Strategic Management Report: Kellogg's Industry and Environment

This report provides a comprehensive strategic management analysis of Kellogg's, a multinational food company. It begins with an introduction to strategic management and its importance in the current business environment. The main body of the report focuses on industry analysis using Porter's Five Forces model, examining the competitive landscape, threats of new entrants, rivalry among firms, bargaining power of suppliers and customers, and the availability of substitutes. The report then shifts to business environment analysis, utilizing the PESTLE framework to assess political, economic, social, technological, and environmental factors impacting Kellogg's operations, particularly in the UK market. The analysis highlights the impact of Brexit, economic downturns, changing consumer preferences, and technological advancements. The report concludes with an overview of Kellogg's capabilities and competitive advantages, offering recommendations for future success, emphasizing the importance of adapting to changing market conditions, and leveraging strengths in branding and supply chain management. This report is a valuable resource for understanding the complexities of strategic management in the food industry, offering insights into the factors that drive success and profitability.

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION .........................................................................................................................1
MAIN BODY...................................................................................................................................2
Industry analysis.....................................................................................................................2
Business environment analysis ..............................................................................................5
Capabilities or competitive advantage of business ................................................................7
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic management refers to an ongoing process that is used to analyse, monitoring
and assessing all the needs of the business enterprises so that goals and objectives can be
satisfied within a specified period of time. In these changes occur within the business
environment requires the organisations to regularly assess their strategies so that they get higher
success in their future terms. This report is based on Kellogg's company that is one of the famous
American multinational food company since 1906. This company deals in manufacturing the
varieties of food items that includes cereal and convenience foods also involving toaster,
pastries, frosted Flakes, Eggo, Chee z it and many more. This report is based on focus on
industry analysis,
competitor’s analysis and the business environment and also evaluate with best
recommendations that helps in gaining the higher success and profits to the company (Berndt,
2019).
MAIN BODY
Industry analysis
Industry analysis refers to a assessment application which is adopted by an organisation
that enables to develops the competitive strategy so that firm will gain the competitive advantage
in their long term survival. This industry helps in understanding the several economic pieces of
marketplace that helps in attaining the competitive advantage. As Kellogg’s is one of the ideal

choices for the customers because they can follow proper systematic strategic process so that
they become a leader of market. The manager of the company can use the porter's five forces that
includes five aspects by the help of them organisation can effectively analyse their industry
competitiveness and gain the rivalry advantage so that high profits can be attained. This is very
essential for Kellogg because this helps in analysing their market position in the same business
market. (Krystallis, 2017). Porters five forces model is significant tool to examine competition
within market. It involves the power of suppliers, customers, new entrant, substitutes that can
impact over the operations of the companies. As per the viewpoint of several authors this model
is very effective to developed the business organisation and their profit margin. The Porters
industry model of Kellogg’s can explain below:
Illustration 1: source: Porter's Five Forces
 Threats of new entrants- It is one of the best aspects that reflects the ease of the new
business enterprises that want to spring in the market. The entry of new buyers is highly
influenced by the various determinants like switching cost, product differentiation,
retaliation from competitors etc. In context of Kellogg's that have high brand image and
well-established firm who can lead the market. Due to this there is low threat for the
company from the entry of new entrant. As Kellogg’s can adopts the high cost

advertising and enjoy more economics of scale that is very difficult for new entrant to
match it (Moutinho and Vargas-Sanchez, 2018 ).
 Rivalry of the firm- It reflects the challenges and pressure on the company that is given
by the competitors in the marketplace to maintain their market position. It shows the
number of competitors that was relay on the market and their level of control that is based
on their strength and weaknesses. In terms of Kellogg's they face the competition from
the well-established companies like Weetabix, General mills, Bagrrys etc. as they have
best marketing strength that are the major threat for the company within the marketplace.
Within the marketplace the competition is more that represents the high promotional and
selling costs. To maintain their market position Kellogg's focus on their pricing strategy
that showcasing as a weakness in the market so for them focus on setting the price is
more important and also developing the new offerings as per the customers requirements
so that high amount of profits can be attained. By focusing on innovating the products
and services organisation will face the moderate level of threat due to this Kellogs can
highly focus on research and development.
 Bargaining power of suppliers- This is one of the best aspects to examine industry
analysis because it shows the demands and supply factors. This determinant relies on the
availability of distributor, substitutes and level of collaboration of the company with the
suppliers who are present within market. As Kellogg's is one of the largest food company
that have number of suppliers such as sugar, flour, food grain. In this Kellogg's have the
high power to control their suppliers as their power is low in case of this company
because they the organisation have leverage to switch their suppliers if they charged the
high price. Due to this bargaining power of suppliers are low (Hitt and Duane Ireland,
2017).
 Availability of substitutes- This aspect includes the availability of substitute, changes in
customer taste, price substitutes etc. In case of Kellogg's this factor contains high power
because they produce common food items like cereal, toasters, pop tarts etc. that is
available easily in all their competitors. The taste of consumer is also changing with time.
In this Kellogg's have the issue as they response very slow in context of diversification
and also have high pricing strategy that will help customer to switch the brand towards
the competitors.

 Bargaining power of customers- It shows number of buyers, brand identity, price
elasticity etc. In context of Kellogg's company, they try to reduce the high power of
customers by adopting the best marketing strategy by doing innovation research so that
they offer that the customer wants. Business enterprise also offers several physical
education and health maintenance activities that is useful to create an awareness between
the customers. As they also pressurise supermarkets to place the products of Kellogg's on
high shelves so that they can easily visible to customers. Because of huge size and
resources customers power is low for the company. In this risk related to customer
attraction is low because of strong resources of the organisation.
From the above explained models and application under the various heading is shows as
an effective for the success and the survival of the business firm. It is reflected that the using an
effective approach and models for examine the various analysation is very essential and making
this report by selecting the several models reflects the best results for the company and for
gaining its competitive advantage (Hitt, Ireland and Hoskisson, 2016). This report is based on the
Kellogg's that is one of the best multinational food company that deals in all over the world. As
this business enterprise is the key of the market and the food industry especially in cereals and
convenience food industry. The image of the company is very high and have a well reputation in
the eyes of the people. So, it is very essential to analysing the industrial analysis of Kellogg's
company and for this porter five forces model is the best. Because it helps in providing the
powers of various stakeholder’s information like customers, buyers, new entrants and the rival
firms and information regarding all this is very beneficial to examine the industry so that higher
profits can be attained by the organisation. It also helps in taking the decisions related to the
market expansion and exploration. And also helps in managing the investment to the high extent
related to supply chain, production, selling, promotional activities etc.
Business environment analysis
Business environment refers to that strategic tool that helps the businesses to analyse the
internal and external environment so that they can gain higher profits and revenues by satisfying
the demands of the customers as per current trends. In case of Kellogg's this report takes the help
of PESTLE analysis to analyse the business environment that can be evaluated below:
 Political factor – This factor is related with the intervention of the government within
which company can sustain and do their operations. It includes tax policy, labour laws

etc. because of stable condition of UK Kellogg's have the opportunities to import the
products from the several countries of Europe’s and store them for further use. But
because of Brexit, UK has to face many issues that are uncertain and impact highly on the
operations of Kellogg's. Because due to separation of UK from EU, policies related to
free trade will be prohibited and this affects the high cost of operations and this will
reduce profits (Frynas and Mellahi, 2015).
 Economical factor - It includes the spending power of customers, GDP of country, per
capita income etc. In case of Kellogg's, the economy of the UK is breakdown due to this
government have imposed strict policies on taxes that negatively affects the consumers
purchasing power. In this GST has slightly enhanced that impact the rise in the price of
the good of the organisation. This will affect the company sales and retaining the
customers for this Kellogg's can do some adjustments on their pricing policies that show
moderate prices for the consumers and they will retain with the company. This aspect
creates the major threat for the company because of COVID 19 impact so many people
are loosing their jobs and due to this purchasing power is to be affected. But at the same
time it also creates opportunities because of pandemic situation people are highly focused
on health and keep the foods and drinks that are healthy it will enhance the profit margin
of the company.
 Social factor - This represents as a value, behaviour of people etc. within the society. As
Population of UK is very wide and this create a great opportunity for the company
sustainability especially for food industries. In this high culture of UK to eating ready
made and healthy food helps in attracting the large base of customers towards the
Kellogg's. In this company also focus on adapting the changes occur according to season
because it helps in building the high base of customers. It is very effective especially in
spring and summer when people are spending their time more from out of their house and
active to relay on readymade food. This will increase the profits of the company.
 Technological factor - It refers to that factor which shows the advancements in
technology that was occur within the marketplace and that will influence the operations
of the company. In context of Kellogg's, company more focus on technology, as their
supply chain management is highly upgraded that incorporates under the territory,
secondary and primary production. Organisation also use the technology in their

transportation and logistics specialist to manage the supply chain. For this Kellogg's can
do the collaboration with the food and drink federations so that they can modify their
packaging and eliminating waste, use of water and transportation. As this firm also
adapted the e-invoicing solutions for ease in accounting that helps in reducing the amount
for its branches in the Europe and United Kingdom (Morden, 2016).
 Environmental factor - This determinant is based on the change in climate and
environmental policies that is imposed by the government. It also involves the factors
related to waste and pollution activities that helps in carried the business by saving the
eco-system. In this Kellogg's is establishing as a best food company that follows the
sustainable practices in their businesses. Furthermore, it announces their marketing
strategy that is related to encouraging the zero waste with using technologies, zero carbon
emission that helps in their promotional activities related to health interest of the public.
Further to examine the business environment Kellogg's can adopts the use of PESTLE
analysis because this reflects the external determinates which are not controllable by the business
organisation. So, if the company can use this analysis in their business environment than they
easily understand the demands of the customers, trends follows within the marketplace, political
stability of the country so that transactions and operations of the firm can be done effectively.
This also helps in developing the best marketing strategy by effectively analysing the PESTLE

model. If organisation cannot use this analysis in business environment than they cannot examine
the trends and modifications that was done within the marketplace. It also helps in understanding
the competitor’s strategy that they will use to attracts the number of buyers. It also helps in
doing the strategic planning for the business to gain higher profits and revenues. It is very easy to
make the PESTLE due to which organisation can effectively understand the business
environment. It also helps the manager of the firm to develops the strategic thinking (Peppard
and Ward, 2016).
Capabilities or competitive advantage of business
In order to analyse the competitive advantage of the business enterprises, internal
capabilities are the best sources in which VRIO and SWOT analysis is the best models to
understand the capabilities and resources of the organisation that helps in sustaining for a longer
period of time. VRIO analysis can be shown below in context of Kellogg's:
VRIO ANALYSIS
It refers to analysis of o9rganisation that is useful to remain competitive within
marketplace. This model helps in examine the capabilities of resources by using four aspects that
are rare, valuable, imitate and organised. From the several authors view point VRIO analysis
helps in organising the resources properly as per their nature of priority so that high profitable
results can be enjoyed by organisation. In terms of Kellog's this analysis can be shown below:
Resources
and
capabilities
Valuable Rare Imitable Organised Level of
competitive
advantage
Cost
efficiency
YES NO NO NO Competitive
parity
Customer
loyalty
YES YES NO NO Temporary
competitive
advantage
Innovation YES YES YES NO competitive
advantage
Brand YES YES YES YES Sustained

competitive
advantage
 Valuable: It is one of the best aspects of this model that reflects the resources of the
company which are valuable for giving the major competition in the marketplace. In case
of Kellogg's marketing manager is effectively utilise their resources as they are very
valuable to the company to give the high competition to the competitors. If company can
use high valuable resources than they can get high returns and profits. The valuable
resources of Kellogg's company their innovation, technology, brand and their cost
effectiveness. By using all this company can enhance their supply chain management that
helps in proper functioning of the business enterprises over the other enterprises. This
valuable things helps in attaining the specified goals that can satisfying the needs of
customers with high sales (Rosenberg Hansen and Ferlie, 2016).
 Rare: It is one of the advantageous aspects for the businesses in recognising the
manufactured goods and services that are rare and unique as per the context of market. In
case of Kellogg's the rare resources are their customer loyalty, innovation in marketing
strategy and brand image all the terms help the businesses to enhance sales and profits in
effective manner. As use innovation in their technology by following the e- invoicing
policies for their UK branches helps in gaining the competitive edge. This helps the
company to make unique identity within the marketplace that helps in developing high
profits and revenues.
 Imitable: In this Kellogg's is focus on adopting those resources which are not easily
imitable by the other business firm for their profits. If the goods and services are imitable
by other firm that image of the business enterprise may affected negatively. Imitable
resources of Kellogg's are including innovation in their marketing strategy to attracts
large base of customers. And also, their brand image that will lead the large market area
and helps in earning higher profits and revenues.
 Organised: It is the essential to manage the present resources and employees of the
company to the high extent. If resources are not used effectively that firm will did not get
the high results and it will also affect their operating cost. In case of Kellogg's if the
brand value cannot be organised in an effective manner than it will affect their customer
base and profits earning (Makadok, Burton and Barney, 2018).

SWOT ANALYSIS
STRENGTH WEAKNESSES
 One of the best strengths of Kellogg's is
that they have high brand recognition
and also have strong ability in doing
innovation and research and
development (Meyer, Neck and Meeks,
2017).
 The major weakness of Kellogg's is that
they have low diversifications in their
products as they only focused on their
products offerings.
OPPORTUNITIES THREATS
 Kellogg's have great opportunity
related to international expansion. And
they have effective marketing strategy
in customer awareness and people
health interest.
 The major threats for Kellogg's are
their competitors that are General mills,
Weetabix etc. that give high
competition in products and pricing
strategy.
Further this report includes the analysis of competitive advantage and capabilities, for
this it is to be critically evaluated that in this VRIO and SWOT analysis technique are very
effective and efficient. As VRIO is helpful to understand the capabilities of the resources that
helps in gaining the competitive advantage. In this company valuable, rare, imitable and
organised resources are involved. This helps in developing the best marketing strategy for the
company this helps in sustaining in the market for a longer period of time. In this SWOT analysis
helps in analysing the strength and weaknesses due to this firm will focus on their weaknesses
and improve it by taking corrective actions. In this strength are also helpful for the company
because organisation can focus on this to enhance the profits and revenues.
CONCLUSION
From the above report it is to be concluded that strategic management is an essential term
that reflects the various analysis which helps in gaining the higher success by the company in
their long-term survival. It also helps in beating the completion within market place so that they
can attracts the large base of customers with their loyalty. In this industry analysis helps in
understanding the position of the company into market with their values and market size and in
this company can focus on business environment so that they do changes as per the demands

occur in the external environment. Further it can conclude the critical approach to the used
models so that this helps in gaining the competitive advantage and company will sustain for a
longer period of time.
This report provides some recommendation for remain competitive is that they hire an
experience candidate who examine the market and customers needs in effective manner. So that
taking decisions would be easy. Focusing on innovating products so that large number of
customers are to be attracted and it helps in gaining the competitive advantage for a longer
period of time.