Crown Holdings SWOT and PESTLE Analysis

Strength

1. Global outreach as legacy solution provider of metal packaging: Crown Holdings, Inc. is a premier global company of metal-based packaging solutions. The Company stands unmatched in terms of breadth and global footprint, operating with 95 manufacturing facilities in 23 countries. Unique global scale provides access to diverse markets and helps leverage R&D capabilities more effectively. It has divided its area of operations in 3 regions, namely, American Division (48 plants in 7 countries), European Division (60 plants in 22 countries) and Asia Pacific Division (28 plants in 8 countries). The American Division (revenue in 2019-$4.4 billion) consists of U.S., Brazil, Canada, the Caribbean, Colombia and Mexico. Majority of the earnings in this region comes from the beverage packaging, which generated revenue worth $ 3.4 billion in 2019 (77% of the division’s revenue). The company markets and manufactures beverage, food and aerosol cans and ends, glass bottles, specialty packaging, metal vacuum closures, steel crowns and aluminum caps. European Division (revenue in 2019-$3.6 billion) is a close 2nd largest division after the American Division. It services Europe, the Middle East and Africa. Business of beverage packaging only consists of beverage cans here, which generates more than 40% of the region’s revenue. European Division markets and manufactures beverage, food and aerosol cans and ends, promotional packaging and metal vacuum closures and caps. Asia Pacific Division consists of mainly beverage can business, withy footprints of other kinds of metal packaging. It is active in Cambodia, China, Indonesia, Malaysia, Myanmar, Singapore, Thailand and Vietnam with revenue of $1.3 billion in 2019.

2. Mitigating competition through flexible and all-round solution strategy: The company understands the dynamic perspective of consumers in product selection and has provided enough flexibility in product proposition to acquire and retain consumers. The beverage cans’ factories across the globe produce 5 different sizes of cans beginning from 5.1-ounce to 18.6-ounce, apart from the standard 10 ounce (330ml). This makes cans feasible for usage for consumers of all ages and choices. It also helps to keep a check on the industry specific volumes of beverages sold beginning from beer to juice. Apart from packaging solutions, Crown Holdings commit to provide all-round services to customers through the transit business. Transit business consists of protective solutions and automatic and semiautomatic tools and equipment required, for the completion of packaging in the factories of the consumers. ItsTransit Packaging business has been the market leader since 1913, after launching the first strap packaging products, then the first automatic strap packaging machine in 1946 and then the battery operated tools since 1995. The division is well developed as it generated revenue worth $2.4 billion in 2019 (more than 15% of the total annual revenue), and it is operational in 23 countries with 100 plants

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Weakness

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Opportunity

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Threats

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Political

1. Restriction of steel and aluminum import in USA: The tariff war waged by US in 2018 had its edge on the import of steel and aluminum imports. The tariff on imported steel and aluminum in the US increased to 25% and 18% respectively. Steel and aluminum are the basic raw material for metal packaging. Steel and aluminum comprises of 20% and 34% respectively of the total cost of products sold. The spiked tariff of these metals significantly decreases competition for American metal producers and reduced competitiveness of Crown over pricing to other mediums of packaging. Crown and Ball have petitioned the US government, stating that the increased tariff would add a cent to every can produced, which would decrease profitability and customers would look for other means of packaging to cut the cost. North America division generate more than 25% of the net annual revenue of Crown holdings, and the tariff increment has turned to be a debacle for the sector of metal packaging. However, there is an attempt to mitigate the pressure by employing cutting edge innovation through R&D and recycling.

2. US China Trade affecting Chinese business of American Crown: US China trade war is not a novel affair. The USA already levied taxes on the steel and aluminum, key raw material of Crown Holdings’ products. Before the tariff surged on aluminum and steel, China exported steel in the US more than worth $180 million, which decreased later on. But with the trade war intensifying, China, added another 10-15% as tax. On one hand Chinese imports exposed Crown to tariff expenses of more than 30% overall and on the other hand even China imposed tariffs on imports from US. Crown also has business interest in China, which would be liable to be affected in the long run with the flaring trade war. The Asia Pacific Division generated $1.3 billion (8.9% of total annual revenue) in 2019, in which China serves as major market.

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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

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