Question

Please write 1-2 page answer to the discussion questions for the case Campbell Soup.

Please choose a total of four to five questions from the two sets of questions: general questions listed in "Case&PaperGuideline" and case specific questions listed below. You don’t have to answer ALL the questions listed. You can write one short paragraph for each question, or use bullet points.


Discussion questions for Case Campbell Soup and Chapter 6 Corporate Level Strategy:


a. What business level strategy is Campbell Soup using in its main business segment (soup, sauces, and beverages) in the US? Cost leadership, differentiation, focused, or integrated?


b. Based on internal analysis, what is Campbell Soup’s core competency, if any? Do you think the business level strategy identified in Q1 fits Campbell Soup’s core competency?


c. Based on the external analysis of Campbell Soup, what are the major threats to its current product portfolio? What strategic adjustments do you recommend to deal with these threats? Do these adjustments fit Campbell Soup’s core competency?


d. Campbell Soup has used a series of acquisitions to expand its product line as mentioned in the case, such as Pace Food (a Mexican sauce producer, page 65). At the same time Campbell has divested from some premium food products such as Godiva chocolate (page 67). What’s the rationale behind the acquisition and divestiture? What kind(s) of diversification are these acquisitions? How can Campbell Soup increase value through these acquisitions/diversification? Economy of scope (shared activity or corporate level core competency)? Market power? Financial economy?

Answer 1

Campbell Soup is a well-known company in the food industry with a long-standing history. The company has established itself as a leader in soup, sauces, and beverages in the US. Below are my thoughts on the discussion questions for the case and chapter 6 corporate level strategy:

a. Campbell Soup appears to be utilizing a differentiation strategy in its main business segment in the US. The company has created a wide range of unique and high-quality products, which sets them apart from their competitors. Campbell Soup's products generally cater to a higher-end market, which justifies the price premium.

b. Campbell Soup's core competency seems to be its ability to create and market high-quality products. The differentiation strategy mentioned earlier builds on this core competency. Overall, the business-level strategy fits the company's core competency.

c. One of the major threats to Campbell Soup's current product portfolio is the trend towards healthier eating habits. The company's higher-end products, while popular, may not fit the trend towards healthier eating. Campbell Soup could introduce more healthy options or potentially acquire companies offering such products to remain competitive. Such a move may not necessarily fit the core competency, but it is crucial for maintaining market share.

d. Campbell Soup has used acquisitions to expand its product line, and divestitures to shed non-core products. The rationale behind these moves often centers on the pursuit of better economies of scale, providing better margins for the company and its investors. Campbell Soup's acquisition of the Mexican sauce producer, Pace Food, is an example of how Campbell Soup diversifies its product line. By adding the Mexican sauce products to its portfolio, Campbell Soup increased its market share. Economies of Scope are essential for supporting strategic diversification. Additionally, divesting from premium food products such as Godiva chocolate, when not aligned with core competencies or not providing the better returns, strengthens the company's position. Campbell Soup's diversification efforts are mainly economy scope-based as they invest in roles that fit their core competencies to create synergies and efficiency. Overall, these acquisitions and diversifications represent opportunities for Campbell Soup to increase value.

In conclusion, Campbell Soup's business-level strategy has been successful over the years. The company utilizes differentiation to create unique products that cater to a higher-end market. The external threat of healthier eating could be an opportunity for the company to introduce more healthy options or acquire companies that offer such products. Campbell Soup's diversification efforts are mainly economy scope-based, which provides critical synergies and efficiency. These actions aim at increasing values and achieving better margins for the Company.