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Strategic Thinking: Why Campbells Bought Rao’s Sauce for $2.7 Billion

Prior to the major announcement last week that Campbell’s was purchasing Rao’s Pasta Sauce, the company generated about $580 in top-line revenue which means their revenue-to-value ratio (the relationship between revenue generation and market value was 4.66 which is extremely high for a consumer-packaged food product.

But then again, Rao’s is not just another Pasta Sauce. Please note that for the sake of this blog post, I call it a pasta sauce and not a “gravy” as that is a different post for another day. Rao’s is considered by the “experts” and consumers as one of the best products in the market and the story from a small restaurant to purchase by Campbell’s is an incredible success story.

In many of Advantexe’s Business Acumen learning journeys, we spend a significant amount of time teaching participants concepts related to the value proposition, the value equation, and the value dashboard and often it’s challenging to understand the concepts without context. Experiencing and learning by doing in a digital business simulation experience is great, but having a real-world case study like Rao’s can add even more insights into the concepts.



This post first appeared on Advantexe Advisor, please read the originial post: here

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Strategic Thinking: Why Campbells Bought Rao’s Sauce for $2.7 Billion

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