General Mills Case Study

1214 Words5 Pages
1. General Mills, as one of the Big Three companies that focused on diversification of consumer goods on cereal division, restaurant chains and packaged consumer foods. In 1994, the cereal industry was profitable and had been one of the most concentrated industries overall historically, and the big Three company had a dominant position in this industry. However, the problem was although the high profitability attracted fewer entry company due to the high entry barrier restrained by joint monopoly of the Big Three, they were facing the threat of private label companies which grew fast in market share by sales and volume. Therefore, what is General Mills strategy to increase revenue while dealing with the threat of private labels. This is a critical issue because General Mills need measure the trade-offs among strategies, and this determines whether General Mills would still be one of the top players in terms of market shares in the industry. 2. The RTE cereal industry has been a highly profitable business. The Big Three gained the first mover advantage since the 19th century, and most of the market share. The rivalry among competing firms was low because the industry was highly concentrated. However, as the increasing sales of small private labels grow fast, the degree of rivalry would increase later. The barrier to entry was high because of the Big Three deterred the new entry firms by taking steps to make the industry unprofitable for the new firms. Whereas, the level
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