BIRDS EYE FROZEN FOODS CASE STUDY

GROUP 2

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HISTORY
Started by Robert Ducas, chairman of a Kent engineering company, Winget Ltd. in August 1938. Owned by General Foods Corp., Robert Ducas, and Chivers and Sons Ltd (a British canner and Jam-maker). In March 1943 Unilever acquired Birds Eye Foods.

Throughout the 1950s and 1960s, Birds Eye accounted for over 60 percent of UK frozen food sales on a tonnage basis.
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KEY ISSUES
Decline began in the 1970s

Birds Eyes market dominance existed primarily in sales of small retail packs to independent grocers and to a lesser extent, supermarkets.
In home freezer centers its share was around 8 percent (1974) In catering sector, Birds Eyes market share was about 10 percent (1973) Widened product range and increased range of market segments posed major difficulties for Birds Eyes marketing strategy and the allocation of its advertising budget.

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CONT
Between 1977 and 1980 expenditure on its modernisation program amounted to some 20 million. In the face of rising competition, (King Harry Foods in 1970, White House Foods Ltd. and Fife Growers Ltd in 1971, and Wold Growers Ltd in 1974), Birds Eye maintained its advertising budget during the mid-1970s while cutting prices on some major-selling products Higher Sales, profit margins halved

1976, the company barely broke even and in 1977 it registered a post - tax loss.
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STRATEGY

Birds Eye used the strategy which included providing frozen foods with high quality and with a personality that combined efficiency, hygiene, confidence and completeness .
This helped in attracting more customers and added more values thus giving their brand a more clear and likeable personality.

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STRATEGY
Selling to private labels: They had gained market share of 21% in 1978. Reduce product lines: concentrate on profitable product lines and promote higher margin products.

Maintain brand: Focusing on high quality products.

Decrease vertical integration: Transaction costs are lower if supply is outsourced. Focus on developing short term and long term partnerships.
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WHY BIRDS EYE DEVELOPED AS A VERTICALLY INTEGRATED PRODUCER

Undeveloped Infrastructure Rapid Growth

Quality of the Product

Securing Raw Materials Prevent new competition
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COMPETITIVE ADVANTAGE OF BIRDS EYE

Birds Eye pioneered the development of market of frozen food It managed to maintain brand leadership and superior profitability over other competitors-Findus and Ross Birds Eyes retail dominance was assisted by a system of discounts Encouraged larger retailers to give Birds Eye the major part of their frozen foods business.

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IMPLEMENTATION
Prior to divesting infrastructure, replacement must be able to meet quality standards set by Birds Eye. Strict oversight and co-ordination of activities done by supplier; ensuring no loss in quality. Reinvest savings to marketing and branding of products. Regain lost market share and profit margins.

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SOLUTIONS FOR BIRDS EYE

Leverage brands Selling to private labels Reduce product lines

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THANK YOU!!

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