Campbell Soup Co. 1. Company Overview Founded in 1869, Campbell Soup Company is one of the leaders in manufacturing & marketing branded consumer food products with approximately 24,250 employees world wide, total revenues of 6.7 billion, 36 manufacturing plants in 10 nations, and over 2000 products on the market. Over the years, Campbell Soup Company has diversified into number of businesses from frozen dinners to retail garden centers. However Soup has been its core business. Some major brands of Campbell Soup Co.
include Flagship red-and-white canned soup, Prego Spaghetti sauces, Godiva Chocolates, Pepperidge Farm baked goods, V8, etc. In addition, since 1980, Campbell Soup Co. has undergone three different strategies under thee different CEOs who brought their own agenda in order to build value for the company and its shareholders. For example, under Gordon McGoverns leadership (1980-1989), Campbells strategic focus was on developing and introducing new products and expansion of the business portfolio through acquisitions. Under David Johnson (1990 1997), The companies focus shifted to increasing sales growth, increase market share & share holder value through Eliminating unprofitable products & business units, focusing more on global marketing and Improving communication and technology sharing between businesses.
Under the third CEO, Dale Morrison (1997 present), Campbells strategy focus continued to increase sales growth, increase market share & share holder value, but focus was shifted more towards profitable businesses with the highest growth potential and divestations of non strategic businesses 2. Problems / Strategic Issues Since 1980, Campbells corporate strategy and the companys business structure have undergone three significant changes. Each strategy was implemented under the leadership of three different CEOs: 1. 1980 1989, Gordon Morrison: o Expansion through acquisitions and development of new products. 2.
1990 1997, David Johnson: o Increase sales growth, increase market share & share holder value. 3. 1997 Present, Dale Morison: o Continue to increase sales growth, market share & share holder value. Campbells corporate strategy, under Gordon McGovern was expansion & development of new products to capitalize on consumer trends & improve operating efficiency. But this strategy turned out to be inefficient, as Campbells managers got too deeply involved in new-product development and neglected the performance of their existing products.
In addition the expansion strategy led to unsuccessful diversification of Campbells business into industries that they had no expertise or competitive advantage. As a result, the companys cost of production went up and profit was reduced. Under David Johnson, the company restructured the business line and implemented a new corporate strategy. The new strategy was to eliminate unprofitable products and business units, improve communication and technology sharing between business units, and focus more on global marketing in order to increase sales growth, market share and shareholder value. This new strategy helped to increase operating margin and profits for the company. Some businesses were also able to improve their performances under Davids strategy.
However, the company encountered some setbacks with its global marketing strategy. For example, the European market was harder than expected to penetrate for such products as Campbells soups. The company failed to detect that aggressive advertisement was needed to introduce The Soup products in Europe that caused sales to drop in those markets. When Dale Morison took over Campbell Soup as CEO, His goal was to enhance David Johnsons plan. He also restructured the companys business line structure further more and planned to Continue to increase sales growth, increase market share & share holder value. But Dale focused more on profitable businesses with the highest growth potential and divested non-strategic businesses.
At this point Dale was faced with the task of allocating.