Strategic Analysis Report: Post Holdings' Acquisition of Weetabix

This report conducts a critical strategic analysis of Post Holdings' acquisition of Weetabix, examining the strategic position of the company, stakeholder analysis, and external factors influencing the business. It utilizes frameworks such as Porter's generic strategies and Bowman's strategy clock to understand the strategic positioning. The report also includes PEST and Porter's Five Forces analyses to evaluate the external environment and industry attractiveness, focusing on the breakfast cereal market. The analysis covers the impact of the acquisition on various stakeholders, including owners, employees, customers, and competitors, and considers the influence of political and economic factors. The report aims to assess the strategic implications of the acquisition and its potential for success in the competitive market, particularly in the context of the UK and US markets.

Strategic Analysis; Tools and Techniques
4/6/2020

Contents
Introduction......................................................................................................................................2
Strategic position.............................................................................................................................3
Porter’s generic strategy..............................................................................................................3
Bowman’s Strategy clock............................................................................................................5
Stakeholder analysis........................................................................................................................7
External factors................................................................................................................................9
PEST analysis..............................................................................................................................9
Industry analysis............................................................................................................................12
Porter’s five forces model..........................................................................................................12
Conclusion.....................................................................................................................................15
References......................................................................................................................................16

Introduction
In the present era, the strategy has changed all over the years due to emergence of the
competitiveness in the market. The high competition has made the company adopt new strategies
through which they can survive, improve the market share and get competitive advantage.
Considering market, companies adopt strategy of acquisition which will lead to the growth and
helps in getting high profit in the market. The report aims to conduct the critical study of the Post
Holdings acquisition of the Weetabix. The analysis related to internal as well as the external
stakeholders has been done considering the cereal industry in which the business operations.
According to the stakeholders of the company, there will be a stakeholder map of Weetabix. The
framework like porter’s generic strategies as well as the Bowman’s strategic clock has been used
with the motive to understand the strategic position. Furthermore, internal and external
examination is carried out with the support of the PEST analysis which will present the
opportunities for the company to get the high revenue. In addition to this, the porter’s five forces
model is used that helps in examining Breakfast cereal industry related to case of Weetabix and
also the attractiveness when it comes to the profitability of the business.
Post Holdings Inc. is a well-known American consumer packaged products holding business
with the present headquarters in suburban St. Louis community of the Brentwood, Missouri. In
year 2017, the company took decision to purchase Weetabix Limited who deals in breakfast
cereal and it allows the business to take the entry into the British market (Post Holdings, 2020).
This acquisition would lead to the drastic change within the internal and external stakeholders
which are mandatory to be considered as there will be an influence on revenue of business.

Strategic position
The term strategic position is defined as strategy impact on the external environment with
internal resources and also influence of the stakeholders within the company (Radut, 2015). In
the competitive market, the business needs to form the strategy through which they can compete
with their competitors and can make a strong position in marketplace. Every company wants to
make the differentiated position in the market that is possible with effective practice of strategy
(Post Holdings, 2020). In buying the Weetabix, the Post holding company needs to evaluate their
target market as well as the presence of the competitors. Post holding company need to analyse
the strategic positioning while buying Weetabix which will help them to understand the
competitors and also to manage the profitability in changing environment (Weetabix Food
Company, 2017). The analysis of the strategic position can be done with the use of porter’s
generic strategies and Bowman’s clock strategy.
Porter’s generic strategy
Porter’s presented the strategies for the company so that they can pursue a competitive advantage
within market against their opponents. The four generic strategies comprise of differentiation,
cost leadership, and differentiation focus, cost focus (Echchakoui, 2018).

(Source: Echchakoui, 2018)
1. In a cost leadership strategy, the company will reduce the cost of products to improve
sales.
2. In the differentiation strategy, the company will expand the business by introducing
different types of products in the market (Echchakoui, 2018).
3. In the focus strategy, it is vital for business to take a narrow focus to pay attention to a
few segments to whom company targets in the market. In this strategy, it is essential for
the company to determine the needs of the specific group and to fulfil the same.
4. In the cost focus, the focus of the company is on the cost to make the products price
sensitive.
It has been found that Weetabix Company adopts the strategy of the differentiation in the global
markets where they perform the business and majorly in the market of China, UK, Africa, and

Mexico. Out of these strategies, the analysis of the post holding reflects that the Weetabix
Company is adopting the differentiation focus strategy for the business which allows them to
emphasis on the few targeted position bazaars. It is seen that in the year 2013 when Weetabix
Company presented a niche goods for their targeted customers that is breakfast biscuits for the
customers who are not able to meet their needs with the use of the cereal breakfast (Hyslop,
2017). The adoption of the focus differentiation would mean that the Weetabix have to be
additional innovation and form the location in the market after purchase to appeal particular
consumers. Also, this has been found that the adoption of this strategy benefits business to attain
high sales in niche marketplace. In research, this has been found that china market sales have not
seen important rise because of favourite to the liquid-based breakfast cereal.
Bowman’s Strategy clock
Bowman’s Strategy Clock is a widespread method to map out the locations within the market
that is founded on the supposed value and price. This strategy is considered as the extension of
the porter’s generic strategic whose major emphasis is on the value proposition to the clients
(Utrilla, Torraleja, Vázquez and Ogáyar, 2012). The framework is formed with the motive to
evaluate how organisations goods and services are positions within the market. On this strategy,
it would be positioned at differentiation policy location emphasized research and development in
which business is involved so that they can bring the new products as per the requirements of
niche market. The business is known for the exports of the cereals in over 80 countries where the
biggest challenge for the company was different needs of different people across the world which
made them spend the time in studying the differentiated market for their business.

(Source: Utrilla, Torraleja, Vázquez and Ogáyar, 2012)
According to the examination of Post Holdings, Weetabix adopted differentiation policy with the
motive to grow the business across the world. This differentiation strategy allows the company to
diversify the brand portfolio which includes brands like Weetos, Ready Brek and many others
(Post Holdings, 2020). According to the market research, the rise in education towards the health
products made the company Weetabix to provide healthier choices due to which they introduced
Breakfast on The Go drinks in the year 2014. Furthermore, the business developed this
differentiation strategy by introducing product development strategy. In this strategy, the
Weetabix Company introduced protein and protein crunch so that they attain customer needs
which is more for healthier products. In the market, while forming the position in the market
among the healthier segment they face the competition with the company like Kellogg’s brands.
The differentiation approach evolved and they used differentiation focus strategy within the
world-wide market like Kenya by applying the strategy of distribution approach that uniforms
manner of consumption by making usage of the bicycles to transport their products at similar
period by accepting a various strategy locating within Mexico as per the research report
(Eyvrigh, 2016).

Stakeholder analysis
The analysis of the stakeholders is considered as the process of determining all these people
before grouping them as per their levels of contribution, influence, as well as interest in project
and also to identify finest to get contain and also to interconnect all these stakeholders. In the
business, there are two sorts of stakeholders that include principal stakeholders as well as others
are secondary investors (Deglane, et al, 2017). The primary stakeholders are the one who has the
control of the actions that are interior to corporate. Post Holding acquisition to the Weetabix
shows investors that are assembled as: -
Primary stakeholders
 Owners who are the stakeholders of post holding and Weetabix
 Investors and financiers who make the trust in the company and expect returns
 Employees of the Weetabix who manage their business activities
 Customers of the Weetabix
 Suppliers and partners who provide the raw material
 Environmental groups (Eskerod and Jepsen, 2013)
Secondary stakeholders
 Government, counties, councils
 Competitors who are present in the market
 Media and journalists
 Public
 Regulators

The analysis of the stakeholders is considered as one of the smart moves which are taken by the
company with the help of which they can easily understand the strategies adopted and with this,
they can manage the internal and external environment to attain superior profitability (Eskerod
and Jepsen, 2013). In the business, every stakeholder has its own power towards the business
which they apply.
Post Holdings acquisition of the Weetabix has different stakeholders available in the market. The
stakeholder's map is presented above which shows the power register and power interest grid
which falls in the four quadrants that reflect the power and interest of the different stakeholders
in this situation of the Weetabix. As per the stakeholder’s matrix, this has been perceived that
media and contributions maintain little interest and power. However, these needs are required to
be informed as well as monitored. In one of the quadrant, this has been witnessed that regulators
and government maintain the high power because all these contribute in licensing as well as
regulations. Furthermore, the owners, investors, shareholders maintain the high power and they
are concerned in the achievement of their organisation due to which all these strategies are
Keep Satisfied Satisfy and manage closely
Manage and inform Key players and keep
informed
Government, councils
Regulators
Owner/Shareholders/Investors
Competitors, Customers, and
suppliers
Media/Journalists
CSR charities
Employees, trade unions
Breakfast Cereals Industry

required to be taken to meet the requirements of clients (Baker, 2014). The competitors have a
high interest which is faced by Post Holdings who acquired Weetabix. Employees need to be
informed considering their concerns related to the tenure of employment.
External factors
It is essential for the Post holding Inc. to analyse the external factors that are required to be
considered at the time of the acquisition of Weetabix. The examination of external factors is
evaluated with the support of PEST analysis (Chernev, 2018).
PEST analysis
PEST analysis is an instrument which is used by the company to analyse the exterior
environment and it also provides the drivers and trends of these factors at the time of acquisition.
(Source: David, 2011)
Political factors

Political factors are one of the vital elements which comprise the change in rules and guidelines
by company (David, 2011). The acquisition of the Weetabix takes place at the time of Brexit
which is a recent driver as it leads to the uncertainty within the political environment. This
current driver of Brexit makes it impossible for many organisations to plan for the entry in the
British market as there is a risk of trading terms. This driver might make the company Weetabix
unsure about the fact that whether they need to prepare the EU business operating laws as well as
foreign trade regulations (Post Holdings, 2020). Furthermore, the Brexit drives the weakening of
the pound which is the major currency of stock exchange that can affect the investment by
company. The fluctuation in the dollar can be considered as the trend which leads to an impact
on the Weetabix cost as well as profitability. Thus, post holdings find a high risk in the political
environment at the time of acquiring Weetabix.
Economic factors
In economic aspects consists of economy of country, their GDP, purchasing power and spending
done by the customers. The purchase of the Weetabix by Post Holdings will get influence due to
change in economy of UK and US. Economic growth is one of the key drivers which vary in
both the countries (Dawson, 2014). For example; economic development in Britain for 2017 has
declined severely to approx. 1.7% because of the Brexit vote. While on the other hand, the US
was guileless at 2.2% in the year 2017 while comparing it to approx. 2.3% in the year 2018. In
the research, this has been found that the Weetabix acquisition case will have to craft the nation
as well as region-specific policies to occupation as well as do company even though that
purchase that might have carried in higher economies of scale in trading as well as production.
This has been found that economic recession would eventually drive Weetabix clients to

alternates except the business to determine a method to bring decline it costs as well as pushes
saving to consumers.
Social factors
The social aspects consist of change in requirements and demand of consumers; it also includes
social trends, demographic, population, and future customer taste. Post Holdings Company
acquires the Weetabix which is vital for the business to comprehend social aspects of
environment that they are performing their operations. Population trends which include growth
rate of population, age distribution, distribution of income, safety emphasis, lifestyle attitudes,
cultural barriers and many other factors that leads to the influence on the strategy of Weetabix
(Rothaermel, 2016). The acquisition will make the company expand the business in different
regions which include china as they are more focused towards the cereal breakfast. In order to
improve transactions in China, business need to sell the goods that line up as well as are delicate
to the customer community taste. The people are getting conscious of the healthy products in
market which leads to an increase in activism against food that leads to obesity among children.
Thus, this trend of healthy products makes them develop cereals to attain the needs of customers.
Technological factors
The change or up-gradation of technology influences Weetabix Company. The company has
adopted the technology which made it likely for business to present products like drinkable
cereal which was introduced by the company to provide breakfast in liquid form. The use of
technology is done for different ways like deploying machines that help the business to use
different rings, bars, tubes, and shapes (Allchin, 2012). The use of e-commerce has unlocked to