The Kellogg Company

profitability, slowing demand growth and a surge in private label sales threatened to undermine the

The cereal industry has only really worked on one pricing strategy, price discrimination. They have used price discrimination by giving out tons of coupons to potential customers. Coupons are designed so that customers can use them to buy the cereal of their desire for a lower price.

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

Kraft Foods Group is a top fortune 100 company founded by James L Kraft in Chicago, Illinois 3 years ago. They specialize in food and beverage products categorized by beverages, frozen and refrigerated meals, dairy products, and other grocery items. Kraft products are known worldwide and can be found in almost every home in the world. Even though Kraft brand has been around for decades Kraft Foods Group is a type of business subsection that adheres separately to each demographic in the world. Since they provide for over 170 countries, they must divide and conquer to stay successful. Although the company has been very successful they face many challenges including broad competition and target markets.

Organizations are constantly being challenged to identify ways to reduce operating cost, increase equipment capacity and utilization. There are many variables in why we see continued increases. One of the major effects is raising fuel cost. Companies are constantly battling this variable. This is not the only issue facing companies today. But it is certainly a concerning one to companies who rely on fuel for their company to thrive. These challenges are aligned with rising material costs as well. The economics of transportation affects the lives of all U.S. citizens and citizens of other nations. The

The Hershey Company and Tootsie Roll Industries, Inc. have weathered the ”Great Depression” with a history of more than one hundred years in the confectionary candy making industry. Their vision and longevity have pushed them into the twenty first century to meet the needs of the community, consumer, affordability, environment and healthy control portions. Both companies have made available, reduced sugar, sugar free, nut free, peanut free and gluten free products that is reflected in their candies, gum and mints. The two companies are worth investing in, but may be better than the other.

1) The Big Three firms, Kellogg, General Mills, and Philip Morris, formed practically an oligopoly in the RTE cereal market. Their price and cost levels moved in lockstep, following signals sent mostly by the biggest player, Kellogg, while their tactics could be used against outside competition, as suggested in the scenario below. Although RTE cereal is a basic food item and production technology stabilized for about half century, the industry had effective barriers to entry. The competition between incumbents was friendly while most of the inputs came from a perfectly competitive market, agriculture. Major customers, the food stores, were coopted in perpetuating barriers to entry in the form of shelf space “slotting”.

Raising cost of raw materials. Raw materials used by the company are petroleum derivatives and highly dependent on oil prices. Variance of oil prices affects negatively the company because it increases the costs affecting profitability and competitiveness.

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.

Introduction: Building an up to date and proper strategic planing is essential for the context of any company. it is the most important part that can make or break any business. Proper decision making and its effective implementation is quite significant in the success of a business. Let it be a multinational company like Kellogg, the same importance is apparent. For that understanding and analysing the environment of the business will be very helpful in making a proper business decisin making for the betterment of the same.

* Fuel. This is a huge weakness and gamble. Trying to manage fuel and the cost in a market that is constantly changing is a weakness.

General Mills competes in a dynamic environment. Some of their competitors are Kellogg’s in the cereal segment. Cereal was a product that used to be the number one election for breakfast in American. As time and new knowledge evolved, consciousness about products with less sugar or gluten free arose making the cereal industry tumble. Products like protein bars, Greek yogurts, and even fast food are the new options to start the date, gaining market share over the cereal industry.

Sales of private label cereal grew 50% from 1991-1994 in the Ready-to-Eat breakfast cereal industry. Some of the factors that contributed to the entry of private label cereal manufacturers and their subsequent growth include - lower costs related to manufacturing, packaging, marketing, R&D compared to the Big 3 cereal companies, product quality approaching that of branded products, higher margins for grocers, lower priced products. Some observers blamed higher prices and elaborate expenditure on coupon printing, distribution, redemption and reimbursement of grocer's handling fee for market share gains made by private label cereal products. The policy of "price up and spend back" seemed to hurt the Big 3 firms.

Understanding the industry environment would allow Corning to better compete with its competitors, increase market share, and develop intelligent business strategies. Analysing the threat of new entrants, bargaining power of suppliers and buyers, threat of substitutes, and rivalry among competitors, will demonstrate that this is an attractive industry with high profit potential.

They can implement the aggressive pricing strategy to strike the new entrants at anytime as they’ve got the large share of the market. Therefore, the threat of new entrants is low. For Threat of Substitutes, Kellogg is the largest cereal producer in this market and it has the long history and strong brand in the market. So they’ve had a large base of loyal customers who are hardly shift to other substitutes. But on the other hands, Kellogg’s cereal product is mainly to serve for breakfast. So, anything that is popular at breakfast time such as fruits, sandwiches, congee, or other healthy foods may be the potential threat of Kellogg. Therefore, the Treat of substitutes is Medium. For Suppliers power, the raw materials of Kellogg products include sugar, flour, food grain, which the market has many suppliers for providing it. Kellogg can switch to other suppliers easily and Kellogg has better control on the cost and has more bargaining power to deal with the supplier as Kellogg has a large market share of the market. Therefore, the bargaining power of supplier is low. For Buyers Power, Kellogg has done a series of marketing activities to educate the consumers and create product awareness in order to capture customers. Due to the consumer awareness, Kellogg can provide pressure to their