Oscar Mayer Foods

Case Study Report

Company Name

Oscar Mayer

Nature of Operations

Processed red meat products

Problems in the case

- Change in consumer lifestyle and eating habits. People prefer those food items which are convenient to prepare and are healthy with less fat content. Thus, Oscar Mayer's red meat products are seeing softening in sales trends.

- Threat from substitute products. Most consumers have shifted their preference from red meat products to white meat and seafood.

- Failure of the new convenient product line of Oscar Mayer, "Stuff ‘n Burgers"

- LR facing competition from copycat brands

- Declining sales for Oscar Mayer

Alternatives available

- Adding new benefits to the current OM/OR products

- Strengthening/diversifying your lines via another acquisition

- Internally developing new products that tap the new needs

- Bringing a new advertising campaign for OM/LR brands

Analysis of Alternatives

Now, looking at the case we can see that McGraw's objective for the next 3 years was to promise the board an annual growth of 4% per year on volume and 15% percent on operating income but an alarming market research report is threatening the company and his objectives in the long run.

The new research report shows changes in meat consumption where consumption in red meat has reduced since last 5 years while white meat consumption has increased. This has hit OM's profits and is likely to threaten the company in the coming years. This combined with other problems had put McGraw in a dilemma. But when he sat down with the letters, reports and memos he began to plan and organize the data that was given to him to formulate a divisional strategy. He has already taken the initial steps of strategy decision making by gathering information about the external environment, analyzing internal strengths and weaknesses, formulating goals, strategies and supporting programs, and now he's at the organizing and implementation step.

Currently, McGraw has 4 options:

1. To back Louis Rich and launch new products with a expensive advertising campaign

Louis Rich has shown promise and is doing well in white meat market. Louis Rich is balancing the scorecards of the division with increased growth and the consumer shift to white meat is favoring LR even more. There is a flip side to