OUR COMPETITORS
Peter Pan’s most prominent competitors are JIF and Skippy peanut butters. They are both dominate the industry and target similar markets. The top three leading peanut butter companies are J.M. Smucker, Hormel and ConAgra. J.M. Smucker operates JIF, Hormel operates Skippy, and ConAgra operates Peter Pan. To analyze these competitors, we completed a SWOT analysis. In this way, we could provide a comprehensive view of the companies’ key strengths and weaknesses and potential opportunities and threats.
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JIF
JIF is one of the leaders in the peanut butter industry. It was founded in 1958 and operates under the J.M. Smucker Company. A strength of JIF as a company is that it is one of the leading peanut butter brands. Smucker’s has remained an industry leader for over 30 years[1]. It plays in a solely domestic market. Being the number one peanut butter company in the United States, innovation continues to be a key focus. The JIF Whips products have been successful for them and a key strength. No other peanut butter company has developed a product like this. The company however has very high investments in research and development.[2] Since JIF continues to innovate and introduce new products into the market, this causes increased research and development costs which could be a problematic in the long run. JIF also has a few opportunities, especially with being the leading peanut butter brand. They obtain 39.6% of the market share in the peanut butter industry. JIF always has the new opportunity to reach new markets. They could target younger populations or a health-conscious crowd. Other opportunities also include the development of new products. They have had great success in this area and there is room for improvement and more research into other products that could be introduced in the future. JIF could also partner with other brands in the future. This is an opportunity that could help them maintain the leading position in the peanut butter industry. Partnering with other companies could help build the company. With opportunities come threats however. Some threats of JIF include financial capacity and increasing costs. Since they are the leader in the industry, there are threats of losing this position and falling behind a competitor. With an increasing market share, this could lead to increasing labor costs due to hiring more employees to operate the facilities, as well as increasing costs of raw materials in order to produce the products. In 2011, the company suffered from a decline in revenue due to the company’s decision to readjust peanut butter prices in line with falling input costs, following massive spikes in peanut prices in 2011[3]. This poses a threat as well since something like this could happen again in the future. JIF has numerous strengths and a few opportunities. The company also has some weaknesses as well as threats that could be a concern in the future. [1] http://clients1.ibisworld.com.pitt.idm.oclc.org/reports/us/industry/majorcompanies.aspx [2] http://www.swotanalysis24.com/swot-j/58693-swot-analysis-jif.html [3] http://clients1.ibisworld.com.pitt.idm.oclc.org/reports/us/industry/majorcompanies.aspx |
SkippySkippy peanut butter competes with both JIF and Peter Pan. Hormel Foods manufactures it and it was first sold in 1932. Ranking second only to JIF, Skippy has some strengths of its own. It acquires 15.2% of the market share in the peanut butter industry. It leads the peanut butter market in China, where peanut butter consumption has grown rapidly during the past few years[1]. Compared to JIF, Skippy is a multinational company. Another strength includes its product innovation. To gain market share, spur volume growth, and enhance profitability the company is constantly developing new products. For example, Skippy Singles successfully helped distance themselves from competitors[2]. However, they do not have adequate marketing and advertising. The brand has high awareness, but compared to JIF, not enough. For example, they do not have a lot of of TV advertisements or direct mail coupons. Skippy peanut butter brand has a few opportunities too. One of these includes its influence in China. It already holds the top market position and can keep growing to further distance itself from any competitor. The Skippy transaction should also garner cost savings by producing economies of scale overseas. Hormel could be able to use the Skippy assets to widen the international reach of some other products overseas for the company[3]. On the other hand, some threats to Skippy include most notably, competition. Since JIF is the main leader, Skippy will need to execute very well and carefully as it continues to climb the value ladder. Any missteps would likely result in market-share erosion.
[1] Ibid. [2] http://www.valueline.com/Stocks/Highlights/Hormel_Foods__ [3] Ibid. |