What Is Oscar Mayer's Core Competency? Essentially, What Is It That They Are Known for Being Good At

1. What is Oscar Mayer's core competency? Essentially, what is it that they are known for being good at.

Core competencies of Oscar Mayer (OM) are processed red meat products like bologna, hot dogs, bacon etc. This has been their main product category since last 100 years. Red meat products from OM division still constitute 82% of operating profit and 70% of annual meat pound volume sales.

2. Has consumer demand for red meat really caused a dramatic drop in sales? Could there be some other reason for the decline?

There is no doubt consumer trend is changing towards white meat based more healthier meat products. This is reducing the overall demand for red meat products impacting sales from OM division. However shift in consumer trend is not the only reason for loss of sales.

OM is also facing more challenging & bigger set of competitors due to recent industry "shake-outs" and consolidations where competitors have become much bigger with sophisticated manufacturing & marketing skills, bigger market share, stronger financial positions and a focus on building value added brands and market share. This requires OM to run it's business operations & develop future marketing strategy much more carefully as they face more competition regarding product quality, product price, variety of available & future new products etc. Lack of appropriate investments in advertisement & marketing and future product strategy is also to some extent contributing to drop in sales of OM products.

Recent price increases for OM products have also outpaced key competitors, OM had to cut A&P budget to control operating costs, result has been slippage in value & trust among OM consumer franchise. This has also led to drop in sales.

3. What is your decision for Oscar Mayer?

I think company should focus on the white meat business which aligns with consumer & market trends. This requires company to put more emphasis on LR products, increase advertising budget, focus on market share & volume sales growth. OM already has a sizable revenue from LR product lines and it has been growing in the last few years, maintaining this momentum and developing strategies in the line of Mr Goodman's suggestions should be top strategy considered by OM to fuel future growth.

This strategy needs to be blended with reinvigorating growth in the red meat product lines as suggested by Eric Stagner. This is still the main revenue generating product for OM and there is a sizable market which may shrink but it is not going to disappear. In the last few years more budget cuts were made in OM unit to support sales growth

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