Business Policy & Ethics Case Study – Campbell: Is The Soup Still Simmering?

Overall Environment for Campbell Soups

Campbell Soups is accompany that can white and red soup and has for a long time been selling soup in the US. Soup has been experiencing slow or stagnant growth for quite a long time.  To improve its sales the company employed an initiative to reduce the level of sodium in the soup and improvement in the nutritional value. This has been the company initiative for the last one decade. Although the company has a better market share as compared to other competitors in the country, soup customers have generally shifted to other food products that include frozen pizza and microwave meals. This has reduced the market share of soup in the food industry. This has initiated the change in the company management, where the current manager considers employing new initiatives that include taste adventure with intention of bring back the old soup customers who considered substituting soup with other food products (Alan et al., 2012).

Types of Soups and their Prices

Campbell produces various forms of soups which include Tomato soup $1.25, peeper pot, vegetable soup, chicken noodle soup $1.99, onion soup, cream of mushroom soup at $1, beef soup. The prices vary from 1$ to 5$ based on the ingredient used to make the soup for a container of the same size. This demonstrates that the nutritional value of the products and the taste matters a lot in determining the product price and also in establishing the purchase quantity for each category. In this regard, company should consider working on the product taste, health and nutritional value to increase its preference in the marker.

Market for Brands Offered by Campbell Soup

The company products that demonstrate a great sale potential is soup products which include tomato soup, mushroom soups and chicken noddle soups. This is because the company offers unique food product and it has been offering this product since it was established in 1869. The fact that it has maintained its reputation as a soup company demonstrates its great potential of selling this product extensively.

Five Portal Forces

  • The company is facing high competition from various companies that include General Mill, Inc., Mondelez International, Inc., ConAgra Food, Inc., Dole Food Company, Inc. and Frito-Lay North America, Inc. among others. Although the company has been faring well in the market, it still experience high competition in the market and has not managed to secure a higher market shares as some of its competitors (Yahoo Finance, 2016).
  • Campbell Soup Company is found in food processing and packaged industry in the US. This industry is experiencing a high rate of new entry especially from international companies. The new entries are offering their products at a reduced cost and thus, the company will be facing new pressure from Canadian companies among others (Thompson et al., 2015).
  • Due to high competition in the market, the company is experiencing a high buyers bargaining power. In this regard, the prices of their products are highly determined by buyers since there are various options in the market.
  • The company has a low suppliers bargaining power since there are many suppliers in the market with all the needed products particularly meat and vegetables.
  •  However, the company is facing high substitution risks from homemade soups produced by a number of competing companies that include Kraft Foods, Heinz Company, General Mills and Nestle (Thompson et al., 2015).

Competition in the Industry

Food Processing and Packaging industry is facing great competition in the market. Campbell’s Soup Company is facing great competition from both local and international companies in the market. The company does not appear in the first ten companies in the industry despite being among the oldest companies in this industry. It has low market shares as compared to Nestle S.A., Mondelez International, Inc., Unilever, Frito-Lay North America, Inc., Cargill, Incorporated, Tyson Food, Inc., Mars, Incorporated, ConAgra Foods, Inc., DANONE, and Smithfield Foods, Inc.  In this regard, Campbell Soup still has a long way to go to acquire a higher competitive advantage in this market (Yahoo Finance, 2016).

Evaluation of the New Vision

Morrison focuses on changing the company’s taste adventure after the previous regime worked more on reducing the sodium level and also on the nutritional aspect. This may increase the company’s chance of growing. Taste is very important and it serves a great purpose in addressing a wide range of customers in the market. With a diverse taste, the company can manage to meet the needs of more customers and thus increasing their responsiveness. However, they should also manage to maintain a good level of sodium and nutritional value to add value to the current product distributed in the market.

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