Crown Cork & Seal in 1989 Harvard Case Solution & Analysis


The paper attempts to describe the background of Crown Cork & Seal while considering the strategic issues that the new CEO would need to consider after the exit of an ailing chairman of Crown. The paper also attempts to analyze the future competitiveness strategy for the industry in which the Crown competes while understanding the structural analysis of the industry. Moreover, the paper aims to describe the attractiveness of the metal container over the years and outlines the performance of the company in the reign of John Connelly. Furthermore, the paper entails to the understanding of significant changes which are taking place in the industry and the response from the new CEO in handling the particular situation. Lastly, the paper describes the current situation of the company and outlines what has happened with the company whether the project became a success or a failure.

Company Background

Crown Cork & Seal started its business through the manufacturing of bottle caps which became popular as a new venture idea, while soon it began selling the bottle caps around the United States. However, the company was in the state of bankruptcy when Charles McManus, a competitor bought the company in the year 1927. The company sold corks to half of the market of United States and helped the company build the largest plant of bottle caps in Philadelphia, although ,the inefficiencies and not meeting the required capacity created huge losses for the company. Soon after the death of Charles McManus in the year 1946, the company started to perform well as it attempted to make diversification in the field of plastics and manufacturing bird cages of metal. In the year 1957, John Connelly took charge of becoming the Chairman after subsequent losses faced by the company. Connelly provided stability to the organization when it needed the most while addressing the change in the company’s patterns along with the change of patterns with respect to the metal can and container industry.

Answer 1

Due to the change in the metal can and container industry trends, Avery has been facing with two key strategic issues after the exit of John Connelly the ailing Chairman of Crown. Avery needed to consider if the company needs to participate in the bid for Continental Can Canada which is one of the largest players of the industry or the company shall enter the plastic container industry in which it forecasted a strong growth along with the growth in glass industry. Crown needed to make a quick decision as there has been a rapid change in the trends of the industry which allowed big players to change their current strategy and shift to a better alternative along with the passage of time. Entering the bid for Continental Can Canada would allow the company to attain a good presence outside the United States.

Answer 2

The appropriate industry to analyze for Crown is the industry of metals, plastics, and glass industry. The attention shall remain on focusing on the metal industry because Crown has major expertise in the particular industry as it operates and competes in the metal industry by developing metal cans and containers. This is the particular industry on which Crown established its core competency and developed profits in the long run. However, the plastic and the glass industry shall also be considered and analyzed because these are the prospect industries for Crown as it aims to spread its wings in either of the industry to sustain its market position and to retain profits for the company.

Answer 3

Porter’s Five Forces Model

Threat of a New Entrant

The barriers to entry for the metal, glass, and plastic industry are very high as it requires huge investment along with the establishment of many plants to achieve economies of scale and to make it feasible to cover the costs and increase revenues for the company. There is also an increase in the uncertainty in the market regarding the different alternative industry which restricts the ability of different companies to either diversify their business portfolio, or to enter in the particular industry as a new entrant. However, in this particular industry there are many big customers such as Coca-Cola Company, Pepsi Cola, and Coca-Cola Enterprises, have assigned their suppliers for their bottlers which makes the industry competitive and achieves high revenues....................................

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Structure, and the latest industry trends metal container, a successful strategy for the Crown competition in the industry, and the direction of John Connally for more than 20 years. In 1989, William Avery succeeded Connelly as CEO and is forced to consider new strategic options in the face of industry change. "Hide
by Stephen P. Bradley, Sheila Cavanaugh Source: HBS Premier Case Collection 22 pages. Publication Date: March 1, 1993. Prod. #: 793035-PDF-ENG

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