Crown Cork Case
1) What are the most significant factors affecting competition in the metal container Industry?
• Consumer demand/Preferences
Consumers have started viewing packaging as more than functional. The container became an advertising vehicle and its features helped contribute to product sales.
• Self-manufacture threat
Temptation for major can users like food/beer producers to make their own cans was high. Campbell Soup Company had actually become one of the largest can producers in the US
• Emergence of new materials such as aluminum, plastic for packaging
Aluminum was light-weight; hence could be transported at lower costs and also recycled easily.
• Diversification of competitors
The competitors of Crown Cork had started diversifying outside the metal container industry. American can started competing in the entire packaging area – metal containers, paper, plastics and laminated products. Some, like the Continental group, also diversified their operations and investments by expanding into foreign locations.
• Research and Development
Many of Crown’s competitors were spending heavily on basic research.
2) What strategy CCS have for competing in this Industry?
• Restricted Research and Development
Crown’s R&D focused on enhancing existing product lines, leveraging their skill in die forming and metal fabrication and working with the sales force to address specific customer needs and requests. They viewed being second as a tremendous asset because they could do away with frills, take minimal risk in an industry in constant flux, let others make mistakes during R&D and learn from the innovators’ heartaches.
• Focus on customer needs
Crown believed that in an industry where there was little technical difference in product quality throughout the industry, the greatest competitive advantage was in providing a high-level of customer service. “Fast answers get customers” was the belief held. Also, Crown provided customers with a single point of contact,
• Consumer demand/Preferences
Consumers have started viewing packaging as more than functional. The container became an advertising vehicle and its features helped contribute to product sales.
• Self-manufacture threat
Temptation for major can users like food/beer producers to make their own cans was high. Campbell Soup Company had actually become one of the largest can producers in the US
• Emergence of new materials such as aluminum, plastic for packaging
Aluminum was light-weight; hence could be transported at lower costs and also recycled easily.
• Diversification of competitors
The competitors of Crown Cork had started diversifying outside the metal container industry. American can started competing in the entire packaging area – metal containers, paper, plastics and laminated products. Some, like the Continental group, also diversified their operations and investments by expanding into foreign locations.
• Research and Development
Many of Crown’s competitors were spending heavily on basic research.
2) What strategy CCS have for competing in this Industry?
• Restricted Research and Development
Crown’s R&D focused on enhancing existing product lines, leveraging their skill in die forming and metal fabrication and working with the sales force to address specific customer needs and requests. They viewed being second as a tremendous asset because they could do away with frills, take minimal risk in an industry in constant flux, let others make mistakes during R&D and learn from the innovators’ heartaches.
• Focus on customer needs
Crown believed that in an industry where there was little technical difference in product quality throughout the industry, the greatest competitive advantage was in providing a high-level of customer service. “Fast answers get customers” was the belief held. Also, Crown provided customers with a single point of contact,