The business strategy adopted by Kellogg’s is extremely straightforward and focused. By following this business strategy, Kellogg’s want to expand and grow the cereal business, diversify the business into convenience food and finding new business opportunities.
Kellogg’s strongly believes in taking responsible actions in all aspects and functions of supply chain. This business model focuses on the long term survival aspects for the company and its stakeholders. Furthermore, Kellogg’s has set a goal to curtail energy and emissions in manufacturing and improving packages to make its business more environmentally friendly.
The case study analysis is to show how Kellogg’s will accomplish its mission through establishing strong connections and improvements in various parts of its supply chain from manufacturing to final consumers through various internal and external factors which can influence the Kellogg’s decision making.
SWOT analysis includes both, internal and external, factors that can affect the decision making of any business. Internal factors include strength and weaknesses; whereas, external factors include opportunity and threats faced by that company.
Kellogg’s is a multinational company which has been able to come up with many successful marketing campaigns through various initiatives. Kellogg’s has enormous labour force which adds up to 30,000 employees worldwide. Kellogg’s is considered as a top quality breakfast brand throughout the world. Lastly, Kellogg’s popularity among every age group consumers further strengthens its position in the market.
However, Kellogg’s cereals are considered to be complimentary meal at the breakfast. Many consumers think of Kellogg’s as non-filling meal. Therefore, it is treated as a snack rather than a proper breakfast meal.
Kellogg’s has found many opportunities to improve its market position in the form of conducting various CSR activities such as “healthy start day”, sponsoring international games and developing strong in-house distribution channels in different countries. Food regulations imposed by government and increasing levels of competition are the only threats faced by Kellogg’s (Voulgaridou, 2007).
Kellogg’s enjoy low level of bargaining power of suppliers mainly due to government regulations and surplus farmer availability which makes the price negotiation extraordinarily difficult. On the other hand, the company enjoys a high degree of bargaining power over its buyers due to the vast availability of grocery stores, product availability and co-dependent buyer relationship with the company. Kellogg’s is involved in the business cereal manufacturing; therefore any product which is highly likely to be consumed at breakfast, is directly substitutable to Kellogg’s. Such products include toast, doughnuts, bars, fruits and other edibles. Kellogg’s does not face high level of threat from new entrants coming to the market. The start-up cost is unusually high to enter into this industry. Kellogg’s is facing direct competition with well-established and mature companies operating in the market. These companies include General Mills, Kraft Foods and Pepsi Co. This implies that there is high and intense competition in the market.
The factors identified in the models above must be considered into account by Kellogg’s in improving its supply chain and producing cereals according to the tastes and preferences of the consumers.
In accordance with the supply chain sections of Kellogg’s, the industrial supply chain requires the interaction between different departments to ensure that goods and services are timely and provided to the customers. Kellogg’s needs to find efficient and effective ways of supply chain management to ensure timely delivery of its products at the right price.
It is recommended that Kellogg’s should focus on specialization as it is more cost effective and it will be more effective given the internal and external factors analyzed above. In order to achieve cost effectiveness, Kellogg’s needs to venture partnerships with other players in the industry, such as suppliers, distributors and others. Through more effective management of its supply chain, Kellogg’s will be able to benefit itself in the long run as well as it will have a positive influence on the environment and other businesses involved in the supply chain.