1, What are the key strategic issues that Avery needs to consider? What are his options?
Avery got a few options regarding key strategic issues he needs to consider. He could grow the company and enter into other segments of the business. This segment would be the plastics containers that would have potential. Other option is whether to acquire Continental Can Canada or not. The company generates $400 million in sales per year and it is the largest manufacturer in the Canadian region. That does not seem a whole lot. However, Continental’s USA business has estimated revenues of $1.3 billion which would double the size of Crown’s domestic operations. Also, Continental’s European operations generated estimated sales of $1.5 billion. Potential bidders for the acquisition are the major competitors of CCS. Avery is concerned about both options because they both have pros and cons.
Entering the plastic can business segment would have the following pros:
• Entering a new business segment, great for diversification
• Decreasing shipping cost because of lighter weight
• Made of natural resources
• Plastic material can easily be formed/shaped
Entering the plastic business segment would have the following cons:
• Unknown business territory, no experience
• Carbonation leaks after 4 month – major issue
• Cannot be fully recycled
Acquiring Continental Can Canada would have the following pros:
• Double in size domestically, increase market share rapidly
• Plastic container line would come from this factory
• Expansion globally
• Increasing bargaining power
Acquiring Continental Can Canada would have the following cons:
• Bidding war could create too high acquisition price
• Conflict with different cultures
• Expansion might create unnecessary costs
• Increased difficultness of overseeing the company

2, How attractive has the metal container industry been over the years? The metal container industry was representing a 61% market share of all packaged products in the United States in 1989. The industry produced a variety of solutions on how to package a product. These products were metal cans, crowns (bottle caps), and closures (screw caps, bottle lids). Metal cans were made of steel or aluminum, or the combination of both. At the beginning, three-piece steel cans were technologically most advanced and widely used in the industry for packaging mainly beverages. The advancement of new technologies quickly created a two-piece can made of aluminum which quickly took over the marker over the three-piece steel version. The use of aluminum had several advantages over steel; for example, lighter weight, ease of handling, wider variety of graphics options, and consumer preference. The industry’s attractiveness was eliminated by thin margins, high competition, and increasing raw material prices. Bottlers were also putting pressure on the metal can manufacturers by having more than one can supplier; therefore, can suppliers were on the edge not to make any mistake. Also, volume discounts offered by manufacturers and over utilizations of the factories were not helping the industry as a whole either.

3, What were the keys to CCS’s success under John Connelly?
When Mr. Connelly took over the company, Crown Cork & Seal Company was near to bankruptcy. CCS had a large amount of debt and made some wrong business choices such as entering the plastic can business and expanding rapidly. The company was inefficient and was losing money. Mr. Connelly made some structural changes within the company by reducing the headquarters staff by half. His plan was to eliminate any unnecessary costs and inefficiencies within the company. He reduced payroll by 24% and eliminated 1,647 jobs. Restructuring extended to re-shaping the corporate structure by having all cost and accounting control at corporate level. Another major change he implemented was that each plant manager was liable for the profitability, quality, and customer service for their assigned plant. This strategy helped to create pride and drive from managers to run the plant successfully, and managers got compensated on top of that as an extra incentive. When Mr. Connelly took over, the company was in major debt issues. By liquidating and reducing inventory, he was able to pay off the debt.

4, What should Avery do?
Considering all pros and cons involved in the expansion into the plastic can business segment and the acquisition of Continental Can Canada, the concentration of the business between a few major players, increased need for plastic containers, and shrinking market growth in the metal can industry were all major decision-driven objectives. Considering all that, I believe Avery should acquire Continental Can Canada for numerous reasons. First, CCS will expand not just domestically, but globally as well. The acquisition should be done aggressively and not let any other competitor out-bid CCS because that means one of the major competitor will take on CCC making it possibly the largest player in the industry. Even if CCS pays more than CCC’s true value, the acquisition will be worth it in the long-run as sales will double domestically and CCS will be present globally which will further open doors. Cultural differences can be eliminated by placing plant managers within the same cultural background where the factory is. Avery should not place a leader to a plant in Europe from the U.S. I believe that will minimize the mistakes can be made by not knowing the culture in an American standpoint. Connelly’s initial strategy was focused on international growth, so acquiring a company with strong international presence would be in-line with that goal.
CCS should not expand its product line and get into the plastic can business just yet. I suggest that Avery should focus on the acquisition exclusively, and make sure that the expansion in size, presence, volume, and market share will be run efficiently to increase revenue by maintaining costs to potentially increase the otherwise low margins. CCS known of its extraordinary and superior quality for its metal cans, so after the completion of the acquisition, CCS needs to make sure the quality standards are implemented in all of its plants including in their overseas plants as well.