crown cork 2013
DESCRIPTION
History and evolution of Crown and Cork seals companyTRANSCRIPT
CROWN CORK AND SEAL IN 1989
GROUP 2:Suman Paul
METAL CONTAINER INDUSTRY
61% OF PACKAGED PRODUCTS
3 PIECE CAN TO 2 PIECE CAN
STEEL BODY TO ALUMINIUM
INDUSTRY STRUCTURE
PRICING
CUSTOMERS
DISTRIBUTION
MANUFACTURING
SUPPLIERS
INDUSTRY TRENDS
IN HOUSE MANUFACTURING
PLASTICS
GLASS
SOFT AND ALUMINIUM CANS
DIVERSIFICATION AND CONSOLIDATION
CONNELLY’S STARTEGYPRODUCTS AND MARKETS
MANUFACTURING
RECYCLING
R&D
MARKETING AND CUSTOMER SERVICE
FINANCING
INTERNATIONAL
PERFORMANCE
Final Strategy adopted by Crown cork are:
1990 Consolidation :
Continental Europe Unit purchased to increase market share in Europe.(In Metal Can)
1992-Getting into Plastics :
It acquires CONSTAR International, a world leader in PET plastic containers for the beverage, food and household markets.
1996-Creating a World Packaging Leader:
Crown Cork & Seal acquires CarnaudMetalbox, Europe's leading manufacturer of metal and plastic packagingBecomes the world's packaging leader.
2000 : Innovation in Sealing systemCrown introduces the first major breakthrough in beverage end technology in nearly 20 years: the revolutionary Super End® beverage ends. This development reflects Crown's dedication to innovate within the metal packaging industry
2005
Crown sells its Global Plastic Closures business.
2008-Environmental friendly product:
EarthSafe™ Dispensing SystemReplaces hydrocarbons with compressed air as the propellant.
2011Orbit™ Closure A unique two-part designThat reduces torque making it twice as easy to open compared to standard twist-off closures.
2013360 END technology used by Sly Fox BreweryEntire lid could be removedUse as drinking cup
Market Position in 2013
• One of the largest packaging companies in the world.
• Only full-line global packaging company.• #1 producer of food cans and metal vacuum
closures in the world.• #3 producer of beverage cans in the world.• #1 or #2 producer of aerosol cans in markets
where we compete.
Brand Building Packaging……It’s a way of life at crown.
• Net sales is $8.5 billion in 2012 against $1.8 billion in 1988.
• 149 plants in 41 countries as against 88 plants in 1989.
• Biggest threat: Plastics. ( raw material prices fluctuations)
Current market of metal can industry
400 metal can shipping container manufactures
Together all firms generated $23.2 billion
58.1% of all aluminium cans were recycled
Highly seasonal trends
MARKET ANALYSISENTRY THREAT (LOW)
• Easy entry• 2 piece line available for $12 M• Low profit margins
RIVALRY (HIGH) • Commodity product• Excess capacity• Low market concentration
SUBSTITUTES THREAT (MODERATE)• Low switching cost• Plastic / Glass
SUPPLIER (HIGH)• Few big suppliers• 71% of market s aluminium
BUYER POWER (HIGH)• Backward integration• Purchase large volumes• Buyers know cost
SWOT ANALYSIS
STRENGHTS WEAKNESS
FINANCIAL STABILITY LOW COST OF PRODUCTION SOUND CUSTOMER RELATION
NO R&D NO DIVERSITY OF PRODUCT
OPPORTUNITIES THREATS
MERGER AND ACQUISITION GLOBALIZATION
SLOW GROWTH RATE SUPPLIERS AND COMPETITORS
PRODUCING IN HOUSE PLASTIC MARKET
MARKET ANALYSIS
SWOT ANALYSIS
IMPACT OF BUYING CONTINENTAL CAN ON MARKET SHARE
AMER
ICAN
NAT
ION
AL C
AN
CON
TIN
ENTA
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ETAL
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CRO
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RK &
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BALL
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RPO
RATI
ON
0%5%
10%15%20%25%30%
PRE-MERGERPOST MERGER
IMPACT OF BUYING CONTINENTAL CAN
DOMESTIC OPERATIONS WOULD DOUBLE
INCREASING GLOBAL PRESENCE
STEP IN PACKAGE OPERATIONS
DIVERSIFICATION IN PLASTICS :Market analysis
Market Segment (1980-1998)
Y_O_YPlastic (%
mkt share)Metal Can(% Mkt Share)
Glass (% Mkt Share)
1980 8 27.7 64.3
1983 11 38.8 50.2
1986 14 49.9 36.1
1989 18 61 21
1992 19.5 62.5 18
1995 21 64 15
1998 22.5 65.5 12
PROS AND CONS for Diversifying into Plastic Industry
S.No Pros Cons
1 Increasing market share Material requires for retaining carbonation
2 Light weight & Convenient Handling Preference for flat base containers by soft drink industry
3 Declining Resin prices
4 Easy substitute for glass based containing solution :food ,beverages ,beauty, pharmaceutical
Strategy Adopted :Recombining
• 1990 Consolidation BeginsCrown acquires major portions of former industry leader Continental Can Company and becomes the North American packaging leader.
• 1992-Getting into Plastics Crown Cork & Seal acquires CONSTAR International, a world leader in PET plastic containers for the beverage, food and household markets.