Kellogg's Strategic Management Process

This report examines the importance of strategic management processes in shaping organizational policies, using frameworks such as SWOT and PESTLE to understand factors impacting the organization's environment. It explores different strategic approaches used by Kellogg to grow its market and attract new consumers after acquiring Pringles.

DIVESTMENT OF
PRINGLES TO KELLOGG
COMPANY

Table of Contents
INTRODUCTION...........................................................................................................................1
1. Theories and frameworks.............................................................................................................1
Framework 1 - SWOT.................................................................................................................1
Framework 2 – PESTLE.............................................................................................................3
2. The strategic choices of Kellogg..................................................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
The below report showcases the importance of the range of concepts and models that are
applied in the analysis of strategic issues faced by Kellogg company while divestment of
Pringles. Kellogg is a multinational American food-manufacturing company headquartered in
Michigan, United States. The company is known for its products such as cereal and convenience
foods. The report aims to understand the organisation's strategic management processes which
are used in shaping organisational policies. Along with it, it explores different strategic
approaches used to overcome the problems faced by the organisation. Also, it develops, analyses,
presents and defends a variety of logical strategies and issues. At last, the report concludes with
explaining the links between both theory and practice.
1. Theories and frameworks
Kellogg as being one of the largest food-manufacturing companies carries a large
organisational environment. For successful operation's this environment tends to operate with the
usage of strong strategies and developments. Below applied are the variety of frameworks used
during the divestiture of Pringles to Kellogg company(Bendle & Wang, 2017).
Framework 1 - SWOT
Strengths Weaknesses Opportunities Threats
The products of
Kellogg are produced
in 18 different
countries. Also, these
products are marketed
and sold in 80
different countries.
The company is
having a good
marketing initiative in
The company holds
are good reputation in
making products with
good taste and
consumer preference
yet its high sugar
content makes it less
preferable among its
consumers. Also,
because of this heavy
Kellogg with the help
of other companies is
set to develop a
number of distribution
channels in other
countries to boost its
market(Brownell,
2017). Along with it,
to boost its business
Kellogg is tied up with
Threats such a rising
amount of competition
in ready-made
breakfast
manufacturers and the
company's consumers
shift towards these
manufacturers is
making the
organisation to suffer

form of various
campaigns which
allows it to raise its
product awareness.
The organisation does
its promotion through
different developed
mascots for each of it
product categories and
company is having a
global workforce of
over 30,000
employees. Along
with it, the company is
having a good word of
mouth in the market
which provides it a
high brand recall. The
company has managed
to make the presence
of its brand through
merchandising, motor
sport etc. and the
addition of Pringles
would make its reach
to new consumer
markets(Jacobs, 2015).
sugar content its
product are said to
cause problems such
as obesity and diabetes
if eaten in breakfast,
which is causing
troubles for the
company to keep
producing or selling its
product with the same
intensity it used to sell
before(Gujarathi,
2015). Along with this,
the controversies
regarding its products
recall have made the
company's reputation
suffer. The
organisation is facing
different distribution
problems making its
product less available
for its consumers in
the market.
different hotels, a
number of restaurants,
school etc. Other
opportunities for the
company is that it is
diversifying itself in
other healthy snacks
from which it can gain
its lost reputation in
the market and would
find new consumers as
well. The company's
fix distribution is
another great
opportunity for it.
There is a great
demand for consumers
with breakfast snacks
which are healthy and
affordable, Kellogg is
making its market
reach in these
consumers segments
to grow its
possibilities.
from businesses
profitability issues.
Along with it, strict
food regulations from
government does not
allow the company to
sell its products in its
desired markets. Other
threats includes
various environmental
impacts and rising
food prices.
The above mentioned SWOT analysis showcases the various strengths, weaknesses,
opportunities and threats of the food manufacturer Kellogg's.

Framework 2 – PESTLE
PESTLE analysis explores the macro environmental aspects faced by an organisation that
impacts its growth and development. The below explained analysis explains such macro
environmental aspects in context of Kellogg.
Political : The government of different countries is supportive in terms of providing the
company with political relief as its products are much popular and are demanded across the
world(Ma, 2017). Although, strict food policies of these countries does not allow the company to
perform as it wants to. The company tends to produce its products as per these food policies and
regulations.
Economical – The customer demand is affected by the recession, though the company is
having strong markets in America and United Kingdom which keeps it markets strong and
demanding. Its products are very popular in the above countries as well. The healthy options
provided by the company are making consumers from worldwide attracted towards its products
categories(Stowell & Kawar, 2017).
Social : Its products are made for different consumer segments. These segments range
from children's, millennials, for parents and old age people as well. This makes the company to
provide its products to a variety of consumer and earn profits accordingly.
Technological : The company invests constantly on various technologies and does
required research and development to grow it markets(TREZZINI MATTA, 2017). Pringles
addition is going to make it invest more on its R&D and explore new consumer markets to
develop its potential.
Legal : Countries such as China and Japan tends to implement strict laws on the product's
of Kellogg. This impacts the companies overall sales. Pringles is having a large consumer
markets in both of these countries. Its acquisition is making the company to reach those markets
where it was not able to make it reach before. Along with it, customers from worldwide which
are interested in Pringles are seemed to inclined towards the products of Kellogg as well.

Environmental : The company is accused because of the used of genetically engineered
ingredients by Greenpeace(Vietoris, 2017). Along with it, Kellogg has also been accused of
deforestation practices, which after the acquisition might impact the sales of Pringles.
The above explored PESTLE analysis showcase the factors impacting the organisation
after the divestment of Pringles.
2. The strategic choices of Kellogg
Below mentioned are the strategies adopted by Kellogg to acquire Procter and Gamble's
Pringles successfully:
Understanding product's market: It is essential for the company to understand the
product's market. This strategy is used by the company to evaluate how different the market of
the product is which is going to be acquired from the ones which they sell. The company
analyses various trends and consumers interests of the Pringles. What they like, what they don't
and how these factors impact the overall sales of an organisation. Evaluating this makes the
company aware of various consumer markets which they were not involved in before. This is
also going to make Kellogg now sell its products such as breakfast cereals in these markets as
well. The consumers of these markets are now targeted with these products from which the
company is going to increase its overall products market availability and its sales. This will also
help the Kellogg to achieve its organisational goals and objectives. The product's market plays an
important role to understand consumers demands and necessities and it also helps the company
to overcome strong competition as well. Also, a good product market always improve the new
product's market availability as well. In case of Kellogg, the company after the acquisition of
Pringles would earn a lot of consumer attention from various product segments.
Adoption of right technology: After understanding the product's market the company
would seek to adopt the right technology to manufacture the product under its own brand name.
This technology would include various machineries to produce, pack, and improve the quality of
the product. The usage of the right technology would also ensure the desired changes are in place

for the product's overall improvement. Along with it, the company will decide what other
technological changes are need to be done in advance to maintain the regular supply and demand
of Pringles. In terms of keeping up with the demand the company will choose to buy the old
technology from the company which were producing Pringles before if required to save the cost
and expenses. Along with it, Kellogg is doing the right market research if there are any updates
in the new technology and there are any fast production options available. This is making the
company to produce the desire amount of goods under its name and sell them along(Woodall, &
Shannon, 2018). If production needs to large in quantity, the company needs to open new plants
and fit them with efficient technology to keep up with the demands.
Marketing and Promotion: Kellogg will now use the right marketing and promotion
techniques to sell the product under its own brand name. This will create awareness in the minds
of its consumers about the company and its other product ranges as well. The company now
creates efficient advertisement and promotions to reach new consumer markets. These markets
are targeted with the help of various communication channels such as radio, television, public
relations, newspapers etc. This might make the company reach new consumer markets served by
the Pringles earlier and to sell its products and services along(Ma, 2017). If done effectively, the
right marketing is going to make the company to reach wide consumer markets with high
demands. This will increase the overall profitability of the company and is going to increase its
market share. The effective promotion will lead the company to make its reach in the markets
where its products are still missing. Covering these markets will increase the selling of the
product and attract new consumers towards it.
Reforming product's market base to sell it under the name of Kellogg's: The
company is going to reform the product's market base, in which it would make the consumers
aware about the company's takeover of Pringles. This is going to be done by advertising and
promotion of the product's name under the name of Kellogg. This strategy will attract the
consumers towards products sold by Kellogg. The overall products of the company are now in
awareness of the consumers of Pringles. These consumers if attracted with the right strategies
would buy the services and products sold by the company and it can make the organisation to

earn new consumers easily. The approach required to make this successful is to use right
strategies such as better advertisement focusing Kellogg and Pringles equally.
Developing consumers attention: In this strategy, the company is going to be focused
on developing consumers attention towards the brand and the name under which it is going to be
sold. As seen in the above PESTLE analysis that the company is having large markets in
countries such as America and United Kingdom. The company can increase develop consumers
attention towards its new acquired product of increase its selling. Along with it, with the usage of
right promotion and marketing the company can make its products reach in new market
segments. The countries in which Pringles is sold will be proved as an opportunity for the
company to understand the demands of these consumers and sell its product such as breakfast
cereals etc. Developing new consumer market will help the company to make its reach in wider
markets with wider expectations. Along with it, with keeping competition in mind the company
can produce new required goods in these market. This can help the company to reach audiences
with new markets.
The above mentioned strategies explain in what ways Kellogg is going to improve its
market availability after acquisition of Pringles(Stowell & Kawar, 2017). These strategies are
developed by keeping in mind the performance of the acquired product and its consumer markets
as well. The needs and requirement of new consumer market which are going to be targeted after
the new product's arrival and how the overall market is going to be impacted with these changes.
It also mentions how the organisation would deal with the changes in technologies, supplies,
demands etc.
CONCLUSION
The above report explores the importance of the range of concepts and models that are
applied in the analysis of strategic issues faced by Kellogg company while divestment of
Pringles. The report aims to understand the organisation's strategic management processes which
are used in shaping organisational policies. Various frameworks such as SWOT and PESTLE are
used in report to understand the factors impacting the organisation environment. The report also
explores different strategic approaches used to overcome the problems faced by the organisation.

The overall report will make the reader understand the strategies used by Kellogg to explore
different ways to grow its market and attract new consumers after its acquisition of Pringles.

REFERENCES
Books and Journals
Bendle, N. T., & Wang, X. S. (2017). Marketing accounts. International Journal of Research in
Marketing.34(3).604-621.
Brownell, T. R. (2017). The influence of brand-equity mascots used by US food, beverage, and
restaurant companies on the diet of American children and parents (Doctoral dissertation,
Virginia Tech).
Gujarathi, M. R. (2015). Diamond Foods, Inc.: A Comprehensive Case in Financial
Auditing. Issues in Accounting Education.32(1).95-112.
Jacobs, M. (2015). Chips in black boxes? Convenience life span, parafood, brandwidth, families,
and co-creation. Appetite.94.34-39.
Ma, L. (2017). Financial Analysis of Unilever Company.
Stowell, D. P., & Kawar, N. (2017). HJ Heinz M&A. Kellogg School of Management Cases, 1-
25.
TREZZINI MATTA, F. (2017). Global Networks and Competitive Strategic Alliances in the
Automotive Industry. The Case of declining Europe.
Vietoris, V. (2017). Introduction to sensory marketing. In Sensory and aroma marketing.(p.160).
Wageningen Academic Publishers.
Woodall, P., & Shannon, T. L. (2018). Monopoly Power Corrodes Choice and Resiliency in the
Food System. The Antitrust Bulletin.63(2).198-221.