William Wrigley Jr. Company is one of the most successful company in the world. It manufactures and sells chewing gum under different Wrigley's brands. Four generations of the Wrigley family have provided continuous leadership of the company beginning with the founder, William Wrigley Jr., who was followed by his son, Philip K. Wrigley, whose son William Wrigley led the company for 38 years until his death in March of 1999 and now his son, William Wrigley Jr. is the current president and CEO.

William Wrigley Jr. Company was founded by Mr. William Wrigley Jr. in 1891. When Mr. William Wrigley Jr. came to Chicago in 1891, he was 29 years old with only $32 in his pocket. With his ambition, unlimited enthusiasm and energy, he founded one of the world's most successful company. At the start of his business, Mr. Wrigley sold Wrigley's Scouring Soap, which was come from his father's business in Philadelphia. In Chicago, Mr. Wrigley offered baking powder as a premium to the merchants. When baking powder proved to be more popular than soap, he switched to the baking powder business. Then, he offered premium again, and this time was chewing gum. It was in 1892. Once again, chewing gum business seemed more promising than baking powder. At that time, there were at least a dozen chewing gum companies in the United States, but the industry was relatively undeveloped. Mr. Wrigley decided that chewing gum was the product with the potential he had been looking for, so he began marketing it under his own name.

Getting a foothold in the chewing gum business was not easy. There were a lot of competitions. In 1899, the six largest chewing gum companies merged to form "the chewing gum trust", and this combination meant very serious competition for the developing Wrigley business. Several times Wrigley Company was on the verge of going under, but hard work overcame the difficulties, and the Company forged ahead. In the very early days, Mr. William Wrigley Jr. personally did much of the selling to the trade. He listened to customers' point of view and accommodated himself to their needs. In addition, Mr. Wrigley continued the use of premiums to encourage merchants to stock his products. He also experimented with the idea of using advertising to encourage more people to buy Wrigley's gum. He advertised in newspaper, magazine, outdoor posters and any other forms of advertising by telling people about the benefits of the product. As more and more consumers began to ask for and buy Wrigley's chewing gum in the stores, the storekeepers would naturally want to keep a sufficient stock of Wrigley brands on hand. He then concentrated on popularizing the Wrigley's SpearmintÒ.  In 1906, Mr. Wrigley decided to advertise the gum on a modest scale in the three eastern cities of Buffalo, Rochester and Syracuse and the results were promising. The company was also rapidly becoming an international business. Through exports to many countries, Wrigley brands became known the world over. As the company continued to grow, Mr. Wrigley always emphasized that "Even in a little thing like a stick of gum, quality is important".

Since the founder, Mr. Wrigley, emphasized that quality was important, Wrigley scientists constantly worked toward two main goals: quality control and future product development. Wrigley Company has two research facilities in the United States, and each of the facilities worldwide has a quality assurance laboratory. Under the direction of a food chemist, quality assurance specialists carefully inspect and test all ingredients and materials. Samples from each facility are tested regularly to be sure the flavor and texture of the company's brands are uniform throughout the world. Furthermore, the Research and Development Laboratory in the United States plays a very important part in the Wrigley Company's activities. Experiments are constantly under way to develop new products or to improve the existing products and packages.

Two associated companies are very important to the Wrigley Company. They are L.A. Dreyfus and Northwestern Flavors. L.A. Dreyfus has the facilities at Edison of New Jersey in the United States and Biesheim in France making the gum base to serve all Wrigley production facilities. Northwestern Flavors has only one facility at West Chicago of Illinois in the United States making flavoring to serve all Wrigley production facilities. There is a Wrigley wholly-owned associated company called Amurol Confections. Its production facility at Yorkville of Illinois in the United States makes bubble gum and confections and serves over 50 countries in North America, Latin America, Europe, Africa, Middle East, and Asia/Pacific.

The headquarters of William Wrigley Jr. Company is located at 410 North Michigan Avenue, Chicago, Illinois. It has 9,200 employees and 14 manufacturing facilities worldwide. The locations of the facilities are one in Africa, three in North America, five in the Asia/Pacific region and five in Europe (including one in Russia currently under construction).

In the United States, there are seven Wrigley brands on the market. They are the Wrigley's Spearmint, Doublemint, Juicy Fruit, Big Red, Winterfresh, Extra (sugarfree), and Freedent (non-tack). In 1998, Extra and Winterfresh turned in the best brand performance. Extra recorded strong volume gains as consumers continued to respond positively to its improved, longer-lasting flavor and new advertising. Winterfresh added to its impressive track record. Although there is no actual figure for individual brand selling distribution, Winterfresh-four years after its introduction-passed Doublemint to become the top selling, single flavor brand of chewing gum in the United States. With the volume gains of Extra and Winterfresh were offset the declines of the other Wrigley brands in the U.S. market, Wrigley Company continued to outperform the total U.S. chewing gum market. At the end of June 1999, Wrigley chewing gum led the market more than double the closest competitor, Warner-Lambert, in terms of market shares. Figure 1 shows the market shares of the chewing gum industry in the U.S at the end of June 1999.

With so many different brands of gum available to each consumer, it's easy to see why the chewing gum market is intensely competitive in the United States, as well as in most international markets. In the United States alone, there are about 20 chewing gum manufacturers, with the Wrigley Company being the largest. Its basic marketing and promotional strategy is to "pull" the products through retail stores by strong consumer advertising. By using this method, its advertising makes consumers very familiar with the products, so that when they enter a store they know Wrigley's gum is their preferred choice. In order to achieve the efficiency of this "pull strategy", Wrigley Company advertises on television and radio, in magazines and newspaper, and etc. Among all those media, Wrigley Company finds that the most effective media is transit advertising, such as car cards, on buses and subways.

One of the distribution channels of Wrigley's gum is through wholesalers, who in turn supply retail stores in the areas they serve. The gum is shipped almost entirely by truck to the wholesalers from Wrigley factories or warehouses located in various cities. For chain stores or cooperative groups, the gum is shipped to their warehouses, then distributed to the member stores. At the consumer level, Wrigley's gum is sold in such outlets as food, drug, variety, convenience and confectionery stores, gas stations, newsstands and restaurants. Vending machines are another important aspect of the retail distribution system. These machines serve the public in places where retail stores are not present such as factories, airports and bus, railroad and subway stations.

William Wrigley Jr. Company reported record revenues of $2.02 billion for 1998, a 3.5% increase over 1997. Net sales for 1998 were favorably affected by higher international unit volume and selected selling prices increases. Net income was $304.5 million or a 12.1% increase over 1997. For the past 10 years, the net sales of Wrigley Company have been doubled from $1 billion in 1989 and the net income has been almost tripled from $106.1 million in 1989. The earnings per share (EPS) also soared almost three times from $0.90 per share in 1989 to $2.63 per share in 1998. Moreover, the return on average assets (ROA) was growth steadily with around 20% per year. The following 3 charts will illustrate the above figures.

William Wrigley Jr. Company became a public corporation in 1919. The stock was first listed on the New York Stock Exchange under the ticker symbol of WWY in 1923. Since then, Wrigley Company paid dividends continuously every quarter. Usually, around 50% of the net earnings would be distributed as dividends. In 1998, the dividends paid were $1.30 per share compared to $0.45 per share in 1989. The price per earnings (P/E) ratio was 34.11 times in 1998 compared to 25.97 times for the industry and 36.47 times for the Standard & Poor 500. It reflects that Wrigley Company is a healthy company with a steadily return on the investment. Figure 6 will show the Wrigley stock growth for the past 10 years (stock splits have been reflected).

For more than 100 years, William Wrigley Jr. Company followed the strategy of good quality, which was emphasized by its founder, Mr. William Wrigley Jr.. Year 1998 was a good example of good quality control. Because of the improved, longer-lasting flavor, ExtraÒ and WinterfreshÒ recorded strong volume gains. With the volume gains of Extra and Winterfresh, it offset the declines of the other Wrigley brands in the U.S. market, Wrigley Company continued to outperform the total U.S. chewing gum market. At the end of June 1999, it had a 53.7% market share in the chewing gum industry in the U.S.. Moreover, continuous new product development such as ExcelÒ and AirwavesÒ also boosted the international business. In addition to the above good Company strategies, the steadily growth of its financial data and stock performance also gave us the confidence to choose this Company as a long-term investment.