Case Analysis of Gerber Products Company

G. Holland, Strategic Management, 2nd ed. New York: McGrawHill

The time frame of this case is 1988. Financial data for Gerber Products Company, and market share data for the baby food industry are available through calendar year 1987. This case analysis is performed from a strategic perspective. The purpose of the analysis is to (1) identify viable strategic alternatives, and (2) recommend a strategy choice for the company. The results of the analysis are presented in discussions related to (1) an analysis of the situation, (2) the identification of strategic alternatives, and (3) the recommended strategy choice.

The analysis of the situation includes (1) an environmental analysis, (2) a resource analysis, and (3) a market analysis. The American economy was generally strong in early1988. The country was entering its fifth consecutive year of growth, and no general recession was projected in the near future. The economy had experienced and was continuing to experience, however, traveling minirecessions which struck specific industries and geographic areas of the country. The general economy in 1988, however, did not pose any major threats to either the baby food industry generally or to Gerber Products Company specifically. Human and physical resource supplies were ample, and no significant threats in these areas were in the offing for eithe

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. In all other data pertaining to market share presented in the case, however, Gerber, Heinz, and BeechNut were presented as if they represented 100 percent of the baby food market. Thus, when Figure C14.2, as an example indicates that Gerber's market share was 60.5 percent in 1986, that number actually indicates Gerber's share of the baby food sold in the United States by Gerber, Heinz, and BeechNut. In the total baby food market in the United States, however, Gerber's market share was only 51.4 percent. The case analyst is, thus, asked to believe that all market share gains and losses experienced by Gerber, Heinz, and BeechNut occur at the expense or gain of the other two main competitors, while the minor players in the baby food industry remain unaffected. While such an assumption is completely unreasonable, the faulty and incomplete information provided in the case leaves the case analyst with no recourse other than to work on this basis. Baby food sales at Gerber were $561.1 million in 1987. On page 483 of the case, it is stated that Gerber's market share was 67 percent in 1987. That 67 percent, however, was only of the GerberHeinzBeechNut total. Gerber's share of the total baby food market in 1987 was a more mo
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Approximate Word count = 2498
Approximate Pages = 10 (250 words per page)

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