Strategic issues and options open to Avery
In order to develop a future strategic decision plan we have assessed Crown’s business with a SWOT analysis, keeping in mind all issues Avery has to consider. That implies an evaluation of the different strengths, weaknesses, opportunities and threats of Crown Cork’s business. The analysis is as follows: • Strengths: Crown’s return on equity and total return to shareholders was ranked much higher than its competitors’, creating high value to its customers; Crown has a tremendous skills in die forming and metal fabrication, and they can move to adapt to the customer’s needs faster than anyone else in the industry; Crown’s research teams also worked closely with customers on specific customer requests. • Weaknesses: Growth slowing in metal containers; the possibility of diversifying beyond the manufacture of containers was not at hand, because while Crown’s competitors had aggressively expanded in a variety of directions, Crown had been cautious. • Opportunities: expand its product line beyond the manufacture of metal cans and closures, since industry observers forecast plastics as the growth segment for containers in the 90s; Avery also considered the growing opportunity in glass containers; the bidding for all or part of Continental Can would almost double its size and make them even more international. • Threats: Avery knew that most mergers in this industry had not worked out well; the challenge of taking two companies that come from completely different cultures and bringing them together; Potential bidders for all, or part of Continental’s operations, included many of Crown’s U.S. rivals in addition to European competition; the continuing threat of in-house manufacture of metal cans. Regarding to the strategic options which are open to Avery, we have thought about three options as the most profitable and likely ones. The first one would be to expand its product line beyond the manufacture of metal cans and closures,...
Please join StudyMode to read the full document