Hausser Food

Introduction

For much of its history, Hausser Food Products (HFP) Company has been the market leader in the production and marketing of baby foods. But by the mid-1990s lower birth rates, concerns over food additives, and increased competition from private names caused a compression in profitability. Concerned with how HFP will engage in business under this new environment, top management realizes the need for new products. However, the development and marketing of such products is a long-term objective. In the short-term, HFP’s objective is to find new ways of increasing sales of its existing product-line. This responsibility was squarely that of regional managers, who were to solicit ideas from district sales teams.

Problem Statement

Cultural differences between the district sales teams and regional management created a fault-line between these two parts of the company leading to a lack of communication, understanding, and trust.   The incentive system that management put in place failed to align the goals of the sales teams with the goals of the overall company because management did not communicate well with the sales teams or understand what motivates them. Since the sales teams were not financially incentivized to help the overall company and they did not trust management, they did not share ideas on how to improve sales of the existing product line. As a result the company was unable to adjust to the changing external environment.

Analysis

Environment

The Hausser brand, with a mature product line of baby foods, was known to consumers for its high quality. Behind this high quality was an efficient production and warehousing system and a well-developed distribution network that had helped the company achieve its 60% market share and rapid expansion and growth over the years. However, the market for infant foods started changing significantly with decreasing birth rates, concerns about food additives, and increased competition. The...