Company Overview
Campbell Soup Company also called Campbell’s which specializes on production of soups and other related products under the food industry. The company’s headquarter offices are situated in Camden, New Jersey. Considering the fact that it also produces other products that are related to soup and which are also canned, it divides itself into three main departments. The divisions are as follows: first the simple meals division whose production is mainly of soups, either condensed or ready to serve soups, the second is the baked snacks department which produces just one product which is the Pepperidge Farm and the last division is the department of health beverages which focuses on just one other product which is V8 juices. The business has been successful and growing in every aspect since it was started by Joseph A. Campbell in 1869.
As mentioned earlier, the company’s main focus is on production of soups which are sold in over 120 countries in the world and whose markets are very tight and strong. The company takes a large share of soup market especially in the U.S simply because they are capable of producing different tastes of soups and in addition to that they produce different forms like condensed and ready to serve soups. Some of the company’s product brands are: soups (condensed, chunky, home, ready to serve to name a few), meat balls, pasta foods, beverages among others. Apart from just producing the soups, the company has created a lot of employment for the people in the places where they are located as well as tried to provide cooking classes for those who have passion for soup preparing. This means that it is really a well thought of company, popular and famous to many (Lederer et al, 2017).
The company’s mission statement is “Together we will build the world’s most extraordinary food company by nourishing lives everywhere, every day”. The company’s slogan is “Nourishing people’s lives everywhere, every day”. Both of these statements show the aspirations, values and business aims for both the company and towards the consumers. This shows that the company’s first and foremost desire is to focus on fulfilling its customer’s needs and making sure they get the best product possible. However, as a business it also need to keep its operations running and therefore needs to make profits. Its mission statements and slogan say volumes about the company as a whole.
This is a strategic management tool that is used to study the external environment of a business and their effects to the business operations and plans. It analysis the macroeconomic aspects of the business to be able to know the current business performance, potential changes and the direction of the business operation to be able to improve performance (Issa et al, 2010). The PESTEL analysis is composed of the following aspects: Political, economic, social, technological, legal and environmental factors of the macroeconomic environment of a business.
Product Line
This factor relates to how the government rules and laws affect the business operations. Most business are affected by the government rules and regulations especially when it comes to taxation, licensing, political stability, environmental laws and tariffs to name a few laws. Just like any other business, Campbell Soup is also affected by some of the rules like taxation which certainly cause major effects to their profits, in case they had not planned.
These factors generally affect a business operations and decision making responsibility. They may include things like interest rate, exchange rates, economic growth rate and inflation rate among others (Shabanova et al, 2015). Therefore, when it comes to Campbell, since it exports its products all over the world, it may be affected by such as factor like exchange rate which further makes business impossible.
This include aspects like cultural differences, food tastes, age distribution, believes to name a few. This aspects differ from consumer to another and therefore affect business in different ways (Pavel, 2013). For Campbell, since it specializes on soups, then for them to take of every customers needs they have to produce different tastes e.g. Chinese taste, Muslim and Indian tastes among other tastes.
This relate to the change in technology and the one being used for production. The technology should be effective and efficient in production. Therefore, with Campbell having so many competitors then it has to ensure that its production and product is continuously better than that of its competitors.
These factors relates to laws a business must follow to be able to operate, like product quality law, consumer law, food safety law, employment law to name a few. These can affect a business’s costs and demand for products and therefore it means that it affects Campbell’s operations as well.
These are factors that rely on nature and environmental changes such as climate and weather changes whose effects is mainly on tourism and farming businesses. They affect a business’s production schedules and product demand (Engert et al, 2016). Therefore, since Campbell deals with soup preparations, it will be affected by this because they take care of tourists’ foods and their raw materials include farm products.
These are forces that help a business in realizing how improved they are and what types of strategies they use to keep them in the market and operational. These forces include:
This relates to the level and number of competitors in the specific industry where the company belongs. An industry with a large of companies offering the same services or products means high competition (Zhao et al, 2017). Therefore, in the food industry Campbell faces some tough competition from General Mills and Heinz Kraft Food Company who offer the same services and products.
Mission Statement and Slogan
Every business has some new business people trying to enter the market which seem as a threat to the existing ones. However, the easier the effort to enter a new market the more unstable the existing company will be. Therefore, as new business try to enter the food industry, Campbell faces threats but still fights them into becoming one of the best in the U.S.
This is in relation to raw material suppliers. When the raw material suppliers are few, they hold more ground on determining product price. Therefore, a company should not depend so highly on one supplier to make sure that they also share a say in determining product price. This is the case for Campbell whose suppliers are pretty many any therefore, the company end up determining the price of their products.
The number of consumers can also determine product price. A larger number of consumer base can also a change in the product price. However, this may not directly affect the business profits and most likely the effects will be very small (Galliers et al, 2014). Therefore, for Campbell, since they have a very large market share and segment, they sometimes rely on their consumers to set the prices which does not affect their profits negatively but instead they increase.
Every product or service in the market always has a substitute. Therefore, the threat for substitutes taking over the company’s products is really affecting businesses operations. The easier the effort to substitute a product or service for another, the easier it is for a business to lose its power (Dinnie, 2015). However, Campbell tries its level best to keep its products on top of its substitutes no matter what the cost.
Campbell as mentioned earlier is one of the best businesses in food industry specializing in soup preparation. However, apart from soups, they also produce beverages, provide home services, ready to serve soups as well as baked products. Additionally, the business offers very good quality products and services which are highly rated therefore making them popular and famous among consumers. The business different ways of marketing itself, its products and services to its customers (Holsapple, 2013). They do a lot of promotions and advertisements, participate in social events among other things. These are actually the key competencies for Campbell Soup since they seem to make it different than other similar businesses.
Campbell being one of the top businesses in the food industry, it has invested a lot in innovation which is currently one of its most effective strengths. Apparently, the business has always focused on providing the best products for its consumers but they are always improving on the quality, forms and packaging. Also it has built new manufacturing plants in different locations like, Ohio, Paris, Texas and Napoleon which are currently using much modernized methods for production and especially in treating its wastes.
PESTEL Analysis
As mentioned earlier, Campbell has always had a large market share in the food industry. However, its market share suddenly dropped from 60% to 49% within two year period (2007 and 2009). This was as a result of emerging private business operations who offered the same quality products and at cheaper prices and therefore attracting more customer, even Campbell’s customers. Due to this situation, it lost 11% of its share to the private sector. In addition to that, the company is still facing very stiff competition from Green Mills, Heinz Kraft and Nestle food companies who are also offering the same products and services.
Currently, most consumers are looking towards improving their health and therefore demand for more healthy foods. For instance, the young generation is asking for less calorie foods and the old for foods with more sodium. This is a chance for Campbell to come up with an idea on how to avail such products to their customers considering the fact that they specialize in foods, specifically soups.
This generally comes from its competitors, General Mills, Nestle, Wal-Mart to name a few. Currently, Campbell’s main soup dish is facing stiff competition from Green Mills and the private businesses who are offering the same kind of soup and may be even cheaper. This becomes a big blow to the company and a serious threat that they may be overtaken.
Campbell shares the same market with many other companies in the food industry. In addition to that, they also offer the same tastes, quality and types of products as well as the services. This causes a lot of rivalry in the markets simply because the products are all the same and give the same satisfaction but are from different companies (ElKhouly et al, 2015). Therefore, this bring up the idea of competition and every business finding a way to be better than the other. Apparently, its competitors mostly use the strategy of price domination as their competitive advantage whereby their product prices are much higher than those of Campbell. However, for Campbell, it has invested so much in innovation so as to reduce production costs, marketing, promotions and frequent advertisements among other things. Apparently this are the activities that are holding Campbell in the market which means that they are also effective methods.
Some of the closest Campbell competitors include: Green Mills, Wal-Mart, Heinz Kraft Food Company, Nestle and other private business in the food industry. Some of these business are producing the exact same product that Campbell produces but with a small difference in packaging and they still operate in the same market as Campbell and therefore causing stiff competition for both companies.
Market Analysis
Campbell should focus mostly on the business strategies that can help it turn its weaknesses into advantages and increase its strengths. For instance the business should consider using product differentiation strategy to make its products and services seem different from those of its competitors. This may include finding ways to provide superior product quality and offer include value added services as well. However, they should concentrate more on what the customers need than what the business itself needs. This will certainly increase the customer attraction rate to them.
Also, I would recommend the business to also diversify its products in a better manner than that of its competitors. This includes like preparation of foods for different age groups, social classes and cultures. Also this strategy will be focused on what the customer wants and requires than what the company itself needs.
Conclusion
In conclusion, Campbell Soup is a business that is certainly very successful in the food industry but still needs some changes to be able to be better than its competitors. The business, requires strategy changes to increase its market share, differentiate its products from those of its competitors and diversify its products and services.
References
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