Strategic Management Plan: Kellogg's Business Strategy Analysis

This report presents a comprehensive business strategy analysis of Kellogg's, a renowned American-owned organization. It begins with an introduction to business methodology and its impact on organizational strategy. The report then delves into an external analysis using the PESTLE framework, examining political, economic, social, technological, legal, and environmental factors affecting Kellogg's. An internal analysis follows, employing SWOT analysis and resource-based analysis to assess the company's strengths, weaknesses, opportunities, and threats, as well as its tangible, intangible, and core competencies. The report further investigates the competitive forces affecting Kellogg's using Porter's Five Forces analysis. Finally, it proposes a strategic management plan, including the application of Porter's generic strategies, specifically cost leadership, to guide Kellogg's strategic direction. The report concludes with recommendations for Kellogg's to maintain and enhance its market position.

BUSINESS STRATEGY

CONTENTS
INTRODUCTION.................................................................................................................................1
TASK – 1 (EXTERNAL ANALYSIS)..................................................................................................1
PESTLE analysis of Kellogg’s..........................................................................................................1
Conclusion.........................................................................................................................................2
TASK – 2 (INTERNAL ANALYSIS)...................................................................................................2
SWOT analysis..................................................................................................................................2
Resource based analysis....................................................................................................................3
Conclusion.........................................................................................................................................3
TASK – 3 (COMPETITIVE FORCES & STRATEGIC DIRECTION)................................................4
Porter’s five force analysis................................................................................................................4
TASK – 4 (STRATEGIC MANAGEMENT PLAN).............................................................................5
Porter’s generic strategies..................................................................................................................5
Strategic management plan................................................................................................................5
CONCLUSION.....................................................................................................................................7
REFERENCES......................................................................................................................................8

INTRODUCTION
Speaking in regards with the business methodology, it alludes to planning as well as
execution of procedure to accomplish the objectives and goals. The prominent association are
creating and executing methodologies by examining the market patterns and exercises, as it
have noteworthy effect on the business system and on its development (Aaker and
McLoughlin, 2010). The current research study focuses on producing an environmental
analysis and strategic growth management plan on the basis of the renowned internal and
external analytical tools of Kellogg’s, an American owned organisation. As a corporate
strategy manager of the company the main task is to evaluate the impact and the influence of
macro-environment on the strategies of Kellogg’s. Further, the internal analysis and
capabilities of the firm will also be assessed. Strategic management plan will be prepared in
the final parts of the report.
TASK – 1 (EXTERNAL ANALYSIS)
PESTLE analysis of Kellogg’s
Political
Focusing in relation with the political environment of United Kingdom, it
is quite stable. Laws and regulations imposed by the government are
quite strict and even private organizations are more encouraged. In UK,
Kellogg’s is quite well-known brand and thus, the government is quite
supportive to it. However, the politicized marketplace at the time election
severely impacts the business (Zoe, 2017).
Economical
The employment rate of UK is quite high i.e. 9 percent. There is a high
level of competition amid the breakfast as well as snack brands. Since,
Kellogg is famous as breakfast cereal in UK, its demand never get
affected during recession as well. But, the volatile movements of the
currency rates impacts the demand of the product.
Social
In IUK, people are becoming more conscious in regards with their health
and thus, Kellogg’s is their preferred choice. Further, there is growing
acceptance of private labels by the customers in the nation.
Technological
In regards with the technological aspects, UK is quite high in this sense
as huge investment is made by the government in the areas of research
and development and the same is being performed by Kellogg.
Additionally, mobile applications are being used widely in the market for
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sales collaboration (Hendersonand Venkatraman, 2009).
Legal
In relation with the legal aspects, UK government is quite supportive of
Kellogg’s. Further, there is strong compliance standards for the suppliers.
There is a lawsuits for any sort of misleading description of the product
as well as advertisements (Taylor, 2015).
Environmental
Concerning about the current situation of the environment, it is important
for the company to develop ecological & recyclable packaging for
avoiding any waste. The company is also being accused for utilizing
genetically engineered ingredients.
Conclusion
From the above analysis of the macro-environmental factors of Kellogg’s, it can be
said that all these factors significantly have one or the other impacts on the strategic
management decisions of the firm. Consequently, the future methodology for Kellogg ought
to be that they should focus on carrying more assortment and little modification in contrast to
their items in light of the fact that the client has a fluctuating decision regarding this. Next
day, there will be some other choice in the field of grain and individuals will shift towards
that particular product. Cereals have the degree to improve a ton and there can be parcel
numerous preferences which can be created in this field (Trott, 2010). Additionally, the
organization should forcefully advance and partner with more well-being as well as care
related exercises so individuals remember it as a healthy nourishment.
TASK – 2 (INTERNAL ANALYSIS)
SWOT analysis
Strength
 Kellogg’s has strong positioning
between the customers
 Re-engineered marketing strategy
 Strong level of commitment towards
nutrition
 Supply chain management is very
efficient (Newsroom Kellogg
Company, 2014)
 Presence in the multinational markets
Weakness
 There is lack of segregation in the
portfolio of product
 Limited research and development
centres to some particular areas only
 Most of the products in the portfolio of
Kellogg are being sold in the markets
of North America
Opportunities Threats
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 Opportunity for venturing into new
emerging markets
 Expanding the portfolio of the product
 Growth in the market of ready to eat
cereals
 Electronic business models adoption
 Intense level of competition in the
market
 Strict laws and regulations of the
government
 Altering needs and expectations of the
customers
Resource based analysis
Some of the vital resources of the Kellogg’s company are tangible, intangible and
core competencies. Explanation of these resources are being done below:
 Intangible resources – These are being referred as the resources which are not visible,
although plays an important role in achieving the goals of the company. Some of the
intangible resources of Kellogg are good reputation, brand image, quality services and
value of the firm. In addition to thus, the firm has also created a sustainable
competitive advantage in the market which is very difficult for the firm to duplicate
(Hill, Jones and Schilling, 2014).
 Tangible resources – There are many tangible resources which are clearly visible
within Kellogg’s such as trained and skilful employees, quality of products and
number of outlets at strategic locations. All these are being regarded as the major
strength of the firm. However, all the workers are employed at lower salaries as
compared to the rivalry firms operating in the same market.
 Core competencies – The core competencies of the company includes effective
research and development, innovation capabilities, marketing strategies, human
resource and technological capabilities. All these competencies have supported in
transforming the firm to accomplish performances of the firm.
Conclusion
From the above internal analysis, it can be said that one of the major strength of the
company is its brand image and reputation in the multinational markets. Further, the research
& development investment of Kellogg is also very huge that leads them to gain a significant
competitive position in the market. However, with the rising level of competition, regulations
and changing expectations of the customers, company needs to alter its policies and strategies
for effectively attaining its desired goals (Gupta, Kamala and Srinivasan, 2009). Other than
this, the core competencies and capabilities of Kellogg’s are mainly research and
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development, innovation, marketing, human resource and technology. In addition to this, the
company is also famous for its K values that significantly shapes the culture and offer
direction so as to operate the business effectively. Some of the values of the firm are
integrity, humility, passion, simplicity, results and accountable.
TASK – 3 (COMPETITIVE FORCES & STRATEGIC DIRECTION)
Porter’s five force analysis
Threats of new
entrants
In the industry in which the Kellogg operates, it is very difficult to
achieve economies of scale. For those who are producing large
usually takes the advantage of this. Further, the requirement of
capital in this industry is huge and thus, makes it difficult for the
firms to enter. The cereal industry attracts many global leaders to
step into this market but due to the high brand positioning threat of
new entrants is medium (Murphy, 2018).
Threats from the
substitute goods
The firm has strong brand positioning in the market and also it is
one of the largest producer of cereals in this industry. Even the
consumers are very loyal towards the brand which makes them
hardly shift towards other brands or substitutes. This signifies that
the threat from the substitution is also a weaker force.
Competitive rivalry
Some of the major rivalries of Kellogg are Nestle, Ralcorp
Holdings and General Mills. These firms are posing great level of
competition to Kellogg. In this regards, the firm has created a range
of different brands as well as product lines that significantly
contends the need of different customers. This implies that the
competitive rivalry in this industry is quite high (Hoovers, 2014).
Bargaining power of
the suppliers
Speaking about the number of suppliers in the industry in which the
Kellogg operates, it is quite large in comparison with the buyers.
This pertains to the fact that the suppliers have less control and
power over the prices. The major raw materials for the firm is corn
and rice and there are abundance of suppliers of such items.
Bargaining power of
the buyers
In the present scenario, trends related to healthy food items has
been increased a lot. Consumers nowadays does not hesitate to pay
extra for having quality and hygienic items (Alkhafaji, 2011).
Kellogg’s offer nutritional as well as high quality food products to
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its customers which lowers down the bargaining power of the
buyers.
On the basis of the outcome being gathered from the above porters five force analysis,
it can be said that there are certain factors such as competition and entry of new firms which
are quite stronger force and thus, they might impact the profitability of Kellogg. On the other
hand, there are forces like suppliers, buyers and substitutes, can help in increasing the
profitability of the concern (Morschett, Schramm-Klein and Zentes, 2010). Consequently, it
is important for the company to pay attention on differentiating its products for the purpose of
having minimal effect of the actions of competitions on the customers that search for unique
products. Finally, the firm can take the advantage of economies of scale and can fight off new
entrants by its advantage of cost. This will help in improving the market position and
competitive edge of Kellogg.
TASK – 4 (STRATEGIC MANAGEMENT PLAN)
Porter’s generic strategies
As per the words of by Michael Porter, there are three varied strategies that can be
used by the firms for creating as well as continuing an advantage over the other firms in the
industry. These strategies are cost leadership, focus and differentiation. In cost leadership, the
target market is quite broad and products are sold in the market at lowest possible price. In
case of focus strategy, the market is niche wherein products are either at lowest price or
unique. On the other hand, in differentiation, market is broad and high demanding (Fangfang,
2013). Products have exclusive features. From the analysis held above, it is suitable for
Kellogg to make use of cost leadership strategy to enter into a diversified market. Firm must
step into new products like sun-rich and cheese focusing more on impulse food rather than
breakfast. With this, the firm will be in a position to achieve a competitive advantage in the
industry in which it operates.
Strategic management plan
Strategic vision
The main vision of the firm is to augment the revenue as well as reputation of the new
products along with boosting the quality & promotion of the brand Kellogg
Gaol Objective Action plan Measurement
 Launching new
product range for
men, women and
 Product
development for
30 percent more
gross income of
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Growing the returns
of the company
children in
following six
months
 Advertising of
sales in
midsummer season
market testing
 Choosing the best
product and
introducing in the
market
 Augmenting the
volume of sales
by 30% seeking
help through
advertising
the firm
Enhancement in the
acknowledgement of
the brand
Advertisement of the
brand Kellogg
through utilizing in
store display,
promotion and
discounts (Cooper,
2000)
Engaging a specified
team liable for
promotion of the
brand
 70% of the
target market
identifies the
brand
 About 30%
awareness of
the new
product
Enhancement in the
insight of quality
 Improving the
perception of
quality of each and
every products of
Kellogg
 Accomplishment
of extraordinary
awareness of
quality for the new
product category
 Quality will be
the major
consideration
during market
testing of new
products
 Good quality
raw-materials,
innovative
designs and
colourful
packaging will be
used for altering
the perception
 Enhancement
in the
discernment of
quality by 10%
of the existing
Kellogg’s
products
 Awareness of
quality of 80%
of the new
product
launches
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CONCLUSION
From the above discussion, in general it can be said that the association has various
characteristics alongside assets that can be used effectively for achieving a concentrated edge
in the market. Kellogg’s has used half and half procedure which is exhibited to be both
successful similarly as difficult for the competitors to copy. With incredible arranging and
systems, the firm had the choice to stay before its conflicts. They have moreover centred on
every class of people and offered them isolated things. This assisted the company with
accomplishing stimulated level of performance and higher advancement of arcade.
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REFERENCES
Books and journals
Aaker, D.A. and McLoughlin, D., 2010. Strategic Market Management: Global Perspectives.
1sted. UK: John Wiley & Sons.
Alkhafaji, A.F., 2011. Strategic management: formulation, implementation, and control in a
dynamic environment. Development and Learning in Organizations: An International
Journal, 25(2).
Cooper, L., 2000. Strategic selling planning for radically new merchandises. Journal of
Marketing, 64(1), pp.1-15.
Gupta, V., Kamala, G. and Srinivasan, A., 2009. Business Policy and Strategic Management:
Concepts and Applications. New Delhi: PHI Learning.
Henderson, J. and Venkatraman, N., 2009. Strategic Alignment - leveraging information
technology for transforming organizations, Management Decision, 32(1), pp.472–484.
Hill, C., Jones, G. and Schilling, M., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
Morschett, D., Schramm-Klein, H. and Zentes, J., 2010. Strategic International Management.
2nded. Text and Cases.
Taylor, F.B., 2015. Newbies Guide to Pestle Analysis. New York: Create Space Independent
Publishers.
Trott, P., 2010. Innovation management and new product development. Harlow, England:
Financial Times/Prentice Hall.
Online references
Fangfang, L., 2013. Assembling a strategy for the future. Assembling a strategy for the
future. [Online]. Available through: <https://africa.chinadaily.com.cn/weekly/2013-
11/15/content_17108320.htm>. [Accessed on 27thNovember 2019].
Hoovers. 2014. Kellogg Company Names of Competitors. [Online]. Available through:
<http://www.hoovers.com/companyinformation/cs/competition.Kellogg_Company.b53
0620d866a5afc.html >. [Accessed on 28thNovember 2019].
Murphy, E., 2018. Kellogg Company Porter Five Forces Analysis. [Online]. Available
through: https://www.essay48.com/term-paper/2916-Kellogg%20Company-Porter-
Five-Forces>. [Accessed on 28thNovember 2019].
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Newsroom Kellogg Company. 2014. Kellogg Company News Room - Company Overview.
[Online] Available through: <http://newsroom.kelloggcompany.com/index.php?
s=27521>. [Accessed on 27thNovember 2019].
Zoe, E., 2017. Kellogg Company Pestle Analysis. [Online]. Available through:
https://medium.com/@emma24zoe/kellogg-company-pestle-analysis-17c8ddff94e3>.
[Accessed on 27thNovember 2019].
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