Smucker’s Case Study
1) Smucker’s corporate strategy is to build a portfolio of brands that are sold in the center of every grocery store. They plan to execute this strategy through the organic growth of their products, the development and introduction of new products, and by acquiring brands. The majority of Smucker’s brands share two strategy elements. First, they are ‘middle of the store’ processed foods. Second, they are often high margin products. Another common element among the brands they acquired is the fact that the brands were all industry leading name brands before they were acquired. Such acquisitions were beneficial to the firm not only by diversifying their product line-up, but it gave the firm more leverage when dealing with chain retailers. The type of products they diversified into made sense for the firm as it did not go against their corporate strategy. Any brands that went against the strategy were divested.
2) Since 2002, Smucker’s has acquired brands such as Jif, Crisco, Hungry Jack, Pillsbury, Carnation, and Folgers, to name a few. I believe Smuckers has made very smart acquisitions especially in the coffee industry. Smucker’s Coffee segment appears to the fastest growing segment for the company given their expansion in the k-cup market and the joint venture with Dunkin Donuts. Looking at Smucker’s Nine-cell Industry Attractiveness-competitive Strength Index, one can see that the firm’s coffee segment has been very beneficial for the firm’s health as the Processed Foods segment has not been that attractive as of late. In 2011, the segment lost revenue over the prior year. While the firm’s Specialty Markets segment has been an average performer, it is still more attractive than Oils and Baking. All segments are competitive and hold a strong market share.
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