1. Wm. Wrigley Jr. Company once made only chewing gum. When Wrigley bought Life Savers ( a line of candy mints) and Altoids ( a line of breath mints) from Kraft, chewing gum then constituted less than 95 percent of revenues.

Q: Describe in what ways did Wrigley's corporate strategy charge?

1. Jewell Company ( JC) is a $2 billion diversified manufacturer and marketer of single household items, cookware, and hardware. In the early 1950s, JC's business consisted solely of manufactured curtain rods that were sold through hardware stores and retailers like Sears. Since the 1960s however, the company has diversified extensively through acquisition into such businesses as paintbrushes, writing pens, pots and pans, and hairbrushes. Over 90 percent of its growth can be attributed to these many small acquisitions, whose performance it improved tremendously though aggressive restructuring and its corporate emphasis on cost-cutting and cost controls. While JC's sixteen different lines of business may appear quite different, they all share the common characteristics of being staple manufactured items and sold primarily through volume retail channels like Walmart, Target, and Kmart. Because JC operates each line of business autonomously ( separate manufacturing, R&D, and selling responsibilities for each line), it is perhaps best described as pursing a related linked diversification strategy. The common linkages are both internal ( accounting systems, product merchandising skills, and acquisition competency) and external ( distribution channel of volume retailers). JC is presently contemplating the acquisition of Plastico, a 3$ billion U.S. based manufacturer of flexible plastic products like trash cans, reheatable and freezable food containers, and a broad range of other plastic storage containers designed for home and office use. While Plastico has been highly innovative ( over 80 percent of its growth has come from internal new product development), it has had difficulty controlling costs and is losing ground against powerful customers like Walmart. JC believes that the market power it wields with retailers like Walmat will help it turn Plastico's prospects.

Q: Why would the acquisition of Plastico be good for JC?