Why Did Birds Eye Develop As A Vertically Integrated Producer

1. Why did Birds Eye develop as a vertically integrated producer? Birds Eye Food Ltd. Began as a frozen foods company that needed to a develop a organization system that could control, store, and distribute their food because there was not a well-established infrastructure. This is an example of competitive advantage and innovation. The innovations in food processing along with freezing techniques led them to control the means of production. As a result, it became easier for them to control market structure therefore, they could control quality and service and create more added value for their company.

Demand for frozen vegetables and meat became commonplace as a result of new innovation and storage. Birds Eye felt that since they were

The products included vegetables, fish, and beef burgers. After the company began introducing new sources of revenue such as new products including ready-to-eat meals, desserts, and ethnic dishes, this diversified the amount of packaging and meals had to be cross planned. Many of the factors that were affected included seasonality of raw materials and location of those sources. Bird’s Eye began buying up most of the production from farming for peas and vegetables. From seedling to harvest, Bird’s Eye had to keep the process close to where they were picked had to be processed in a certain amount of time. Also, farming was another major issue in terms of how to grow the business because they were sourcing everything from contracts that were published until they finally bought the means of production. They eventually bought their own chicken broiler in 1958 to produce it quickly. As far as meat and fish, many times they were based on contract because of the way fishing can be different and fished. Winter seasons became difficult, so they had to buy bulk contracts in order to meet demand. Many times fish auctions superseded buying on contract resulting in suppliers trying to get the best for their

One of the main featured taking their four regional units and turning them into global business units or GBUs. Outsourcing these GBUs into business divisions that handled the work of the main business helped promote innovation. After the stock fell from $86 to $60 per share in January 2000, it was important for them to strategize. Confidence was an issue with this company from the get go and resulted in lots of problems, so a shake up was needed. The case for global product divisions was based on innovation and duplicating those functions across research facilities would hold them accountable. New GBUs would also help develop cross-cultural integration. What works here in the United States may not work somewhere else. Moving quick was the best way to diverse product portfolios and implement quick change. P & G was pushing a more open innovation policy. The policy would have cross functionality and could help reduce costs if executed