Birds Eye and the UK Frozen Food Industry Harvard Case Solution & Analysis

Birds Eye and the UK Frozen Food Industry Case Solution

1.     Introduction:

In 1920, General Food Corporation was successful in manufacturing and marketing Bird Eye frozen foods in America by using different freezer which was developed by Clarence Birdseye in order to prevent the freshness of frozen food.

On the other hand, in 1938, the Bird Eyes was established in the UK as well. This initiative was taken by Robert Ducas with the financial and technical corporation of General Foods Corp. and Chivers and Sons Ltd. Although the frozen food industry was already developed and occupied by many other major companies in the market such as Smedley’s, Mudd and Son, Associated Fisheries Ltd, etc.,therefore, Bird Eye was not pioneered in the frozen food industry particularly in the UK.

However, Unilever was highly interested in the business operations of Bird Eye and therefore, on March 1943, Unilever had acquired Bird Eye Foods, During the 1950s and 1960s, Bird Eye Food had successfully acquired most of the UK’s food market and accounted for above 60 percent of the UK frozen food sales on a tonnage basis. Bird Eye detained a significant competitive advantage over its major competitors such as Ross and Findus. Bird Eye wassuccessful in achieving greater market share and large return on investments. Moreover, Bird Eye had becomethe pioneer in the frozen food industry in the UK, and its competitors began to follow its strategies and moves.

Bird Eye was intended to direct its business towards establishing such organization that could fully incorporate with controlling and developing food production and supplying retailers with the quality frozen foods. However, the companyhad to build its own entire system, due to the lack of well-developed infrastructure for producing, supplying, distributing, storing and retailing frozen foods and became successful in integrating all these systems in its business operations. The followers of Bird Eye developed the same approaches of production, distribution, and marketing to successfully acquire its market share. Bird Eye also gavemajor discounts to its retailers which encouraged large retailers to give the major part of their frozen foods business to Bird Eye.

On the other hand, the company’s strategy was more or less marketing oriented as, it focused to increase its sales by introducing new products, spreading consumer awareness for the money of frozen food and developing consumer acknowledgment of the quality related with the Bird Eye products. However, due to the intense competition of the UK’s frozen food industry, Bird Eye’s profitability and market share began to decline.

2.     Key Problems:

In 1970, competition grew and became severe which caused the decline in Bird Eye’s market share and sales volume. Its market dominance existed mainly in sales of small retails packs to independent grocers and smaller level supermarkets. However, in home freezers centers its market share was accounted 8% and in catering service the market share was accounted about 10%. In addition, broad product range and increased market segment created major problems for Bird Eye’s marketing strategies and the allocation of advertising budget.

3.     Vertical Integration:

Vertical integration is a concept where the companies expand their businesses such as when a manufacturer of producer owns its suppliers/distributors. This process helps the companies to reduce the costs and improve the effectiveness and efficiency of its overall business operations  by decreasing transportation cost and decreasing time.

1.      Production and Raw Material Supplies:

In production, problems occurred from the application of processing into a short period, the unreliability of machinery and equipment to the lack of skilled labor. Due to this, the company was forced to import machinery from the US and Canada which were a costly procedure. In addition, the factories were determined by the sources of raw materials available in that area. However, Bird Eye operated six factories and associated cold storages which produced a number of different products. .................

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