Strategic Analysis; the Balanced Scorecard; Value-Chain Analysis: The Packaging Industry Dana Packaging Company is a large producer of paper and coated-paper containers with sales worldwide. The market for Dana’s products has become very competitive in recent years because of the entrance of two large European competitors. In response, Dana has decided to enter new markets where the price competition is less severe. The new markets are principally the high end of the packaging business for products that require more technological sophistication and better materials. Food and consumer products companies use these more advanced products to enhance the appeal of their high-end products. In particular, sturdier, more colorful, more attractive, and better-sealing packaging has some appeal in the gourmet food business, especially in coffees, baked goods, and some dairy products. As a consequence of the shift, Dana has had to reorient its factory to produce the smaller batches of product associated with this new line of business. This change has required additional training for plant personnel and some upgrading of factory equipment to reduce setup time. Dana’s manufacturing process begins with pulp paper, which it produces in its own mills around the world. Some of the pulp material is purchased from recycling operators when price and availability are favorable. The pulp paper is then converted into paperboard, which is produced at Dana’s own plants or purchased at times from outside vendors. In most cases, the paperboard plants are located near the pulp mills. At this point in the manufacturing process, the paperboard might be coated with a plastic material, a special embossing, or some other feature. This process is done at separate plants owned by Dana. On occasion, but infrequently, when Dana’s plants are very busy, the coating and embossing process is outsourced to other manufacturers. The final step in the process is filling the containers with the food product or consumer product. This step is done exclusively at Dana-owned plants. Dana has tried to maintain a high reputation for the quality of the filling process, stressing safety, cleanliness, and low cost to its customers.
1. What is the new competitive strategy for Dana Packaging Company? a. Cost leadership because of increased competition b. Differentiation because of niche markets c. Differentiation because of high technology and high quality d. Cost leadership because of cost pressures in the industry 2. Briefly explain your reasoning for the choice in requirement 1. 3. Develop a value chain for Dana. What are the opportunities for cost reduction and/or value enhancement from using value-chain analysis? 4. Dana’s management is considering the use of a balanced scorecard for the firm. For each of the four perspectives within the balanced scorecard, list two or three examples of measurable critical success factors that should be included.