Phillips Food Inc. - Case Analysis

Phillips Food Inc.: Case Analysis

Introduction

Phillips Food Inc. was founded in Maryland, over a century ago, by Augustus E. Phillips. With $160 million in sales, Phillips became the one of the largest seafood brands in the United States. The company is made up of three business units: (1) a restaurant division, (2) a foodservice products unit, and (3) a retail products division. Phillips food is having trouble reaching out to the later of the three units. In the case, the VP of marketing, Cherry Stockworth, and king crab product manager Ron Birch discuss the success of phase I and the potential phase II for their pasteurized king crab product. Phillips was the first company to pasteurize and can king crabmeat and has expanded overseas. The company owns and operates all of its plants, ensuring quality and low prices. For phase II of the launch, Birch was looking into the best way to secure retail distribution for the consumer market version of the product.

SWOT

Strengths

Phillips Food Inc., having been around for a century, has become a reputable company that restaurants have grown fond of. Phase I of the king crab project had been a success in their restaurant division building a strong basis for phase II. Phillips was the first to perfect a method to pasteurize and can crab meat while preserving a fresh-like product taste and texture, creating a new market in which they were the dominant company. To support these product innovations, Steve Phillips (CEO Philips Foods, Inc.) also implemented a bona fide branding strategy. He investing in brand-building activities to build a stronger image for Phillips. By 2006 the company was selling to over 10,000 retail stores in the U.S. The advantages of pasteurized king crab meat for consumers were: a reasonable price in comparison to fresh or frozen; the convenience of 100% usable crab meat; and the high-quality taste of fresh without the mess of cracking and removing the shell.

Weaknesses

Phillips has a hard time selling to retailers because not many people buy seafood at the grocery store. Many people do not know how to cook seafood in their homes, therefore they do not care to buy the raw crab in the stores. Even though the company has a competitive advantage, they still do not have a strong customer base, which has retailers worried about the shelfspace that will be occupied by these products.

Opportunities

Phillips has the opportunity to show consumers just how easy it is to use their products. They are the only ones marketing this product, giving them open space to take the seafood department by storm and create the profit they are looking for. Consumers were expected to purchase a greater share of their weekly food basket in warehouse clubs