AVERY DENNISON CORPORATION: STRATEGIC AUDIT

This paper develops a strategic audit of Avery Dennison Corporation. The findings of the strategic audit are presented in seven topic-specific sections, as follows: (1) background information on the company; (2) external analysis of the company's environment; (3) internal analysis of the company; (4) analysis of the company's strategies; (5) analysis of organizational structure and control systems; (6) analysis of the company's past performance; and (7) predicted future performance of the company.

Background Information on the Company

Avery Dennison Corporation is known best to most people as the maker and marketer of self-sticking labels. The company is the worldwide leader in the adhesive label industry. The company manufactures labels for almost any purpose; however, major sellers are packaging labels and mailing labels (Hoover's, Inc., 2004).

Avery Dennison also manufactures the pressure sensitive adhesives that it uses on the labels the company produces. The pressure-sensitive adhesives manufactured by the company are, however, also sold to other companies and to individuals for a wide variety of uses. While Avery Dennison is best known to the consumer for its label products, pressure-sensitive adhesives and materials generate more than one-half of the company's total revenues (Hoover's, Inc., 2004). The distribution of the company's 2003 revenues by product group is summarized in Exhibit 1, which may be

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substitutes, however, are less useful for all users, and the substitutes are less productive for business and organizational users. In relation to pressure-sensitive, self-adhesive labels, therefore, the threat of substitute products exists, but it is not a strong threat (Hoffman & Korane, 2003). With respect to substitute products for pressure-sensitive adhesives, there are no viable substitutes if the need exists for pressure-sensitive products. The alternative is to use adhesives that are not pressure-sensitive, which is not an option for many manufacturers (Manolis-Sherman, 2004). The fifth force in Five Forces analysis is the intensity of competitive rivalry in an industry. The level of competition in the pressure-sensitive adhesives industry, as well as in the pressure-sensitive, self-adhesive label industry, is high. The intensity of the competition, however, may not be as intense as the competitors in these industries would like people to believe. The United States Department of Justice in conducting an investigation based on the premise that cooperation between industry competitors is closer than is desirable from consumer perspectives (D'Amico, 2003). PEST analysis is concerned with the political, economic, soci

Category: Business - A