Campbell Soup Jim Elsner Must Research Proposal

Therefore, the move into microwaveable lines is subject to significant risk. The company-wide aversion to this level of risk can be seen in the actions of the Maxton plant managers and the engineers assigned to the project.

There are a number of options available to Campbell's. The first step they need to undertake is to determine the future of their move into microwaveable soups. It is recommended that the Plastigon program be scrapped in favor of the DRG program. At present, Campbell's does not appear to be capable, in terms of personnel, culture and systems, to develop new technological processes. The DRG program represents modifications of existing technology, which is more congruous with Campbell's existing capabilities. Additionally, DRG products have the potential to be profitable. Per unit operating costs are 22% of Plastigon products and the wholesale price is only 70%. While DRG products cannot be produced profitably at present, they are close enough that tweaks to the price or production efficiency can get them there. Plastigon products, whose production costs are estimated to be 175% of the wholesale price, are nowhere near profitability.

The second recommendation is to overhaul the product development process. As competitive intensity increases due to market maturity, packaging will become an increasingly vital source of competitive advantage. Campbell's therefore needs to dramatically improve its competency in that area. The packaging department should receive its down dedicated engineering team. The existing engineering systems department has two main functions to which it is largely dedicated. The packaging department should have its own team, the bulk of whom should come from outside the company. This team would work with the food engineers with regards to new product development, but would specialize strictly on packaging development. By bringing in outside people, a culture can be developed for the department that is more conducive to innovation than is the present corporate culture at Campbell's. The dedicated team will not be distracted by multiple projects and requests from other departments. Duplication, such as the simultaneous development of Plastigon and DRG that is being experienced at present, will be eliminated. The engineers in the unit will be hired with the understanding that they will travel, so turnover will be reduced. Also, communications will be improved because the team will work closely with each other, liaising with other units only with regards to specific project-related issues. Lastly, by dramatically increasing investment in the packaging team, the increased role of packaging development in the strategy of the company will be recognized and adequate investment will be made for the strategic objectives…