Harvard Case - Metal Can and Container Industry in 2014
"Metal Can and Container Industry in 2014" Harvard business case study is written by Metin Sengul, Matthew Lee. It deals with the challenges in the field of Strategy. The case study is 9 page(s) long and it was first published on : Jan 26, 2015
At Fern Fort University, we recommend a multi-pronged strategy for metal can and container companies seeking to thrive in the dynamic and competitive landscape of 2014. This strategy focuses on innovation, sustainability, and strategic partnerships to secure a sustainable competitive advantage.
2. Background
The case study 'Metal Can and Container Industry in 2014' highlights the challenges facing the industry due to factors like increasing competition, rising raw material costs, and evolving consumer preferences. The key protagonists are the established players like Ball Corporation and Crown Holdings, who are grappling with disruptive innovations from new entrants and the need to adapt their business models to stay relevant.
3. Analysis of the Case Study
Industry Analysis:
- Porter's Five Forces: The case study reveals a highly competitive industry with strong bargaining power of buyers due to the availability of substitutes, moderate bargaining power of suppliers due to the availability of raw materials, and high threat of new entrants due to relatively low barriers to entry. However, the threat of substitutes is mitigated by the unique properties of metal cans and containers.
- SWOT Analysis:
- Strengths: Established infrastructure, brand recognition, economies of scale, and technological expertise.
- Weaknesses: High capital intensity, susceptibility to commodity price fluctuations, and potential for environmental concerns.
- Opportunities: Growing demand in emerging markets, increasing focus on sustainability, and advancements in technology and automation.
- Threats: Competition from alternative packaging materials, regulatory pressure, and economic downturns.
- Value Chain Analysis: The industry's value chain involves raw material sourcing, manufacturing, distribution, and marketing. Companies need to optimize each stage to achieve efficiency and cost-effectiveness.
Strategic Analysis:
- Competitive Advantage: Companies can achieve a sustainable competitive advantage through product differentiation, cost leadership, and innovation.
- Business Model Innovation: Companies need to explore new business models that focus on value creation beyond traditional manufacturing. This could include vertical integration, strategic alliances, and outsourcing.
- Globalization Strategies: Expanding into emerging markets presents significant growth opportunities, but requires careful consideration of cultural differences, regulatory frameworks, and local competition.
4. Recommendations
1. Embrace Sustainability:
- Environmental Sustainability: Invest in eco-friendly manufacturing processes, renewable energy sources, and recycling initiatives. This aligns with growing consumer demand for sustainable products and strengthens brand image.
- Corporate Social Responsibility: Engage in community outreach programs and ethical sourcing practices to build trust and enhance reputation.
2. Innovate and Differentiate:
- Product Development: Focus on product differentiation by developing innovative packaging solutions that meet evolving consumer needs. This could include lightweight designs, enhanced functionality, and personalized packaging.
- Technology and Analytics: Invest in advanced technologies like AI and machine learning to optimize manufacturing processes, improve efficiency, and enhance product design.
- Digital Transformation: Embrace digital transformation to enhance customer engagement, streamline operations, and optimize supply chain management.
3. Strategic Partnerships:
- Mergers and Acquisitions: Consider strategic acquisitions to expand into new markets, acquire new technologies, or enhance product offerings.
- Strategic Alliances: Form strategic alliances with other companies in the value chain to optimize resource allocation, reduce costs, and enhance market reach.
- Vertical Integration: Explore vertical integration to gain control over key aspects of the value chain, such as raw material sourcing or distribution.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The recommendations align with the industry's core competencies in manufacturing and technology, while promoting sustainability and innovation, consistent with a mission of providing high-quality, sustainable packaging solutions.
- External Customers and Internal Clients: The recommendations address evolving customer needs for sustainable and innovative packaging, while fostering a positive work environment for employees.
- Competitors: The recommendations aim to differentiate the company from competitors by focusing on sustainability, innovation, and strategic partnerships.
- Attractiveness: The recommendations are expected to lead to increased profitability, market share, and brand value, based on the anticipated growth in demand for sustainable and innovative packaging solutions.
6. Conclusion
The metal can and container industry is at a crossroads. Companies need to adapt to changing market dynamics and embrace innovation, sustainability, and strategic partnerships to thrive. By implementing these recommendations, companies can secure a sustainable competitive advantage, enhance brand value, and ensure long-term success in the dynamic and evolving landscape of the metal can and container industry.
7. Discussion
Alternatives:
- Cost Leadership: Focus solely on cost reduction and efficiency, potentially sacrificing innovation and sustainability.
- Market Penetration: Focus on increasing market share in existing markets, potentially neglecting new market opportunities.
- Market Development: Focus on expanding into new markets, potentially neglecting product development and innovation.
Risks and Key Assumptions:
- Economic Downturn: A significant economic downturn could negatively impact demand for metal cans and containers.
- Technological Disruption: Rapid advancements in technology could disrupt the industry, requiring ongoing adaptation and investment.
- Regulatory Changes: Changes in environmental regulations could impose significant costs and impact manufacturing processes.
8. Next Steps
- Develop a detailed strategic plan: Outline specific goals, timelines, and resource allocation for implementing the recommendations.
- Conduct feasibility studies: Assess the financial viability and market potential of specific initiatives.
- Establish key performance indicators (KPIs): Track progress towards achieving strategic goals and identify areas for improvement.
- Foster a culture of innovation: Encourage employees to generate new ideas and embrace change.
- Engage with stakeholders: Communicate the strategic vision and seek support from customers, suppliers, and investors.
By taking these steps, companies in the metal can and container industry can navigate the challenges and opportunities of the evolving market and position themselves for long-term success.
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Case Description
This short case is a companion to the classic "Crown Cork & Seal in 1989" case, documenting the evolution of the metal can and container industry in the quarter-century following the rise of William J. Avery to the CEO position at Crown in 1989.
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