Vershire

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Case 4-1
Vershire Company

Internal Environment Analysis
* Vershire is a diversified packaging company
* Several major divisions
* One of the largest manufacturers of aluminum beverage cans in the United States. * Plants scattered throughout the U.S
* Key players include: CEO, divisional GM, vice presidents of marketing and manufacturing

External Environment Analysis
Industry competitors:
* Five beverage container manufacturers accounted for 88% of the market. * Some processors manufacture their own containers.
* Alcan, Alcoa, Reynolds all manufacture aluminum cans.
The aluminum can manufacturing industry contains several competitors. With almost 90% of the industry divided between 5 producers, competition is high, which could be negative for Vershire, especially since some beverage processors are beginning to manufacture their own cans.

Customers:
- Most customers had between two and four suppliers.
- Some companies were starting to manufacture their own cans. The fact that most customers had several suppliers means that if Vershire failed to keep up with demand or quality standards, customers would turn to other suppliers. Backwards integration was also hurting Vershire’s business as some beverage processing companies were beginning to produce their own containers.

Suppliers:
* Four global companies supplied aluminum to can producers (Alcoa, Alcan, Reynolds, Kaiser) This shows that there aren’t many suppliers of aluminum, and since three of them also manufacture aluminum containers, the limited number of suppliers could be risky.

Substitutes:
-The fact that each competitor employed the same technology, and product quality was equal across the board, shows there is little customer loyalty and customers will switch suppliers if they are not satisfied.

New entrants:
* Five manufacturers account for 88% of the market.
* Minimum efficiency was 5 lines at $20 million per line. This shows the threat of...
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