Project
3
A Soup Company
CEO David Johnson makes Campbell Soup grow again
Richard Hagberg, an analyst of CEO (Chief Executive Officer) personality
traits and performance, believes that many bosses fail at two crucial tasks:
communicating strategy and aligning troops behind a vision. “They get so
wrapped up in their own ideas that they fail to communicate strategies.” His
research shows that about 70% of top executives are introverts. Not David
Johnson. Johnson's command of emotional and quantifiable factors separates
him from the CEO pack. His showmanship, combined with a laser-like focus
on financial rigour, has paid off, imbuing the 127-year-old Campbell Soup
with renewed vigour.
Johnson focuses his people on a single goal - increasing net earnings faster than competitors. He drives managers to search for the next big idea that could produce a blockbuster. “Bring me ideas supported by how much each will add to earnings”, he directed. For example, when low-fat cream soups became a hit in Britain, someone suggested that he transplant the formula to the USA - he did.
Looking to the future, the CEO is counting on his idiosyncratic brand of voodoo to power Campbell over two major hurdles: tepid sales growth and a limited international presence. In the USA, the company for all its earnings prowess, has been stewing in a food market that's been stagnant for years. It has been struggling to adapt to the American consumer's preference for eating out or bringing home freshly prepared meals. To boost growth, Johnson has launched a re-examination of the company's business portfolio that will winnow out hundreds of low-profit offerings, many in soup, and redirect investment dollars to products with the highest returns. Although Campbell now commands 80% of the US canned soup market, he lusts after a 90% share. He plans to achieve this by reinventing old favourites and producing new hits like cream of broccoli. Last year Campbell added one third more chicken to its chicken noodle soup and increased sales by 18%.
Growing the business overseas is more difficult. In Europe, the company languishes behind CPC International and Nestlé,
makers of Knorr and Maggi dehydrated soups, and Heinz who claim 53% of the UK
soup market. Campbell has launched beachheads in Japan, Malaysia, Indonesia and
Hong Kong. Unlike that of many consumer-products companies, Campbell's strategy
is to customize its brands to local tastes. For example Campbell's cream of pumpkin
has become Australia’s top-selling canned soup, while in Hong Kong it sells
watercress and duck gizzard soup.
The global excursion will require at least 10 years of superior execution before
it can be judged a success. And critics argue that in the US, the company needs
to take some creative quantum leaps to infuse new excitement into soup and to
combine brands in intriguing new ways. Campbell did this last year when PepsiCo's
KFC introduced chicken pot pies made with chicken swimming in what is essentially
Campbell's Chunky Soup, covered by a Pepperidge Farm Crust. The pies are flying
out the door so fast that KFC predicts sales will reach $300 million in 1996.
(From Grant, L. (1996) 'Stirring it up at Campbell',
Fortune, 13 May, pp.50-3.)
When using this for the Project Break, it might help you to consider
the following questions:
 What are the different product strategies described?
What were the new products developed according to each new product
strategy?
What new product ideas can you suggest for each of these strategies
and why do you
 think
these will help develop this product strategy? |
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