Should Crown Cork & Seal acquire Continental Can, breaking with the corporation’s tradition and manufacture new products (such as plastic and glass containers)? This question is essential since it would have significant influence on Crown Cork & Seal’s ability to survive the dramatically varying economic environment of the metal container industry. Whether the action could bring Crown sustainable competitiveness in the future is the main concern of the analysis. To to answer the question, the understanding in structure/attractiveness of the container industry and Crown’s competitive advantage should be taken into account as well. As statement in the article, 61% of container market in the U.S was occupied by the metal container industry …show more content…
The case presented that low profit margins, excess capacity and rising material and labor costs led to corporate diversification and consolidation. Crown also put efforts in finding its own competitive advantage by figure out its “position” and apply several strategies in areas such as operation, financing, and marketing. Due to the fact that Crown is a small manufacturer competing in a market dominated by American Can and Continental Can, it focuses on metal forming and fabrication, which are Crown’s traditional strengths. The position of Crown would be cost leadership, supporting by relocating factory facilities and reducing jobs to cut down payroll and transportation expenditures. On the other hand, it focused on R & D in order to enhance existing metal container product lines, which is predicted to lead to cost efficiency. Moreover, Crown emphasized quality, flexibility and fast respond to customers’ needs, which could be achieved by enhanced existing product lines since Crown would have a refined product line and sophisticated employees that could produce requested items at low defect rate and less time-consuming; therefore, further reinforce the “low cost” position. Crown’s activity map implies that each of the company’s activity is supported by each other, forming a sustainable competitive advantage which could not easily be imitated by competitors, and leading to growth in