Ball Corporation SWOT and PESTLE Analysis

Strength

1. Unique offerings of products and services: Ball Corporation offers a unique diversity in its product portfolio. On one hand, the company offers packaging solutions made of aluminum and on the other hand, Ball Corporation has a profound involvement in aerospace solutions. This American conglomerate is the largest supplier of metal packages for beverages. It has global tie-ups with multinationals offering beverage, personal care, and household products. The company has a significant supply line for global brands like Coca-Cola Company and Anheuser-Busch InBev. Apart from plump business from the FMCGs, Ball Corporation enjoys established leadership as an aerospace service provider. It works as both third party solution provider and as direct contractor to the government and commercial customers. It offers products and services for spacecraft, signal systems, sensors, data management and other advanced technologies required in aerospace industry.

2. Strong financials through well-defined vision of growth: Ball corporation has always maintained steward ship towards growth using its One Drive for 10 vision, which has 5 strategic levers offering distinct solution to growth prospects, which in short includes, maximization in existing business, business expansion in terms of products and geography, customer centric approach, and leveraging in-house technology for competitive advantage. These strategic levers have given the company immense growth in financial terms. The company has been a profitable organization, even in hostile business portfolio. The revenue of the company did not change much in FY19 but it increased its profitability through healthy means of cost optimization. The company has net earnings worth $566 million with a net margin of 4.93%. In last 2 fiscals, FY19 and FY18 the company has shown consecutive growth of 24.9% and 21.3% respectively. Even amidst the COVID-19 pandemic, the company was able to register profit in quarterly earnings of FY20. The company also has been respected by the Wall Street for its phenomenal performance as it doubled its investors money between 2014 and 2019, whereas S&P 500 gave returns of only 1.5 times. The company has phenomenal levels of free cash flow too. In the end of FY19, Ball Corporation had cash reserves worth $1806 million, which grew by 247% in one year, and 393% in two years. This American conglomerate has a debt to equity ratio of 3, which is much lower than the industry standard of 7. Keeping in mind, the capital-intensive nature of packaging business, the ratio of 3 seems fine. From its financial activities, Ball Corp. seems to live up to its defined vision, which utilizes its core proficiencies better than competitors.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Dependence on seasonality on sales: Several packaged beverages are influenced by seasonal variations. They are produced in high volume at a certain period of the year and the production volume depends on other climatic factors like rain, summer, etc. Moreover, unseasonal weather can change the demand of beverages. Unseasonal changes adversely affect the demand, supply chain and related investments. The major portion of the earnings of Ball Corporation comes from beverage packaging. It contributed 83% of the net sales in 2019. Fluctuation in demand and supply of beverages has material effect on the sales and earnings of the company. In Europe, it is observed that the highest demand occurs between May and August. UK has a substantial higher demand in winter holidays whereas it is offset by lower demand in Russia. With such trends, the company ascertains the supply in various regions, which gets affected with irregularities in climatic conditions.

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