Crown cork 2013

CROWN CORK AND SEAL IN 1989

GROUP 2:Suman Paul

METAL CONTAINER INDUSTRY

61% OF PACKAGED PRODUCTS

3 PIECE CAN TO 2 PIECE CAN

STEEL BODY TO ALUMINIUM

INDUSTRY STRUCTURE

PRICING

CUSTOMERS

DISTRIBUTION

MANUFACTURING

SUPPLIERS

INDUSTRY TRENDS

IN HOUSE MANUFACTURING

PLASTICS

GLASS

SOFT AND ALUMINIUM CANS

DIVERSIFICATION AND CONSOLIDATION

CONNELLY’S STARTEGYPRODUCTS AND MARKETS

MANUFACTURING

RECYCLING

R&D

MARKETING AND CUSTOMER SERVICE

FINANCING

INTERNATIONAL

PERFORMANCE

Final Strategy adopted by Crown cork are:

 1990 Consolidation :

Continental Europe Unit purchased to increase market share in Europe.(In Metal Can)

1992-Getting into Plastics :

It acquires CONSTAR International, a world leader in PET plastic containers for the beverage, food and household markets.

1996-Creating a World Packaging Leader:

Crown Cork & Seal acquires CarnaudMetalbox, Europe's leading manufacturer of metal and plastic packagingBecomes the world's packaging leader.

2000 : Innovation in Sealing systemCrown introduces the first major breakthrough in beverage end technology in nearly 20 years: the revolutionary Super End® beverage ends. This development reflects Crown's dedication to innovate within the metal packaging industry

2005

Crown sells its Global Plastic Closures business.

2008-Environmental friendly product:

EarthSafe™ Dispensing SystemReplaces hydrocarbons with compressed air as the propellant.

2011Orbit™ Closure A unique two-part designThat reduces torque making it twice as easy to open compared to standard twist-off closures.

2013360 END technology used by Sly Fox BreweryEntire lid could be removedUse as drinking cup

Market Position in 2013

• One of the largest packaging companies in the world.

• Only full-line global packaging company.• #1 producer of food cans and metal vacuum

closures in the world.• #3 producer of beverage cans in the world.• #1 or #2 producer of aerosol cans in markets

where we compete.

Brand Building Packaging……It’s a way of life at crown.

• Net sales is $8.5 billion in 2012 against $1.8 billion in 1988.

• 149 plants in 41 countries as against 88 plants in 1989.

• Biggest threat: Plastics. ( raw material prices fluctuations)

Current market of metal can industry

400 metal can shipping container manufactures

Together all firms generated $23.2 billion

58.1% of all aluminium cans were recycled

Highly seasonal trends

MARKET ANALYSISENTRY THREAT (LOW)

• Easy entry• 2 piece line available for $12 M• Low profit margins

RIVALRY (HIGH) • Commodity product• Excess capacity• Low market concentration

SUBSTITUTES THREAT (MODERATE)• Low switching cost• Plastic / Glass

SUPPLIER (HIGH)• Few big suppliers• 71% of market s aluminium

BUYER POWER (HIGH)• Backward integration• Purchase large volumes• Buyers know cost

SWOT ANALYSIS

STRENGHTS WEAKNESS

FINANCIAL STABILITY LOW COST OF PRODUCTION SOUND CUSTOMER RELATION

NO R&D NO DIVERSITY OF PRODUCT

OPPORTUNITIES THREATS

MERGER AND ACQUISITION GLOBALIZATION

SLOW GROWTH RATE SUPPLIERS AND COMPETITORS

PRODUCING IN HOUSE PLASTIC MARKET

MARKET ANALYSIS

SWOT ANALYSIS

IMPACT OF BUYING CONTINENTAL CAN ON MARKET SHARE

AMER

ICAN

NAT

ION

AL C

AN

CON

TIN

ENTA

L CA

N

REYN

OLD

S M

ETAL

S

CRO

WN

CO

RK &

SEA

L

BALL

CO

RPO

RATI

ON

0%5%

10%15%20%25%30%

PRE-MERGERPOST MERGER

IMPACT OF BUYING CONTINENTAL CAN

DOMESTIC OPERATIONS WOULD DOUBLE

INCREASING GLOBAL PRESENCE

STEP IN PACKAGE OPERATIONS

DIVERSIFICATION IN PLASTICS :Market analysis

Market Segment (1980-1998)

Y_O_YPlastic (%

mkt share)Metal Can(% Mkt Share)

Glass (% Mkt Share)

1980 8 27.7 64.3

1983 11 38.8 50.2

1986 14 49.9 36.1

1989 18 61 21

1992 19.5 62.5 18

1995 21 64 15

1998 22.5 65.5 12

PROS AND CONS for Diversifying into Plastic Industry

S.No Pros Cons

1 Increasing market share Material requires for retaining carbonation

2 Light weight & Convenient Handling Preference for flat base containers by soft drink industry

3 Declining Resin prices

4 Easy substitute for glass based containing solution :food ,beverages ,beauty, pharmaceutical

Strategy Adopted :Recombining

• 1990 Consolidation BeginsCrown acquires major portions of former industry leader Continental Can Company and becomes the North American packaging leader.

• 1992-Getting into Plastics Crown Cork & Seal acquires CONSTAR International, a world leader in PET plastic containers for the beverage, food and household markets.