Crown Cork and Seal Case

Group -1, SECTION - 3

ABHINAV CHAURASIA
(FT163002)
AKANKSHA SHUKLA (FT163009)
ARSH PRAKASH (FT163014)
ARSHIA PARVEEN (FT163015)
DEBHARSHI BHATTACHARYA (FT163018)
GARIMA SINHA (FT163023)
JAY GHOSH KHEMKA (FT163033)

What are the most significant factors affecting competition in the

metal Container Industry ?

Canning Technology Change

Micro Economic Scenario

What Strategy does CCS have for competing in this industry ?

Value Proposition:
CCS did not diversify in to other industries like forest produce and plastics
CCS did not compete with fibre foil cans for motor oil can market.
Target Segment:
They targeted two major segments: beverage and aerosol market.
They expanded their distribution network in domestic market and invested
heavily in underdeveloped nations.

Manufacturing: Invested heavily in geographically new plants to reduce

transportation cost .
Marketing/Service: CCS provided high level of customer service.

What advantages does CCS have over competitors?

Early Mover Advantage: CCS made Industrys first aerosol container way back
in 1946

Logistics: CCS relies heavily on efficient logistics therefore enjoys a high

delivery speed

Environment: The economic scenario supports a higher growth in beverage

industry where CCS enjoys a significant influence over its competitors

Marketing: Competent sales force and technical department to resolve

customer problems.

Research: R&D department focused on enhancing the existing product line.

In 1962 it introduced the first beverage filling machine that could handle both
bottles and cans. This coupled with favourable market growth in the beverage
industry gives them a distinct advantage

Explain the comparisons in exhibit 3 of the case

Market Players: Continental (18.4%) and American Can (16.6%) are well
ahead of National Can (8.7%) and CCS (8.3%) in market share

Revenue: Market leaders(Continental and American Can) generate up to 9

times more sales and 5 times more Net Income than the underdogs (National
Can and CCS)

Growth Rates: During 1967-76, Underdogs show sales growth of over 200%
and profit growth of over 145% while the market leaders grow at 100% and 33%
respectively.

Capital Utilisation (Sales per Can Plant): Continental (764) and American
(1107) are way ahead of National Can (144) and CCS (227) signifying
Economies of Scale advantage

CCS enjoys minimum Debt Ratio at 23 % and highest Return on Equity at 15.8%

What recommendations would you make to the management?

Supply Side:
CCS should open more plants to expand its base and enjoy economies of
scale. They could try inorganic growth through market consolidation and
acquisition of smaller can manufacturers
CCS should try aluminium cans and should see how they can reduce its
cost. They could use double declining depreciation for the newly acquired
two-piece can operations to enjoy tax benefits

Demand Side:
Venture into under developed nations and look at customer diversification

Thank You