Sealed Air Analysis – Should Sealed Air Enter the “uncoated Bubble” Market?

Sealed Air Analysis – Should Sealed Air enter the “Uncoated Bubble” market?

Sealed Air should begin producing uncoated bubbles. Doing so will help maintain its leadership in the market. While there are risks in doing so, such as alienating distributors who have already complained about Sealed Air’s increased focus on Instapak sales, the threat of uncoated bubbles on the coated bubble market was real and Sealed Air would be prudent to respond.

Current Sealed Advantages

Possesses perceived customer benefit

Incumbent in market

Current Sealed Air Disadvantages

Product being imitated in U.S., although poorly.

Market threatened by increasing market share growth of uncoated bubbles. Product has strong potential in void fill segment.

Producing uncoated bubble PROS

Low switch-over costs

Producing uncoated bubbles may be a good defense against loss of market share through maintenance of existing customers who require a less expensive product and would otherwise switch to a new supplier. Several already had begun carrying the cheaper imitations.

Sealed Air has competitive advantage when leveraging current strengths.

Producing uncoated bubbles will meet the needs of price sensitive customers.

There were uncoated operations being set up in Ohio, California and New York. Sealed air can defend market share.

Producing uncoated bubble CONS

Has never achieved more than 15% market share

Producing uncoated bubbles might be in conflict with history of promoting the benefits of the sealed product, undermining part of the reason for their customer benefit.

Sealed Air already sells lower grades, so they may just sacrifice margin on existing customer sales as occurred with the A-100 line.

Lack of focus (Instapak) had already upset some distributors.

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