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Mccormick

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Submitted By jinxincai
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Case analysis on McCormick

Company Background:
McCormick is a world’s leading manufacturer and provider in spices, herbs and seasonings industry, founded in 1889 in Baltimore. Its yearly sales account for around 21% market share in global market and 17% market share in US market. McCormick sources globally and has more than 1500 suppliers.
McCormick operates in two business segments: consumer and industrial. The consumer segment is to sell spices, herbs, extracts, seasoning blends, sauces, marinades and specialty foods to the consumer food market under a variety of brands worldwide; it is the primary driver of their business representing approximately 58% of sales, 80% of EBIT profits. The industrial segment sells seasoning blends, natural spices and herbs, wet flavors, coating systems and compound flavors to food manufacturers and the food service industry, both directly and indirectly through distributors and represents 42% of sales and 20% of EBIT profits.

Competitive Environment analysis:
Major competitors in the industry include Lawry’s, Krafts Foods Group Inc., Unilever, Associated British Foods, Goya Foods, Badia Spices, Alberto-Culver Co. and Morton Salt. Even though McCormick is the leader in this market, all its competitors are trying to differentiate with others and promote sales to compete with McCormick. How to maintain its competitiveness and lower price becomes one of McCormick’s challenges in terms of the business environment.
In terms of competitive advantages, product innovation and development are two critical parts. McCormick has previously applied new technologies, such as automation, computer-aided manufacturing, and advanced packaging equipment, to increase efficiency, speed up the production process, and decrease defective rate. Also being a large spice provider that has a global presence provides McCormick a strong bargaining power

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