Campbell: Is the Soup Still Simmering?

CASE DESCRIPTION primary subject matter of this case concerns the importance of doing an external and an internal analysis before selecting a business unit strategy. Secondary issues examined include discussions on how the new CEO makes a difference in changing the strategy. case has a difficulty level of four, appropriate for senior level. This case would be most appropriate for business strategy courses. case is designed to be taught in one to one and a half class hours and is expected to require two hours of outside preparation by students. CASE SYNOPSIS soup business has been stagnant or slow growing for many years. Consumer preference has moved away from soup to frozen pizzas and microwave meals. Campbell has struggled in the face of this decline by first diversifying its products and then consolidating tangible assets in order to focus on soups. In July 2011 Douglas Conant is stepping down as the CEO of Campbell Soup Co. and Denise Morrison will step into his shoes. Morrison currently runs the company's struggling North American soup. She plans to change the focus of the company from salt reduction to in the coming years. Will Morrison's change in strategic direction work for the Campbell? INTRODUCTION Change is stirring at Campbell Soup. Douglas R. Conant is stepping down as the chief executive of Campbell Soup on July 31, 2011 closing the book on a stint that began in January 2001. On deck to take his position is Denise Morrison, who currently heads the company's North American soup business, whose sales fell 5 percent in the last quarter of 2010, as consumers opted for frozen pizza and microwave dinners instead of the comfort of soup. change at the top for the company received a lukewarm response from investors, who are left wondering what meaningful change will come from this new CEO (Gutierrez, 2010). company may have missed an opportunity by picking insider Denise Morrison to eventually lead the world's largest soupmaker, instead of bringing in outside talent to revive sales, analysts said. It is not a surprise to us that Campbell is making a change, given how it has struggled recently, said one analyst What is surprising is that Conant will be replaced by the executive who currently heads the business unit that has struggled the most. Putting the head of the soup business in charge of the company doesn't seem to be the way to go when you consider this is the business that appears to have most of the problems. (Boyle, 2010). In November 2010, Campbell Soup Co. said it will begin moving attention away from reducing salt in its products to focusing more on taste adventure as its U.S. soup business has turned cold. Campbell Soup was one of the first large U.S. packaged-food makers to focus heavily on decreasing sodium across its product line. salt-reduction push was one of the company's biggest initiatives of the past decade. The company had pursued reducing sodium levels and other nutritional health initiatives partly to prepare for expected nutritional labeling changes in the U.S. But amid the attention on salt-cutting, management focused less on other consumer needs, such as better tastes and exciting varieties, said Mr. Conant. I think we've addressed the sodium issue in a very satisfactory way. challenge for us now is to create some adventure. (Brat & Ziobro, 2010). This change comes as heavy supermarket promotions of simple meals as boxed macaroni and cheese have battered Campbell earnings in recent quarters of 2010 (Brat & Ziobro, 2010). COMPANY BACKGROUND Probably known best for its red and white soup cans, Campbell Soup Company was founded in 1869 by Abram Anderson and Joseph Campbell as a canning and preserving business. Almost 140 years later, Campbell offers a whole lot more than just soup in a can. Today the company, headquartered in Camden, NJ, competitively operates in four segments: U. …