The Success Of United Cereal

1728 WordsJan 18, 20167 Pages
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. UC got known in the industry for using the brand management matrix structure, which allowed it to succeed in the European market, only second to Kellogg’s. Using this system, brand managers operated under subsidiaries and country managers. As brands were treated as profit centres, it gave rise to internal competition, promoted efficiency and cut costs. As a result, the R&D achieved supremacy, allowing UC to own the highest product and process patents in the market. Using a multi domestic strategy, UC also established national subsidiaries in individual countries which acted as Mini UC’s which worked on the same values and structure of its parent American company. However, the CM’s were allowed to customise and tailor products and processes to local needs to obtain maximum profit. As an aftermath
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