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Kelloggs Case Study
The purpose of the paper is to provide SWOT and pestle analysis of the company, Kellogg’s in following paragraphs. The Kellogg Company, an American multinational food manufacturing company which focused on the various nutritional foods which are commercially used around the globe. The headquartered of Kellogg Company is in Michigan, United States. Considering foods which are commercially produced, Kellogg’s sells cereal as well as convenience foods such as crackers and toaster pastries. Other Kellogg Company commercially used products include Corn Flakes, Frosted Flakes, Pringles, Eggo, as well as Cheez-It.
The mission statement of the company such as “Nourishing families so they can flourish and thrive”. The company exhibited manufactured and marketed their products for approximately 180 countries. Considering the history of the company. The company is the major competitor in the mealtime food market sector. The company exhibited proved to be sophisticated operators within the fast-moving consumer goods industry and often have low competitors. However, they are facing stimulating challenges of a declining market place as consumers focus of food removed from more health-focused, are ingesting out more, and have better solution for improving their health.
History of the company:
The history of this company is interesting and provided a brief insight into the struggles that require for improving the identity while capturing global market. For example, W. K. Kellogg convinced his brother to serve the diet in flake form for the guests in order to reduce the perishable characteristics of the food. However, the flaked wheat was wrapped to meet mail-order requests from visitors after they left the Sanitarium.
However, Dr. John Harvey prohibited his brother Will from dispensing cereal beyond his consumers. Consequently, both the brother split and W. K. launched the Company on the name of Battle Creek Toasted Corn Flake on the exact date of February 19, 1906. Convincing his brother to surrender rights to the product, Will's company produced as well as marketed the hugely successful Kellogg's Toasted Corn Flakes. The company was renamed the Kellogg Toasted Corn Flake Company in 1909 which also operated under the Kellogg Company that was finally launched in the global market. The following paragraphs will provide SWOT and pestle analysis of the company.
Strength of the company:
Worldwide presence is the first strength as Kellogg’s products are manufactured in 18 countries and often marketed more than 180 countries for $2.7 billion in a cash
High awareness is the second strength as Kelloggs is successful in building awareness in advanced economies. Hence, it is world’s largest cereal maker and often gained the mainstream market through in building awareness in advanced countries.
Marketing Initiativesis the third strength as it has situated itself as a brand meant for fighting hunger specifically as an alternative to the breakfast. Kellogg’s products such as breakfast cereal brand which has helped the company to obtain the share of wallet of the customers.
Questionable marketing campaigns is the weakness as the company marketing has been interrogated in the media, encouraged by an upsurge. The consumer consciousness of the mismatch between the marketing messages as well as the produces themselves which lead to the negative word of mouth. Food bloggers have also interrogated the advertising methods used by cereal industrial companies due to their high sugar content as well as use of ingredients such as high-fructose corn syrup.
Slow Innovation is the weakness as the company of the cereal market is overloaded with local, National as well as international brands. Despite of this extent of competition Kellogg is not able capture the marketplace in the developing marketplaces. The reason being slow innovation in contents of the cereals for the health consciousness.
Market penetration is the first opportunity penetrating further in the current market & targeting other developing markets will help the company in increasing its sales.
Changing lifestyle is the second opportunity as the growth population, their hectic as well as changing lifestyle people are looking for some easy meals to put down their hunger & save their time which is the driving force the growth of the cereal industry.
Targeting Restaurants as well as hotels are excellent opportunities. Many companies from FMCG as well as food manufacturing are tying-up with Restaurant as well as hotel chains to expand their business. There’s great opportunity lying ahead for Kelloggs if they can generate their business.
Intense competition is the major threat because rivalry is one of the major factors that are affecting the revenue such as readymade foods, restaurants. These reason that restricts the growth of cereal industry.
Government regulations is the major threat because Government policies connecting ingredients used in the cereals is generating a big obstacle in their development.
Changing lifestyle is the third threat because people use to have less time so now they are shifting to “Take away outlets” to save their time.
Political factors play an important role in influencing the factors that can control Kellogg Company's long term profitability as well as growth. The political factors are following:
Lawful framework and regulation for contract enforcement
Anti-trust rules associated with Processed as well as Packaged Goods
Risk of army invasion
Obligatory workers benefits including low wage and high wage workers
Industrial safety guidelines in the Consumer Goods sector.
Macro environment factors such as savings rate, foreign exchange rate as well as economic cycle control the collective demand as well as aggregate investment in an economy.
Exchange rates as well as steadiness of other country currency.
Labour costs as well as productivity in the economy
Unemployment rate, inflation rate as well as interest rates
Society’s culture influence the revenue as the impact the culture of an organization in an environment often influence the product delivery and manufacturing services. Shared beliefs as well as attitudes of the population play a great role in how dealers at Kellogg Company.
Class structure, hierarchy as well as power structure in the society
Business spirit as well as wider nature of the society
Demographics as well as skill level of the population
Culture factors such as gender roles, social agreements etc.
Transportation industry excellent example to illustrate Technological Factors. Over the last 5 years the manufacturing has been altering really fast, not even giving chance to the established players to cope with the changes.
Recent technical developments
Technology's influence on creation contribution
Influence on price structure in Processed and Packaged Goods industry
Influence on value chain
Texas as well as Florida have different obligation sections in case of mishaps or environmental disaster.
Laws regulating environment pollution
Air and water pollution regulations in Processed & Packaged Goods industry
Copyright Intellectual property law
Consumer protection as well as e-commerce
On a concluding note, it can be said that Kellogg Company, an American multinational food manufacturing company which focused on the various nutritional foods. The company was renamed the Kellogg Toasted Corn Flake Company in 1909 which also operated under the Kellogg Company that was finally launched in the global market. In order to bring revenue, the company can install technology and R and D.
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