Assignment 1: Strategic Management and Strategic Competitiveness
Jermall Cuffee
Professor Ira Poladian
BUS 499
04/19/15
The purpose of this paper is to research and understand how the changes of globalization and technology have impacted Herr’s Factory. This paper will also apply the industrial organization model and the resource-based model to determine how the Herr’s Factory earn above average returns. This paper will explain how the Herr’s Factory’s success is through its mission and vision statements of Jim Herr founder of Herr’s Chips. Finally, this paper will evaluate how the importance each category of the stakeholder’s impact is to the overall success of Herr’s Factory.
The Herr Food story began back in 1946 when founder James Stauffer Herr bought a small potato chip company in Lancaster Pennsylvania, for $ 1,750. The business then moved into a vacated tobacco shed in 1947. Jim Herr developed a new and improved process of cooking the delicious snack food. As the demand for Herr’s Potato Chips grew, so did the company. Currently Herr’s Foods are the leader in the snack food industry. They continue to introduce innovative products and packaging needed to satisfy the ever changing appetites and tastes of many snack lovers. There complete line of snacks currently consists of more than 340 items including potato chips, pretzels, tortilla chips, cheese curls, popcorn, crackers, nuts, pork rinds, onion rings and meat sticks.
Jim Herr handed over the Chairman of the Board gavel to his son, James M. Herr in 2005. Herr’s company continues to maintain the philosophy of “health through continued growth”. While trying to keep his father’s business approach Jim stresses the fact that the desire of the company’s leadership is to solidify existing markets and break into new ones. The U.S. manufacturing sector has grown faster than the rest of the economy, according to the National Association of Manufacturers. Technology has a huge impact on globalization and enables companies of every size to do business with customers around the world. Additionally businesses can establish satellite offices in any country no matter how remote a location is as long as they have Internet access.
“Globalization is the increasing economic interdependence among countries and their organizations as reflected in the flow of goods and services, financial capital, and knowledge across country borders. Globalization is a product of a large number of firms competing against one another in an increasing number of global economies. In globalized markets and industries, financial capital might be obtained in one national market and used to buy raw materials in another. Manufacturing equipment bought from a third national market can then be used to produce products that are sold in yet a fourth market. Thus, globalization increases the range of opportunities for companies competing in the current competitive landscape”. (Manzella, 2001)
Most manufacturing operations produce some kind of waste and the Herr’s Factory is no exception to the rule. Thankfully though the Herr’s Factory uses most of the waste it produces in nearby Farms. Water discharge is used for spray irrigation, sludge for fertilizer and potato skins for fodder. It was always the vision and mission of Herr’s to produce the best tasting potato chips while using the best manufacturing practices. Also all the product that does not meet the quality standards set by Herr’s is used as cattle feed. The manufacturing systems at Herr’s are carefully designed to be environment friendly and energy efficient. This had lead to the existing success of the company with continued growth. Herr’s Factory prides themselves on having the best quality product along with good manufacturing practices. They host thousands of facility tours that allow their visitors to sample fresh hot potato chips right off of the manufacturing line. Introducing new flavors and products to keep their company
