Challenges Ahead In her new role, Morrison said she planned to accelerate the rate of innovation at the company Morrison planned to grow the companys brands through a combination of healthier food and beverage offerings, global expansion, and the use of technology to woo younger consumers While innovation isnt a term typically associated with the food processing industry, Morrison said that innovation was a key to the companys future success As an example, she cited Campbells development of an iPhone application that provided consumers with Campbells Kitchen recipes The companys marketing team devised the plan as a way to appeal to technologically savvy, millennial generation consumers, Morrison said In fiscal year 2017, under the ongoing leadership of Morrison, the company continued its focus on unleashing the power of its overall potential and performance The future plan was to focus on four key strategies to enhance the companys growth Elevate Trust Through Real Food, Transparency and Sustainability Increase Engagement and Drive Sales Through Digital and E Commerce Continue to Diversify the Product Portfolio in Health and Well Being Expand the Companys Presence in Developing Markets Yet more than a few years into her governance, analysts still had a lukewarm response about Morrison taking over They still expressed their doubt about whether Morrison was the right choice, rather than some new blood as a CEO replacement Industry Overview The U S packaged food industry had recorded faster current value growth in recent years mainly due to a rise in commodity prices In retail volume, however, many categories saw slower growth rates because Americans began to eat out more often again This dynamic changed for a couple of years when cooking at home became a more popular alternative in response to the recession and the sharp rise in commodity prices in 2008 After years of expansions and acquisitions, U S packaged food companies were beginning to downsize In August 2011, Kraft Foods announced that it would split into two companies a globally focused biscuits and confectionery enterprise and a domestically focused cheese, chilled processed meats, and ready meals firm After purchasing Post cereals from Kraft in 2008, Ralcorp Holdings spun off its Post cereals business (Post Holdings Inc ) in February 2012 Though supermarkets were the main retail channel for buying packaged food, other competitors were gaining traction by offering lower prices or more convenience The recession forced shoppers to consider alternative retail channels as they looked for ways to save money A big beneficiary of this consumer trend was the discounters, which carried fewer items and national brands than supermarkets but offered lower prices in return For example, dollar store chains Dollar General and Family Dollar expanded their food selections to increase their appeal Drugstore chains CVS and Walgreens expanded their food selections as well, especially in urban areas, to leverage their locations as a factor of convenience Mass merchandiser Target continued to expand its PFresh initiative, featuring fresh produce, frozen food, dairy products, and dry groceries Competition Campbell operated in the highly competitive global food industry and experienced worldwide competition for all of its principal products The principal areas of competition were brand recognition, quality, price, advertising, promotion, convenience, and service Nestl Nestl was the worlds number one food company in terms of sales, the world leader in coffee (Nescaf), one of the worlds largest bottled water (Perrier) makers, and a top player in the pet food business (Ralston Purina) Its most well known global brands included Buitoni, Friskies, Maggi, Nescaf, Nestea, and Nestl The company owned Gerber Products, Jenny Craig, about 75 percent of Alcon Inc (ophthalmic drugs, contact lens solutions, and equipment for ocular surgery), and almost 28 percent of LOral In July 2007 it purchased Novartis Medical Nutrition, and in August 2007 it purchased the Gerber business from Sandoz Ltd , with the goal of becoming a nutritional powerhouse Furthermore, by adding Gerber baby foods to its baby formula business, Nestl became a major player in the U S baby food sector General Mills General Mills was the U S number one cereal maker, behind Kellogg, fighting for the top spot on a consistent basis Its brands included Cheerios, Chex, Total, Kix, and Wheaties General Mills was also a brand leader in flour (Gold Medal), baking mixes (Betty Crocker, Bisquick), dinner mixes (Hamburger Helper), fruit snacks (Fruit Roll Ups), grain snacks (Chex Mix, Pop Secret), and yogurt (Colombo, Go Gurt, and Yoplait) In 2001 it acquired Pillsbury from Diageo and doubled the companys size, making General Mills one of the worlds largest food companies Although most of its sales came from the United States, General Mills was trying to grow the reach and position of its brands around the world The Kraft Heinz Company The Kraft Foods Group and H J Heinz Company closed a merger deal in July 2015 The combined company was called The Kraft Heinz Company, and became the third largest food company in North America and fifth largest in the world Its most popular brands included Kraft cheeses, beverages (Maxwell House coffee, Kool Aid drinks), convenient meals (Oscar Mayer meats and Kraft macn cheese), grocery fare (Cool Whip, Shake N Bake), and nuts (Planters) Kraft Foods Group was looking to resuscitate its business in North America H J Heinz had thousands of products Even prior to the merger, Heinz products enjoyed first or second place by market share in more than 50 countries One of the worlds largest food producers, Heinz produced ketchup, condiments, sauces, frozen foods, beans, pasta meals, infant food, and other processed food products Its flagship product was ketchup, and the company dominated the U S ketchup market Its leading brands included Heinz ketchup, Lea Perrins sauces, Ore Ida frozen potatoes, Boston Market, T G I Fridays, and Weight Watchers foods In 2013 Heinz agreed to be acquired by Berkshire Hathaway and 3G Capital The post merger Kraft Heinz Company was also dedicated to offering healthy food products to its customers by adapting to changing tastes and consumer preferences Financials In the 2016 fiscal year, Campbells earnings from continuing operations decreased from $666 million to $563 million, due to disruptions in product availability for a period of time Organic sales declined 1 percent, while adjusted earnings per share (EPS) from continuing operations decreased from $2 13 to $1 82 The larger pie of the sales came from the U S market, whereas about 19 percent of the companys total sales were from international markets outside the U S With regard to financials, Morrison stated For fiscal year 2017, the companys sales for year ending 2016 declined by approximately 1 percent to $7 961 amid the negative impact of exchange rate volatility and decrease in organic sales However, most of the adverse impacts were offset by the benefits achieved by acquiring Garden Fresh Gourmet The decline in sales could be larger if company had not increased the selling prices in 2016 to offset the loss of sales by decrease in sales volume Similarly, for Americas Simple Meals and Beverage division, Campbells sales decreased 2 percent amid the decline in V8 beverages and soup, but increased costs were up, wearing away margins Also, the Global Biscuits and Snacks division sales decreased 3 percent but for the Campbell Fresh division sales increased 1 percent, which could be better if the company had not gone through the trouble of execution issues and crop destruction Sustainability Campbell Soup Company was named to the Dow Jones Sustainability Indexes (DJSI) repeatedly and to the DJSI World Index This independent ranking recognized the companys strategic and management approach to delivering economic, environmental, and social performance Launched in 1999, the DJSI tracked the financial performance of leading sustainability driven companies worldwide In selecting the top performers in each business sector, DJSI reviewed companies on several general and industry specific topics related to economic, environmental, and social dimensions These included corporate governance, environmental policy, climate strategy, human capital development, and labor practices Campbell included sustainability and corporate social responsibility as one of its seven core business strategies Campbells Napoleon, Ohio, plant had implemented a new renewable energy initiative, anchored by 24,000 new solar panels The 60 acre, 9 8 megawatt solar power system was expected to supply 15 percent of the plants electricity while reducing CO 2 emissions by 250,000 metric tons over 20 years Additionally, Campbell employees volunteered an average of 20,000 hours annually at more than 200 nonprofit organizations Supported by local farmers and Campbell, the Food Bank of South Jersey was earning revenue for hunger relief from sales of Just Peachy salsa The salsa was created from excess peaches from New Jersey and was manufactured and labeled by employee volunteers at Campbells plant in Camden Whats Next Campbells advertising campaign failed to assist the company much in gaining the expected traction in the ready to serve soup business Campbell was trying to correct this by introducing new products offering unique flavors into what many considered a rather ordinary product line If the economy continued to improve would Campbell be successful in its international expansion, especially in lucrative emerging markets such as China As the recession became a distant memory, would Campbells name still resonate with American consumers or would consumers venture back to restaurants Would Campbell Fresh become a success or would it spoil Would Campbells soup simmer to perfection, or would the company be in hot water Q1 Based on your reading of the case study, critically evaluate the key resources available for Campbell to effectively and successfully compete within its boundary and sustain a competitive advantage Discuss whether Campbell market position is supported by its value chain activities

Question

Challenges Ahead In her new role, Morrison said she planned to accelerate the rate of innovation at the company  Morrison planned to grow the companys brands through a combination of healthier food and beverage offerings, global expansion, and the use of technology to woo younger consumers  While innovation isnt a term typically associated with the food processing industry, Morrison said that innovation was a key to the companys future success  As an example, she cited Campbells development of an iPhone application that provided consumers with Campbells Kitchen recipes  The companys marketing team devised the plan as a way to appeal to technologically savvy, millennial generation consumers, Morrison said  In fiscal year 2017, under the ongoing leadership of Morrison, the company continued its focus on unleashing the power of its overall potential and performance  The future plan was to focus on four key strategies to enhance the companys growth  Elevate Trust Through Real Food, Transparency and Sustainability Increase Engagement and Drive Sales Through Digital and E Commerce Continue to Diversify the Product Portfolio in Health and Well Being Expand the Companys Presence in Developing Markets Yet more than a few years into her governance, analysts still had a lukewarm response about Morrison taking over  They still expressed their doubt about whether Morrison was the right choice, rather than some new blood as a CEO replacement  Industry Overview The U S  packaged food industry had recorded faster current value growth in recent years mainly due to a rise in commodity prices  In retail volume, however, many categories saw slower growth rates because Americans began to eat out more often again  This dynamic changed for a couple of years when cooking at home became a more popular alternative in response to the recession and the sharp rise in commodity prices in 2008  After years of expansions and acquisitions, U S  packaged food companies were beginning to downsize  In August 2011, Kraft Foods announced that it would split into two companies  a globally focused biscuits and confectionery enterprise and a domestically focused cheese, chilled processed meats, and ready meals firm  After purchasing Post cereals from Kraft in 2008, Ralcorp Holdings spun off its Post cereals business (Post Holdings Inc ) in February 2012  Though supermarkets were the main retail channel for buying packaged food, other competitors were gaining traction by offering lower prices or more convenience  The recession forced shoppers to consider alternative retail channels as they looked for ways to save money  A big beneficiary of this consumer trend was the discounters, which carried fewer items and national brands than supermarkets but offered lower prices in return  For example, dollar store chains Dollar General and Family Dollar expanded their food selections to increase their appeal  Drugstore chains CVS and Walgreens expanded their food selections as well, especially in urban areas, to leverage their locations as a factor of convenience  Mass merchandiser Target continued to expand its PFresh initiative, featuring fresh produce, frozen food, dairy products, and dry groceries  Competition Campbell operated in the highly competitive global food industry and experienced worldwide competition for all of its principal products  The principal areas of competition were brand recognition, quality, price, advertising, promotion, convenience, and service   Nestl Nestl was the worlds number one food company in terms of sales, the world leader in coffee (Nescaf), one of the worlds largest bottled water (Perrier) makers, and a top player in the pet food business (Ralston Purina)  Its most well known global brands included Buitoni, Friskies, Maggi, Nescaf, Nestea, and Nestl  The company owned Gerber Products, Jenny Craig, about 75 percent of Alcon Inc  (ophthalmic drugs, contact lens solutions, and equipment for ocular surgery), and almost 28 percent of LOral  In July 2007 it purchased Novartis Medical Nutrition, and in August 2007 it purchased the Gerber business from Sandoz Ltd , with the goal of becoming a nutritional powerhouse  Furthermore, by adding Gerber baby foods to its baby formula business, Nestl became a major player in the U S  baby food sector  General Mills General Mills was the U S  number one cereal maker, behind Kellogg, fighting for the top spot on a consistent basis  Its brands included Cheerios, Chex, Total, Kix, and Wheaties  General Mills was also a brand leader in flour (Gold Medal), baking mixes (Betty Crocker, Bisquick), dinner mixes (Hamburger Helper), fruit snacks (Fruit Roll Ups), grain snacks (Chex Mix, Pop Secret), and yogurt (Colombo, Go Gurt, and Yoplait)  In 2001 it acquired Pillsbury from Diageo and doubled the companys size, making General Mills one of the worlds largest food companies  Although most of its sales came from the United States, General Mills was trying to grow the reach and position of its brands around the world  The Kraft Heinz Company The Kraft Foods Group and H  J  Heinz Company closed a merger deal in July 2015  The combined company was called The Kraft Heinz Company, and became the third largest food company in North America and fifth largest in the world  Its most popular brands included Kraft cheeses, beverages (Maxwell House coffee, Kool Aid drinks), convenient meals (Oscar Mayer meats and Kraft macn cheese), grocery fare (Cool Whip, Shake N Bake), and nuts (Planters)  Kraft Foods Group was looking to resuscitate its business in North America  H  J  Heinz had thousands of products  Even prior to the merger, Heinz products enjoyed first or second place by market share in more than 50 countries  One of the worlds largest food producers, Heinz produced ketchup, condiments, sauces, frozen foods, beans, pasta meals, infant food, and other processed food products  Its flagship product was ketchup, and the company dominated the U S  ketchup market  Its leading brands included Heinz ketchup, Lea   Perrins sauces, Ore Ida frozen potatoes, Boston Market, T G I  Fridays, and Weight Watchers foods  In 2013 Heinz agreed to be acquired by Berkshire Hathaway and 3G Capital  The post merger Kraft Heinz Company was also dedicated to offering healthy food products to its customers by adapting to changing tastes and consumer preferences  Financials In the 2016 fiscal year, Campbells earnings from continuing operations decreased from $666 million to $563 million, due to disruptions in product availability for a period of time  Organic sales declined 1 percent, while adjusted earnings per share (EPS) from continuing operations decreased from $2 13 to $1 82  The larger pie of the sales came from the U S  market, whereas about 19 percent of the companys total sales were from international markets outside the U S  With regard to financials, Morrison stated  For fiscal year 2017, the companys sales for year ending 2016 declined by approximately 1 percent to $7 961 amid the negative impact of exchange rate volatility and decrease in organic sales  However, most of the adverse impacts were offset by the benefits achieved by acquiring Garden Fresh Gourmet  The decline in sales could be larger if company had not increased the selling prices in 2016 to offset the loss of sales by decrease in sales volume  Similarly, for Americas Simple Meals and Beverage division, Campbells sales decreased 2 percent amid the decline in V8 beverages and soup, but increased costs were up, wearing away margins  Also, the Global Biscuits and Snacks division sales decreased 3 percent but for the Campbell Fresh division sales increased 1 percent, which could be better if the company had not gone through the trouble of execution issues and crop destruction  Sustainability Campbell Soup Company was named to the Dow Jones Sustainability Indexes (DJSI) repeatedly and to the DJSI World Index  This independent ranking recognized the companys strategic and management approach to delivering economic, environmental, and social performance  Launched in 1999, the DJSI tracked the financial performance of leading sustainability driven companies worldwide  In selecting the top performers in each business sector, DJSI reviewed companies on several general and industry specific topics related to economic, environmental, and social dimensions  These included corporate governance, environmental policy, climate strategy, human capital development, and labor practices  Campbell included sustainability and corporate social responsibility as one of its seven core business strategies  Campbells Napoleon, Ohio, plant had implemented a new renewable energy initiative, anchored by 24,000 new solar panels  The 60 acre, 9 8 megawatt solar power system was expected to supply 15 percent of the plants electricity while reducing CO 2 emissions by 250,000 metric tons over 20 years  Additionally, Campbell employees volunteered an average of 20,000 hours annually at more than 200 nonprofit organizations  Supported by local farmers and Campbell, the Food Bank of South Jersey was earning revenue for hunger relief from sales of Just Peachy salsa  The salsa was created from excess peaches from New Jersey and was manufactured and labeled by employee volunteers at Campbells plant in Camden  Whats Next  Campbells advertising campaign failed to assist the company much in gaining the expected traction in the ready to serve soup business  Campbell was trying to correct this by introducing new products offering unique flavors into what many considered a rather ordinary product line  If the economy continued to improve would Campbell be successful in its international expansion, especially in lucrative emerging markets such as China  As the recession became a distant memory, would Campbells name still resonate with American consumers or would consumers venture back to restaurants  Would Campbell Fresh become a success or would it spoil  Would Campbells soup simmer to perfection, or would the company be in hot water    Q1  Based on your reading of the case study, critically evaluate the key resources available for Campbell to effectively and successfully compete within its boundary and sustain a competitive advantage  Discuss whether Campbell market position is supported by its value chain activities

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Challenges Ahead In her new role, Morrison said she planned to accelerate the rate of innovation at the company. Morrison planned to grow the companys

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