Crown Cork & Seal
1. In 1989, the metal container industry was thriving. 61% of cans, crowns and closures we made from metal. Glass and plastic were in a distant second place. Metal cans were used for beverages, food and general packaging industries. There were two main types of cans, three-piece and two-piece. Steel was primarily used in three-piece, but for the two-piece can both aluminum and a thin-walled steel were the primary materials. The industry soon realized that steel was much more expensive to ship and therefore their profits started to decline. Conversely, aluminum prospered.
Five firms dominated the metal can industry in 1989, with Crown Cork & Seal being one of the leaders. Pricing was competitive, there was an over capacity and a shrinking customer base, which as a result led many companies to offer volume discounts. Manufacturers started selling at lower prices to keep their market share, resulting in waning profits. A few large companies were the leading users of metal cans, and during the 1980's many of them consolidated. Most manufacturers wanted to decrease the cost of transporting their product, therefore they located their production plant near their customer. Costs mainly came from materials, labor and transportation. Steel cans were not much of a threat to the metal can industry for the sheer fact that their transportation costs were too high. Their only advantage over aluminum was price, but this did not prove substantial.
The first major trend of the industry was the threat of in-house manufacturing. Companies like Coors took advantage of producing their own cans to lower costs, but the soft drink industry did not tend to manufacture in-house. By producing in-house, the metal container industry lost a great deal of business. Anoth ...