Smucker’s in 2011: Expanding the Business Lineup

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Smucker’s in 2011: Expanding the Business Lineup

The J.M. Smucker Company was founded in 1879 in Ohio. By 1920 it began building a complete line of jams, jellies, and preserves, leading to national distribution of in 1942. The company went public in 1959 and from there, began several different acquisitions of other food companies to diversify itself. Paul Smucker retired in 1987 and as a result, his two sons became responsible for the company’s operations, representing the fourth generation of Smucker family management.

Smucker’s has faced continued success due to a number of reasons, including its corporate strategy. This strategy is composed of three main components: grow the market share of its existing brands, introduce new products, and make strategic acquisitions. Since Smucker’s has many brands, it must have common strategic elements in order to achieve competitive success. To do this, it creates a portfolio of attractive products, strives to achieve organic sales growth for existing brands, and expands its product line through acquisitions. The decision to expand its product line beyond jams and jellies through these various acquisitions has proved to be successful. It protected the company against an acquisition by another company and increased its net sales, gross profit, operating income, and EPS by large margins. Additionally, the company’s net cash increased an impressive 74% in the span of two years, from $182,918 in 2008 to $713,478 in 2010. The J.M. Smucker Company has made smart strategic choices in its acquisition decisions. Rather than build new brands from scratch, the company has acquired well-established brands in order to ensure success for Smucker’s. Its acquisitions of International Multifoods, P&G, and White Lily have given it brands such as Jif, Folgers, Pillsbury, and Crisco. As a result, Smucker’s brands are strongly positioned in each industry segment since they are all market leaders in their respective...
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