Campbell Soup Co., one of the oldest and best-known global food companies, saw demand for its major product, condensed soup, plummet by 30 percent between 1998 and 2004 as customers switched from high-salt processed soups to more healthful low-fat, low-salt varieties. Campbells profits and the stock price plunged as its condensed soup business collapsed, and in 2001 its directors brought in a new CEO, Douglas Conant, to help the troubled company. Conant decided it was necessary to develop a three-year turnaround plan to help the company strengthen its market position against aggressive competitors such as General Mills, whose Progresso Soup division had attracted away many Campbell customers with its innovative new lines of healthful soup. One of Conants first actions was to initiate a thorough SWOT analysis exercise. External analysis of the environment identified the growth of the organic and healthy food segment of the food market and the increasing number of other kinds of convenience foods as a threat to Campbells core soup business. It also revealed three growth opportunities: (1) the growing market for health and sports drinks, in which Campbell already was a competitor with its V8 juice; (2) the growing market for quality bread and cookies, in which Campbell competed with its Pepperidge Farm brand; and (3) chocolate products, where Campbells Godiva brand had enjoyed increasing sales throughout the 1990s. With the analysis of the environment complete, Conant turned his attention to his organizations resources and capabilities. His internal analysis of Campbell identified a number of major weaknesses. These included staffing levels that were too high relative to its competitors and high costs associated with manufacturing its soups because of the use of outdated machinery. Also, Conant noted that Campbell had a conservative culture in which people seemed to be afraid to take riskssomething that was a real problem in an industry where customer tastes are always changing, and new products must be developed constantly. At the same time, the SWOT analysis identified an enormous strength: Campbell enjoyed huge economies of scale because of the enormous quantity of food products that it makes, and it also had a first-rate R&D division capable of developing exciting new food products. Using the information from this SWOT analysis, Conant and his managers decided that Campbell needed to use its product development skills to revitalize its core products and modify or reinvent them in ways that would appeal to increasingly health-conscious and busy consumers. Conant stressed convenience with microwaveable soups and cans that open with a pull. The recipes became more healthful for its soups, V8 drinks, and Pepperidge Farm snacks because Conant needed to expand Campbells share of the health, sports, snack, and luxury food market segments. Also, to increase sales, Campbell needed to tap into new food outlets, such as corporate cafeterias, college dining halls, and other mass eateries, to expand consumers access to its foods. Finally, Conant decided to decentralize authority to managers at lower levels in the organization and make them responsible for developing new soup, bread, and chocolate products that met customers changing needs. In this way, he hoped to revitalize Campbells slow- moving culture and speed up the flow of improved and new products to the market. Conant put his new plan into action, sales of new soup products increased, and he began to put more emphasis on sales of soup at outlets such as 7-11 and Subway and less on supermarket sales. By 2005 analysts felt that he had made a significant difference in Campbells performance but that there was still a lot to do Campbells operating margins were still shrinking. Carrying on the SWOT analysis, Conant decided Campbell should produce more products to meet the needs of the low-carb diet, such as new kinds of low-carb bread and cookies. He also decided to shrink the companys operations to lower costs. His goal was to raise profit margins to the level of his major competitors, Kraft and General Mills, by 2007 using a new three-year plan based on this SWOT analysis. By 2007 Conant had substantially achieved his goals. Sales of soup had recovered, and the Pepperidge Farm and Godiva divisions were earning record sales and profits. (Sales of Goldfish crackers had increased by 100 percent!) Campbells stock price soared, and Conant and employees at all levels received bonuses that rewarded their intense efforts to turn around the company. However, Conant immediately set a new round of SWOT analysis in motion to find fresh opportunities for developing new products.

**Important: All your answers must be based on your understanding of the above case (Do not copy and paste any sentences from the case) **

Q2: In less than 200 words, discuss the first step in the decision-making process. Reflect on your answer from the Campbell Soup Co. case.

Q3: In less than 200 words, discuss Campbell Soup Co.s planning level, and strategy level. Reflect on your answer from the case.