H.J. Heinz Co.: The Administration of Policy (A) Harvard Case Solution & Analysis

P.E.S.T Analysis

Political Factors

  • Rules and regulations
  • Employee related legislation
  • Safety and health regulations

Economic Factors

  • National Economy
  • Labor market

Social Factors

  • Health conscious and Attitudes
  • Lifestyle variations
  • Population

Technological Factors

  • New product expansion
  • Information technology
  • Infrastructure Development.

S.W.O.T. Analysis


  • Brand names
  • Market Leader in many countries
  • Slogans and Advertising.

Without any doubt it can be said that Heinz has actuallyrespectable reputation for offering a quality food, and it has been doing so since its establishment back in1869, the initiatorof the company Mr. Henry J Heinz set out to introduce the quality and uniformity to the buyers homes and the company had been successful in maintaining the exceptional quality from the beginning. Entering the market as a leader in many countries is one the finest job that has been done by the company’s several divisions. Moreover the company has also done a satisfactory job in terms of marketing and advertising.


  • Quiet mature product
  • Production cost
  • Other market leaders

The company has been at a back foot when it comes to the controlling of production cost. They need to control the production cost which would help them to increase the overall net profits.


  • Market growth
  • Brand name extension
  • Overall customer’s feedback

Being  FMCG Company there are immense opportunities that are present in the market which still needs to be captured. Additionally, they can still go for brand name extension which would help them to increase the market penetration.


  • Competitors
  • Government policies
  • Rivals brand loyalty

For each and every company there are certain threats which might create issues at any stage.  Sometimes competitors branding and marketing activities might create some issues for company to additionally penetrate in marketing.The company also might face threats from a new government policy which might come across any time.

Financial Analysis

As per the exhibit 1 company’s sales has been growing in an exceptional manner. Reflecting back to the year 1972 company had a sales of around $1,020,958 which increase to 1,116,551 in the very next year. As the time passes these figures gets the gigantic boom and reached to $2,150,027 by the year 1978. Definitely in relation with the sales the overall cost of products sold had also increased in a similar manner and in the year 1972 this figures was around 700,530 which reached to 1,439,249 by the year 1978.  According to the exhibit 1company’s book value per common share had to be given special importance because company’s overall sales has gaineda tremendous boom as compared to the book value per share. In the year 1972 the book value per share was around $17.26 which reached to $28.96 by the year 1978. Although this increase is quitegood, but it is a bit low in comparison with the company’s overall net profits. 


The discovery of alleged practices between companies started due to sole contribution of Heinz which carry out the antitrust activities originally. The beginning of these antitrust activities started from the private antitrust suit filed by Heinz against Campbell soup for practicing monopoly in the market of canned soup. In response to the Heinz condemning, Campbell Soup also filed a case against Heinz, accusing the company for practicing the same activity in the ketchup market. The major action took by the attorneys of Campbell was to oblige the Heinz to present a document explaining the relationship between Heinz and one of its advertising agencies in order to criticize their financial relationship. The attorneys questioned the president of Heinz USA division Arthur West, asking for evidence regarding flow of fund and especially taken into account those items that are known as off-book accounts. Claiming the Fifth Amendment that according to Arthur West gives him immunity from being accused or to be more precise from self-incrimination. This entire incident happened during the April of 1979 when both the companies were practicing antitrust allegations against each other. The curtains were dropped after Stangerson received confirmation of the financial relationships between Heinz and the advertising agency as the agency confirmed the invoicing practices.The company has been doing a successful job, but needs little attention in managing its financial aspects. What they simply need to do is to have a detailed audit on a regular basis, which would help them to catch the root cause on an initial basis. Moreover, they must also keep their focus on advertising and branding activities to increase the brand recall as much as possible. They must also control the exceeding cost so they can see some exceptional increase in the overall profits...............................

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