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Sunoco - Case Study Example

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Sonoco is an established, 100 years old successful global business organization in the area of industrial and consumer packaging (Thomas and Groysberg, 2010). Its major clients are Nestle, Kraft, Gillette and Proctor and Gamble. It was founded in 1899 in Hartsville, South…
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Download file to see previous pages Though it has managed to garner 14% increase in net income through cutting expenses, the loss in shareholders’ value has become a major concern. The company is faced with challenges of reducing cost through restructuring and evolving new business model. As a result, Cindy Hartley was appointed as Senior Vice President of HR by CEO, Harris DeLoach so as to bring about necessary changes within the organization. It is believed that new business model would enhance organizational capabilities in terms of human resource and provide it with flexible approach to meet the challenges of time.
Sonoco’s traditional model of business is faced with huge challenges of competitive business due to rapid globalization and advancing technology. The overcapacity within the industry has forced businesses to consolidate and diversify to regions like South East Asia, specifically China and India where low production cost helps to maintain leverage. Initially, industrial packaging had accounted for 55% of its revenue but now the trend seems to have reversed. Consumer packaging now represents 70% of industrial revenue and operates within the broader framework of global business environment. Branding and market segmentation have also become very important aspects which have redefined the role of packaging within the new business imperatives. Retail packaging has become vital part of marketing of goods. This has further escalated financial burden as creative inputs in design require new technology that would equip organizations with hi-tech tools of designing. Most importantly, Sonoco has realized that in the dynamic business environment, people centric policies have become central to business goals and must be developed to compete in the highly competitive business environment.
The major problem of Sonoco is that its HR strategies are not aligned with the business goals and objectives. Though it has centralized HR policy but each of the Divisions of Sonoco works independently ...Download file to see next pagesRead More
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