The Corporate Strategy of Smuckers - Case Study Example

In terms of their acquisition strategy among product lines, they practice horizontal acquisition which is they acquire companies in the same industry segment.
The Smucker’s brands exhibit a strategic fit because they all belong to the processed food industry. Furthermore, their brands have the same distribution network and target markets. Their products are all sold at supermarkets. Even the manufacturing and operations of their various products have a strategic fit, creating economies of scale.
One believes that it only makes sense for Smucker’s to expand their business line-up within their core businesses. Expanding beyond their core businesses would be difficult because the marketing strategies that they need to implement might need to be different. Moreover, expanding beyond one’s core of business would mean extensive research on their part and one might not have the competence in that business.

2. Use the appropriate course models to (1) identify at least four major macro-environmental trends and issues in the geographic domains where J.M. Smucker's operates, and (2) indicate the level of strategic attention each of these should be given. The first major macro-environmental trend that affects Smucker’s is the growing trend of women working outside the home; thus, an increase in the number of meals eaten out. This means that the household budget for processed foods and beverages, like those sold by Smucker’s, will decrease and will be redirected to the budget for eating out. The level of attention that must be given to this should be minimal. Another macro-environmental factor that affects the industry is the current recession and economic slowdown experienced in the US which is the major market for Smucker’s products. The level of attention that this factor must receive should be high. The company must come up with a marketing strategy wherein consumers will still buy their products despite the recession. The consolidation of supermarket chains and the increased confidence of consumers in them is another powerful force that will affect Smucker’s. Supermarket chains have come up with their own house-brand versions of products which directly compete with Smucker’s product lines. The supermarket house brands are priced lower than those of the branded manufacturers, including Smucker’s. The level of attention to this factor should be high. The fourth macro-environmental factor is the slowdown in the growth rate of the food industry, especially in the geographical domain where Smucker’s operates. The higher growth rate in the industry is forecasted to be in Latin America, Asia, Eastern Europe and Africa. The level of attention that must be given to this factor should be high. Smucker’s should start tapping other markets outside their geographical domain to augment a possible decrease in their sales in the US market.

Evaluate the processed foods industry and give an indication of its attractiveness and the level of profitability that firms can expect in it. The processed foods industry is characterized by consolidations and mergers among companies in the industries. The intense competition in the industry has driven companies to acquire other firms within their product line to increase their market share in that particular line. The level of profitability that firms can expect may not be so high because of the saturated market. This is also one reason why most firms in the processed food industry have started to tap into the institutional and international markets.