Strategic Management of General Mills: Identification of SBUs, BCG Matrix Analysis, and Recommendations

Strategic Management
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Contents
Introduction................................................................................................................................... 3
Part- a- Identification of SBUs, market growth rates and rival market share................................3
The above discussion highlights that General Mills is doing well in most of the SBUs..................8
Market growth Vs Market share of the 5 SBUs discussed above...................................................8
Part-b – BCG Matrix....................................................................................................................... 9
Recommendations.........................................................................................................................9
Conclusion................................................................................................................................... 11
References................................................................................................................................... 12
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Introduction
Strategic business unit (SBU) is a fully functional unit of an organisation having a vision,
marketing plan and revenue centre of its own (Aaker & McLoughlin, 2010). An SBU could be a
product line, a branch or the complete business (Alkhafaji, 2013). General Mills is a US
multinational company which manufactures and markets consumer food products (General
Mills, 2018). The company has many well-known and profitable food brands under its umbrella.
Part- a- Identification of SBUs, market growth rates and rival market share
General Mills has five major product lines globally (General Mills, 2018). These are cereals,
snacks, convenience meals or ready to eat food items, yogurt and ice creams (General Mills,
2018). These product lines have separate marketing plans, structures and vision for success
(General Mills, 2018). Therefore, these product lines of the company can be called SBUs.
Following is tabular comparison of the different SBUs of General Mills
SBU’s of General Mills
SBU name/
Product line
Reasons for identification
as SBU
Market growth rates and
strategy
Nearest Rival’s
market share
Cereals market
product line
General Mills has an
extensive cereal product
line with many cereal
brands like Cheerios,
Monster cereals and Coca
puffs etc. (General Mills,
2018).
These cereal brands have
their own vision,
direction, and advertising
strategy and target
Breakfast cereal market
has been growing rapidly
over the past few years
(mordorintelligence.com,
2018). This is because
people want healthy and
easy to make breakfast
for their family and kids
(Buhamra, 2013). The
market is growing at a
rate of 4.5% Per annum
Kellogg’s and Cereal
partners worldwide
are the nearest
rivals having nearly
40 and 19%, market
share respectively
(General Mills,
2018).
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audience. An SBU has this
type of structure
(Freeman, 2010).
Therefore, cereals have
been identified as a
separate SBU of General
Mills.
which is a very healthy
sign
(mordorintelligence.com,
2018). In the US, General
Mills has 31% market
share (General Mills,
2018). Globally General
mills cereals have a joint
venture with Nestle
which is known as Cereal
partner worldwide
(Frynas & Mellahi, 2015).
This venture has market
share of 17 % (General
Mills, 2018)
Snacks market
product line
General Mills have a line
of highly popular snack
brands like Annie’s foods
which specializes in
organic food like pastas
other snacks (General
Mills, 2018).
Another snack brand of
the company is Bugles
which specializes in corn
snacks (Eden, 2013).
These snack brands have
their own marketing and
advertising strategy and
There is a growth in
demand for branded
snacks due to increase in
health and hygiene
awareness (Goworek,
2015).
The global snack market
is growing at nearly 3%
per annum (Global
Industry analysts, 2018).
Global snack market
creates nearly $1.7
Billion business
worldwide.
The largest
company in snack
food industry is
PepsiCo which has
nearly 38.5 market
share (Global
Industry analysts,
2018). Whereas
share of General
Mills in snack food
industry is 17%
(General Mills,
2018)
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