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Oscar Mayer (Om)
Oscar Mayer (Om)
Prepared By:
Brief History
It is a well known meat producing company Established in 1883 by Mr. Oscar F. Mayer
1919- a meat packing plant was purchased 1970- C. F. Claussen & Sons was purchased( packed and distributed frozen products) 1979- OM acquired LOUIS RICH(Manufactured Red Meat) 1981- General Food acquired OM 1985- Philip Morris Companies, Inc., (Parent of Kraft's Food) Purchased General Foods
PRODUCT LINES
OSCAR MAYER(OM)
Lunch Meat
Hot Dogs
Bacon
CASE FACTS
Targets in front of OSCAR MAYER Division 15% operating margins 4% Y-O-Y growth in volume
Major Challenges
1) Shift in consumer inclination. 2) Increased demand for fast and easy to use products. 3) Competition. 4) High expenses.
Meat Consumption
180 160
140
120
100
80
Current year
5 years ago
60
40 20 0 All meat Red White
Market Share
25
20
10
0 Lunch- oscar mayer louis rich oscar mayer Louis RichOscar Mayer Lunch- Hot dogHot dog- Bacon-
14.00%
12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% CURRENT YEAR LAST YEAR TWO YEAR
OSCAR MAYOR
LOUIS RICH
TOTAL DIVISION
POUND VOLUME
1000
900
800 700 600 500 400 300 200 100 0 OSCAR MAYO LOUS RICH TOTAL DIVISION CURRENT YEAR LAST YEAR TWO YEARS
REVENUE
2000
1800
1600 1400 1200 1000 800 600 400 200 0 OSCAR MAYOR LOUIS RICH TOTAL DIVISION CURRENT YEAR LAST YEAR TWO YEARS
POUND VOLUME*
% CHANGE V/S LAST YEAR ADVERTISING AND PROMOTION OPERATING INCOME
272
10.9% $133
305
12% $155
$29
$27
*Figures in millions.
Chicken Rite Inc. : Location: Savannah Sales: $15MM Product: Low Calorie Chicken Salad in Single Serve Tubs
Product: Similar to Louie Rich and also Ready Made Frozen Sandwiches
Advantages of Acquiring
Turkey Time has almost same product line as of Louie Rich., Which can support further LR expansion Chicken Rite and Crabbies, Inc give us a chance to venture into some new protien sources and convenience products at low risk All the companies being small can be bought for $15-25MM each without much annual debt
Results
ROB: Wants to spread awareness for White meat, and increase A&P Budget to $22 M. JANE: Wants me to purchase TURKEY TIME Ltd COST=$10-20M
1) We would get frozen food technology, 2) And Excess production and storage capacity.
McGraws Observations
BUT its Profits and Market Cap. are both unknown. JIM: Wants me to expand to 4th category of products. ZAPATITES LUNCHABLES Easy, fast to eat, Useful for working moms Health Values Easy to carry. Still in nascent stage Less in health and hygiene 6-8 months required High cost & low profits. ERIC: wants to improve OM brand value! Increase sales growth!
TO DO LIST
Invest in R&D to formulate a low fat and salt line of OM products. Add a fourth category to the existing product line keeping the white meat demand in mind.. Appropriate allocation of resources on both red and white meat product lines A&P budgets should be increased. Special focus on health conscious market. Acquire well performing companies ->Turkey time ltd.
POSSIBLE SOLUTIONS
1) Purchase Turkey Time Ltd. And start R&D on ZAPPETITE Products to increase growth of OM Division.
2) Spend on A&P of OM and LR division and start R&D on ZAPPETITE products to increase growth of OM division.
THANK YOU!!!