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NOTE – ADDITIONAL WEB LINKS TO FINANCIAL INFORMATION:
One interesting way to evaluate the competitiveness in the industry is to look at comparative
financial performance from the perspective of an investor. Since Campbell is a publicly-traded
firm, take a look at http://finance.yahoo.com/q/co?s=CPB to see how it compares with its peers.
2. What internal resources does Campbell have that may give it a competitive
advantage?
Referencing Chapter 3: Analyzing the Internal Environment of the Firm
When one firm outperforms others by a wide margin over a long period of time, it’s important to
figure out how this could be. The answer may lie in how that firm arranges its activities and
Remember, value-chain analysis is a strategic analysis of an organization that uses value-creating
activities. Value is the amount that buyers are willing to pay for what a firm provides them and is
measured by total revenue, a reflection of the price a firm’s product commands, and the quantity
To answer the question of what strategy Campbell should choose, that strategy should be
adequately supported by its value chain and other internal resources. Campbell must assess the
relationships between the elements in its value chain. Every activity should add value. Take a
look at Exhibit 3.1 to see the value chain activities. Here is what an assessment of this might look
like for Campbell:
Value chain activity How does Campbell create value for the customer?
What challenges does it have in its value chain?
Primary:
Inbound logistics (distribution
facilities, material control
The company’s principal executive offices and main
research facilities are company-owned and located in
Operations (efficient work-flow
design, quality control systems)
Company’s manufacturing and processing plants are
well maintained and are generally adequate to support
Outbound logistics
(consolidation of goods, efficient
Campbell uses an electronic network to facilitate its
continuous-replenishment program with its most
Marketing and Sales (motivated
sales people, innovative
advertising & promotion,
Sales activities are conducted by the company’s own
sales force and through broker and distributor
arrangements. The company has strong market positions
Service (ability to solicit
All of the company’s segments sold products to
Secondary (or support):
Procurement (procurement of
raw materials, “win-win”
relationships with suppliers)
The ingredients required for the manufacture of the
company’s food products were purchased from various
suppliers. While all such ingredients were available
Technology development
(innovative culture & qualified
Campbell sustains an appropriate technology
infrastructure to provide and maintain connections
Human resource management
(effective recruitment, incentive
Re human resource management, as per CEO Conant’s
statement, the company “possessed the people” to
General Administration
(effective planning systems to
establish goals & strategies,
Under Mr. Conant’s direction, Campbell made many
reforms through investments in improving product
quality, packaging, marketing, and creating a company
Primary Activities
Campbell had historical strength is all its primary activities, especially its inbound, operational
Secondary Activities
Campbell had added value in its procurement processes, and appeared well aware of the need for
supportive technological processes in order to continue to sustain that advantage. Retired CEO
To answer the question of how to support a competitive strategy, it’s important to consider the
concept of the resource-based view of the firm, and the three key types of resources: tangible
Tangible Resources:
Financial – Douglas R. Conant’s focus on winning in both the marketplace and workplace had
Physical – Campbell’s physical facilities were certainly adequate.
Technological – Campbell maintained an adequate technological system that allowed it to
Organizational – Able to produce new varieties of products in the past using organizational
Intangible Resources:
An important issue to focus on here is the importance of intangible resources like innovation and
reputation. Especially in mature brands, sustaining reputation is essential. Look at any intangible
Human: CEO Conant’s focus on innovation appeared to continually revitalize the workforce.
Innovation and creativity: Campbell was constantly adding new products that better reflected
Reputation: Excellent - Campbell started its business in 1869 and now sells its products in
over 100 countries. Campbell’s name and brand logo represented reliability in product
quality.
Organizational Capabilities: The ability to produce new varieties of products for their
customer’s health and wellness and its expansion into emerging markets meant Campbell had
Determining whether the internal resources are valuable, rare, difficult to imitate, or difficult to
substitute (VRIN) can help a firm sustain a competitive advantage. See Exhibit 3.6. Applying the
VRIN concept shows that Campbell had valuable resources, which nearly every competent firm
3. What do you think Campbell should do to counter the competition and remain in the
top of the soup business?
Referencing Chapter 5: Business-Level Strategy
A competitive strategy is linked to the value chain, and supported by intangible assets. Campbell
had historically good coordination across the value chain. Resources and assets should provide a
In order to achieve a sustainable competitive advantage, Campbell had to assess its ability to
contend with other processed food companies. The question of how to compete in a given
business to attain competitive advantage requires an assessment of the types of competitive
strategies, including the three generic strategies that are used to overcome the five forces and
achieve a competitive advantage:
●Overall cost leadership
oLow-cost-position relative to a firm’s peers
●Differentiation
oCreate products and/or services that are unique and valued
●Focus strategy
oNarrow product lines, buyer segments, or targeted geographic markets
Generic strategies are plotted on two dimensions: competitive advantage and strategic target. The
Campbell had products that targeted different types of consumers and their health concerns, such
as blood pressure or weight loss. With new products on the market and on their way, contract
CEO Douglas Conant had remade the company's condensed soups, introduced soup in
microwavable containers, revamped marketing and redesigned shelving systems in supermarket
soup aisles. This made Campbell one of the industry’s best performers and its preset production
Was it necessary to put more emphasis on differentiation? Would a combination strategy make
sense for Campbell?
Referencing Chapter 6: Corporate-Level Strategy
Corporate strategy focuses discussion on the questions of what businesses a corporation should
compete in, and how the businesses should be managed so they can create “synergy” – creating
Diversification is the process of firms expanding their operations by entering new businesses.
Some possibilities include:
●Mergers and acquisitions
●Strategic alliances
Whatever the choice, it should create value for all stakeholders – employees, suppliers,
Companies can achieve synergy through diversification in two ways:
Through related businesses (horizontal relationships)
●Sharing tangible resources
Or through unrelated businesses (hierarchical relationships)
●Value creation derives from corporate office
●Leveraging support activities
Core competencies reflect the collective learning in organizations – how to coordinate diverse
production skills, integrate multiple streams of technologies, and market diverse products and
Campbell operated with a related business model. Given its core competencies in the
Campbell had grown primarily through acquisition and internal development, and it appeared to
NOT in the case: Campbell operated 5 divisions worldwide:
U.S. Simple Meals, which included all the various soups, both condensed and ready-to-serve,
plus sauces (Prego) and baby food (Plum Organics);
Global Baking and Snacking, which included Goldfish snack crackers, Pepperidge Farm cookies,
and Arnott’s biscuits outside the U.S. as the biggest sellers;
International Simple Meals and Beverages, which included soups and sauces;
U.S. Beverages, which mainly consisted of the V8 product line; and
Bolthouse and Foodservice, businesses, which involve service to restaurants.
NOTE – ADDITIONAL WEB LINKS:
One of Campbell’s strengths is its brand. In 2013 Campbell announced that its soups, primarily
the Chicken Broth & Noodle, would be available in Keurig K-cups as “fresh-brewed” mini-meal
options. CEO Morrison said “This innovative partnership is a win for consumers and for both
companies, and represents another important step as Campbell expands into higher-growth
spaces.” Will this increase the brand’s presence and drive more sales in other product categories?
See http://investor.campbellsoupcompany.com/phoenix.zhtml?c=88650&p=irol-
newsArticle&id=1852005 for the whole story.
Also in June of 2013, Campbell had acquired Plum Organics, “a leading provider of premium,
organic foods and snacks that serve the nutritional needs of babies, toddlers and children. ‘Plum’
is the No. 2 brand of organic baby food in the United States and is currently the No. 4 baby food
brand overall. Plum Organics generated $93 million in gross sales for the year ended Dec. 31,
2012.” See http://investor.campbellsoupcompany.com/phoenix.zhtml?c=88650&p=irol-
newsArticle&ID=1829771&highlight=
Do these recent acquisitions and alliances bode well for the company? Are the synergies apparent
here?
In June 2013 Forbes agreed that Campbell appeared to be reinventing itself with innovations and
acquisitions, and putting a lot of emphasis on branding and consumer outreach, especially to
Hispanics and “Millenials”. For a report on how Campbell was reaching out, see the article at
http://www.forbes.com/sites/avidan/2013/06/03/soups-on-at-campbells-as-it-reinvents-itself-
with-innovations-and-acquisitions/
For more about Morrison’s overall strategy, see
http://www.forbes.com/sites/jennagoudreau/2013/02/21/the-campbell-soup-turnaround-is-
heating-up-will-it-sizzle-or-fizzle-out/, which includes a timeline and video report on the new
initiatives.
But not everyone was buying this new brand strategy, especially the idea of “soup in a bag”.
Stephen Colbert poked fun at the soup pouch idea in November 2011 in this video:
http://www.huffingtonpost.com/2012/11/16/stephen-colbert-soup_n_2143500.html
Would this new “soup” strategy increase overall market share and revenue?
Referencing Chapter 7: International Strategy
International expansion is a viable diversification strategy; however, before pursuing this, a firm
needs to determine why an industry in a given country is more (or less) successful than the same
industry in another country. When choosing a country to expand into, firms must assess the
There are two opposing forces that firms face when entering international markets: cost
A global strategy was effective if it standardized all of a firm’s products for all of its worldwide
markets. Doing this would reduce a firm’s overall costs by spreading investments over a larger
global market. However, a global strategy should be based on three assumptions:
●Customer needs and interests were homogeneous worldwide
Campbell had been pursuing a global strategy with its simple meals and beverages and global
baking and snacking businesses. The assumption was that customers liked soup, vegetable
drinks, and both savory and sweet snacks worldwide. This may have been true in the European
Would CEO Morrison be able to succeed to grow brand recognition, grow market share and
profits worldwide?
NOTE – ADDITIONAL WEB LINKS:
Take a look at Campbell’s various brands at
http://www.campbellsoupcompany.com/our_brands.asp
Note the European brands as well as the branding move into Asia Pacific. Does the Asian brand
profile appear to be adequately positioned for growth into this region?
Regarding the European business, in August of 2013 Campbell announced that it was in final and
exclusive negotiations for the potential sale of its “simple meals” and beverages business
in Europe to CVC Capital Partners (CVC), a leading global private equity firm. According to the
Lemmens and Royco in Belgium.The proposal also includes the sale of four plants in
Puurs, Belgium; Le Pontet, France; Lubeck, Germany; and Karpalund, Sweden. The proposed
Campbell’s products in the United Kingdom or the Middle East or Africa. It also does not
include Kelsen Group, which will continue its operations in Denmark and the export of its
http://investor.campbellsoupcompany.com/phoenix.zhtml?c=88650&p=irol-
However, also in August 2013, Campbell announced that it had “completed the acquisition of
Kelsen Group A/S, a producer of quality baked snacks, including the Kjeldsens and Royal
Dansk brands, sold in 85 countries around the world. Based in Nørre Snede, Denmark, Kelsen is
http://investor.campbellsoupcompany.com/phoenix.zhtml?c=88650&p=irol-
newsArticle&ID=1846153&highlight=
Do these recent moves appear reasonable?
In 2015 there appeared to be nothing new: Campbell was reshaping itself, trying to “improve its
growth trajectory by strengthening its core business and expanding into faster-growing spaces.
Does this sound terribly “innovative” to you?
