Case for Analysis Campbell Soup Company CSC

1
Case for Analysis Campbell Soup Company (CSC)

• CSC is one of the worlds leading manufacturers
  and marketers of branded consumer food products
• Strategy by Gordon McGovern (1980-1989)
• Grow CSCs sales through a series of acquisitions
  and a strong emphasis on developing and
  introducing new food products
• Under McGovern, CSC introduced 922 new items
  during the 1980s
• CSC acquired Mrs. Pauls Kitchens, Snow King
  Frozen Foods, Juice Bowl Products, Costa Apple
  Products, Freshbake foods, etc,
• In the late 1980s, McGoverns strategy failed,
  profits fell sharply and key members of the
  Dorrance family, which had controlled Campbell
  Soup since 1900, forced McGoverns resignation

2
Case for Analysis PepsiCo,INC

• Strategy by David Johnson (1990-1997)
• He adopted a more performance-oriented strategy
  for CSC
• He set financial objectives of 20 earnings
  growth, 20 return on equity, and 20 cash return
  on assets.
• He stressed concentrating on growing sales of
  CSCs best known brands its red-and-white soup
  lines, Prego, and Pepperidge Farm, etc.
• He divested 26 unprofitable and slow-selling
  product lines
• He reorganized McGoverns 6 business units into
  3, sold 8 plants, shut down 12 plants, and
  reduced the workforce by 8000 people during his
  first 18 months as CEO
• He took a more cautious approach to new product
  development
• In July 1997, Johnson step aside as CEO when his
  contract expired

3
Case for Analysis PepsiCo,INC

• Strategy by Dale Morrison (1998-2000)
• He executed a major portfolio restructuring that
  was largely devised by Johnson
• He divested the Vlasic Pickle business unit,
  Swanson frozen dinners, and other CSC units
  accounting for US1.4 billion
• He underwent a restructuring program to
  streamline its worldwide production and
  administrative functions
• His portfolio restructuring effort had little
  effect on CSCs financial performance
• By the end of 2000, CSCs stock price declined to
  its lowest point since 1995
• Morrison resigned as CSCs CEO