Oscar Mayer Case Study Summary

MARKETING MANAGEMEMT
CASE 1 : OSCAR MAYER
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INTODUCTION
Oscar Mayer was founded in the year 1883 and was owned by Kraft’s food. It was famous for its red meat in United States. Oscar Mayer had also made a very recent acquisition of Louis Rich, a producer of White meat and this acquisition proved to be a success mainly because of the growing demand for white meat over red due to health reasons.
Case facts of Oscar Mayer
The case starts with Marcus McGraw in a fix with a very complex strategic decision to make. This complex decision came into being when he had received a note from Mike McTiernan, a relied

 Consumers began looking for processed meat products which were more convenient to prepare in a lesser amount of time and hence began looking at other products other than the ones being offered by Oscar Mayer.
Weaknesses of the Competition:-
 Oscar Mayer had an already established market share and hence enjoyed the loyalty of their customers which posed as a problem for the new entrants into this maket.
 Since Oscar Mayer had been in the business for over a long period of time, their manufacturing techniques and facilities were more sophisticated than that of its competitors.
 Oscar Mayer, being already well established, would definitely enjoy a better financial position that that of its competitors who would have recently joined the meat business.

Effects of competition on the Oscar Mayer Division:-
 Oscar Mayer would have to take a ten cent per package price cut on the top three OM branded items in each category to be able to once again have a competitive market

The company although very similar to Louis Rich in the white meat market, rather than investing in Louis rich the acquisition helps reduce cost and efficiently produce since the Turkey-time has excess capacity.

 Diversifying portfolio (Crabbies Inc.): Given the OM and LR have essentially been in the white and red meat space, a diversification of portfolio is the need of the hour. Although starting their own line of different foods can be detrimental given the past attempts at doing so, acquiring Crabbies Inc. which essentially clocks an annual revenue of 15million USD and is headquartered in Maine. The firm produces stimulated shellfish products(e.g. crabs, lobsters) made out of low cost materials.
The second-best strategy would be the one suggested by Eric Stranger (VP – OM brand):
 Truly believes in the strength of the OM brand despite the rising concern among experts about the decline in the category as a