Campbell Case Analysis
Campbell’s Soup Company Case by Dan Barrett
Chuck Hensley
for
Mgt 5320 Organizational Theory & Behavior
Dr. Ron Stephens
April 11, 2001
PROBLEM IDENTIFICATION
The Campbell’s Soup case covers a period of time from 1980 through approximately 1994. During this time two CEO’s with differing business strategies and organizational structures led the company. In the case and under the direction of the first CEO Gordon McGovern, the most important problem was his over-diversification of the company that led them away from their core competencies. McGovern created a complicated hybrid organizational structure that resulted in a lack of inter-divisional communication, increased conflict and competition for limited resources. Although the direction under the next CEO David Johnson began to refocus the company on its core competencies, his organizational restructure did not fully support the international growth strategy across all product lines or divisions.
DATA AND ANALYSIS SUMMARY
Across the globe Campbell Soup Company sells more than 2,000 products and manufactures in more than 40 nations. The flagship of the company is the red-and-white label on its canned soups. Its corporate strategy has evolved with each change in leadership and its diversification strategy has shifted as each new CEO pursued a different course. To succeed completely in the marketplace, a company must realize that the overall environment and customer preferences are not static, but constantly changing. How can a company survive in this versatile business world? How can it meet the demand in the marketplace? Any company must understand and analyze the whole environment in order to find the right direction to effectively and efficiently utilize the company’s limited resources. In 1980 when Gordon McGovern took over, Campbell’s Soup Co. was organized into six divisions; Campbell’s U.S., Pepperidge Farm, Vlasic Foods, Mrs. Paul’s Kitchens, Other U.S.
Chuck Hensley
for
Mgt 5320 Organizational Theory & Behavior
Dr. Ron Stephens
April 11, 2001
PROBLEM IDENTIFICATION
The Campbell’s Soup case covers a period of time from 1980 through approximately 1994. During this time two CEO’s with differing business strategies and organizational structures led the company. In the case and under the direction of the first CEO Gordon McGovern, the most important problem was his over-diversification of the company that led them away from their core competencies. McGovern created a complicated hybrid organizational structure that resulted in a lack of inter-divisional communication, increased conflict and competition for limited resources. Although the direction under the next CEO David Johnson began to refocus the company on its core competencies, his organizational restructure did not fully support the international growth strategy across all product lines or divisions.
DATA AND ANALYSIS SUMMARY
Across the globe Campbell Soup Company sells more than 2,000 products and manufactures in more than 40 nations. The flagship of the company is the red-and-white label on its canned soups. Its corporate strategy has evolved with each change in leadership and its diversification strategy has shifted as each new CEO pursued a different course. To succeed completely in the marketplace, a company must realize that the overall environment and customer preferences are not static, but constantly changing. How can a company survive in this versatile business world? How can it meet the demand in the marketplace? Any company must understand and analyze the whole environment in order to find the right direction to effectively and efficiently utilize the company’s limited resources. In 1980 when Gordon McGovern took over, Campbell’s Soup Co. was organized into six divisions; Campbell’s U.S., Pepperidge Farm, Vlasic Foods, Mrs. Paul’s Kitchens, Other U.S.