Headquartered in Camden, New Jersey, The Campbell Soup Company is an American company that produces canned soups and related products. These products are sold in over 120 countries around the world. Consumers trust Campbell for the provision of authentic and readily available food since its inception in 1869. Campbell soup is listed in the New York Stock Exchange and has a market cap of 11.87B. According to CSC Brands (2010), Campbell Soup's key success factors include driving sales growth in healthy beverages and bakes snacks through increased innovation including wellness as well as increased marketing.
Opportunities
Campbell Soup has the opportunity of expanding its international presence, particularly in emerging markets. Even though most of Campbell’s sales are mainly American based, the company now owns segments in Brazil, Germany, Sweden, and other states. These countries have a sizable number of people in communities who have access to Campbell products. With the emergence of new technology, Campbell has an opportunity to improve the quality of its products and also practice differentiated pricing strategies which will not only enable the firm to retain its existing customers but also lure new customers through other value-oriented propositions. With the firm producing better goods for the sake of their consumer’s health, it has the opportunity of expanding its healthy beverages as well as baked snacks. In relation to this Campbell has the opportunity of positively contributing to the society through corporate social responsibility.
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Trends
According to a Trends cape report released by Campbell in 2019, the top trends of the year include Wellness sips where convenient drinks continue to serve individual needs through the provision of healthful sips packed with fruits and vegetables. The vegetable evolution is another trend where more snacks and drinks are vegetable-oriented, and more consumers continue to change their thinking about different vegetables that they earlier would not intake as snacks (RFF, 2019) . Consumers are also moving into all-day dining, therefore, demanding meals that suit any hour of the day as well as any level of hunger.
Porter’s Five Force Analysis
Established by Michael E. Porter, the Porters Five force Model is a tool used in strategic management to aid in determining the competitive landscape of an industry. These five forces are Threat of New entrants, bargaining power of suppliers, bargaining powers of buyer’s threat of substitute products and service and competitive rivalry.
Threat of New Entrants
It is easy for companies producing large capacities to have a cost advantage in this industry; this is because achieving the economies of scale is relatively difficult. Production costs for new entrants are therefore made more costly making the threats of new entrants a weaker force. Also, the capital requirements for this industry are high; this could be attributed to high research and developments costs. Due to this factor, it is difficult for new entrants to set up a business. The government policies governing the industry impose strict legal and licensing requirements making the threat of new entrants a weak force.
Bargaining Power of Suppliers
Compared to the available buyers in the industry hat Campbell soup bell operates the number of suppliers is more. This, therefore, reduces the power that suppliers have over control of prices hence a weak force. The suppliers can also be easily switched since the products supplied to Campbell soups are fairly standardized, less differentiated and have a low switching cost.
Bargaining power of Buyers
The bargaining power of the buyers is fairly high; this is because of the presence of many trends that affect purchasing behavior. Since these consumers have a low switching cos, they can easily alternate from one product to another depending on the food trends. For consumers who are loyal to specific brands and shop exclusively for items produced by the brand, their bargaining power is lower.
Threat of substitutes
The packaged food industry is vulnerable to substitutes, even though Campbell aims at providing a wide array of products to its customers, it is very easy for them to purchase substitute products. It is also very easy for consumers to purchase their fresh produce and make meals from their homes. Also, for consumers who plan for their meals and prepare them in advance could use hose meals to replace the convenient go-to meals offered by Campbell
Competitive Rivalry
There are numerous firms involved in the production of food and beverages. Different companies compete in the quality, price, advertising and taste of products. Competitive Rivalry is, therefore, a strong force in the packaged food industry. Known competitors include General Mills Kraft’s and Nestle. General Mills is a firm that deals with the manufacturing and marketing of branded consumer foods. Operating under similar strategies as Campbell, General Mills dividend yield as of 2018 was at 4.93% while Campbell was sat 3.57%. General Mills market cap is also higher standing at $30.99B.General mills key success factors include focussing on expanding its international presence and it is doing so by creating relationships with more diverse suppliers in order to widen its footprints The company has a high brand loyalty mainly due to product longevity in the market. It is, therefore, one of the main competitors of Campbell seeing that it operates in the same industry with some shared goals and a broader market.
References
CSC Brands. (2010, July 12). Campbell Steps Up Investments in Baked Snacks and Healthy Beverages; Highlights Plans for Simple Meals. Retrieved April 23, 2019, from https://www.campbellsoupcompany.com/newsroom/press-releases/campbell-steps-up-investments-in-baked-snacks-and-healthy-beverages-highlights-plans-for-simple-meals/
RFF. (2019, January 7). Campbell Soup reveals Top 6 food, beverage trends in 2019. Retrieved April 23, 2019, from https://www.refrigeratedfrozenfood.com/articles/96244-campbell-soup-reveals-top-6-food-beverage-trends-in-2019
