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1. What are the most significant factors affecting competition in the metal
container industry?
• Consumer demand/Preferences
• Technological Change
• Environmental / Legislative Risk
• Number of Competitors
• Geographic location of plant and customer
• Infrastructure Investment
• Research and Development
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Adam Francis, Greg Cullen, Angus Walker, Terje Fiskvik 7/3/03
Crown Cork and Seal
2. Have these factors changed over time?
Consumer demand/Preferences – The consumer is more aware of needs and ability
To manufacture to desired specification (Packaging)
Technological Change – Tin manufacturing lines have reduced in cost,
as manufactures lost clients which in turn lead to a reduced cost of approx 80%.
Environmental / Legislative Risk – Ozone hazards relating to fluorocarbons and the
Value of recycling tin was less than aluminum.
Number of Competitors – Decreased considerably due to increased manufacturing
and logistics, and the reduction of consumer demand.
Geographic location of plant and Infrastructure Investment – They increased the
number of plants by 300%, reduced the size and based them close to customer rather
than raw material.
Research and Development – Crowns R&D focused on enhancing their existing product line.
Their preference was to perfect their technology that they were using, and let others take the risks.
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Adam Francis, Greg Cullen, Angus Walker, Terje Fiskvik 7/3/03
Crown Cork and Seal
3. What strategy does Crown Cork have for competing in this industry?
• Not much Research and Development
• Focus on customers needs
• Invested in new plants
• Plants set up for multiple customers
• Located plants close to customer
• International Expansion – Crown and Cork concentrated on international
growth, especially in developing nations. (In many cases the company received
10-year tax shelters)
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Adam Francis, Greg Cullen, Angus Walker, Terje Fiskvik 7/3/03
Crown Cork and Seal
4. What advantages, if any, does a firm the size of Crown Cork have over
American Can and Continental Can?
• They don’t have as many organisational obstacles and are able to react
quicker to product innovation
• As they would have lower overheads than the 2 majors they don’t have to
follow suit & diversify, they are able to specialise on tin products.
• Do not have a high Research and Development budget as they are not
interested. They are able to let others take the risks and make mistakes during
R&D and learn from the innovators heartaches.
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Adam Francis, Greg Cullen, Angus Walker, Terje Fiskvik 7/3/03
Crown Cork and Seal
5. How would you explain the comparisons shown in exhibit 3 in this case?
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Adam Francis, Greg Cullen, Angus Walker, Terje Fiskvik 7/3/03
Crown Cork and Seal
6. Identify and discuss the major problems facing Crown, Cork and Seal.
• The Ozone Controversy – Most tests supported the basic thesis that
fluorocarbons were in some way damaging to the ozone layer.
• Regulating Nonreturnable Containers – Legislative restrictions on the use of
nonreturnable containers threatened Crown Cork. The EPA banned
throwaways from federal property.
• Economic Impact – Laws posed a threat as would increase beer and soft drink
prices.
• Deposits and Recycling – This new system favored aluminum cans because of
the higher value reclaimed for aluminum and the recycling network already
existed.
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Adam Francis, Greg Cullen, Angus Walker, Terje Fiskvik 7/3/03
Crown Cork and Seal
7. What recommendations would you make to John Connelly as of the end of
the case?
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Adam Francis, Greg Cullen, Angus Walker, Terje Fiskvik 7/3/03
Crown Cork and Seal
7. What recommendations would you make to John Connelly as of the end of
the case? Cont…
• Marketing approach
• Additional and or synergistic markets
• Plant locations
• Efficiencies at plants (Just-in-Time manufacture?)
• Efficiencies for raw materials
• New types of raw material
• Employment efficiencies
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Adam Francis, Greg Cullen, Angus Walker, Terje Fiskvik 7/3/03
Crown Cork and Seal
7. What recommendations would you make to John Connelly as of the end of
the case? Cont…
Continue with
• Customer service approach
• Re-evaluating fabrication processes looking for efficiencies
• Tight financial controls on spending
• Quick response times to customers
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Adam Francis, Greg Cullen, Angus Walker, Terje Fiskvik 7/3/03
EVOLUTIONARY PROCESS FRAMEWORK FOR
TECHNOLOGY
Crown Cork andSTRATEGY
Seal
(Burgelman & Rosenbloom, 19 89 a nd ada pted by Hampson, 2000)
© Hampson, 2000
Monitor, review and standardise
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Adam Francis, Greg Cullen, Angus Walker, Terje Fiskvik 7/3/03
Crown Cork and Seal
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Adam Francis, Greg Cullen, Angus Walker, Terje Fiskvik 7/3/03