Porters Five Forces Model of The External Environment for Oscar Mayer Foods - Case Study Example

Your Oscar Mayer Case Analysis Introduction External environment of a business keeps changing, and the challenge is to strategize operations in order to sustain growth and profitability. Porter’s five forces model of the external environment – suppliers, buyers, customers, substitute products and existing rivals – coupled with internal analysis, in the backdrop of a firm’s objectives and goals, will help to decide on the strategy. Marcus McGraw, President of Oscar Mayer Foods, is presented with multiple options by the consultant and his four managers, and this case analysis is based on these inputs.

Objectives and goals McGraw intends to retain Oscar Mayer’s (OM) reputation within Kraft Foods as the fastest growing profit maker, and hopefully achieve a +4% volume growth and +15% profit growth for the coming year. His division has two business lines: the traditional OM meat-based products line and the recently acquired/fast growing Louis Rich (LR) turkey-based products line. He has to tailor his strategy which would balance the interests of both lines and yet, achieve his targets.Internal and external analysisStrengths: OM products enjoyed customer confidence for nearly 100 years, and contribute a massive 82% or $110 MM of the total profits.

Acquisition of LR and investment in its line of white meat products has proven to be a strategically wise decision, as shown by the strong volume growth of its products.(Your last name) 2Weaknesses: There is a significant shift in consumer preference towards less fat/salt food products, i.e., the LR line, while OM line has been giving the maximum profits; its prices are out of tune with the market. Investment costs for acquisitions and/or A&P to buttress LR business will further depress OM business and depress short-term profits; competition from unbranded products will add to the pressure on pricing and bottom line.

LR products are susceptible to copying.In terms of convenience, taste, price and customer satisfaction factors, there is a greater negative bias on OM products. OM’s frozen product ‘stuff n burger’ has not been an outstanding success. Opportunities: LR product line business is showing promise of further growth, albeit at the expense of OM product line. LR can add further range to its existing products through in-house R&D efforts that are already underway. Or, it can acquire one or more mid-size firms dealing in white meat products to complement present facilities and products.

Threats: Consumers are shifting to healthier and more convenient foods, directly impacting OM range. LR range of products is easy to copy and competition from branded as well as unbranded products is increasing. Profit margins for LR range is also comparatively less.Recommendation OM should be strengthened to make up lost volumes by a combination of price reductions, R&D efforts on ‘Lunchables’ having low fat/salt, and enhanced A&P support. Overall volume growth can best be achieved through the acquisition route – of Turkey Time Ltd.

, which has strategic complementarities with LR, and in-built capacity for future as well. Jim (Your last name) 3Longstreet’s Zappetites has too many uncertainties, more important of which are the timeline for development and consumer acceptability. This strategy meets with the objectives of maintaining volume and profit growth on the one hand, and combines the best suggestions of all the four managers.