Contents Introduction
Kellogg’s is highly a profile company which is hugely known not only in the UK but in the world at large. It is one of the largest breakfast companies in the word, not only that but it is also financially it is a stably and well organised company. Kellogg’s profits have been stable if not increasing for the better from what it was 5 years ago.
Terms of reference
As the financial analyst of the company, this report is written in respect to how the financial position of the company can be improved. This report is aimed for the senior management team.
Prioritisation Section
Strengths Weaknesses
Strong brand making easier to introduce a new product.
Large advertising capacity
Customer Loyalty High priced product
…show more content…
1 Strong market power and a large market base (new product)
Introducing a new product to the market is a very risky operation. Not only is it risky but it takes time, effort and money. In order for a product to be successful, it had to fully undergo the product life cycle. Kellogg’s has an advantage when it comes to the breakfast market as it holds the biggest market share. After providing the British public with breakfast for years, it most certainly has a larger customer loyalty base. The strong brand makes it easy for product launching as the public are already familiar with the brand. However, introducing a new product comes with its challenges and risks. Looking at the ratios, Kellogg’s has a current ratio to date of 1:1.1 . This in financial terms rings alarm bells as it shows that the company will struggle to pay its short term obligations. Kellogg’s however can operate on a low current test ratio as it has a good long term revenues coming into the business. This means that it is possible to borrow on this basis to meet its current obligation. After calculating the net present value, which gave a positive NPV of £38450million, I move that we go ahead with the introduction of a new product. In traducing a new product is a sign of innovation and growth on the part of the competitors. In order for a new product to be introduced to the market, Kellogg’s will have to spend money on the actual product, the marketing side of
Kellogg Company has been dedicated to producing great-tasting, high-quality, nutritious foods that consumers around the world know and love. With 2009 sales of nearly $13 billion, Kellogg Company is the world’s leading producer of cereal, as well as a leading producer of convenience
This situational analysis closely parallels the Kellogg’s example. Consumers’ lifestyle and buying habits are forever changing. The companies that survive over the years are the companies that are able to understand and anticipate these trends and adjust their products and services to meet the meet the evolving wants and needs of consumers. The companies who do it best, reap the rewards of increased market share, profits, and longevity.
Despite winning several awards and featuring in many tables of the best places to work, Kelloggs is still committed to improving the conditions of its workplace. The most impressive of improvements this year include the establishment of a ‘total health management’ program for all employees, as well a new leadership development program. These two initiatives show Kelloggs to be a company that cares not only about their employee’s physical wellbeing, but also to be a company that is involved in the training and development of their staff. Other notable workplace schemes include the improved safety regulations and their dedication to diversity-related organizations.
This paper research the possibility of General Mills to be successful despite of high levels of competitions and consumers changed in eating habits to find healthier and fresher alternatives. With 150 years in the market and with a vast portfolio of more than 100 products that are marketed inside and outside the United States, General Mills have gotten behind in the development of new products that attract the need of the new consumer demand. New eating patterns represent a threat to the company along with the proliferation of private labels. A weakness in the strategic planning functions made General Mill’s competitors gained market share over GM. Chapter one mentioned that one the company biggest rival in the cereal line is Kellogg’s, which was already suffering from low sales. Yoplait in the yogurt line, used to be a leading brand in the country are now losing market share to give way to the newcomers.
Krispy Kreme Doughnuts, as discussed in Darden Business Publishing Case UVA-F-1479, appears to be at a crossroads. After years of astronomical growth, the company find its share price plummeting in the midst of discoveries about faulty accounting practices. The following paper examines several issues behind the sudden decline First, the historical income statements and balance sheets are examined to determine the financial health and current condition of the company. This is followed by an analysis of key financial ratios across time and versus industry standards. Next, the paper addresses if Krispy Kreme is financially healthy at year-end 2003 and, if so, what accounts for the firm’s recent share price decline. The paper concludes
The only real vision statement Heinz offers is to have a bottle of ketchup on every table.' This vision statement reinforces the notion that Heinz only produces ketchup. It is unnecessary for Heinz to further identify themselves with ketchup. The ketchup market is not going to continue to expand much more than it has already. Since Heinz is synonymous with ketchup already, and customers are aware of this high quality product, they should make consumers aware of the other products they offer. Those who feel Heinz ketchup is of the highest quality would be eager to buy other products produced by Heinz believing they too would be of the highest quality. They do need a
A future marketing plan should focus on the product being sold as a family cereal in the morning as there is a growing segment that would relate to this. A report conducted by Ihekweazu (2011) looks into the eating habits of people within the UK. Stating that the sales of breakfast cereals has therefore been mainly driven by consumers demand for a cost effective and convenient breakfast options driven by a desire for a healthy start to the day. It was also found that ‘two thirds of consumers eat breakfast at home every day, rising to 78% of over-55s and 85% of those that are retired.’
The only real vision statement Heinz offers is to have a bottle of ketchup on every table.' This vision statement reinforces the notion that Heinz only produces ketchup. It is unnecessary for Heinz to further identify themselves with ketchup. The ketchup market is not going to continue to expand much more than it has already. Since Heinz is synonymous with ketchup already, and customers are aware of this high quality product, they should make consumers aware of the other products they offer. Those who feel Heinz ketchup is of the highest quality would be eager to buy other products produced by Heinz believing they too would be of the highest quality. They do need a
Q2. Breakfast cereal industry is a very competitive industry in today’s market. Over the past century, they were few large cereal companies that led the cereal industry, and they were cooperative to increase their profit and satisfy their market. However, due to consumer’s taste changes and increase in competition, the industry has changed and it has to face more challenges.
Market through the "marketing mix" which is: product, price, place, promotion. As part of the managing and balancing between strategy and the marketing mix, the Kellogg Company announced that while creating a balance between strategy and marketing mix, the company has developed a unique brand that has helped to raise sales and service levels. The Kellogg company managed the marketing mix through 4P's and the product was the First, the Kellogg chose the product of breakfast cereals with high and light characteristics, which were studied extensively, as well as the researchers conducted by the company in order to know the best product for the customers. Second, is the price, The Kellogg prices the product according to the market conditions and also sets flexible prices in order to compete and obtain the competitive advantage which depending on the growth of sales, however, Kellogg most of the time put discounts and vouchers to win the satisfaction of the customer and success in the market. Third, place, where the Kellogg sells its products through the force of direct sales for resale by the grocery stores and also used the system of intermediary and distributor of certain products and the system of delivery of direct stores such as super brand and distribution through electronic commerce. Kellogg focuses on the emerging market, which contributes to making the company's products available to all customers. Fourth, the promotion, Kellogg built a large brand and used promotional strategies to increase the share of sales, where it sponsored some of the concerts and events under the publication of the brand such as gymnastics and a series of children
In the 1990’s, the core markets of Kellogg’s, such as the United States and the UK, had been stagnant for over a decade. There also seemed
The strategic problem considered is to analyse Krispy Kreme’s current operations and suggest recommendations for how this may be tailored for the UK market for long-term profitability given cultural and retail differences.
United Cereal began its European expansion in 1952 by the acquiring a baked goods company in England. It then directly invested in other established companies in order to save costs by utilising their well-established distribution lines and branding products using well known subsidiaries. This expansion aimed to achieve leverage by economies of scale and further increase revenues. The company’s strong shared values, ‘The UC way’, effected their strategies by ensuring the company carried out extensive market research before launching their new products to maximise customer value and innovate to prevent stagnation. Additionally, innovation was greatly encouraged in the organisation.
Kellogg failed to realise that even if consumers accept the product but still it has to offer it at a rate compared to competitors. Kellogg didn’t lower its prices thinking that competitors would follow suit but they didn’t and as such, Kellogg was unable to gain projected market share.
Nestlé is decentralized and is organized in a matrix structure. Branches of the organization are given a relatively high degree of autonomy in running daily operations, while major strategy decisions are made at headquarters. The company operates six segments: Zone Europe; Zone Americas; Zone Asia, Oceania, and Africa; Nestlé Waters, Nestlé Nutrition, and Other. The responsibility for making operational decisions are left to local divisions of the company. Nestlé has a board of directors and a chief executive. Nestlé’s management is divided into three levels – top-level, mid-level, and lower-level.