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Hill Country Snack Foods Co. Case Analysis

Essay by   •  January 15, 2016  •  Case Study  •  1,504 Words (7 Pages)  •  3,028 Views

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Hill Country Snack Foods Co.

Final Term Paper

Jessica Winer


Situation Analysis

General Environmental Analysis

        The same person has run Hill Country Snack Food for the past 15 years. CEO Howard Keener had run the company based on and only on Shareholders value. Over the past two years the economy of the whole country collapsed and every company was passing through hard times maintaining their sales. After the big hit companies where working on new ideas and products in order to start growing sales again. Hill Country Snacks was know for manufacturing churros, tortilla chips, salsa, pretzels, popcorn, crackers, pita chips, and frozen treats, which are products more southwestern related. The company started to offer a more traditional type of snack in order to expand sells.

        Companies hard to work hard to over come the recession, which obligated most of them on getting debt in order to finance new product and develop new idea. We see from the different charts of the case study that a company such as Snyder’s Lance was being managed with a percent of capital of 23.5% percent when Hill Country was working and producing new ideas without any debt. Keener’s growth and success was because of efficient operation, quality products, and understanding his region that helped produce and finance new products and ideas within the company. Knowing and understanding the economic and population growth of the region Keener to advantage and started to distribute the companies products with sports event, movie theaters, and other leisure venues.

Industry Analysis

        After a two-year economy collapse the whole food industry collapse along with everything else. The entire food industry rose by creating new products in order to get third parties to buy and distribute to end consumers. Some companies created more new products while other only created one or two. In the case of Hill Country they usually created products whenever the felt the need to on comparison with the competition that created a new products every so often. Hill Country spend less money on new ideas compare to the competition because all they were financing their ideas within the company when the competitions was working on debt.

Competitor Analysis

        Based on Exhibit 2 of the case study we could see that Snyder’s Lance, Inc., which is a similar size of Hill Country Snacks, has more sales than Hill Country but they also have more in debt. By looking at the financial information for the competition you could see that if Hill Country Snack introduces a different capital structure and introduces debt to capital the company would grow sales in a much faster way and see better outcomes for the company. Introducing debt would allow them to grow faster just like the competition.

        When looking at competitors its also important to look at new companies in industry. Starts ups tend to take the market for the first couple of months until people decide if they like it or not. They also tend to spend lost of money on advertising. New companies come up with innovative product and ideas for packaging to attract consumers. Also very common start-ups provide a great initial agreement with distributors in order to have their products display in the right section of the supermarkets, grocery, and elsewhere.

Internal Analysis

        When you internally analyze you company you understand that the company works based on what your customers needs and wants. For example, Hill Country Snack Foods had to reduce the amount of fat and sugar that their products had in order to meet the requirements the schools needed. Hill Country did this in order to keep the school system as clients. Another reason is to expand products in order to succeed in the rapidly changing market. By being on top of the market companies are ready if there is any changes in the industry.

Identification of Environmental Opportunities and Threats and Firms Strengths and Weaknesses

Strengths & Weaknesses

        Hill Country Food Snacks has lots of strengths but also have weaknesses. The biggest strength Hill Country has is being able to operate in the most efficient way and still be able to provide quality products. Tending to focus on customers needs and wants makes them competitive besides the competition. By understanding what the client needs and being able to produce in an efficient way they are able to contribute with hat the client is asking for. Also because CEO Keener is aware of the regions growth and understands the market he was able to position the company in a way that the expansion of products to various locations was efficient and fast.  

        Hill Country not only has strengths but it also has weaknesses. The most important weakness is the companies low return earning. The company is has performing with no debt and without taking any risk. This is why on Exhibit 1 you don’t see major changes on sales year to year. By not taking risk Hill Country is underperforming compared to the competition leaving many opportunities for growth behind. This is caused because Keener has been running the company in a more conservative way. His believe are steady and slow but guaranteed.

Opportunities & Threats

        Hill Country has many opportunities for future success but this will happen based on how the company will be run by the new CEO. A great opportunity would be to restructure the company from start. Be restructuring the company the new CEO would have the opportunity to downsize or grow the company based on the needs, technology upgrade in order to by more efficient, and finance related issues such as presenting debt. If the CEO decides to financially restructure the company and introduces debt the company will show higher sale growth from year to year, will have the opportunity to be more competitive.

        Having opportunities leads you to having threats. The biggest threat Hill Country Food Snack may have would be in if the economy turns around. This would affect the company tremendously specially if they have debt. Taking the risk would help the company if the economy remains what it is but if the economy changes this would affect Hill Country majorly. Another threat will stress developed by the risk the company took specially because the company and shareholders and not used to debt.

Strategy Formulation

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