Smucker's Case Study Answers
Industry Analysis
Market Size and Growth Rate- The processed food industry has grown exponentially over the past few decades. With people more on the go and looking to prepared products rather than making it themselves there has been a giant increase in the growth rate of this business.
Number of Rivals- There are many competitors in the processed food industry. Many of the largest have recently acquired other businesses in order to remain at the top of the “food chain”.
Scope of competitive rivalry- Competition among the industry is dominated by larger more diverse companies offering many different products in the processed foods industry.
Number of Buyers – The number of users has been steadily increasing over the …show more content…
Since 2010 it has gone down a little bit to now being .3457 in 2013. This should be a concern for Smucker’s even though over the past two years it has stayed steading and also slightly increased in 2013 so far, this is something that they should be putting great attention into.
Current Ratio- With a Current Ratio of a mere 1.3181 in 2009 transforming into a current ratio in 2013 being 2.6729 it is showing that Smucker’s is financially sound and the fluxuations have not been too severe over the past five years again reiterating their stability in the processed foods market. They are sufficiently able to pay current liabilities without concern.
Long Term debt-to-equity Ratio- Smucker’s Long Term Debt to Equity ratio has fluctuated some over the past five years. In 2011 the ratio was at its lowest indicating that during that time they were at a better standing to borrow funds if needed. In January 2012, the company closed its purchase of a foodservice coffee and hot beverage business from Sara Lee. (7) Without this acquisition to show the jump in ratio from 2011 to 2012 the company would seem to be in financial …show more content…
They are remaining steady over the past 3 years. In 2013 Peanut Butter was at 13% (a 1% gain over 2012) and Fruit Spreads went from 8% in 2011 to 6% in 2013. One of their newer aqcuisitions of coffe is booming with a 4% gain over the past 3 years going from 44% in 2011 to a whopping 48% in 2013. I would recommend focusing more advertising and marketing dollars on the products with a decrease in product line sales in order to save what they had originally started their company with.
Increasing International Expansion - With the well-known brand name and similarity of products that people use in other countries I believe that by exporting more of their products Smuckers can grow in to a larger and better recognized brand globally. If they started out just shipping and not creating facilities overseas they could save money in the beginning by not having the overhead of a brand new facility and all of the expenses that come along with it. Also they could easily pull out of the markets that they are not able to penetrate
Market Size and Growth Rate- The processed food industry has grown exponentially over the past few decades. With people more on the go and looking to prepared products rather than making it themselves there has been a giant increase in the growth rate of this business.
Number of Rivals- There are many competitors in the processed food industry. Many of the largest have recently acquired other businesses in order to remain at the top of the “food chain”.
Scope of competitive rivalry- Competition among the industry is dominated by larger more diverse companies offering many different products in the processed foods industry.
Number of Buyers – The number of users has been steadily increasing over the …show more content…
Since 2010 it has gone down a little bit to now being .3457 in 2013. This should be a concern for Smucker’s even though over the past two years it has stayed steading and also slightly increased in 2013 so far, this is something that they should be putting great attention into.
Current Ratio- With a Current Ratio of a mere 1.3181 in 2009 transforming into a current ratio in 2013 being 2.6729 it is showing that Smucker’s is financially sound and the fluxuations have not been too severe over the past five years again reiterating their stability in the processed foods market. They are sufficiently able to pay current liabilities without concern.
Long Term debt-to-equity Ratio- Smucker’s Long Term Debt to Equity ratio has fluctuated some over the past five years. In 2011 the ratio was at its lowest indicating that during that time they were at a better standing to borrow funds if needed. In January 2012, the company closed its purchase of a foodservice coffee and hot beverage business from Sara Lee. (7) Without this acquisition to show the jump in ratio from 2011 to 2012 the company would seem to be in financial …show more content…
They are remaining steady over the past 3 years. In 2013 Peanut Butter was at 13% (a 1% gain over 2012) and Fruit Spreads went from 8% in 2011 to 6% in 2013. One of their newer aqcuisitions of coffe is booming with a 4% gain over the past 3 years going from 44% in 2011 to a whopping 48% in 2013. I would recommend focusing more advertising and marketing dollars on the products with a decrease in product line sales in order to save what they had originally started their company with.
Increasing International Expansion - With the well-known brand name and similarity of products that people use in other countries I believe that by exporting more of their products Smuckers can grow in to a larger and better recognized brand globally. If they started out just shipping and not creating facilities overseas they could save money in the beginning by not having the overhead of a brand new facility and all of the expenses that come along with it. Also they could easily pull out of the markets that they are not able to penetrate