Oscar Mayer Case Study

Topics: Oscar Mayer, Meat, Kraft Foods Pages: 23 (5146 words) Published: September 24, 2012

Oscar Mayer Foods Corp. is the maker of one of the most venerable and successful food brands currently available on supermarket shelves. The company's sliced meats and other products are sold across North America and in parts of South America and Asia. Oscar Mayer's product line includes a wide range of popular meats, including hot dogs, bacon, and pre-packaged lunch combinations. In the early 1990s, the company also tried its hand at the restaurant business, in an attempt to find additional outlets for its food products. Oscar Mayer, now part of the Kraft General Foods Empire, grew from a modest family business into an international food giant, maintaining a firm presence in both the American refrigerator and the American consciousness. Kraft is an independent public company; it is listed on the New York Stock Exchange and became a component of the Dow Jones Industrial Average on September 22, 2008, replacing the American International Group.

German immigrant Oscar F. Mayer (1859–1955) began working at a meat market in Detroit, Michigan, and later in Chicago, Illinois. In 1883 in Chicago, Oscar Mayer, along with his brother Gottfried, leased the Kolling Meat Market, on the near-northside of Chicago. The two sold bratwurst, liverwurst, and weißwurst and were popular in the predominantly German neighborhoods of Chicago around the market. As the meat market's popularity grew, it expanded its storefront and sponsored local events including the Chicago World's Fair in 1893. By 1900, the company had 43 employees and Chicago-wide delivery service. In 1904, Oscar Mayer began branding its meats to capitalize on their popularity, beginning an industry-wide trend. Early company specialties were “Old World” sausages and Westphalian hams, soon followed by bacon and wieners. In 1906, Oscar Mayer & Co. was among the first to volunteer to join the newly created federal meat inspection program. In 1919, the company made its first major expansion, with the purchase of a processing plant in Madison, Wisconsin. The plant quickly proved to be a profitable, efficient operation and eventually Madison became the corporate headquarters. For nearly a century, Oscar Mayer remained an independent company owned primarily by descendants of the Mayer brothers who started it. Then in 1981, Oscar Mayer stockholders elected to sell their company to General Foods Corporation, which had the resources to stimulate even further growth for the business. Four years later, Philip Morris Companies, Inc. acquired General Foods Corporation, and in 1989 merged General Foods with the newly acquired Kraft, Inc. Shares of Kraft foods were first offered to the public via an initial public offering in 2001. Altria Group (formerly Philip Morris & Companies) spun off remaining shares of Kraft Foods to Altria shareholders in 2007. April 2, 2007 marked Kraft's first day trading as an independent company on the New York Stock Exchange. Oscar Mayer is also famous for their Wienermobile, which has toured the United States for over 70 years. The first Wienermobile was created in 1936, and nine have since been built. 3. CASE INTRODUCTION:-

The President of the Oscar Mayers division, Marcus McGraw, was confronted with a complex business problem. According to the report delivered by McTiernan Corp, a consulting firm for the division, the growth of the firm in the market segment of processed goods could be threatened. One of the key issues faced by McGraw is that there is a large gap between his projections for next year, and what the manager's are promising him. His goal is to obtain a 15% increase in the operating income from his division. The managers are projecting a decrease of 5.2% from the current year. In absolute terms there is a gap of $27 Million in the projected divisions operating income. If McGraw were to keep his Advertising & Promotion budget the same as last years, he...
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