A1 Steak Sauce
To: Chuck Smith
From: XXXX
Date: June 22, 2012
Re: A.1. Steak Sauce: Lawry’s Defense
Case Analysis
I apologize for missing Friday’s meeting; I heard that we got quite the news!
I reached out several members on the cross-functional team to get all caught up. From what I have gathered, thus far is that you received an email from Susan Connor regarding the Publix account. She made us aware that Publix is considering promoting Lawry’s new steak sauce in the Memorial Day ad unless we are prepared to match their two-for-$5 promotion.
As you know, A1 Steak Sauce is one of the premier brands of the Kraft Portfolio. From its creation in 1830, to its American debut in the early 1900’s and ultimately its acquisition through Nabisco in 2000, A1 Steak Sauce has always been in the forefront of the steak sauce category. It is prominent in most steakhouses and has control of over 50% the dollar share. Just last year A1 yielded an operating profit of $60 million (See Exhibit A). With the blue ocean that we have experienced, it is only natural that competition would eventually surface.
Now we learn that Lawry’s has decided to be that bold competitor. In addition to Lawry’s entering the market, they have decided to launch with an aggressive pricing strategy to undercut our A.1. pricing during our most important time of our sales season. They intend to premiere their product at a two-for-$5 price point for Memorial Day and Fourth of July.
Given this new insight, our focus is how we attain our desired operating profit increase of 55 million, in spite of competitive pressures.
Potential Alternatives
Based on everything we discussed at Friday’s meeting, here is what I believe our viable options are:
• Do Nothing
With the strong brand presence that A1 has in the marketplace, it a feasible strategy to disregard Lawry’s new steak sauce and not respond to their aggressive pricing strategy; especially given the fact that A1 owns 54% of the dollar shares and 46% of the volume
From: XXXX
Date: June 22, 2012
Re: A.1. Steak Sauce: Lawry’s Defense
Case Analysis
I apologize for missing Friday’s meeting; I heard that we got quite the news!
I reached out several members on the cross-functional team to get all caught up. From what I have gathered, thus far is that you received an email from Susan Connor regarding the Publix account. She made us aware that Publix is considering promoting Lawry’s new steak sauce in the Memorial Day ad unless we are prepared to match their two-for-$5 promotion.
As you know, A1 Steak Sauce is one of the premier brands of the Kraft Portfolio. From its creation in 1830, to its American debut in the early 1900’s and ultimately its acquisition through Nabisco in 2000, A1 Steak Sauce has always been in the forefront of the steak sauce category. It is prominent in most steakhouses and has control of over 50% the dollar share. Just last year A1 yielded an operating profit of $60 million (See Exhibit A). With the blue ocean that we have experienced, it is only natural that competition would eventually surface.
Now we learn that Lawry’s has decided to be that bold competitor. In addition to Lawry’s entering the market, they have decided to launch with an aggressive pricing strategy to undercut our A.1. pricing during our most important time of our sales season. They intend to premiere their product at a two-for-$5 price point for Memorial Day and Fourth of July.
Given this new insight, our focus is how we attain our desired operating profit increase of 55 million, in spite of competitive pressures.
Potential Alternatives
Based on everything we discussed at Friday’s meeting, here is what I believe our viable options are:
• Do Nothing
With the strong brand presence that A1 has in the marketplace, it a feasible strategy to disregard Lawry’s new steak sauce and not respond to their aggressive pricing strategy; especially given the fact that A1 owns 54% of the dollar shares and 46% of the volume