Crown Essay

5435 Words Mar 27th, 2015 22 Pages
Crown Cork & Seal in 1989

Teaching Note

I introduce the class by remarking that John Connelly ran Crown Cork & Seal for over 30 years and followed essentially the same strategy for the entire period. The total return to shareholders over the 32-year period was just under 20% compounded. Now that Connelly has stepped down as CEO and given control to William Avery, is it finally time for a change? I begin by asking what are the key strategic issues facing Avery in the summer of 1989.

Question 1. What are the key strategic issues that Avery needs to consider? What strategic options are open to him?

Here I just want to develop the list and save the analysis of the issues until the end of class. The list of issues should
…show more content…
Who is in the packaging industry?” The response should be all of the players in the case. “Who else? All glass manufacturers, all plastics manufacturers, all paper and cardboard manufacturers, all composite manufacturers, etc.?” Eventually we end up with almost all manufacturing in North America. In a real sense, the packaging industry is too broad and includes many different industries to be included in our discussion. Not because various packaging manufactures are unimportant and can be ignored, but because we will treat them somewhat arbitrarily as substitutes in our analysis.

Then ask: “Why not focus our analysis on the beverage and aerosol segments of the market?” These are Crown’s “served market” and reflect their strategic positioning. Many companies, in fact, tend to focus on analyzing their served markets. However, this is clearly too narrow a view of the industry since it completely misses potential threats, as well as opportunities, that the company faces. It is useful to point out that after we carry out our industry analysis we may need to go back and segment the industry and refine our analysis by segment to develop appropriate tactics for the segments they serve. So we agree to analyze the metal container industry.

Question 3. How

Related Documents