Smuckers has a number of strengths from which to gain competitive advantage. The company has a roster of leading brands that are household names (2009 Annual Report). It has saturation-level distribution around the nation. The company is consistently profitable and has a healthy balance sheet (MSN Moneycentral, 2010). It is liquid, has a low debt ratio and the company is growing faster than the industry average -- impressive since its business tend to be mature. One weakness of Smuckers is that its brands lack dynamism -- they are staples and do not excite consumers. The company's margins typically lack those in the industry over the past five years, indicating that Smuckers has lower pricing power than its competitors.
There are a number of opportunities in the market. Smuckers can place increased emphasis on the growing organic segment. Organic groceries have grown from $1 billion in 1990 to $23 billion in 2008 with expected future growth rates of 18% per year (Organic Trade Association, 2008). There is also further merger and acquisition opportunity -- the Folgers transaction in 2008 had been a huge success for Smuckers (AP, 2009). Some of the threats include competition, increasing grocery specialization occurring outside of Smuckers' area of expertise (organic, ethnic) and shifting consumer tastes. New entrants are common and some of them have emerged as legitimate players in some Smuckers' businesses. The company's brand strength has insulated it thus far, but over time there is concern that this brand strength is being eroded by new entrants and a failure of Smuckers to deliver premium product to match its premium pricing. This raises the specter of being forced into a low-cost model, which Smuckers may find that it is not adequately prepare for.
Conclusion
Smuckers is at present a strong company with a roster of successful brands. It markets its products as premium, but the company's...
The vast majority of the trademark value at Smuckers ($1.824 billion) is considered by the company to be indefinite-lived, not subject to amortization. This means that the company believes its marks have near-permanent value, evidence of their strength in the market. The company's distribution competency is also considered to be one of its greatest strengths. Smuckers has saturation distribution across North America, which allows it to launch brand extensions and
The units should be multi-disciplinary, such that all elements are in place to build these two brands. In addition, the new units need to be allocated both human and fiscal resources in order to achieve their tasks. Support from the organization's highest levels is imperative to the success of any project. The third step in this strategy is to identify specific tactics. For Smucker's to create superpremium brands in coffee
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