Crown cork and seal in 1989

Strategic Options Before Avery

Is it viable to consider the bidding of Continental Can(complete or partial

acquisition)?

Should Crown breakthrough and expand beyond the production of cans and
closures(related or unrelated diversification)?

If yes , which sector should they enter? the plastic closures or glass container
market(related diversification) or the sectors such as energy or insurance
sector(unrelated diversification) like its competitors?

Industry Analysis: Porters Five Forces

Bargaining Power of Suppliers :

High

Bargaining Power of Buyers : High

Threat of Substitutes : Moderate

Threat of new entrants: Low

Internal Rivalry: High

Factor Analysis
Key strategic factors

Weight

Rating

Weighted score

Product differentiation

0.15

0.75

Financially sound

0.10

0.30

No R & D

0.20

Lack of product diversity

0.10

0.50

Chance to consolidation

0.15

0.75

Globalization /Pioneer rights

0.15

0.60

Slow growth rate

0.05

0.15

Emerging plastic market

0.10

0.30

TOTAL

1.00

4.35

Connellys Strategy: keys success factors

Product line

Focus on beverage and aerosols which was high growth segment

Focus strategy exited oil can segment though they had 50 % market share.

Marketing

Emphasized on customer service and being close to customer Fast answers get customers

Just in time delivery

Manufacturing

Built 26 plant near customer location.

No plant for single customer to avoid bargaining power.

Continuous cost reduction and emphasis on quality

Kept inventory of 1 month to cater client.

Research and development

Eliminated research and development to avoid unnecessary cost.

Quick follower of any innovation

Organization

Decentralized responsibility at plant level , owner to be owner operator.

Most decisions other than finance made at the local level.

Tight control of overhead expenses.

International

Early commitment to an international strategy.

Targeting developing countries for tax holidays, low wages, and market.

Had 62 plants outside the US, Substantial number located in developing countries.

Recommended Strategy

Stick to old strategy, Maintain the focused strategy, provide superior customer satisfaction,
defend their low-cost position in the industry

Expand beyond 62 plant outside US , Expand product line eg. Food can

Buy continental can other than European operation.

Acquiring continental Canada to be a market leader in Canada.

Diversifying into plastic packaging as it did in metal container initially.

Other completely unrelated diversification should be done on study since no data available