Heinz Case Study

Company made a corporate move that close in the course of their future business model. In order to increase their competitiveness, Heinz had to come up with a business strategy that would rival competitors. According to the case study, the sovereign corporate strategy has been Identified as a directional strategy, which was based on analyzing the companys orientation toward growth. It was noted that the company needed to 1) cut back on operations by simplifying their business model, 2) diversify the business to increase growth, and 3) grow nationally and globally through a merger which would also reduce debt.The start step in the strategy included streamlining their product selection which would refocus the companys business model, while also offering to a greater extent flexibility. Heinz had decided to allow their devil main food platforms to be the highlight of the company meal enhancers (which included condiments of all types) and meal and snacks (including frozen and shelf-s table goods and the same made for the food service industry). In doing so, they could focus more attention to detail on their successful products such as packaging and quality, Instead of spreading themselves thin by splitting helpless with struggling products and brands.The second strategy Included Increasing growth by diversifying business. Heinz did so by engaging In concentric diversification with the Del Monte Company. By creating a synergistic relationship with a like- forefronted food company, Heinz was able to take stock of their product lines, figure out strengths and weakness of each, and identify which of the products would upbeat from a strategic fit with Del Motes input regarding approach and knowledge in production, marketing and/or sales. This allowed both companies to converge, growing both individually and together, thereby increase profits and company growth.In fact, it was expected that as Whines revenue increased by twenty percent, Del Motes company would doubl e in size. Lastly, the business merger of Heinz with Del Monte Foods has not only Increased wealth, but It has reduced the debt. By allowing Its shareholders to assume a 0. 45 share of stock In Del Monte for every share that they owned In Heinz, this also allowed Del Monte to acquire twenty percent of Whines debt. This essentially made those shareholders the majority owners in the new Del Monte. Additionally, more debt was alleviated when Heinz was able to centralise dividends by thirty-three recent, which generated extra monetary flow.By 2004, Heinz was able to change its organizational structure which showcased its horizontal growth. They were able to venture into new markets through their band acquisitions from Del Monte, and created a strong presence in the following markets North America, U. S. Foddering, Europe, Asia/Pacific, and smaller markets in Latin America, Africa, India, and the Middle East. Across the board, this resulted in profitable diversification In revenue. The correctness of this directional strategy seems to have worked In the Heinz Companys favor.Instead of continuing to be weighed down by debt, and an over-bloated portfolio of products (all of which were not profitable), the merger helped to alleviate most of the problems. If they had chose to only focus on a of debt acquired by Del Monte. Also by not choosing a parenting strategy, they allowed for more of a partnership between companies instead of a one holding more power than the other. The directional strategy seemed to offer the best combination (portfolio attention and a synergy relationship) of the latter two strategies, which worked best for the goals that Heinz Company had in mind for their own personal growth.