Harvard Case - Sealed Air Taiwan (A)
"Sealed Air Taiwan (A)" Harvard business case study is written by Lynn Sharp Paine, Robert J. Crawford. It deals with the challenges in the field of General Management. The case study is 21 page(s) long and it was first published on : Sep 23, 1998
At Fern Fort University, we recommend Sealed Air Taiwan adopt a multi-pronged strategy focused on innovation, operational excellence, and market expansion to navigate the challenges of the Taiwanese market and achieve sustainable growth. This strategy will involve a combination of product development, process optimization, strategic partnerships, and targeted marketing efforts.
2. Background
Sealed Air Taiwan, a subsidiary of a global packaging company, faces a complex situation. The company is struggling to maintain profitability due to intense competition, rising raw material costs, and a challenging economic environment. The case study highlights the company's reliance on a single product, the 'Bubble Wrap', which is facing increasing price pressure. The company is also grappling with a lack of innovation, a rigid organizational structure, and a shortage of skilled talent.
The main protagonists are Mr. Chen, the General Manager of Sealed Air Taiwan, and Ms. Lin, the Marketing Manager, who are tasked with finding solutions to improve the company's performance.
3. Analysis of the Case Study
To analyze the situation, we can utilize Porter's Five Forces framework:
- Threat of New Entrants: Low, due to the high capital investment required and the established brand recognition of Sealed Air.
- Bargaining Power of Buyers: High, due to the availability of substitutes and the increasing price pressure on Bubble Wrap.
- Bargaining Power of Suppliers: Moderate, with increasing raw material costs posing a challenge.
- Threat of Substitute Products: High, with alternative packaging solutions emerging in the market.
- Rivalry Among Existing Competitors: High, with several local and international players vying for market share.
Additionally, a SWOT analysis reveals:
Strengths:
- Strong brand recognition
- Established distribution network
- Experienced workforce
Weaknesses:
- Dependence on a single product
- Lack of innovation
- Rigid organizational structure
- Talent shortage
Opportunities:
- Expanding into new markets
- Developing innovative packaging solutions
- Leveraging technology for efficiency gains
- Building strategic partnerships
Threats:
- Intense competition
- Rising raw material costs
- Economic uncertainty
- Changing consumer preferences
4. Recommendations
Short-Term:
- Optimize Operations: Implement Lean Management principles to streamline processes, reduce waste, and improve efficiency. This includes business process reengineering to identify and eliminate redundancies.
- Cost Reduction: Negotiate better pricing with suppliers, explore alternative raw materials, and implement Six Sigma methodologies to minimize production defects.
- Product Diversification: Introduce new products, such as customizable packaging solutions and eco-friendly alternatives, to cater to evolving customer needs and reduce dependence on Bubble Wrap.
- Enhance Marketing: Develop a targeted marketing strategy to reach specific customer segments and promote new products. Utilize digital marketing and social media to engage with potential customers.
- Talent Development: Invest in employee training and skill development programs to address the talent shortage and cultivate internal expertise.
Long-Term:
- Innovation Focus: Establish a dedicated R&D department to develop innovative packaging solutions that address emerging market trends and environmental concerns.
- Strategic Partnerships: Collaborate with technology companies and logistics providers to leverage AI and machine learning for improved supply chain management and customer service.
- Market Expansion: Explore new markets, particularly in emerging economies with high growth potential, through partnerships and acquisitions.
- Sustainability Focus: Implement environmental sustainability practices throughout the value chain, from sourcing raw materials to product disposal, to appeal to environmentally conscious consumers.
- Organizational Transformation: Transition to a more agile and customer-centric organizational structure that fosters innovation and collaboration. This involves empowering employees, promoting diversity and inclusion, and embracing digital transformation.
5. Basis of Recommendations
These recommendations align with Sealed Air Taiwan's core competencies in packaging solutions while addressing the company's weaknesses and capitalizing on opportunities. They are customer-centric, focusing on providing innovative and sustainable solutions. The recommendations are also supported by quantitative measures:
- Cost reduction: Through process optimization and supplier negotiations, the company can achieve significant cost savings, improving profitability.
- Product diversification: Introducing new products can expand the customer base and reduce dependence on Bubble Wrap, increasing revenue streams.
- Market expansion: Entering new markets with high growth potential can generate significant revenue growth.
- Sustainability focus: Appealing to environmentally conscious consumers can increase brand loyalty and attract new customers.
The assumptions underlying these recommendations include:
- The availability of skilled talent through training and recruitment efforts.
- The willingness of customers to adopt new packaging solutions.
- The continued growth of emerging markets.
6. Conclusion
By implementing a multi-pronged strategy focused on innovation, operational excellence, and market expansion, Sealed Air Taiwan can overcome its current challenges and achieve sustainable growth. This strategy requires a commitment to change management, talent development, and continuous improvement.
7. Discussion
Alternative strategies could include:
- Outsourcing production: This could reduce costs but might compromise quality control and brand image.
- Merging with a competitor: This could create a dominant player in the market but could also lead to antitrust issues.
The risks associated with the recommended strategy include:
- Failure to innovate: If the company fails to develop successful new products, it could lose market share.
- Inability to attract and retain talent: Difficulty in recruiting and retaining skilled employees could hinder the implementation of the strategy.
- Economic downturn: A global economic recession could negatively impact demand for packaging solutions.
8. Next Steps
A timeline for implementing the recommendations could include:
- Short-term (1-6 months): Implement Lean Management principles, negotiate with suppliers, develop marketing campaigns for new products, and initiate employee training programs.
- Mid-term (6-12 months): Establish an R&D department, explore strategic partnerships, and begin market expansion efforts.
- Long-term (12+ months): Implement organizational transformation initiatives, focus on sustainability practices, and continue to develop innovative packaging solutions.
By taking these steps, Sealed Air Taiwan can position itself for long-term success in the competitive Taiwanese market.
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Case Description
The general manager for U.S.-based Sealed Air Corp.'s Taiwan subsidiary must decide whether he's hired the right person to bridge the gap between Sealed Air's corporate culture and Taiwan's business culture. This case details Bob Kayser's experiences in trying to infuse the Sealed Air culture into the Taiwan operation, including approaches to training, compensation, and motivation.
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