I.

Problem situation of the case:

The current situation of the soup industry had been in steady decline for several years,
and the division’s sales, market share, and profitability had slipped for the last three since
2010. Besides that, there were some problems that Bert Clark, vice-president and general
manager of Brannigan Foods’ Soup Division wondered to make a decision of 4 proposal
plans prepared by his team members.

There are the four alternative plans. First, they invest in the growing sectors proposed
by Srikant Tipha (Director of the Simple Meals unit) Second, they acquire product lines to
complement the core in growing sectors proposed by Claire Mackey (Director of Finance and
Planning). Third, they invest in organic growth from internally developed new products
proposed by Anna Chong (Chief Innovation Officer). Fourth, they invest in the core proposed
by Bob Pugh (Director of Sales and Marketing).

II. Company Analysis

Brannigan Foods is a 100-year-old company in the Soup Industry. However, the

company had undergone a decline in profitability and Bert Clark (vice-president and general
manager of Brannigan Foods’ Soup Division) has to come up with a new strategy to most
likely turn the division around. The products that the company produces including Ready-To-
Eat soups, Fast & Simple Meals, Heart Healthy and Dry-mix soups.
Besides, the company also has some customer-based assets that are perceived by
customers and retailers. The consumers perceived Brannigan as the company that was behind
competitors in the following aspects as Health trends, Diet claims, Convenience offerings,
Flavors (especially popular regional ones), and Seasonal products outside of cold weather. In
addition, the retailers also perceived Brannigan as the category leader in soups but not
innovative or even less profitable than store brands and competitors.

III. External Analysis

1. Industry Analysis
 According to soup Consumption in the US from the case, the 2011 total of $6.4
billion sales in all categories represents a decline of 2.8% compared to 2010.
Also, sales of existing soups decreased, while sales of other types of soups increased.
Therefore, cannibalization occurred, and sales of new products were negatively affecting
sales of existing products.

2. Market Analysis
a) Customers:

The current customers of the company are baby boomer generation (born between
1946 and 1964) which was the largest and most brand-loyal segment of soup consumer
Although the condensed and ready-to-eat (RTE) soups were still a staple in most diets in the
United States, this had serious long-term implications for Brannigan. Therefore, the company
also needed to engage younger generations of consumers. Clark also felt that this was one of
the most pressing needs for the company at that time.

b) Trends:

There is a growing concern about health and obesity. This had led to a reduction in
processed foods in general and products with high sodium content in particular. Organic food
has also been trend. Customers prefer a variety of soups such as deli soups, dry-mix soups,
and microwavable packaged soups and their sales are increasing. Therefore, it is a trend to
prefer healthy and diverse new types of soups. Also, many Americans tend to pursue quick
and simple meals.

Besides, due to the critical trend “for fast, simple meals” lay in the U.S. population’s
increasing desire, particularly among working mothers, Clark also wants to win over this
consumer by competing with many strong competitors.

3. Potential entrants:

There are some cons and pros for new entrants might cope with, particularly
Brannigan. The first issue we can mention is if a small company was acquired retailers would
exert pressure on Brannigan to take out some of its weaker products so that Brannigan would
have no net gain in shelf space after the acquisition. Not only that, the larger ‘‘cost’’ to
Brannigan concerned its retailers who were becoming increasingly intolerant of the cost to
them of bringing in new products with short life-cycles that failed to meet their sales and
profit expectations.

In contrast, the low-sodium Heart Healthy soups introduced several years ago are also
gaining traction and market share, as shown in the report, as they are well-positioned to
address the concerns of over-50 consumers. Moreover, the dry soups category is also
expanding but they only have a few offerings at that point, but they are very promising for the
company.

Generally, the prime cons that Brannigan can suffer from a high level of investment in
terms of advertising and promotion to reinforce the brand awareness of the company. This
reflected clearly when they want to reinforce awareness of their new items and induce trial by
increasing the advertising investment in the Fast & Simple soup meals and the Heart Healthy
soup line. Not only that, but the company could also face a "shelf war" to gain more space.

4. PEST Analysis

a) Economic factors:

Due to the continued sluggish economy will keep consumers eating at home and
favour foods less than $2 per serving, so soup will be an appropriate and positive food for US
consumers behind the economy of US.

b) Social/cultural issues:

The other critical trend lay in the U.S. population’s increasing desire, especially
among working mothers, for fast, simple meals. With increasing worries about health and
obesity in the US society as a whole, there is a tendency to prefer healthy foods with low
sodium. Also, most consumers knew they should eat healthier foods, but with close to 70% of
the US overweight it was obvious that few actually were changing their eating habits.

c) Technological developments:

Food technology has been developed to create new soup foods in a variety of flavours
and healthy organic forms such as Low sodium RTE'Heart Healthy', Annabelle’s Fast and
Simple, Dry soups and mixes. In addition, as the productivity of food increases, foods can be
provided more quickly and simpler than past.

5. Competitor Analysis

In terms of the competitor’s capabilities analysis, we can see that there are some
competitors that the company should also concern. For example, Brannigan's Foods and
General Mills occupy over 60% of the market and dominate the market. However, many of
the soup market competitors are competing with each other to create new soup products that
are healthier, faster and simpler to eat according to the current trend.

The DeGennaro report also indicates that a number of small competitors are offering
healthier and more convenient soups, as well as flavors rapidly gaining in popularity, such as
Mexican and Southeast Asian, where we have little presence. There are also several
companies that the company could consider acquiring to bring Brannigan into their categories
comprising Roarin’ Cajun Foods, Red Dragon Foods, and Brothers Gourmet.

In addition, the company also suffered the effect of Wal-Mart’s private-label soups
have grown over 5% per year during the past five years. As a result, the shelf space in their
stores has decreased by 3% there in that period.

According to the given table above, we can easy to see that in terms of the
competitive industry. Brannigan’s Food is the leading market share in the soup market with
39.8%, followed by General Mills with 24%. The number of products includes wet Ready-
To-Eat and condensed Ready-To-Eat also reached the highest point of sales. Overall, the
company still has a competitive edge in this area over other competitors.

6. Supplier Analysis

Brannigan has a strong relationship with retailers for the strategic marketing decisions
of their company. Therefore, retaining the relationship with retailers is also very important.
However, most retailers were wary of having their larger vendors, like Brannigan, gain shelf
space. Clark knew that if a small company was acquired retailers would exert pressure on
Brannigan to take out some of its weaker products so that Brannigan would have no net gain
in shelf space after the acquisition. This same set of retailer concerns applied to new
products. It is definitely trouble for the company if Brannigan’s kept using the acquired brand
name, the pressure from retailers to give up shelf space would be less.

7. Buyer Analysis

As the behaviour and characteristics of soup customers had been analysed, there were
some outcomes. First, 38% of consumers eat as a snack millennials (age 15-30) with $25-49
income most likely to do so 91% of consumers agree that canned soup is good to keep in the
pantry. Second, 55% say that they or someone in their household eats soup year-round 86%
are more likely to eat soup when the weather is cold. Third, 51% use soup as a cooking
ingredient. Next, 78% agree that soup is a healthy/low-calorie option diet. Finally, 61% of
purchasers take low sodium into account when purchasing.