Essay on Crown, Cork & Seal

1490 Words Mar 21st, 2014 6 Pages
Crown Cork & Seal in 1989
As many successful companies do, Crown Cork & Seal began with an idea—one that had the potential to improve the world in which we live. In 1891, a machine shop foreman conceptualized a superior method for creating bottle caps, and set about to do so. Crown Cork & Seal was born, and what followed were intermittent periods of triumphant achievements and costly missteps, soaring profits and depressing losses, eventuating in a successful company with rich tradition and history. However, the competitive business environment slows for no one, and the company finds itself constantly reevaluating its strengths, its competitive advantages, and the viability of the industry in which it has built its legacy.
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Finally, due to the importance of keeping prices low, the industry is run by fierce price-based competition to maintain market share; the main companies in the industry also utilize volume discounts to provide more attractive offers. But once again, the fierce competition based on prices reduces the attractiveness of the industry, where margins tend to be tightened.
Despite important barriers to entry that protect current producers, the industry is not very attractive mainly because of its saturation that offers very few opportunities and its price-based competition that lowers the margins. Rivalry is fierce over prices, and customers benefit from a real power over the producers.
Strategic Positioning
Most great organizations can trace a portion of their success to a visionary, a leader, or a champion of some sort. For Crown Cork & Seal, that leader was John Connelly. Connelly took over the presidency of the company in 1957, while the company was on the brink of bankruptcy. His overall strategy focused on controlling costs while prioritizing quality and service. Connelly reduced staff, discarded the divisional accounting departments and central R&D facility, and increased accountability through the organization. His approach kept Crown Cork and Seal from bankruptcy and on a road to exponential growth in profitability (1,646% increase in profits from 1957-1961).
Products and Markets: Crown positioned itself as a small producer

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