Crown Cork & Seal Crown Cork and Seal

What do you think of Connelly's industrial strategy, financial policy & performance?

Connelly's strategy was ahead of its time. This is because he saw the changes that were occurring early and made adjustments to the business model of the firm. From the 1960s to the 1980s, this helped Crown Cork & Seal to adjust with demand from customers. His financial policy was designed to reduce costs by: closing facilities that were unprofitable and going into products that had a lower cost structure. This enabled the firm to increase its bottom line results and improve shareholder value. These factors, enhanced performance by focusing on markets which are contributing to larger percentage of the worldwide market share. ("Crown Cork & Seal," 1997)

What do you think of Avery's industrial strategy, financial policy & performance?

Avery's focus was on increasing the company's competitive position through acquiring firms that helped to increase its dominance in worldwide markets. This created opportunities for Crown Cork & Seal to reach out to new segments of customers. Financially speaking, he was controlling the total amounts of debt and ensured that the company could increase its bottom line results. This helped the firm to engage in acquisitions which improved its profit margins and worldwide dominance. The performance of the company, under Avery's control, was outstanding. This occurred with him seeking out companies that could diversify Crown Cork & Seal's shift to a global packaging company (with it realizing $4.5 billion in annual sales internationally). ("Crown Cork & Seal," 1997)

What are the dynamics of the U.S./European container market in 1995?

The U.S. And European container markets were considered to be mature. This meant that any kind of new...

At the same time, there was tremendous amounts competition and pricing pressures on all firms. These factors made it difficult for them to compete and increase profitability. ("Crown Cork & Seal," 1997)
What is the rationale behind the proposed CCS / CMB merger? What are the sources of value? What are the dangers?

The rationale behind the merger is that it can increase the competitive position of the combined entity worldwide. This is because each company has select areas where they are strong. At the same time, they have others they are weak in. If the two firms were to merge, this could help the combined company, to become a dominant player inside the global marketplace. Moreover, this will allow the entire organization to seize upon new opportunities when they are first arising. ("Crown Cork & Seal," 1997)

The biggest sources of value are: the new firm can expand into new markets in developed and emerging economies where they did not exist. Inside Asia, the Middle East and other regions; this will improve its ability to compete. A good example of this can be seen with observations from Crown Cork & Seal CEO (William Avery) with him saying, "When you put [the two companies] in overlay there are only a couple of areas in the world where we're even competing. When you think of it, we're both in Vietnam with beverage can plants. But, we're in Hanoi and they're in Ho Chi Minh City. In China we're in beverage cans and they are in food and aerosol cans. In Saudi Arabia, we have cans, they have ends. The thing just fits together. It was like somebody had been working on this for the last 20 years, putting plants in so some day we could put them together." This is illustrating how the sources of value are combining different segments together, to increase the dominance of the firm inside different markets…