Business Strategy for Kellogg's: Analysis and Strategic Plan

This report discusses the analysis of macro environment and internal capabilities of Kellogg's, as well as the application of Porter's five forces and the development of a strategic plan.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Mention appropriate models and framework to analyse the influence of macro environment on
a business firm and its strategies.................................................................................................1
TASK 2............................................................................................................................................2
Analyse internal capabilities and environment of a company using suitable frameworks.........2
TASK 3............................................................................................................................................2
Apply porter's five forces to acknowledge the competitive force of selected organisation........2
TASK 4............................................................................................................................................2
Discuss a range of models, concepts and theories to devise a strategic plan in context with the
selected business firm.................................................................................................................2
CONCLUSION ...............................................................................................................................2
.........................................................................................................................................................3
REFERENCES ...............................................................................................................................4

INTRODUCTION
Business strategy is defined as various tactics and decisions which are taken by a
company to increase their productivity and performance in market place. This is a master plan
that assists a firm in attaining expected goals and targets in a timely manner (Amran and et. al.,
2016). This assignment is performed in relation with Kellogg's which is an US based food
manufacturing organisation, headquartered in Michigan, US. This company is founded in 1906
and operates in global manner. This report is going to cover about different frameworks and
models to acknowledge the internal and external factors of market which can impacts a business
in a considerable manner. Other than this, porter's five force model is discussed to identify
competitive edge in market. At last, an appropriate strategic plan is mentioned so that concerned
company can achieve their business objectives in efficient way.
TASK 1
Mention appropriate models and framework to analyse the influence of macro environment on a
business firm and its strategies
Strategy is referred as a tactics which is adopted by the manager in a company to achieve
their objectives and targets prior deadlines. This is basically a general direction that is followed
by staff of a company so that maximised outcomes can be achieved in future. With the help of
efficient business strategies, Kellogg's can attain maximised profits and revenues in the region
they are operating. Impact of macro environment on Kellogg's can be acknowledged with the
help of PESTLE analysis which is stated below:
 Political factors: These type of macro factors are related to the political stability of the
region in which a company is performing their business operations. In case of UK, this
nation is political stable due to a stable government due to this policies and regulations
for business organisations do not change often. This aspect is advantageous for Kellogg's.
But, due to Brexit, large scale companies have faced set back which can influence of
company in negative way (Ghezzi, 2013).
 Economic factors: These factors include purchasing power, interest rate, inflation rate,
GDP etc. High purchasing power of people in UK due to high GDP will help Kellogg's in
earning high sales. Great recession of 2018 has increased inflation in UK which limits the
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purchasing power of people to some extent. This will impact company in negative
manner.
 Social factors: This factor is associated with the opinion, belief, perception and choice of
a people living in a specific region. Individuals in UK are very health conscious and they
prefer to eat healthy and nutritious food. This factor will help the concerned company in
earning high profits in UK. Changing preference of people in UK at fast pace may
decrease their will towards products of company. This can reduce the sales of Kellogg's
in concerned region.
 Technological factors: This aspect of external environment is associated with the
adoption of modern technology to grab attention of customers. As people of UK are
technologically advanced, they prefers to use those services and products which are
easily available via technology and internet (Scholes,2015). Manager in Kellogg's is
needed to update their technology and increase their online presence on regular basis so
that customers can be retained for maximum time. Otherwise, customers will shift their
preference towards products of other company.
TASK 2
Analyse internal capabilities and environment of a company using suitable frameworks
In order to analyse and evaluate the impact of internal environment on the working of a
company, models like SWOT and VRIO are used. Aspects related with these models are
mentioned below:
SWOT framework
With the help of this analysis, manager in Kellogg's is able to acknowledge their
weaknesses and potential threats along with strengths and opportunities. By this, concerned
company will be able to understand their internal environment in a proper manner (Thompson,
Strickland and Gamble, 2015). SWOT for Kellogg’s is given below:
Strengths Weaknesses
 Brand recognizance of Kellogg’s is
high because of their wide product line
and efficient services.
Kellogg’s offer their products under various
 Innovation level of organisation is less
as they are mainly offering products
associated with cereals only.
 Company utilize traditional techniques
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sub brands due to which company is sustaining
strong position in marketplace (Wang and
Verma, 2012.
to create their items because of which
their items are valued profoundly in
correlation with the rates which are
given by rival associations.
Opportunities Threats
 Company can increase their online
presence so that high number of people
can purchase their products on regular
basis.
 Kellogg’s can provide offers and
discounts to customers on seasonal
basis. This will help the company in
hiking their sales and increasing their
customer base throughout the year.
 Changing world of politics because of
global business can goes about as an
obstruction in the viability of
organization
 Rival associations and restaurants are
giving intense challenge to Kellogg’s
that can be a major danger for the
association.
VRIO analysis
VRIO is a strategical instrument which is utilized by an organizations to recognize their
accessible assets and inner abilities. This will benefits the concerned organisation in
accomplishing high advantages over opponents. In case of Kellogg’s, VRIO framework is
referenced underneath:
 Valuable: It is significant for manager in Kellogg’s to appropriately use their valuable
assets with the goal that intense challenge to competitors can be given in a legitimate
manner. If a business association posse some valuable assets, they can gain high benefits
from it. For ex, valuable asset for Kellogg’s is their workers, suppliers and Supply chain
management system (Oldman and Tomkins, 2018).
 Rareness: This element of VRIO benefits a firm in identifying if the resources which are
used by them are unique or not. Rare items offered by Kellogg’s will help the firm in
retaining clients for maximum time because of which their market shares and incomes
will increment in an extensive way. Rare resources of organization are their
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manufacturing and creation machines, skilled employees etc. Kellogg’s believes in giving
high quality items to their clients because of availability of rare resources.
 Imitable: Kellogg’s is needed to give those items which can not be duplicated by rival
firms. If the items offered by Kellogg’s will be replicated, at that point rivals can sell
these products in less price because of which individuals won't want to purchase those
products from Kellogg’s. Crude material for preparing food and special ingredients are
imitable material for concerned organisation (Lehmann, 2016).
 Organisation: It is fundamental for business firm like Kellogg’s to deal with their
current assets in an ideal way. In any case, if the assets and materials of an organization
won't be utilized in precise manner, it will hike expenses of organization. This will lessen
incomes for organization due to which attainment of expected goals will not be possible.
Resource in this scenario are stakeholders, capital, employees, managers and investors of
firm.
TASK 3
Apply porter's five forces to acknowledge the competitive force of selected organisation
Porter's five forces is a strategical model which takes strategic choices by considering future
results instead of evaluating only present challenge. There exist five elements of this model
which is referenced underneath for Kellogg’s:
 Threat of new entrants: Threat of new organisations isn't so much for Kellogg’s as it is
a popular company which is working at worldwide level. It isn't possible for newly
operating firm to contribute as much Kellogg’s is contributing in terms of income while
performing business tasks and exercises. This is the reason new entrants are not able to
sustain advantageously in front of Kellogg’s (Langabeer and Champagne, 2016).
 Bargaining intensity of suppliers: There are numerous large scale business firms that
are managing their activities in food retail segment. Because of this, bargaining power in
context with suppliers is too much high. If different firms will pay high amount to the
providers, they will be unable to give Kellogg’s all the necessary resources, materials and
assets. This will limits the production and profitability of company.
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 Bargaining power of purchasers: In context with bargaining intensity of buyers, it is
high for Kellogg’s as customers are the king of market and satisfying their requirements
is the prime duty of company. If concerned organization will charge high expenses from
their clients without giving standardised items then clients can their inclinations towards
the offerings which will be given by rivals.
 Threat of substitutes: There is potentially no substitution for food and nourishment.
Because of this, danger from substituted items in less if there should be an occurrence of
Kellogg’s. But, if offered items of Kellogg’s won't be great, clients will feel hesitant in
purchasing them. It will impact company in negative way (Austin and Pinkleton, 2015).
 Rivalry among existing rivals: There are numerous retail firms that are working in UK
and worldwide level, for example, Nestle, Cadbury and so on. Risk from these contenders
is exceptionally high if relation to Kellogg’s. This is on the grounds that rival
organization rate their items as per competitive pricing because of that a slight ascent in
rate of product of Kellogg’s will benefits rivals to sustain high customer base.
TASK 4
Discuss a range of models, concepts and theories to devise a strategic plan in context with the
selected business firm
Vision: Main vision of firm is to became market leader in their respective field and offers high
quality products to their customers.
Mission: Major mission of Kellogg’s is to achieve high competitive advantage over their rival
firms.
Objectives: To increase their profits and retain their consumers for maximum time period.
Strategies: Appropriate strategy for company will be selected through porter’s generic strategies
which is mentioned below:
Generic strategies of porters benefit a company in recognizing the path by which they can
accomplish their targets in marketing place. There are three sort of strategies according to porter
i.e. differentiation, cost leadership and focus (David and David, 2019). In relation to Kellogg’s,
these strategies are referenced beneath:
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 Cost leadership: With the assistance of this strategy, middle class customers can be
effectively targeted by a company. In this aspect, Kellogg’s can offer their items to
clients in less cost. Additionally, organization can provide offers, discount and vouchers
to loyal clients because of which their trust in organization will improve and they will
continue their sales. This will assist the organization in expanding their revenues because
of which high benefits can be earned (Jenkins and Williamson, 2015).
 Differentiation: In this generic strategy, an organization provides innovative and unique
items to their clients with the goal that their offerings can be separated from product of
other organizations performing in same sector. Inside this strategy, Kellogg’s can offer
creative and new items to their clients with the objective that sales can be improved in an
desired way.
 Focus: This strategy includes two elements within it which are cost focus and
differentiation focus. In context with cost focus, Kellogg’s can give their items in less
cost with the goal that large number of individuals will purchase them. In differentiation,
organization will be expected to offer modern items so that clients can get them without
being price delicate (Martinez-Simarro, Devece and Llopis-Albert, 2015).
Manager of organisation is recommended to adopt differentiation strategy so that innovative
product can be given to customers and they can be retained for maximum time period.
Financial projection:
Evaluation: To evaluate their performance, manager of Kellogg’s can use techniques like KPI
and benchmarking. These techniques will help the organisation in getting accurate results
(Suarez,Calvo-Mora and Roldán, 2016).
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CONCLUSION
As per above discussed report, this has been stated that a good business strategy benefits
an organisation in achieving their goals and targets in a proper manner. With the help of Pestle
analysis, impact of external factors on business strategies can be analysed. In case of identifying
internal capabilities, VRIO and SWOT analysis can be used. Porter's five force helps in
evaluating competitive forces in respect with selected business. With the help of porter's generic
strategies, an efficient strategic plan can be prepared that will helps a company in achieving their
expected results.
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REFERENCES
Books and Journals
Amran, A. and et. al., 2016. Business strategy for climate change: An ASEAN
perspective. Corporate Social Responsibility and Environmental Management. 23(4).
pp.213-227.
Ghezzi, A., 2013. Revisiting business strategy under discontinuity. Management Decision. 51(7).
pp.1326-1358.Köseoglu, M. A. and et. al., 2013. Linkages among business strategy,
uncertainty and performance in the hospitality industry: Evidence from an emerging
economy. International Journal of Hospitality Management. 34. pp.81-91.
Scholes, M. S., 2015. Taxes and business strategy. Prentice Hall.
Wang, J. and Verma, A., 2012. Explaining organizational responsiveness to work‐life balance
issues: The role of business strategy and high‐performance work systems. Human
Resource Management. 51(3). pp.407-432.
Oldman, A. and Tomkins, C., 2018. Cost management and its interplay with business strategy
and context. Routledge.
Lehmann, C. F., 2016. Strategy and business process management: Techniques for improving
execution, adaptability, and consistency. Auerbach Publications.
Langabeer, J. R. and Champagne, T., 2016. Exploring business strategy in health information
exchange organizations. Journal of Healthcare Management. 61(1). pp.15-26.
Austin, E.W. and Pinkleton, B.E., 2015. Strategic public relations management: Planning and
managing effective communication campaigns. Routledge.
David, F.R. and David, F.R., 2019. Strategic management: A competitive advantage approach,
concepts and cases. Pearson.
Jenkins, W. and Williamson, D., 2015. Strategic management and business analysis. Routledge.
Martinez-Simarro, D., Devece, C. and Llopis-Albert, C., 2015. How information systems
strategy moderates the relationship between business strategy and
performance. Journal of Business Research. 68(7). pp.1592-1594.
Moseley III, G.B., 2017. Managing health care business strategy. Jones & Bartlett Learning.
Suarez, E., Calvo-Mora, A. and Roldán, J.L., 2016. The role of strategic planning in excellence
management systems. European Journal of Operational Research. 248(2). pp.532-542.
Thompson, A., Strickland, A. J. and Gamble, J., 2015. Crafting and executing strategy:
Concepts and readings. McGraw-Hill Education.
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