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Sealed Air Corporation (Hbs 9 582 103) Case Analysis

1077 words - 4 pages

1. What are the problems?Market leadership and technological innovation have marked Sealed Air's participation in the U.S. protective packaging market. Several small regional producers have introduced products, which are less effective than Sealed Air's but similar in appearance and cheaper. The company must determine its response to this new competition. The company is faced with a difficult choice of choosing from a range of feasible options ranging from doing nothing to introducing a new product. This has raised product line management issues, particularly cannibalization, and affords the opportunity for the development of a marketing plan for any new product introduction. The timing of launch and any change in policies for Air Cap cushioning and Sealed Air's other products also needed to be communicated.2. What has been happening in this market? How is SA doing?Segments:The protective packaging market had three major use segments:Positioning, blocking, and bracing - e.g. shipment of motors, computer peripherals etc.Flexible Wraps - could be used as void fill also, e.g. glassware, small spare parts, light medical instruments etc.Void Fill - to prevent movement during shipping, did not generally qualify as flexible wraps.ProductsTill 1970 heavy paper based products had dominated the market. In the seventies companies began product development with an assessment of packagers' needs. In addition to coated and uncoated polyethylene air bubbles there were two major competitors in these markets: paper based products and foams.UsersThe proliferation of packaging products and the lack of easily demonstrable universal superiority caused confusion among the end users. Users were a varied lot - some buying on price/performance basis whereas the others with purchase department mentality considered price per square foot and delivery before any purchase decision.InfluencersBased on domain knowledge Hauser guessed that a packaging engineer influenced about 40% of the material purchase decisions. The other group of course would be the purchase department as mentioned above.Marketwise Performance of Sealed AirThe US Market - Packaging Supplies were viewed as productive, cost saving resource. Sealed Air had kept most of the air bubble market (20% of Flexible wrap market). Key factors being:Patent protection.Licensing of only one competitor (Astro Packaging)Extensive Market EducationThe European Market - Packaging supplies were viewed as expendable commodities. SA was the only company selling coated products in these countries.England - SA had developed the market and had good distribution but the uncoated manufacturers were chipping away at SA's market share (likely to lose 50% market share to uncoated manufacturers).France - SA owned SIBCO (uncoated mfr.) and was facing competition in uncoated products (price lower than Air Cap) from 2 other manufacturers (one with a superior production facility). Market was shifting gradually towards uncoated products.Germany...

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