Crown Clark & Seal Case Stury

General Environment
Economic forces:
Technological forces:
Demographic force:
Social forces:
Political/Legal forces
Political/Legal forces analysis confirms the presence of laws and policies regulating the container package manufacturing industry. Certain standards were required for the production in United States, unlike other emerging countries’ low standard requirements.
Global forces
Global forces provided promising future for can manufacturing industry, when new countries of Africa were emerging.
Industry Environment
Metal container industry, accounted for 61% of all packaged products in United States in 1989, producing metal cans, crown and closures.
Throughout the decade of the 1980s, the demand metal cans grew by an annual average of 3.7%. Aluminum cans demand increased 200% in 9 years (from 1980-1989), while steel cans demand decreased 3.1% per year.
Despite persistent metal can demand, industry operating margins fell approximately 7% to roughly 4% between 1986 and 1989.
The threat of new competitor
The threat of new competitors was not bothering Crown Cork & Seal, concerned threat was presented from already established manufacturers through their mergers with established companies and acquiring more small companies, increasing their share in the market.
Bargaining power of buyers
Ultimate buyers of the can manufacturing industry were the Coca-Cola Company, Anheuser-Bush Companies, Inc., PepsiCo Inc., and Coca-Cola Enterprises Inc. Buyers of can manufacturers had obviously great powers to influence the producer, since can constituted about 45% of the total cost of a packaged beverage, soft drink bottlers and brewers usually maintained relationship with more than one can supplier. Poor service and uncompetitive prices could be punished by cuts in order size.   Most companies offered volume discounts to encourage large orders and to protect market share. Bargaining...