Business Case
Essay Preview: Business Case
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Derodrick Rhodes
Dr. Debra Louis
MGT 599
4 December 2009
Executive Summary
The resource based view emphasizes the internal capabilities of the organization in formulating strategy to achieve a sustainable competitive advantage in its markets & industries. In this exercise of analyzing the SWOT for the J.M.Smuckers Company, we have been trying to identify its capabilities within the value chain activities that provide it with competitive advantage.
Based on the resource based view, we have calculated the EVA and then analyzed the resources and capabilities, translating into SWOT of the organization. The EVA for the present year is coming to negative USD $0.8 mn. This is due to the fact that the company has acquired the Folgers coffee brand and paid dividends to its existing share holders. The entire deal was to the tune of USD $3 billion, which clearly indicates the obvious reason. Even though the EVA is largely on the negative side as of now, an assessment done with the tangible & intangible resources and capabilities surely brings the company in good light.
The Strengths of the company come out as Market Reputation, Product Portfolio, Supplier Relations, Financial Management & Company Management; where as weakness of the company appears to be Size of the company, lack of research & development, dependency on large retailers & distributors. Opportunities are Expansion through Inorganic acquisitions, Leverage acquired expertise on renewable energy source utilization & economies of scale, increase focus on new forms of distribution & customer acquisition where as Threats seem to be Acquisition by Bigger players, Single product Replication by small suppliers, Legal compliance fall back, Lack of consumer demand & hence problems with cash flows.
In light of the analysis it is recommended that the company should retain its focus on its impeccable finance management & growth strategy, while leveraging its competence in cost and resource management and look at expanding its channels of distribution keeping in mind the compliance issues.
Analysis
This section attempts to analyze the tangible and intangible resources and capabilities of The J.M.Smuckers Company and thereby come up with clear Strengths, Weakness, Opportunities and Threats to the organization.
SWOT Analysis of Smuckers:
Strengths
Leaders in the market of jams, jellies and preserves in the US. Theyre customer centric and very employee friendly and hence features in the top quartile of the Fortunes 100 Best Employers. They have earned the record of Best Overall Deal and Breakthrough Deal in 2002 for their outlook and thoughts on Innovativeness and freshness of ideas. The company has been the market leader in a number of different food categories and also increased in the market share with excellent marketing, advertising techniques adopted. They have good levels of public interactions and publicity programs and focused portfolios. J.M.Smuckers have great use of all resources thereby being cost effective by providing excellent product portfolio with innovativeness and healthy options.
There are numerous acquisitions and excellent management
that spread across over 45 countries and very successful in Latin America. The company have
constant increase in revenues with excellent brand management and constant efforts to grow their brand successfully. They also have an excellent customer relationship management.
Weaknesses
There several small operations and limited product line that J.M.Smuckers face. In order to improve some processes within some of their operations they needed to get rid of some of the outdated technology and facilities lead to failure of the business like Mrs. Smith. Also with the post acquisition of Crisco the company has been faced with a fall in sales.
Opportunities
There are many opportunities with the acquisitions like Crisco and JIF add to the total brands of the company. Also these acquisitions allows a more expansion in terms of the sales, profits, and cash flows for the overall company.Newer acquisition strategies and growth strategies can be implemented to improve the overall growth of the company. The newest and most advanced form of information is becoming a major part of the project to help the company reach out to number of customers. Also the use of several newer systems would help the company to grow back to a respectable amount when the company can also use newer technology for the cartridge.
The company also requires to keep in track with several other acts and to comply with several standard requirements and regulation requirements.The company could also brand extension into breads.
Threats
As the recession is nearly over with the suppliers have a major impact on the business. The company has a high level of dependency on the suppliers and the major suppliers of the company include Wal Mart which has almost 24% of the companys total sales. The company has several smaller brands that it possesses and the business portfolio like that of Smuckers. There are an abundant of substitutes available that lead the company to be faced with a threat and this company is not faced by a single company as competition and currently the company has three main competitors, a) Unilever, b) Kraft Foods, and c) Conagra Foods.
Since the company deals with food industry, there are several rules that they need to adhere to. The economical factors include several others like the slowdown of the country and the recession that is faced. The level of demand has see a continuous growth and increase, which can lead the promoting the product on the store shelves.
Tangible Resources
Physical Resources: Smuckers is present in the domain of manufacturing & marketing products. It has products in more than 11 categories & has more than 10 brands. Smuckers owns manufacturing plants across 18 locations in the United States and 3 locations in Canada. The J.M. Smucker Company has over 2,700 employees worldwide and distributes products in more than 45 countries. The outlook of Smuckers is to build facilities at locations, which are central to supplier locations as well as customers. The Company has implemented and managed a variety of programs, including the