The Quaker Oat Company Presentation
THE QUAKER OAT
COMPANY:
THE RISE TO BIG BUSINESS
BY: COURTNEY SMITH
THE QUAKER OATS COMPANY AND THE PATH TO
BIG BUSINESS
• Strategies:
• New Product Development
• Horizontal Integration
• Economies of Scale
• Forward Vertical Integration
• Overseas Expansion
NEW PRODUCT DEVELOPMENT
• Ferdinand Schumacher was the first to introduce steel-cut oats to the American table. • Established the German Mills American
Oatmeal Factory in Akron, Ohio in 1856
• German and Irish immigrants were his only customers in the beginning.
COMPETITION AROSE…
• Canadian Robert Stuart began a large mill in Cedar Rapids, Iowa in 1873.
• He financed an expanded building in
Chicago and, under the same label, established markets throughout the
Midwest, but avoided areas that
Crowell and Schumacher’s companies dominated. AND EVEN MORE COMPETITION…
• Henry Parsons Crowell purchased the
Quaker Mill in Ravenna, Ohio in 1881.
• He gave his oats the Quaker name, which had been trademarked by former owners Henry Seymour and
William Heston in 1877 as the first cereal. • Henry Crowell advertised in German,
Irish, and Scottish newspapers to get ahead in the industry.
HORIZONTAL
INTEGRATION
• Crowell and Stuart combined their companies in 1885
• Schumacher finally joined when his largest mill burned to the ground.
• Together they formed the Consolidated
Oatmeal Company
CONTINUED…
• The Consolidated Oatmeal Company collapsed under financial and legal trouble in 1888.
• Soon after in 1888, 4 more leading to 7 of the largest American oat millers united as the American Cereal
Company.
ECONOMIES OF
SCALE
• Under the American Cereal Company name, production was doubled and costs of production were cut in 1890 by taking the production operations to the 2 largest mills in Cedar Rapids and Akron.
• This helped the company survive the depression of the 1890s, as well.
FORWARD VERTICAL
INTEGRATION
• In 1899, Stuart and Crowell took control and began building new facilities and diversifying
the
COMPANY:
THE RISE TO BIG BUSINESS
BY: COURTNEY SMITH
THE QUAKER OATS COMPANY AND THE PATH TO
BIG BUSINESS
• Strategies:
• New Product Development
• Horizontal Integration
• Economies of Scale
• Forward Vertical Integration
• Overseas Expansion
NEW PRODUCT DEVELOPMENT
• Ferdinand Schumacher was the first to introduce steel-cut oats to the American table. • Established the German Mills American
Oatmeal Factory in Akron, Ohio in 1856
• German and Irish immigrants were his only customers in the beginning.
COMPETITION AROSE…
• Canadian Robert Stuart began a large mill in Cedar Rapids, Iowa in 1873.
• He financed an expanded building in
Chicago and, under the same label, established markets throughout the
Midwest, but avoided areas that
Crowell and Schumacher’s companies dominated. AND EVEN MORE COMPETITION…
• Henry Parsons Crowell purchased the
Quaker Mill in Ravenna, Ohio in 1881.
• He gave his oats the Quaker name, which had been trademarked by former owners Henry Seymour and
William Heston in 1877 as the first cereal. • Henry Crowell advertised in German,
Irish, and Scottish newspapers to get ahead in the industry.
HORIZONTAL
INTEGRATION
• Crowell and Stuart combined their companies in 1885
• Schumacher finally joined when his largest mill burned to the ground.
• Together they formed the Consolidated
Oatmeal Company
CONTINUED…
• The Consolidated Oatmeal Company collapsed under financial and legal trouble in 1888.
• Soon after in 1888, 4 more leading to 7 of the largest American oat millers united as the American Cereal
Company.
ECONOMIES OF
SCALE
• Under the American Cereal Company name, production was doubled and costs of production were cut in 1890 by taking the production operations to the 2 largest mills in Cedar Rapids and Akron.
• This helped the company survive the depression of the 1890s, as well.
FORWARD VERTICAL
INTEGRATION
• In 1899, Stuart and Crowell took control and began building new facilities and diversifying
the
References: • Antelman, Gretchen. "The Quaker Oat Company." In International Directory of Company Histories, 558-559. Vol. 2. Chicago, Illinois: St. James Press, 1988. • Heilbroner, Robert L., and Aaron Singer. The Economic Transformation of America: 1600 to the Present. 4th ed. New York: Wadsworth, 1977. 173-185. • "Quaker History." Quaker Oats. 2014. Accessed March 29, 2015. http:// www.quakeroats.com/about-quaker-oats/content/quaker-history.aspx.