Executive Briefing: Crown, Cork, and Seal
Overview of the metal container industry and Crown, Cork, and Seal's business strategy
The metal container industry has been very profitable throughout the years. In 1989 the metal container industry represented 61% of all packaged goods in the US. However, the metal container industry has been on a decline in recent years because a growing number of customers are switching to plastic or glass containers. Crown's basic business strategy is to combine the best quality metal container with the most efficient production and excellent customer service. This position has enabled the company to grow tremendously throughout the years and earn a spot in the Fortune 500.
Five Forces Analysis
Because pricing in the industry is so competitive, Crown has focused on cost efficiency and keeping expenses low so that it can make a good margin while still keeping prices low. To prevent losing orders due to slow customer service, Crown has opened more small plants as opposed to a few very large ones in order to provide faster response time. Crown builds its plants close to the customer to minimize distribution costs and wait time for the customer. Under John Connelly's leadership, Crown plants bought new, faster equipment and started operating twenty four hours a day to increase manufacturing efficiency and take full advantage of the expensive equipment necessary to run a plant. In the early 1980's Crown switched over from producing only steel cans to producing only aluminum cans, which made their product lighter and didn't affect the taste of the can's contents as much. Crown purchased aluminum from suppliers such as Reynolds Metal, Alcoa, and Alcan.
Crown has to buy raw materials such as metal and corks and rent a war ...