Smuckers Has Built Its Success

Smuckers has built its success over the years on the strength of its brand. In recent years, the company has grown largely on the basis of acquisition, in particular the recent purchase of Folger's Coffee that nearly doubled the size of the company. The Smuckers mission is to own a stable of #1 brand in the food industry. They compete on a differentiation strategy, focused more on the brand than the product. The environment the company faces offers some challenges.

One such challenge is that there is intense competition in all segments in which Smuckers operates. The emergence of superpremium segments threatens not only existing Smuckers business, but the strength of the brand upon which Smuckers relies for its differentiated strategy. It is recommended therefore that Smuckers build its own in-house portfolio of superpremium brands using established names. This requires the creation of multi-disciplinary teams and the marshalling of organizational resources.

As the products -- expected to be an organic jam line and a fair trade coffee line -- are developed, they can be brought to market through existing distribution channels and a strong marketing campaign to support the launch. The company should monitor the performance of these new lines against established objectives, and make adjustments to its tactics as necessary. Introduction. It has been recommended that Smuckers follow through on its differentiation strategy by developing a range of super-premium brands.

This strategy will leverage the strength of the Smuckers brand name while reinforcing the company's existing differentiation strategy. The recommendation is also consistent with the company's mission of operating a food conglomerate of number one brands. This paper will outline in detail the steps that will be required in order to implement this strategy. Main Body. In recent years, expansion at Smuckers has been focused on acquisitions, such as the Folger's purchase. This strategy, however, will be focused more on developing new brands and lines internally.

The reason for Smuckers to take this approach rather than follow their traditional acquisition strategy is because this approach allows the company to build on the strength of the Smuckers brand. The brand has been in jeopardy in recent years as the emergence of the superpremium grocery category has diminished the differentiation of old-established premium brands like Smuckers. The first step in this strategy is to set objectives. Smuckers needs to identify the different areas where a super-premium product would have the most market appeal.

The company has a number of different lines that offer potential, but some segments of the market are more amenable to superpremium than others. For example, coffee and jam are two core products where a superpremium market already exists. Once a set of products has been identified, the company needs to set objectives with regards to time frame, cost and market share. These objectives will be used later during the monitoring and adjustment phase.

The objectives should be realistic and attainable, but set optimistically enough as to create motivation in the managers. The objectives will be measured at a later point, so they should also be quantifiable to the greatest extent possible, for example measures such as dollar sales, market share, favorable consumer reviews. With objectives in mind, the next step is to design the organizational infrastructure needed to execute the strategy. In this case, Smuckers needs to create new business units to develop and support their products.

The units should be multi-disciplinary, such that all elements are in place to build these two brands. In addition, the new units need to be allocated both human and fiscal resources in order to achieve their tasks. Support from the organization's highest levels is imperative to the success of any project. The third step in this strategy is to identify specific tactics. For Smucker's to create superpremium brands in coffee and jam, they must identify tactics that will deliver that degree of differentiation.

For example, Smucker's could determine that it will make organic jam and fair trade coffee. The company would then need to identify marketing tactics as well. Distribution would be through the company's usual channels, so they would need a specific plan to gain more SKUs from their retailers. A marketing plan would need to be devised for each project as well, with regard to the promotion.

In addition, the Smuckers would need to identify ways in which to tie the new products back to their existing brands, developing marketing synergies in the process. The fourth step is to monitor the execution of the strategy. Objectives for the project have already been set. Now that the strategy is under way, it is important that the firm devise a methodology for measuring the success of the tactics. As measures are recorded, they must then be evaluated against the stated objectives.

The creation of this feedback gives managers not only a chance to see if their strategy is being implemented successfully, but also to see if they can determine ways to improve the strategy going forward. The final phase of implementation is the adjustment phase. This phase to an extent starts the process from the beginning. As feedback is received with regard to the success of the strategy, adjustments to the strategy can be made in order to improve it. Deviations from the objectives can be noted and analyzed.

The adjustment phase keeps management.