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“Crown Cork Case and Seal in 1989”

In: Business and Management

Submitted By sunilkm2017
Words 288
Pages 2
“CROWN CORK CASE AND SEAL IN 1989”
Takeaways:
Main aspects of strategy-> who are the customers, what is the need, what is the technology
Strategic issues and options:- * Diversification into plastics * Acquisition of continental can (domestic and/or international) * Continue same business * Backward integration * Foreign markets expansion * EXIT * Forward integration
Incentive Compatibility: For sustainable partnerships incentives to both the company and the potential partner must be compatible. Lack of these rules out ‘Partnership’ as a viable option. In the case, this is why a partnership between Crown Cork and Seal and steel bottlers is ruled out.
Potters five force analysis-
Bargaining powers of buyers: * Bargaining power of buyers is high * Timeliness (service quality) is the key factor on the basis of which buyers buy the product * Another important factor is price. Buyers have very high price sensitivity. * Some facts substantiating the above- large volume and long term contract, most of the buyers cost contributed by metal containers
Bargaining power of suppliers- * High as aluminum supplier have 71% market share making it an oligopolistic market * Also Reynolds has lower transaction cost in the market and it has already completed forward integration ( spun aluminum top). So high competitiveness.
Threat of substitutes:- * High- 1. In the short run threat price is the main issue as plastic and glasses can act as substitute. * High -2.In the long run innovation could create a new alternative.
Threat of entrants:- * Moderate to high- profitable market but need high capitalization. * Limited number of suppliers would create problems for new entrants.
Rivalry between existing firms- * High- very high price...

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