Business Case Analysis: Comparing Kellogg's and H&M (MGMT20144)

This essay provides a comprehensive business case analysis of two multinational corporations: H&M and Kellogg's. It begins with an introduction outlining the purpose and scope of the analysis, followed by a synopsis of each company's background. The core of the essay compares and contrasts the business and governance structures of H&M and Kellogg's, exploring the environmental factors impacting each company, and analyzing their respective threats and opportunities. The analysis delves into the organizational structures, employee motivation, and ethical considerations of each company, including their responses to environmental concerns and market competition. The essay concludes with strategic recommendations for both companies, focusing on areas for improvement such as e-commerce, market expansion, and sustainable practices. The analysis is supported by relevant references and adheres to APA style guidelines.

Running head: MANAGEMENT
BUSINESS CASE ANALYSIS
Name of the University
Name of the Student
Author Note

1BUSINESS CASE ANALYSIS
Introduction
Every organization is unique to its preferences and the organisational structure depends
on the kind of industry they represent. The internal and external environment highly depends on
their personal management style. Management styles influences the work culture, performance
of the employee, attitude and motivation within the company. The companies chosen for a
comparative business analysis are H&M a Swedish fashion brand and Kellogg an American
Food Processing & Distribution brand, the following task compares these two companies and
attempts to analyse various aspects of the company.
Case company synopsis
The first ethical company chosen is H&M it is a Swedish apparel brand founded in the 1947 by
Erling Persson. The current CEO is Karl-Johan Persson and CFO is Jyrki Tervonen and the
company’s headquarter is in Stockholm Sweden. This multinational apparel company has about
4958 outlets all over the world (H&M group, 2019). The second company is the famous
beverage company was founded in 1906, in Battle Creek Michigan US which also serves as its
headquarters. It has a global reach and has some of the most popular beverage products with an
estimated net income of US$1.344 billion as recorded in 2018 (Kellogg.org. 2019).
Discussion
Every company has some features that help it to set itself apart in the business sector and helps
them to gain success. Kellogg’s has a functional organisational structure where employees are
grouped by their expertise in respective areas. This ensures high performance among them as the
roles are clear and there is better accountability of their work. There are different department for
different tasks hence the work is not duplicated in any way (Reuter et al, 2010, 45-63.).

2BUSINESS CASE ANALYSIS
Interpersonal relationship in Kellogg’s is very good among the various department which allows
for smooth communication among the various departments. The employees feel secured and are
able to perform better as they are more motivated. The employees have clear goals and
objectives which allows them to achieve their target and to them their career role is very clear.
This makes Kellogg’s create a successful working environment for its employee which ensure
there is customer loyalty. The ease of communication and flexible organisational structure
ensures that there is proper coordination and dissemination of information between all the team
members.
On the other hand, H&M has a matrix organisation according to which the company is
able to share skill and resources seamlessly which allows an open flow of communication among
the various departments of the organisation (H&M group, 2019). The structure of the
organisation is dynamic as it allows employees to communicate across various structure of the
organisation helping to create a positive working environment promoting growth and
development. H&M encourages their employees to gain new knowledge and skills (Vinodh &
Chintha, 2011, p. 343-357). This organisational structure enables proper communication between
the members. The two organisation are similar in the employee motivation and production, both
the companies are invested in their employees. However, the main difference that can be
observed between the organisations is that in matrix structure showed by H&M groups’
employees in two different operational dimension concurrently while in Kellogg’s they have
segregated the organisation based on functional capacity of the employee such as sales sector,
management sector and others.
The environmental concerns are some of the most important factors that can impact the
brand value of the company and may reduce its revenue. Kellogg’s had to recall their products as

3BUSINESS CASE ANALYSIS
the cereal packing was causing customers to get sick. The compound named
methylnaphthalene was found in the packaging substance and needless to say it harmed the
reputation of the company considerably. The company primarily uses corn in their cereal
products, this requires them to farm corn extensively. As they need higher produce they use
genetically modified crops and are accused of turning forestland into farmland. The GMOs cause
a lot of disruption in the ecosystem of the area (Mihailović et al 2015). The following issues have
led to influencing the company to make better ethical decisions and improve their production
quality and take relevant CSR programs. They have started sustainable and energy efficient
programme to ensure they use minimal amount of resources and their packaging is 100%
recyclable material (Reuter et al, 2010, p. 45-63.).
H&M is an apparel brand which is major contributor of waste in the globe. The world of
fast fashion is leading to increased usage of resources such as water, using of oil in various
material and is impacting the overall consumption goods (Edvardsson & Enquist, 2011, p. 535-
551). Polyester a synthetic material is made from oil and the cotton material uses enormous
supply of water. Additionally these cotton plantations use pesticides which affects the nearby
water supplies and makes it unfit for consumption. Moreover, the clothes are finally not recycled
end up in landfill and are then burnt. The burring causes significant emission of gases such as
Carbon dioxide which is harmful for the environment (Edvardsson & Enquist, 2011, p. 535-551).
These environment concerns has led H&M to create a sustainable fashion line “Conscious” that
entirely uses renewal material to make its line. The company also aims to go 100% renewal by
the year 2030.
Each company faces certain threats from the external environment that need to overcome
in order to dominate their respective markets. Kellogg’s is one of the most recognised customer

4BUSINESS CASE ANALYSIS
choice brand, however there an emergence of other cereal brands and the competition is stiff in
both the global and the local manufactures (Kellogg.org, 2019). Secondly, people are more
driven towards a healthier product option some of the products are loaded in processed sugar to
enhance the flavour pose a threat for a growing segment of the population that looks for healthier
option. Lastly, there is a threat of counterfeit and outdated products that are often sold in retail
shops and may cause health issues.
Fashion is always evolving and changing, there is a rising need for more variety in the
consumerist society. Therefore it creates more stress on the production as they need to constantly
change their products. Second threat is the foreign exchange fluctuations, the company receives
money in Swedish Krona but most of the sales conducted in various countries can be different
currencies such as US dollars, Japanese Yen and others. As the currency keeps fluctuating the
company is at risk of losing money in the changing exchange rates. Lastly, the ecommerce
industry is posing a huge threat to the company. More customers are preferring fast fashion
staples through online shopping portal. In this case the H&M’s personal online shopping site is
yet not that well known or popular in most countries. This allows other e-commerce fast fashion
staples which are more available online to sell more impacting the H&M sales considerably.
There are various areas in which the following companies can improve and get an
opportunity to capture a larger target audience the recommendations are given as under.
Kellogg’s is one of the most recognised breakfast option in the world. Their target audience is of
all ages and this covers a broad spectrum of audience. They can try to create a personalised
marketing policy where they focus on a single group of audience to increase their sales.
Secondly, Kellogg’s currently follows mid premium pricing policy change to cost leadership
where they provide best quality product in a lesser price that is premium in the quality yet priced

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lesser than their competitors (Caruana & Ewing, 2010, p. 1103-1110). Lastly, the market for a
healthy product is growing and there is need for fast food options in busy lives of people.
However, as most of the products in the market are often unhealthy, Kellogg’s can certainly find
a market here and ensure the production of new healthier version of food products. For example,
they can design a product specifically targeting diabetes patients without compromising on its
taste and may be segregated further for certain ages.
The apparel brand H&M can also find some of the recommendation that could be used in
the improvement of their brand. First recommendation is improving their e-commerce site. Most
of the shopping is done through ecommerce. Mobile application and web access is available in
most countries that do not have the company’s outlet. Meaning that the countries which do not
have the company outlet is losing out of sale but if they improve their online site, more
customers will be able to buy the products(Cho et al, 2009, p. 389-407). Secondly, there is a
great opportunity in expanding in emerging market which is still not available on many countries
especially developing ones. Ensuring a lower price line for such markets can help the apparel
brand to get further customer base. For example, some of the countries have different cultural
aspect and value and do not appreciate westernisation of the clothing. As the brand is European it
often has the classic influence of the Europe in their design and price which may deter sales,
therefore they can improve the design to suit the needs of the developing country’s cultural
ideals. Lastly, the H&M is a member of the fast fashion industry and more people are aware of
the rising implications that fashion industry is having on the planet. They can focus on the
innovative designs that is sustainable and has several uses and make products long lasting and
durable. Such as designing a jacket that can be worn as a winter coat as well as a coat in the rain

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that is making it waterproof (Lueg et al 2015). They can also lead campaigns that are
contributing positively to the environment.
Conclusion
The companies are both very different from each other and yet they have certain similarities.
While Kellogg’s is a beverage company and H&M is a clothing brand yet they have established
themselves as one of the best companies in their individual fields. They have opportunities,
problems and threats that they can overcome to capture better market and overcome their
competition. There are various implications that they have which can cause a huge impact in
their way of work and employee.

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Reference
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