Introduction
Speaking in regards with the business methodology, it alludes to planning as well as execution of procedure to accomplish the objectives and goals. The prominent association are creating and executing methodologies by examining the market patterns and exercises, as it have noteworthy effect on the business system and on its development (Aaker and McLoughlin, 2010). The current research study focuses on producing an environmental analysis and strategic growth management plan on the basis of the renowned internal and external analytical tools of Kellogg’s, an American owned organisation. As a corporate strategy manager of the company the main task is to evaluate the impact and the influence of macro-environment on the strategies of Kellogg’s. Further, the internal analysis and capabilities of the firm will also be assessed. Strategic management plan will be prepared in the final parts of the report.
Task – 1 (External Analysis)
PESTLE analysis of Kellogg’s
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Political |
Focusing in relation with the political environment of United Kingdom, it is quite stable. Laws and regulations imposed by the government are quite strict and even private organizations are more encouraged. In UK, Kellogg’s is quite well-known brand and thus, the government is quite supportive to it. However, the politicized marketplace at the time election severely impacts the business (Zoe, 2017). |
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Economical |
The employment rate of UK is quite high i.e. 9 percent. There is a high level of competition amid the breakfast as well as snack brands. Since, Kellogg is famous as breakfast cereal in UK, its demand never get affected during recession as well. But, the volatile movements of the currency rates impacts the demand of the product. |
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Social |
In IUK, people are becoming more conscious in regards with their health and thus, Kellogg’s is their preferred choice. Further, there is growing acceptance of private labels by the customers in the nation. |
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Technological |
In regards with the technological aspects, UK is quite high in this sense as huge investment is made by the government in the areas of research and development and the same is being performed by Kellogg. Additionally, mobile applications are being used widely in the market for sales collaboration (Hendersonand Venkatraman, 2009). |
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Legal |
In relation with the legal aspects, UK government is quite supportive of Kellogg’s. Further, there is strong compliance standards for the suppliers. There is a lawsuits for any sort of misleading description of the product as well as advertisements (Taylor, 2015). |
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Environmental |
Concerning about the current situation of the environment, it is important for the company to develop ecological & recyclable packaging for avoiding any waste. The company is also being accused for utilizing genetically engineered ingredients. |
Conclusion
From the above analysis of the macro-environmental factors of Kellogg’s, it can be said that all these factors significantly have one or the other impacts on the strategic management decisions of the firm. Consequently, the future methodology for Kellogg ought to be that they should focus on carrying more assortment and little modification in contrast to their items in light of the fact that the client has a fluctuating decision regarding this. Next day, there will be some other choice in the field of grain and individuals will shift towards that particular product. Cereals have the degree to improve a ton and there can be parcel numerous preferences which can be created in this field (Trott, 2010). Additionally, the organization should forcefully advance and partner with more well-being as well as care related exercises so individuals remember it as a healthy nourishment.
Task – 2 (Internal Analysis)
SWOT analysis
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Strength ·Kellogg’s has strong positioning between the customers ·Re-engineered marketing strategy ·Strong level of commitment towards nutrition ·Supply chain management is very efficient (Newsroom Kellogg Company, 2014) ·Presence in the multinational markets |
Weakness ·There is lack of segregation in the portfolio of product ·Limited research and development centres to some particular areas only ·Most of the products in the portfolio of Kellogg are being sold in the markets of North America |
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Opportunities ·Opportunity for venturing into new emerging markets ·Expanding the portfolio of the product ·Growth in the market of ready to eat cereals ·Electronic business models adoption |
Threats ·Intense level of competition in the market ·Strict laws and regulations of the government ·Altering needs and expectations of the customers |
Resource based analysis
Some of the vital resources of the Kellogg’s company are tangible, intangible and core competencies. Explanation of these resources are being done below:
- Intangible resources– These are being referred as the resources which are not visible, although plays an important role in achieving the goals of the company. Some of the intangible resources of Kellogg are good reputation, brand image, quality services and value of the firm. In addition to thus, the firm has also created a sustainable competitive advantage in the market which is very difficult for the firm to duplicate (Hill, Jones and Schilling, 2014).
- Tangible resources– There are many tangible resources which are clearly visible within Kellogg’s such as trained and skilful employees, quality of products and number of outlets at strategic locations. All these are being regarded as the major strength of the firm. However, all the workers are employed at lower salaries as compared to the rivalry firms operating in the same market.
- Core competencies– The core competencies of the company includes effective research and development, innovation capabilities, marketing strategies, human resource and technological capabilities. All these competencies have supported in transforming the firm to accomplish performances of the firm.
Conclusion
From the above internal analysis, it can be said that one of the major strength of the company is its brand image and reputation in the multinational markets. Further, the research & development investment of Kellogg is also very huge that leads them to gain a significant competitive position in the market. However, with the rising level of competition, regulations and changing expectations of the customers, company needs to alter its policies and strategies for effectively attaining its desired goals (Gupta, Kamala and Srinivasan, 2009). Other than this, the core competencies and capabilities of Kellogg’s are mainly research and development, innovation, marketing, human resource and technology. In addition to this, the company is also famous for its K values that significantly shapes the culture and offer direction so as to operate the business effectively. Some of the values of the firm are integrity, humility, passion, simplicity, results and accountable.
Task – 3 (Competitive Forces & Strategic Direction)
Porter’s five force analysis
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Threats of new entrants |
In the industry in which the Kellogg operates, it is very difficult to achieve economies of scale. For those who are producing large usually takes the advantage of this. Further, the requirement of capital in this industry is huge and thus, makes it difficult for the firms to enter. The cereal industry attracts many global leaders to step into this market but due to the high brand positioning threat of new entrants is medium (Murphy, 2018). |
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Threats from the substitute goods |
The firm has strong brand positioning in the market and also it is one of the largest producer of cereals in this industry. Even the consumers are very loyal towards the brand which makes them hardly shift towards other brands or substitutes. This signifies that the threat from the substitution is also a weaker force. |
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Competitive rivalry |
Some of the major rivalries of Kellogg are Nestle, Ralcorp Holdings and General Mills. These firms are posing great level of competition to Kellogg. In this regards, the firm has created a range of different brands as well as product lines that significantly contends the need of different customers. This implies that the competitive rivalry in this industry is quite high (Hoovers, 2014). |
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Bargaining power of the suppliers |
Speaking about the number of suppliers in the industry in which the Kellogg operates, it is quite large in comparison with the buyers. This pertains to the fact that the suppliers have less control and power over the prices. The major raw materials for the firm is corn and rice and there are abundance of suppliers of such items. |
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Bargaining power of the buyers |
In the present scenario, trends related to healthy food items has been increased a lot. Consumers nowadays does not hesitate to pay extra for having quality and hygienic items (Alkhafaji, 2011). Kellogg’s offer nutritional as well as high quality food products to its customers which lowers down the bargaining power of the buyers. |
On the basis of the outcome being gathered from the above porters five force analysis, it can be said that there are certain factors such as competition and entry of new firms which are quite stronger force and thus, they might impact the profitability of Kellogg. On the other hand, there are forces like suppliers, buyers and substitutes, can help in increasing the profitability of the concern (Morschett, Schramm-Klein and Zentes, 2010). Consequently, it is important for the company to pay attention on differentiating its products for the purpose of having minimal effect of the actions of competitions on the customers that search for unique products. Finally, the firm can take the advantage of economies of scale and can fight off new entrants by its advantage of cost. This will help in improving the market position and competitive edge of Kellogg.
Task – 4 (Strategic Management Plan)
Porter’s generic strategies
As per the words of by Michael Porter, there are three varied strategies that can be used by the firms for creating as well as continuing an advantage over the other firms in the industry. These strategies are cost leadership, focus and differentiation. In cost leadership, the target market is quite broad and products are sold in the market at lowest possible price. In case of focus strategy, the market is niche wherein products are either at lowest price or unique. On the other hand, in differentiation, market is broad and high demanding (Fangfang, 2013). Products have exclusive features. From the analysis held above, it is suitable for Kellogg to make use of cost leadership strategy to enter into a diversified market. Firm must step into new products like sun-rich and cheese focusing more on impulse food rather than breakfast. With this, the firm will be in a position to achieve a competitive advantage in the industry in which it operates.
Strategic management plan
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Strategic vision The main vision of the firm is to augment the revenue as well as reputation of the new products along with boosting the quality & promotion of the brand Kellogg |
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Gaol |
Objective |
Action plan |
Measurement |
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Growing the returns of the company |
·Launching new product range for men, women and children in following six months ·Advertising of sales in midsummer season |
·Product development for market testing ·Choosing the best product and introducing in the market ·Augmenting the volume of sales by 30% seeking help through advertising |
30 percent more gross income of the firm |
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Enhancement in the acknowledgement of the brand |
Advertisement of the brand Kellogg through utilizing in store display, promotion and discounts (Cooper, 2000) |
Engaging a specified team liable for promotion of the brand |
·70% of the target market identifies the brand ·About 30% awareness of the new product |
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Enhancement in the insight of quality |
·Improving the perception of quality of each and every products of Kellogg ·Accomplishment of extraordinary awareness of quality for the new product category |
·Quality will be the major consideration during market testing of new products ·Good quality raw-materials, innovative designs and colourful packaging will be used for altering the perception |
·Enhancement in the discernment of quality by 10% of the existing Kellogg’s products ·Awareness of quality of 80% of the new product launches |
Conclusion
From the above discussion, in general it can be said that the association has various characteristics alongside assets that can be used effectively for achieving a concentrated edge in the market. Kellogg’s has used half and half procedure which is exhibited to be both successful similarly as difficult for the competitors to copy. With incredible arranging and systems, the firm had the choice to stay before its conflicts. They have moreover centred on every class of people and offered them isolated things. This assisted the company with accomplishing stimulated level of performance and higher advancement of arcade.
References
- Aaker, D.A. and McLoughlin, D., 2010. Strategic Market Management: Global Perspectives.
- Alkhafaji, A.F., 2011. Strategic management: formulation, implementation, and control in a dynamic environment. Development and Learning in Organizations: An International Journal, 25(2).
- Cooper, L., 2000. Strategic selling planning for radically new merchandises. Journal of Marketing, 64(1), pp.1-15.
- Gupta, V., Kamala, G. and Srinivasan, A., 2009. Business Policy and Strategic Management: Concepts and Applications. New Delhi: PHI Learning.
- Henderson, J. and Venkatraman, N., 2009. Strategic Alignment - leveraging information technology for transforming organizations, Management Decision, 32(1), pp.472–484.
- Hill, C., Jones, G. and Schilling, M., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
- Morschett, D., Schramm-Klein, H. and Zentes, J., 2010. Strategic International Management. 2nded. Text and Cases.
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