Case Writeups : Sealed Air Corporation
1) What has been happening in this market? How has Sealed Air (SA) been doing? To what do you attribute SA’s success? Sealed Air had achieved 25% annual growth in net sales and net earnings from 1971 to 1980. The company has been keeping a technical leadership position in the market. During 10 years, the company built on its development of the first-cell, lightweight cushioning material, introduced the first foam-in-place packaging system, and engineered the first complete solar heating system for swimming pools. Regarding the protective packaging market, the Sealed Air’s product AirCap has the feature that differentiated called “barrier-coating”. Barrier-coatng and its customer benefits had been the major driving force of Sealed Air’s AirCap cushioning sales for 10 years. Thus, Sealed Air created value to its customers by building high technical product quality in its coated bubbles and by informing the customers about the benefits of coated bubbles through the efforts of its salespeople. Sealed Air’s salespeople also did “consultative selling approach” to increase its market share and profits. Moreover, the company created value for its distributors by the strength of its brand equity and the strong demand for its products. The company also used selective distribution policy with less competition among distributors and thus this policy makes the distributors’ profit margins maximized.
2) Should SA introduce an uncoated bubble in the U.S market to compete with GAFCEL? Why or why not? - SA should introduce an uncoated bubble for the following reasons Introducing uncoated bubbles can allow Sealed Air to retain these customers whose needs are met with uncoated bubbles. It seems that GAFCEL’s ability to get sales at the rate of $1 Million/year with only 1.5 salespeople from only the New York market is a strong indication that the uncoated bubble is going to be a strong competitor for Sealed Air’s coated bubble...
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