Crown Cork & Seal in 1989 Industry analysis

PRESENTED BY:

SHYAMANTA BORAH (05)MANISH PATHAK (45)SAMARTH SHARMA (53)SHASHANKA SHEKHAR (54)

Introduction

• Established in 1891• Financial problems in 1956 leading to virtual bankruptcy in

1957• John Conolly arrived in 1957 and turned the company

around through modernisation; asset disposal• Started overseas investment• Restructuring• Increased Performance

American Na-

tional

44%

Other28%

Cen-tinen

tal Can13%

Renolds Metals

5%Crown Cork

& Seal5% Ball Cor-

poration5%

market share

Top U.S. Users of Containers & Suppliers, 1989Coca-Cola Company Suppliers:

Anheuser-Busch Companies Inc.

PepsiCo Inc.

The Seagram Company, Ltd.

Threat of Substitution

Suppliers• Can producing companies were

fourth largest steel consumers• During 60-70s traditional tin plated

can industry was invaded by aluminium cans and also fiber-foils and plastic suppliers

Customers• 80% of metal cans were purchased

by major food and beverage companies

• Can constituted 45% of the cost of the final product

• Hence most had at least two suppliers

• Poor services and uncompetitive prices could be punished – Therefore high propensity to substitute

• Can plants set up to certain customer format, therefore high bargaining power of customers

Title and Content Layout with SmartArt• Substitutes• Aluminium cans, plastic, paper, glass containers• Aluminium/Steel Price/Preformance glass

• Marketing potential of aluminium/glass (lithography)• "a bottle which a person could recognize even if they

felt it in the dark, and so shaped that, even if broken, a person could tell at a glance what it was" – Coca-cola

• Steel alters taste vs aluminium and glass do not• Steel $17.13 vs $20.81 – Steel vs Aluminium

• Substitutes pushed by legislation – recycling & CFC – aerosols