KATCase_Study_Paper

KATCase_Study_Paper - Tabasco: McIlhenny Company By...

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Tabasco: McIlhenny Company By Kathleen M. Gibson A Case Study Submitted For Operations Management April 27, 2006
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I. General Introduction McIlhenney Company is best known worldwide for its hot and spicy Tabasco brand sauce. The company originated in 1868 by Edmund McIlhenny, after he obtained some hot pepper seeds from a traveler from Central America. McIlhenny planted the seeds to success in Avery Island, Louisiana never knowing that almost 150 years later hot peppers would grow on that very site today. Moreover, the company has become best known for its distribution of Tabasco brand hot sauce, even though the McIlhenny Company still operates in Avery Island, Louisiana. Popularity of the Tabasco brand hot sauce has grown since its creation back in 1868 by Edmund McIlhenny, almost 700,000 bottles are labeled in over twenty different dialects daily. Named after its founder, Edmund McIlhenny, it is worth noting that since the company’s origin, a member of that family has been the head of the day-to-day operations of the company and have been responsible for its success or failure in the corporate and business world. Also, the location of the production plant has remained the same for over 138 years. This plant has stayed on Louisiana’s gulf coast, a two hour drive from New Orleans, and has occupied the same 2,000 plus acres since its founding. This massive plot of land has been quite useful for the large company, as they use their own land to harvest their peppers. This is a practice that no other company in this industry has yet to adopt, and thus aids McIlhenny in maximizing their profit through minimizing their costs. 2
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Because McIlhenny produces such a rare product, they are able to extend out into other areas of the market segment. McIlhenny is able to successfully push their product out into the market, and also utilize resources that have not been previously accessed by other competing companies. An example of this utilization is evident as they extend their products into restaurants around the country. This process was not overnight, however, as it took McIlhenny quite some time to reach restaurants in areas of the country outside of the south. This is obviously due to the types of food that is mostly consumed in the different parts of the country, with the southern areas clearly demanding more food than the north. Spicy foods are more commonly consumed in the southern portions of the United States, like Louisiana, versus the northern portions of the United States0. However, as McIlhenny extending its many marketing campaigns to areas around the country, as well as the world, their spicy product increased in popularity at a steady rate. McIlhenny relies heavily on the “spicy” mentality that goes along with their product. They have been able to successfully take an original product that is designed to flavor foods, and use the same name to market many other product lines. However, since they make the vast majority of their profit off of Tabasco Sauce sales, it is quite
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This note was uploaded on 04/24/2008 for the course MGMT 3165 taught by Professor Yang during the Summer '06 term at GCSU.

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KATCase_Study_Paper - Tabasco: McIlhenny Company By...

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