Kellogg's Case: The Link between Auditing, Planning, and Corporate Strategy

The ready-to-eat (RTE) sector has increased sales and therefore have given the Breakfast cereals market an advantage to have a higher market share of 4.2% in 2013. The emphasis is more to the value and the convenience of cereals rather than the quality. However people are starting to be more heath conscious and are going to the higher nutritional brands which tend to be the well-known ones such as Kellogg 's, Weetabix and Nestle.

Dist. LEXIS 96108 at *7-8. The box mimics the design of health food cereal boxes, despite “sugar” and “corn syrup” being third and fourth on the ingredients list. Sabach, Exhibit A. This contrasts with Videtto v. Kellogg USA, 2009 U.S. Dist. LEXIS 43114, *7-8 (E.D. Cal. May 20, 2009), where fancifully design elements including the spelling of “Froot” and the mascot signaled that the cereal was unhealthy. Similarly, the box claims “100% nutrition.” Sabach, Exhibit A. This could be misinterpreted to mean that the cereal contains 100% of daily nutrition, like the possibility that “‘all natural ingredients’ could … be interpreted … as a claim that all the ingredients in the product were natural.” Henderson, 2011 U.S. Dist. LEXIS 41077 at *31. Dominik Sabach implies that because of these factors, “he intentionally chose “Complete Blueberry Pomegranate” over other cereals…. Based on looking at the cereal boxes, Dominik believed that … other cereals … were likely to contain greater quantities of sugar and artificial sweeteners.” Sabach at 8. Thus, this packaging is “false, misleading, and reasonably likely to deceive the public.” Id. at

External Environmental Analysis We chose Kellogg’s cereal category because Kellogg’s has over 100 years history and we have14 kinds of breakfast cereal products. Our products sell to 180 countries across the world. Our mission is still to provide you and your family with better breakfasts that lead to better days, and now you eat flake corn is the same way W.K. did back in 1898. It just tastes better that way. Kellogg’s cereal provides a variety of nutrition’s cereals that deliver the benefits of grains, and provide important nutrients like iron, B vitamins, zinc and fibre.

The cereal industry is very adamant on using a differentiation strategy to make one’s brand stand out in the minds of certain people. The companies break down the public into different target markets; and then make products that will be attractive to their target markets. Companies make different brands for young kids, teenagers, adults, and people who are health conscience. Currently, there are 387 different brands of cereal sold in the United States and each family is estimated to purchase 17 different brands per year. (O’Connor, Amy) Companies continue to brainstorm for new product ideas to attract the various market segmentations.

The threat of customers finding substitute products from other manufacturers in the food industry is high. In the ready-to-eat breakfast cereals segment, General Mills’ primary business focus, there are a variety of similar products being

In 2006, Kellogg’s launches Special K forest berries and Special K honey almond. A year later, Special K Advantage (fibre) appears in Australia. The last flavor is Special K chocolatey flakes, launched in 2009. The packaging has barely changed since its creation: white background, to represent the purity of the product, and the milk, the big symbol in the middle for the product identity, and some flakes on the right side, for the product representation. There has been an evolution of the nutritional information: now the main compositions are on the front side of the package (sugar, fat, calories). It is part of the strategy to position the product as a partner in weight loss. Te product is considered as a good quality, thanks to its characteristics (benefits for the consumer), and the “Our guarantee to you”, a little section on the left side of the box, explaining that Kellogg has a quality system that assures the highest quality standards to deliver the best product to the consumer. The target of Special K is women, from 20 to 40 years old. Women who try to look and feel good, who are working or raising their children, who want to conciliate their activities with their femininity. Women are represented next to the mention “99% fat free”, and on the back side of the box. Usually they are slim, active and happy. The strategy of Special K is to accompany women all day long, with different products, and to propose them to eat cereals not only for

Objectives: What are the corporate, business, and functional objectives? Are they consistent with each other, with the mission, and with the internal and external environments?

The Kellogg is continuing to innovate a century later, offering cereals that are affordable, convenient to prepare and eat, and tasty. It will also reduce ingredients such as sugar that consumers want less of while increasing fiber, whole grains, vitamins and other nutrients(Kelloggcompany, 2011).

In the RTE cereal industry, there were three large manufacturers, General Mills, Kellogg and Philip Morris that had a strong presence in the market. They were extremely profitable with pricing power and dominated the whole market with great market share; all this made it unattractive

Frito-Lay first toyed with multigrain snack chips in the 1970s, when research indicated a need for a snack in this category. Prontos, released in 1974 and distributed for four years, weren’t incredibly well received. While a lack of success is attributed to a confusing name, poor manufacturing and too narrow a market, Dwight Riskey, VP of Marketing Research and New Business, admits that he is “not sure there were dramatic things wrong with the product design [...]. It may have been invented and introduced before its time.” This sentiment was reflected in the Harvest Project in the early 1980s, when Frito-Lay developed several multigrain products to attempt and have a possible healthy alternative to saltier snack foods for the baby-boomer generation. Lackluster response caused the project to stall into the mid 80s as focus was put on developing new flavors and healthier alternatives in other brands.

Tasty Foods Corporation was founded in 1995 by Henry Abercrombie. The corporation is a food conglomerate that has major product lines including cereals, frozen dinners, canned sodas and fruit juices. Abercrombie founded the company with a small inheritance and with the idea of producing instant hot cereal. The firm’s hot cereal proved to be a success and was well accepted by the consumers. Over the years it grew by its acquisitions and product innovation ideas, expanding considerably over the last 40 years. In addition, Abercrombie proved to be an excellence business person that had a lot of vision and was very business-savvy. When Abercrombie’s health started deteriorating, he decided to hire his

Kellogg’s has over 100 years history and we have14 kinds of breakfast cereal products. Our products sell to 180 countries across the world. Our mission is still to provide you and your family with better breakfasts that lead to better days, and now you eat flake corn is the same way W.K. did back in 1898. It just tastes better that way.

Beginning in 1923, Kellogg’s, a cereal company, located in Battle Creek, Michigan, created PEP, a whole wheat cereal. Significantly, Pep cereal became the first cereal to be fortified with vitamins B and D, in the 1930s. As a result, it began the cereal industry’s food fortification or adding of minerals and vitamins to enhance the nutritional value. Numerous advertising-supported brands and helped to increase the popularity of the product to the public. The company focused extensively on advertising and sponsoring in order to continue to sell their unique product until it was discontinued in the late 1970s.

Krispy Kreme has experienced dramatic growth over the past 5 years based on their income statement. Every line on the income statement has grown rather impressively. Revenues have grown from $220M to $666M and net income has grown from $6M to $57M. Based on the income statement, Krispy Kreme is doing very well.

As aforementioned, Nestlé is the leading company in nutrition, healthcare and wellness, offering nutritious products for every moment and age. It is the largest food and beverages conglomerate in the world, with a portfolio covering almost every food and beverage category, providing consumers a multitude of products to choose from.