Heinz Corporation

The main corporate strategy of the Heinz Corporation our team has identified as Directional strategy. Heinz has initiated several changes within their corporate structure which have led to significant growth. Heinz implemented a combination of directional strategies in order to achieve its goals such as horizontal growth, concentric diversification, retrenchment and divestment. Heinz has grown internally and externally by expanding within their current industry. They expanded their operations globally and domestically through internal development and external mergers, acquisitions and strategic alliances. Heinz divested slower selling products and focused on their two core businesses, meal enhancers and meals and snacks.

Heinz concentrated on achieving horizontal growth by expanding its operations into other geographic locations. This was achieved by acquiring and merging with complementary businesses domestically and globally, such as Del Monte, Hain Food Products, Borden and Weight Watchers. Heinz’s acquisition of these brands enabled the company to develop a strong presence in a variety of segments, such as frozen food products, baby food, vegetarian (meat-free) meals and weight control. This concentric diversification, allowed Heinz to achieve economies of scale, increased market presence and synergy by using its brand to promote other products in its value chain.

Heinz also pursued retrenchment strategies in terms of a turnaround by contracting and improving operational efficiencies by cutting costs and expenses. Deciding to sell its "sluggish brands", Heinz sought to refocus on its core business of “Meal Enhancers” and “Meals and Snacks” and launch an aggressive growth strategy once the spin off was complete. The merger with Del Monte was expected to reduce Heinz’s annual revenue by approximately 20%, or $1.8 billion, while doubling Del Monte’s size. Heinz executed a divestment strategy by spinning off and then shedding its slower-selling products with...