Market Share and Competitor AnalysisSABIHA AFRIN

Company Background

• Founded in Hartsville, South Carolina, on May 10, 1899

• Diversified provider of consumer packaging, industrial products, protective solutions, display and other packaging services

• Products sold in 85 countries

• Aims to be the global leader in providing Innovative Packaging Solutions (IPS)

• Promises to bring more to packaging than just the package

Market Definition

Paper : Most-used material in packaging

Plastic: A much newer packaging material than

paper, metal, or glass

Metal: Lost some share of packaging to plastics

Glass: This also lost some share of packaging to

plastics

Flexible: An innovative packaging solution

Potential Substitute Packaging

Value Added Packaging: Innovating packaging

solutions (IPS)

True Blue(TM) line of sustainable packaging

solutions

Sonoco Recycling

SONOCO

Packaging Market Definition

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1

1.5

2

2.5

3

3.5

4

4.5

Paper

Plastic

Metal

Glass

Flexible

Sustainable

Uns

usta

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Growth Potential and Sonoco

Packaging is a Mature Market (Hopkins, 2009)

Specific trends and drivers for the growth of this market includes world economy, technology, government regulation, consumer behavior, etc. (Hopkins,2009)

Global packaging market to reach $975 billion by 2018 (Smitters Pira)

Global packaging sales are projected to rise by 3% in real terms to $797 billion in 2013

Sonoco streamlined the organization to focus on global growth.

Introduced Innovative Packaging Solutions (IPS) and Sonoco Recycling to embrace sustainability in business and environment.

Sonoco Crown Industry Ratio Performance Gap with Competitor

Performance Gap with the Industry Comments

Key figure Annual Sales (in millions) 2.9 8.6 -7.69 -5.7 10.59 Better than the industry. Worse than competitor.Profit Margins Gross Profit Margin 18.18 15.14 24.52 3.04 -6.34 Worse off than the industry. Better off than competitor.Pre-tax Profit Margin 6.81 6.19 3.85 0.62 2.96 Better off than both the industry and the competitor.Net Profit Margin 4.88 4.68 4.26 0.2 0.62 Better off than both the industry and the competitor.Investment Returns

Return on Equity 14.51 515.85 15.99 -501.34 -1.48 Investment is not paying off as well as the industry or the competitor.

Return on Assets 5.91 4.74 3.91 1.17 2 Assets are being used more effectively than the industry and the competitor.

Management Efficiency Receivables Turnover 0.005 0.007 -0.002 Not collecting receivables as well as the competitor.Inventory Turnover 9.67 6.03 3.64 Moving industry more frequently than the competitor.Effective Tax Rate 0.44 0.46 -0.02 Better tax management practices than the competitor.

Revenue per Employee 12.03 19.86 16.26 -7.83 -4.23 Not staffed properly or as efficient as the industry and the competitor.

Financial Condition Current Ratio 1.58 1.3 1.57 0.28 0.01 Better than the industry and the competitor.Debt-to-Equity 0.55 19.26 1.42 -18.71 -0.87 Worse off than the industry and the competitor.

Interest Coverage 7.07 3.29 4.02 3.78 3.05 Possibly has more debt than the industry and the competitor, however, has the ability to pay obligations.

Growth Rates

5-year Revenue growth 3.3 0.83 15.93 2.47 -12.63 Growth is not as good compared to the industry, but better than the competitor.

Competitor Ratio AnalysisAnnual Sales: Depending on the size, Sonoco's sales revenue is better than the industry, however not as good as the competitor.

Gross Profit Margin: Sonoco is spending less to produce goods than its competitor, however it is still not up to the mark with the industry.

Net Profit Margin: Sonoco's Net Profit Margin is comparable to the industry as well as its competitor. However, Sonoco has a better grasp over its expenses and has a more effective tax strategies than the industry and its competitor.

Return on Equity: Sonoco's investment is not paying off as well as the industry or the competitor.

Ratio AnalysisReturn on Assets: Sonoco's assets are being used more effectively than the industry and the

competitor.

Effective Tax Rate: Sonoco has a better tax management practices than the competitor.

Current Ratio: Sonoco has more short-term cash than short-term debt. It is not where is should

be, but it is still better than the industry and the competitor.

5-year Revenue growth: Sonoco's growth is not as good compared to the industry, but it is

better than the competitor.

Ratio Analysis and RecommendationsInvestment returns: Sonoco is able to utilize its assets effectively, however it is not meeting the

investment returns that it should.

Financial: As seen in the analysis, Sonoco has a higher current ratio and a lower debt-to-equity ratio

than its competitor. Depending on various factors, it can be indicative that Sonoco’s competitor is

funding more projects to expand its business.

Management Efficiency: Sonoco’s management is more efficient than the industry and the

competitor in most aspects. However, Sonoco should look into better staffs to increase efficiency up

to the industry standards to remain competitive.

Sonoco: Competitive Advantage Differentiation Advantage:

Valuable customer relationship

Latest barrier technology (IPS)

Consumer-friendly opening system

Highly Profitable loyal customer base

360-degree Customized Solutions

Multiple packaging solutions

Premium quality packaging

Sustainable Advantage:

Long-term profitability and viability

Building positive brand images

Active Member of Sustainable Packaging Coalition

Rainforest Alliance’s Smart Wood Chain-of-Custody certification

Harvested wood products from well-managed forests

In-house Sustainability Council

Implementing Sonoco Recycling

Key Aspects Sustainability: Cost and Profitability

Maximizing efficiencies in production

Conserving recourses and reducing sources

High-cost to maintain

Controlling costs by reusing and renewing raw

materials

Long-term profitability

Cost saving scope for the investors

Sonoco: Promoting Sustainability

Sustainable advantage: Competitive distinction in

the marketplace

Ensuring positive economic growth and

profitability

Re-envisioning Sonoco: 45.2% total return in 2013

Educating and persuading customers about

sustainability

Key Aspects Sonoco: Innovation, and Globalization

Introduced IPS (Innovative packaging solutions)

to adopt latest technology

Operates in 85 countries

41 industrial manufacturing facilities and 6

paper mills in Europe

International sales and income growth in 2013

Innovation, and Globalization:

Changing supply chains

Customers shifting their manufacturing

facilities

Overseas Competition

High-cost to invest in latest technology

High-cost of operation and management

Conclusion Overall, Sonoco is doing better than the industry, but not as

good as the competitors.

The management should take necessary steps in order to hold

the market share.

Promoting sustainable advantages can be profitable for the

company.

Creating performance targets and management incentives can

be he helpful for the company.

To remain competitive, it is essential for Sonoco to focus on

maximizing productivity of its business.