Tootsie Roll Case Study Essay Example

foreign demand for U. S.

candies and the decreasing international trade barriers. The strengths/weaknesses and opportunities/threats of Tootsie Roll’s strategy are summarized in Exhibit I. To be successful in its strategy and to become “the world’s largest manufacturer of pops,” Tootsie Roll has committed itself to (i) running a trim operation, (ii) eliminating waste, (iii) minimizing cost, and (iv) improving performance.In addition to these objectives, some of the competitive advantages that help the company maintain its leading position in the marketplace are highlighted in Exhibit II. 2.

Key Strategic Issue Tootsie Roll faces a number of key issues concerning its strategy. One of such strategic issues relates to how it can maintain its marketplace success and sustain its competitive advantages, in light of (i) the company’s growth prospects in U. S. and foreign markets, (ii) intensity of the competition, and (iii) the fact that the two key leaders of the company are not getting any younger. .

Options for Resolving Key Strategic Issue To resolve this key issue, we recommend the following options: (i)Because leadership is a key force in determining an organization’s success or lack thereof, the Gordons should consider putting a succession plan in place as soon as possible and should start grooming the would-be successor(s). (ii) Extend Tootsie Roll’s vertically integrated structure to include product packaging facility, to be consistent with the company’s current structure.This could directly reduce costs, in addition to the time and energy saved in negotiating fixed-price contracts with packaging suppliers. Tootsie Roll would also be able to control the production of tamper-proof packaging in a manner that did not compromise its brand image. (iii) Rather than reduce its

spending on advertising in the U.

S. and relying mainly on nostalgia and brand history, Tootsie Roll should consider doing whatever it can to continue keeping its products and brand in front of the public, including increase in spending on advertisements.Since parents, rather than the children, are the primary purchasers of candies for their children, advertising directed at the former will become absolutely necessary as the baby boom generation that grew up with Tootsie Rolls dwindles in number. 4.

Best Option Recommended: Put a Succession Plan in Place •Pros: o Ensures continuity of strategy plans and implementation oMay lead to fresh approach towards making Tootsie Roll a much better company oThe company would be better able to respond innovatively to future changes oMay help calm the nerves of employees who might be worried about the company’s future •Cons: The new leadership may not continue the paths that the Gordons have taken the company. For example, it may decide to go public or merge with a bigger competitor in order to ensure future successes. The Gordons may also find it difficult to let go of their control over the company and may want to influence the new leadership. •Plans for Implementation: oDecide whether to select someone from within or outside of the company oSet up a search committee to pick that someone oBegin the process of grooming the successor