United Cereal Case Study Essay

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Part 2: The European Market
(d) Do an analysis of UC´s environment in Europe by following the information given in the case! Use Porter´s 5 Forces as well as a SWOT analysis!
The multinational breakfast foods company United Cereal entered European markets in 1952. By the year 2010 Europe´s breakfast cereal market has grown to a $7 billion business which has proven to be a profitable market segment and therefore attracted various competitors. Only four actors account for 70% of market share in the European markets. Among them are Kellogg which is regarded as UC´s strongest competitor, ranked first with a 26% share, Cereal Partners, a joint venture between General Mills and Nestlé, with a 17%, and Weetabix with a 7% share in the market.
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as well as in Europe creates new opportunities for UC and its competitors. By reorganizing the company´s organizational structure, UC would be given the opportunity of reducing the number of employees and cutting marketing and product development costs by 10% to 15% within just three years.
The global recession in 2008/2009 did not just lead to a change in consumption towards an increasing demand for cheaper products in the product range but it was also responsible for a decrease in market growth that resulted in a growth rate less than 1% annually. However UC faces the threat of strong competitors. The largest competitors is Kellogg which is the market leader with a share of 26%. Kellogg has the advantage to lower operating costs due to its volume. Along with this increased market competition in Europe, UC was also threatened by a price and promotion pressure outgoing from its major rivals Kellogg and United Cereal. An ongoing fight for market share, and high costs and investment of time in order to develop new brands are just two more factors that UC and its competitors face in daily business. Another market condition that can be identified as an external threat (and opportunity) is the great variation in consumption. Consumers´ cereal consumption varies greatly throughout Europe. While approximately 8/kg year were consumed by UK citizen, Italians only ate 0.5 kg/year. Throughout Europe the point of sale also
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