The Company of Smuckers - Brief Historical Background - Case Study Example

The Company of Smuckers - Brief Historical Background Brief historical background The company website infuses a sense of history and legend in its account of the company’s history: “…It was from the fruit of Johnny Appleseed’s trees that Orrville, Ohio resident Jerome Monroe Smucker first pressed cider at a mill he opened in 1897…” (smuckers.com, 2012). The mill produced more cider than can be sold, so J.M. produced apple butter according to his family’s recipe. From the success of this first product, Smucker’s had been marketing a variety of jams, jellies and preserves by 1920. The company began national distribution in 1942, went public in 1959 under Paul Smucker, and diversified into reduced-caloric and other products by the late 1960s. Strategic acquisitions made by the company in the 1990s to early 2000s made Smucker’s one of the fastest expanding business in the processed health food industry. The company gained strength with strategic divestments and realignments, and it now markets popular brands of fruit spreads, peanut butter, snacks and sandwiches, ice cream toppings, specialty items, and beverages (smuckers.com, 2011). Mission and vision statements of the company The mission statement of the company appears to be embodied in its purpose, which is stated as follows: “Our Purpose: Bring families together to share memorable meals and moments” (Smuckers 10-K Report, June 2011, p. 37). Likewise, the vision of the company is embodied in the description of the firm’s culture, which is specifically stated as follows: “Why We Are, Who We Are…Our Culture: A culture of dotting the i’s and crossing the t’s… Of doing the right things and doing things right… A culture of growth – individual and as a company. It’s who we are. It’s because of who we are. It’s a result of living our Basic Beliefs… Our Commitment to Each Other. To our consumers and to our customers. As we look to the future of unlimited possibilities, we recognize the principles that are instrumental to our success… A culture deeply rooted in our Basic Beliefs… Guideposts for decisions at every level… Why we are who we are. A culture that encourages commitment to each other… Clear communication and collaboration… Vision…A culture of appreciation. A family-sense of sharing in a job well done… Where every person makes a difference.” (Smuckers 10-K Report, June 2011, p. 38) The corporate values flesh out the mission and vision of the company and state in more specific terms the manner in which the company is to attain its strategic purpose. They embody the philosophy of the founder, Jerome Monroe Smucker, as articulated by his grandson, Paul Smucker (smuckers.com, 2012): Thank you for a job well done. This small recognition shows that we notice and appreciate the efforts of our fellow employees. Listening with your full attention. By giving our undivided attention, we are showing that there is nothing more important at that moment than what is being said. Looking for the good in others. By seeing the good in others, we are demonstrating our respect and confidence in their intentions to do what is right, and we are developing an atmosphere where we can grow and learn. Sense of humor. Our work efforts are important; that is how we set the example and take the lead. Our sense of humor is also important, for that is how we maintain our perspective to our work. Humor, not at the expense of others, but as a brief relief from difficult tasks, can make our working atmosphere more pleasant and enjoyable. By keeping these few thoughts in our minds every day, we can build a bridge of understanding that will nourish the atmosphere in which we work and our mutual respect for each other. I ask for your commitment to these thoughts; I ask for your commitment to each other. — Comments by Paul Smucker, early 1980's (smuckers.com, 2012) The foregoing mission (purpose), vision, and values stated by the company, have no doubt served the firm well from the eighties, which is the reason for its success. They convey wholesomeness and optimism, which aligns nicely with the healthful nature of the firm’s products. However, in the 21st century, the heightened competitive challenge of a consolidating industry demands a more direct and unequivocal statement of company purpose, vision, and values. The proposed company vision may therefore be stated as: Vision: Imparting a culture characterized by a healthy lifestyle based on good nutrition, and a strong sense of family throughout the world community. The proposed company vision is to emphasize that culture is still at the center of Smucker’s values, but with an emphasis towards healthy nutrition, and family unity even in the expanded sense of a new global presence. Likewise, the mission, or company purpose, may be improved to the following: Our purpose: To significantly extend the benefits of health foods and beverages, and other wholesome products, throughout the global consumer market. By this new purpose, the firm directs its sights to the creation of benefits for consumers throughout the globe, by way of providing healthy foods, beverages, and products. This signifies that what is basically the same products (fruit juices, jellies and jams) are so manufactured as to give added benefit to the consumer (e.g. lower caloric content, higher nutritional value, improved product freshness, etc). Specific goals implicit in the case The Smucker company, while it maintained market prominence in the manufacture and marketing of jams, jellies and preserve, had increasingly began to feel the pressure of global competition and surmises that it is beginning to lag behind rivals such as Nestlé and Kraft Foods. Despite its acquisitions, its relatively small size and limited product line have constrained its bargaining power against increasingly larger supermarket chains and progressively fewer grocery retailers. It therefore needs to increase in size and scope, and discover new markets where competitive pressure is not yet intense. Based on the case situation, the goals that Smucker company should aim to achieve are: (1) To improve company competitiveness in order to address the increasing consolidation in the market; (2) To explore economies of scope by directing business diversity into related fields, to devise new products or services that may penetrate new markets which have not yet sufficiently been addressed by the competition; and (3) To achieve economies of scale by firm expansion into new and emerging markets beyond the saturated North American processed foods industry, where it experiences its greatest hindrance to growth. References Smucker J M CO (SJM) 10-K Annual Report, filed on 06/28/2011. Accessed 1 June 2012 from http://phx.corporate-ir.net/phoenix.zhtml?c=77952&p=irol-IRHome Smuckers.com, official company website. “History”. Accessed 1 June 2012 from http://www.smuckers.com/family_company/history/default.aspx The J.M. Smucker Company 2011 Annual Report. 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