Celestial Seasonings Case Study

Performance Summary Celestial Seasonings is performing quite well. Tea sales in the U.S. are over $1 billion per year and it has captured 54% of the market. After its independence from Kraft, it made an IPO that brought in $38 million. Its marketing concept works and sustains loyalty by increasing customer involvement. Celestial Seasonings uses its penetration pricing strategy to have a competitive advantage over Lipton and Bigelow. It lost $3 million in 1993, but bounced back in 1994 with …

…Marketing: focused growth via health consciousness, brand awareness, strong customer loyalty, distinctive packaging 4.Low employee turnover 5.Quick decisions, less paperwork since Kraft 6.Price lower than competitors 7.Recognized as an environmentally-friendly company 8.Large market share 9.Quality control Weaknesses 1.Dependency on one production site 2.$45 debt 3.Little new product development 4.Company might be growing too slowly 5.No presence is fast growing liquid tea segment 6.Difficulty in producing the same flavor from the same herb 7.Shaky history with Kraft