Analysis of Hobart Corp.

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BACKGROUND:

HOBART CORPORATION

Hobart Corporation was headquartered in Troy, Ohio and was preparing to embrace the Internet world and be a part of the Internet Revolution in 1996. Internet was privileged by the blending of technology and software and used in turn to promote marketing and various transactions. It looked like the gateway to reduced cost and increased revenue.

Internet has created dilemma for Hobart:

Hobart Corporation was not completely sure if the establishment of internet would actually be profitable for them or not. There were questions regarding relationship with the traditional channel and their reaction. What would happened to the distributors and dealers and if really internet was suitable for their business.

During the 1980s and 1990s, Hobart had conflict with its distributors and it lead to market share decline. Sustaining its current growth and maintaining its financial stability were huge issues that were related to the use of internet.

Internet initiative was assumed to maintain and improve Hobart’s relationship with its distributors. Internet was seen as a rescuer that would make Hobart’s market leadership position stronger and also make it technologically aligned with the industry and time. The company had to fight against industry consolidations, competition and demand targets.

Glimpse of Hobart Corporation’s origination and progression:

Hobart Corporation was born in 1897 as Hobart Electric Manufacturing Company and started off with the production of coffee grinder. In 1913 it was known as The Hobart manufacturing company and had sales over $1 million and introduced kitchen mixer after a year. Hobart was acquired by PMI in 1990 and PMI in turn was acquired by ITW in 1999, with a value of $3.4 billion. These changes were affecting dealer relationships.

Premark International Inc, another acquisition of ITW, merged with Hobart Brothers and became a wholly owned subsidiary by ITW. The merged businesses include food equipments and decorative products that are marketed in more than one hundred countries under the name of Hobart, Vulcan, Trauslen and Wislonart. The food equipment products are supplied to restaurants, hotel, hospital, supermarket, cafeteria, bakeries and dells.

North America segment of ITW counts for 33.5% of the company’s $9.3 billion revenues and 38.3% of company’s $1.4 billion operating revenue in 1999. In 2000, ITW had revenue of $9.984 billion and sales growth of more than 7 % with more than 500 operating units in 40 countries, organized in six business segments.

Hobart Corporation Escalating in 2001:

In 2001, Hobart expanded its product line to include 300 and took the place as one of the largest food equipment manufacturer. There were manufacturing facilities in Ohio, Georgia, Kentucky, and Canada. The existence of 240 sales and service locations around the world made it ‘the largest aftermarket service in the industry’.

Hobart’s service network was nationwide. Hobart was able to become an innovator in the food equipment industry because of its leadership and product development and expansion. Hobart was enjoying a market share of 35% to 75% in core categories like mixer, slicer, ware washing.

Brand image of Hobart Corporation:

Hobart had six different product lines including food machine, warewashing, weighing and wrapping, cooking, refrigeration, and service. Hobart created a high quality, service-oriented brand image. Customers were happy and were willing to pay the asked price because of the product’s dependability, product life and service offered. Hobart did not produce all the equipments of a commercial kitchen an institutional kitchen they covered around 25% of the equipments and in a full-menu kitchen around 40%. Customer’s product requirement and technical support made it difficult to enter Hobart’s products into the market.

Nature of the food equipment industry:

There are several functions of...
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