will mostly be used on acquisitions,
joint ventures, and research and development to continue to offer new refrigerated foods. The
business cannot predict the future because consumer taste preferences are always changing—
meaning that constant scanning of food trends and diets are required. The business will also
suffer lower margins and sales as more competitors offer similar and substitute products.
34. 34
Part 3: Overall Business-Level Analysis
1. Does the business have a sustainable competitive advantage? Justify.
Refrigerated Foods recent acquisition with Applegate and improvement into natural and
organic foods have revitalized their competitive advantage. These attributes are not as vigorously
sought out by competitors. The synergy between research and development, innovation, and
advertising along with speed to market allow the business to gain a first mover advantage over
competitors in natural and organic foods. This will not last long, however. Competitors will also
improve their quality and can acquire companies like Applegate. This segment did the right
acquisition and added the number one natural and organic foods company Applegate. To answer
the question, this business works hard to achieve a sustainable competitive advantage by
acquiring companies that differentiate from competitors. So long as the pace continues to meet
consumer demand a sustainable competitive advantage is possible if done before competitors.
Otherwise, the Refrigerated Foods segment will falter and lag behind.
35. 35
Section 3: Ethical Dilemma
1. Describe in detail an ethical issue they are currently facing/have recently faced. This can be at
either the corporate or business level. Be sure to explain why this is an ethical dilemma.
Avian influenza, also known as bird flu, is an infectious viral disease of birds. Most
viruses don’t infect humans, however, the H5N1 and H7N9 have caused serious infections—
along with many other strains. Initial symptoms include high fever, cough or sore throat,
diarrhea, vomiting, abdominal pain, chest pain, and bleeding from the nose and gums.
Complications of the infection include hypoxemia, multiple organ dysfunction, and secondary
bacterial and fungal infections.37 This is the perception of the avian flu to humans and based on
the symptoms it is no wonder why the stigma would scare people.
In spring of last year, the highly pathogenic H5N2 avian influenza devastated Jennie-O
Turkey Store. Health experts say this strain is low risk for humans and there hasn’t been a case
where a person was infected.38 Twenty-nine Jennie-O suppliers were hit with the flu, fourteen of
them were company owned. 45 of 600 commercial turkey farms in Minnesota were hit by the flu,
wiping out over 2.5 million birds. Overall, the company lost over 1.3 million birds in
Minnesota.38 The Jennie-O Turkey Store segment’s profit declined 23% on an 18% sales
decrease for the fourth quarter in which the incident occurred.23 The economic toll on
Minnesota’s poultry industry climbed to nearly $650 million and farmers lost 9 million chickens
and turkeys. The Jennie-O turkey plant in Faribault, Minnesota laid off more than 200 workers
and about 2,500 jobs across the state were affected. The total loss of labor income was more than
$170 million.38
36. 36
Jennie-O Turkey Store managed the avian flu occurrences in full cooperation with the
USDA Animal and Plant Health Inspection Service, state agency officials, and industry
associations and other poultry companies in the region to ensure food safety and employee
safety. All flocks are tested for influenza prior to processing and no birds diagnosed with the
virus are allowed to enter the food chain. CEO Jeffrey Ettinger made a statement to show just
how seriously the matter was taken:
“Our team continues to work closely with government agencies and other organizations as they study this virus and work to
control future outbreaks, and with our customers as we manage through the turkey breast meat shortages. We have made many
adjustments and are prepared to minimize any future impact to our operations in the event that the virus returns to our area as the
migration season progresses.”23
The avian influenza outbreak is an ethical issue because it decimated millions of birds
and caused a significant amount of economic impact where people were laid-off and shut down
farms. Jennie-O Turkey Store was forced to act quickly to mitigate consumer concerns and abide
by institutional regulations by government and agencies. It was an event that affected animals,
people, and economies.
2. Using an evaluative framework that we discussed in class and that is covered in your textbook,
analyze all aspects of the issue and provide your recommended solution.
Using Cavanagh’s three questions on utility, rights, and justice; a recommendation will
be given.
1) Utility: Shutting down the poultry farms and treating infected birds optimizes satisfaction in
most stakeholders. The stakeholders who benefit are customers, shareholders, stockholders, and
some employees. Customers benefit from ensuring their products adhere to quality and do not
carry diseases, shareholders and stockholders are satisfied by the quick reaction so as to not
37. 37
damage financial results any further, and some employees benefit by the mitigation of financial
impact. It does not optimize the satisfactions of all employees because many people lost their
jobs due to the decision to downsize after the infection. It also does not satisfy suppliers because
they faced economic hardship.
2) Rights: The decisions made respected the rights of some employees, shareholders,
stockholders, and customers. It respects them because it addresses the problem and ensures the
well-being of those people are safe. Again, suppliers faced the hardest impact because their
recovery is not as easy. Their rights are not respected in the sense that they suffer economic
impact and cannot recover easily.
3) Justice: Overall, it is consistent with the canons of justice because birds infected with the flu
exist to infect more. It could wipe out even more livestock if it didn’t get stopped. Most
stakeholders receive justice by ensuring that the virus isn’t spread. Luckily, no people were
infected. Again, suppliers might not feel justice because of their hardship.
Based on Cavanagh’s three questions, it is recommended that Hormel Foods do more to
help suppliers get back off their feet. The communities involved need help, and perhaps
programs could be put in place to make sure their economic prosperity can continue. In addition,
the employees that lost their job should be aided to find employment due to an environmental
issue outside of their control. Hormel Foods can benefit even further with corporate social
responsibilities if more community involvement was included to their bird flu solution. The
decisions to shut down plants and treat livestock seemed favorable and are included in this
recommendation—but Hormel Foods should never give off the perception that it does not care
about the communities affected.
38. 38
Section 4: Recommendations
In order to improve their competitive position, suggestions will be given for Hormel
Foods’ corporate and business-levels. In terms of the corporate-level, they should work on
improving the sales of lower sales performing segments. These segments include Specialty
Foods and International and Other. These segments are often seen as support segments, but there
are a lot of potential for new growth. The recent acquisition of CytoSport shows great promise in
the Specialty Foods segment and the divestment with Diamond Crystal Brands seem to be the
right moves. Hormel Foods should seek international partners with similar missions and values
so as to strengthen synergy between them. In order to achieve their needs to take full
responsibility in international presence, they need to chuck out more resources and cash if they
want to run operations independently. Competitors such as Tyson Foods are rallying to move
their operations out of international involvement. Now is the time to take advantage before their
interests turn around. They should continue on their slow approach towards acquisitions and
growth to ensure their balanced and diversified portfolio continues on their course towards
efficiency. Financially, steady organic growth contributes to their success. No recommendations
in terms of financial health are needed because year over year profits and dividends continue to
increase. The company needs to maintain their financial strength and ensure they continue to
deliver positive results.
On the business-level, Refrigerated Foods is missing an opportunity with non-meat based
proteins. It is recommended that an acquisition is made for a top performing vegetarian and/or
vegan company. Acquisitions in this category further diversify Hormel Foods and will add to
their balanced portfolio and steady financial growth. Most importantly, this falls in line with their
mission to be a part of any eating occasion. The vegetarian and vegan offerings will address the
39. 39
business’ need for diversification without the help of other segments. This will impact the
corporate level by not needing to rely on other business segments to offset the other. Segment
success should not be determined solely on the mitigation by other segments performance. Some
recommended vegetarian and vegan companies include: The Vegg, this company sells scrambled
egg mix made from soy protein and nutritional yeast; Dr. Cow, this company offers vegan artisan
cheeses that are innovative; and Allison’s Gourmet because of their top performance as “only the
finest organic, fair-trade, vegan ingredients that honor and respect growers, animals, the planet
and you!”39 Allison’s Gourmet shares similar core values that Hormel Foods has.
They should continue to ensure that their supply chain is free of diseases and viruses by
vertically integrating more. Sure, this may affect their total assets and cash but it seems that they
need more control to ensure the supply chain is monitored better for quality. It is also
recommended that Hormel Foods do more about sustainable packaging. This ties in with their
move toward becoming more natural and organic—it will also transfer to the minds of
consumers a brand personality of corporate social responsibility that consumers respect and
appreciate. Overall, Hormel Foods seems to be making the right moves—but there are
opportunities such as international presence and vegetarian and vegan products.
47. 47
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