Strategic Management Plan: Analysis of Kellogg Company

This report provides a comprehensive analysis of Kellogg Company's business strategy, beginning with an introduction to business strategy principles. It then delves into a PESTEL analysis, examining the political, economic, social, technological, environmental, and legal factors influencing Kellogg's operations. A SWOT analysis is conducted to assess the company's internal strengths and weaknesses, as well as external opportunities and threats. The report applies Porter's Five Forces model to evaluate the competitive landscape within Kellogg's market sector. Finally, a detailed strategic management plan is presented, synthesizing the findings from the preceding analyses. The report concludes with a summary of key insights and recommendations, supported by relevant references.

Business Strategy

Table of Contents
INTRODUCTION................................................................................................................................3
LO1 PESTEL analysis of Kellogg company....................................................................................3
LO2 SWOT analysis of the Kellogg Company...............................................................................5
LO3 The Porters five force framework for Kellogg company........................................................6
LO4 Detailed strategic management plan for Kellogg...................................................................8
CONCLUSION..................................................................................................................................10
REFERENCES...................................................................................................................................11

INTRODUCTION
A set of actions or competitive moves that a business takes to attract consumers, compete
successfully for achieving organization goals & strengthening of the performances is called
business strategy. Thus, the business strategy is the process how the business must be carried out to
achieve the desired goals of the business. In this report we will discuss the impact & influence of
the macro environment on Kellogg company, the internal environment and capabilities of Kellogg
company to determine the various strength, weaknesses, opportunities & threats associated with the
company. Moreover, we will apply the porters five forces model to the Kellogg company to
evaluate competitive forces of Kellogg in the market sector (Scholes, 2015),
LO1 PESTEL analysis of Kellogg company.
Political factors
For the long-term profitability of the Kellogg company in various countries political factors are
determined. The product of this company is mainly sold in boxes and transferred to different
political systems & environment. For achieving success in exporting this good in various countries
requires systematic risk of political environment. Thus, before entering any market Kellogg undergo
following political analysis of the PESTEL : labelling of the product & various other requirements
of the processing & packaging of the goods, in the sector of consumer goods proper industrial
safety regulations, mandatory benefits to the workers, laws related to wages i.e. minimum wage &
overtime, regulations related to pricing of the commodity, favouring trade partners, intellectual
property protections, for contract enforcement there should be legal framework, government
engaging interference in processing and packaging of the goods, level of corruption, risk military
invasion & political stability of country's economy (Johnson, 2016).
Economic factors
Factors such as economic cycle, foreign exchange rate, interest rate, savings rate, inflation rates are
all the macro environment factors. These factors determine the average investment & average
requirement or the demand of the product in the countries' economy. Competitive advantage of the
company is impacted by the competition norms. For trajecting the growth of the organization the
Kellogg company uses the countries economic factors i.e. consumer expenditure, growth rate of
goods industry, industries economy, inflation rate & growth rate of the economy. For analysing the
economic factors that affects the Kellogg company in expanding to the new market will be : rate of
interest, rate of inflation, rate of unemployment, discretionary income, economic growth rate of the
country, business cycle stage which includes prosperity & recovery, productivity in the economy &
labour cost, level of education in the economy, workforce skill level, financial market efficiencies,
exchange rates & stability of currency of host country, government intervention in free market &

type of economic system in the operation country.
Social factors
The culture of society and the way of doing various cultural practices affects the social factor of an
organization in an environment. The various shared beliefs, rituals & attitudes of the public of the
country plays a significant role in the marketing of the Kellogg company, to understand how the
designs of the marketing or the promotional message influence the goods' industry customers. For
expanding into the new market the Kellogg company undergoes the following check of the social
factors which affect in the growth of the company's progress : leisure interest of the public of the
country, attitudes of the population towards environmental consciousness & health etc., the spirit of
entrepreneurs, broader nature of the society, entrepreneurship is encouraged by some countries &
while some didn't, standard of education & level of education in the Kellogg company industry,
hierarchy, class & power structure of the society & skill level of the countries' population
(Thompson, Strickland and Gamble, 2015).
Technological factors
Due to the advancement of technology, industries are vastly disrupting all across the board. To
illustrate this issue take in consider the transportation industry. In the last 5 years there is a rapid
advancement in the transportation industry. Transportation industry in modifying at vary fast rate
varying from normal cars to the electronic cars. A company must undergo the technological
analysis. It is assumed that slow speed of technological advancement will give enough time to the
company to cope up with the technology. Thus, technological analysis involves to understand the
various impacts : technological diffusion rate, consumer goods sector impact on value chain, cost
structure impact in processed and packing good industry, impact of technology on product offering
& development in Kellogg competitors in recent technologies.
Environmental factors
Attitude toward the renewable energy, endangered species, green & ecological products &
management of waste in consumer goods section, moreover recycling, regulations related to air &
water, environmental pollution laws, change in climate & weather are the various environmental
factors that the Kellogg company must consider before its expanding in the new environment.
Perhaps, different markets have different environmental standards which could impact on the
profitability of industry. Different countries have different laws related to liability & environment.
For instance as Kellogg company operates for the food industry then if it intends to expand in the
European states than it must consider factors such as health tax breaks to operate in this economy.
Thus, before expanding to the new market the company must firmly evaluate the above
environmental standards (Akter and et.al, 2016).
Legal factors

Legal factors are the framework which protects the intellectual property rights of the company. A
company should carefully evaluate legal factors of the country before expanding to the new market.
Data protections, laws related to health & safety, laws related to employment, protection to
customers & e-commerce, laws related to copyrights or patents, discrimination laws & anti-trust
laws in processing packaging of the goods in the overall country. These are the various legal factors
that the Kellogg company must consider before expanding to the new market.
LO2 SWOT analysis of the Kellogg Company
The SWOT analysis is the critical evaluating model shows the impact on micro & macro
environment of the company by accessing the internal & external factors of the company. Thus,
SWOT analysis is generally carried out to recognize the position of company in the competitive
environment. This positioning is recognized by the internal strategic factors such as Strength,
Weaknesses, opportunities & threats associated with the organization. In the traditional breakfasts'
habit people of US & UK are majorly dependent upon the eggs & bacon, but since the alternate of
these products came which are quicker & and easier to prepare, eggs & bacon are substituted with
the healthy breakfast habits. Which are cereals. The Kellogg company has produced a healthier
alternate to traditional breakfast habits, these products are innovative in the current market & also
given the competitive advantage to the Kellogg company.
The SWOT stands for strength, weaknesses, opportunities & threats. The SWOT analysis of
Kellogg company is as follows.
Strength
The growth in the revenue across the globe show the strength of the company. The company if
growing & flourishing all over the glove due to its sustainable & stable revenue & profitability. Its
one of the strength is the variety the company provides in the market & its brand reputation is very
high. The various strength associated with Kellogg are excellent cost control strategies, strong
innovative abilities of the employees along with great research & development ability, high
attraction among the young generation of the country, highly focused on establishing specialized
product market, brand recognizable of the Kellogg is the strongest among the market & great
competitive capabilities (Higgins, Omer and Phillips, 2015).
Weaknesses
The weakness the company has to face is as it has already spread almost the complete globe. So as
least or very little space left with the organization to grow or expand geographically. Moreover, the
company mainly relies on the single product, but if by chance the demand of the particular produce
decreased then the organization will leave with no option. The various weaknesses associated with

the Kellogg are less competitive prising strategies, slow market share growth rate in the last few
years, the organization is product focused i.e. Kellogg is mainly focused on the single product &
very slow in diversification of the products.
Opportunities
The Kellogg company is continuously working on the innovative approaches to the product. As the
firm is spending a large amount on the innovations just to add fuel in the sales growth of the
organization. As more and more people are getting aware of the health & fitness this creates a great
concern of the people towards the healthy breakfast habits as a substitute to traditional bacons &
eggs. The various opportunities associated with the Kellogg organization are : increase in customer
awareness & interest in health related issues among the public of the economy, the product of the
Kellogg could be highly feasible to diversify while focusing on staying to the cereals, high prospect
of getting success at low cost & high share in market with a great pricing strategies, the company
has great prospects to expand internationally (Strategy, 2017).
Threats
As more and more companies are entering the market which is creating more competition among
the already existing companies. Since the introduction of cereal & cornflakes has shifted the
traditional breakfast habits similarly, tomorrow any other product can enter the market and replace
these cereals. For instance, oats are getting popular nowadays in breakfast habits. The various
threats associated with the Kellogg company are as the company most products are sweetened and
the consumers are getting more concern about the sugar level which is present in the breakfasts
cereals, even though the cost of the product is nominal but the discounting provided by the
competitors are affecting the market positioning of the firm, to break the market of Kellogg,
companies such as weetabix & general mills are using pricing strategies & product diversification.
LO3 The Porters five force framework for Kellogg company
These five factors show the significant impact of companies profitability in its industry. These are
the five force that shape the strategy for the profitability of the organization. The following are the
five forces :
Rivalry among the already existing companies
If there are several competitors already existing in the market then non of the company with be
capable of gaining the maximum profit of the market, such that there will be always a rivalry among
the existing players of the industry. Thus, this will force the industry to keep the price of the product
down. Therefore, it will decrease the overall profit of the company (Yuliansyah, Rammal and Rose,
2016).

To tackle intense rivalry among competitors the Kellogg company built sustainable differentiation,
builds a scale to compete better or the Kellogg company may collaborate with the competitors to
increase the market size.
Threat from the alternate product
threat from the alternate product is one of the most common threat that any company faces. This
threat states that introduction of any new service or product which tends to meet the similar
consumer need in a different manner, then it is observed that company profitability has to suffer. For
instance, if two companies tends to sell the same product then neither of the company will tends to
get the maximum profit. Thus, profitability of the company is greatly affected by alternate product
from other company. To overcome this threat of substitute product or service by Kellogg company,
company practices as service oriented rather than being product oriented, by applying systematic
strategies which affect the consumers by increasing the switching costs & by gathering knowledge
about the core need of the customers.
The bargaining power of the buyers
Buyer demands a lot. Every customer wants to buy the best product at the minimum price. Thus, for
constant profitability and long run of the company, the Kellogg company has the pressure of
maintaining the low price of the product. If the customer base of the Kellogg company will be
smaller than the consumer will seek the ability to demand discounts & offers. To overcome the
threat of bargaining power of the buyer the Kellogg company take following measure such as :
establishing large consumer base which helps the organization in two ways i.e. It will reduce the
bargaining power of the consumers as well as helps in streamlining the sales & production. Regular
innovation in the products will let the customers not to demand for discounts & offerings. Bringing
or introducing new product regularly will not let the customers of Kellogg to deflect to any other
company (Razak and et.al, 2016).
The bargaining power of the suppliers
Almost every company has to buy some or the other product (which is the raw material for the that
company) from the other supplier, supplier in dominant position can decrease the profit margins of
the Kellogg company. Thus, sometimes the companies has to buy the raw material at comparatively
higher price due to powerful supplier extracting price from the Kellogg company. Perhaps, if the
power of supplier is higher than it will lower the overall profitability of the Kellogg product.
To tackle the bargaining power of the supplier the steps taken by Kellogg company are :
establishing efficient chain of supply through multiple supplier, the research & development team
must continuously experimenting on using different raw material such that if the price of one raw
material will exceed then the company could switch to other alternative option of raw material & by
establishing dedicate supplier connection whose business depend on the Kellogg.

Threat from the new entrants
The various threats that are introduced by the new entrants : to overcome the challenges and
building an effective barrier to safeguard it competitive edge the Kellogg company has undergone
various steps. The threats that new entrants can bring to the existing company is by bringing more
attractive packaging & processing of the product. Moreover, the new entrants could bring pressure
to the Kellogg company to lower its price, reduce cost or to force it to provide new proportion
packing.
To tackle the threats of new entrants the Kellogg company could bring innovative approach in
product & services. Introduction of new product will bring new customers in the account, by
building scale of economies to lower the fixed cost per unit of the product & by spending money on
research & development, such that new players would fear to enter the market which is already
occupied by the established players such as Kellogg (Leonidou and et.al, 2015).
LO4 Detailed strategic management plan for Kellogg
Ansoff matrix
Product development
Product development states that using the existing product as the base for the development of the
other products. For instance, if the category of product is successfully established in the market then
by using that product as the base the Kellogg company can introduce a range of new products
within the existing range. Thus, for Kellogg the company can introduce elevenses, multigrain etc.
the risk factor in the product development stage will be at medium level.
Product diversification
Seek to develop or create new products, range of products or line of products, similar when
multigrain was first introduced by the Kellogg company. The risk factor here would be the highest
as the product & market both are new for the organization.
Market penetration
Trying to take a share of the existing market with an already existing product. This could involve re-
launching of the products & increasing brand awareness. Thus, here the product would be already
existing in the market which shows at this step the business will be at low risk.
Market development
Finding or creating the new markets by directly targeting new parts of market or by expanding into
the new market. This part of the ans-off matrix shows here the market and product both will be new,
which results in medium risk to the business.
4 stages of BCG matrix

The four strategies possible for any product is as follows
Build
At this stage, to increase the market share of the company the product is given importance by
increasing investment.
Hold
at this stage of the BCG matrix the organization could not invest, or the company has to do other
investments for holding the product in the same quadrant of the BCG matrix.
Harvest
At this stage the company reduces the amount of investment & tries to bring out maximum cash
flow from the said product which increases the complete profitability of the organization.
Divest
This stage of the BCG matrix states that to release out the amount of money already stuck in the
business (Buckley and Ghauri, 2015).
Strategic management plan for Kellogg
Kellogg is the market leader in cereals & convenience food industry. The company has been
established successfully in the market with great international reputation and it has great brand
recognizance.
Goals
The various goals of the company are : encourage population of the country towards physical
activities, sponsoring events which are concerned with physical activities, creating a scene of
identification between the company & physical activities & to use the labels on the food products to
make consumer take decision about the balance of food.
Strategies
Kellogg needs to revive its pricing strategy. The company needs to be ready to sell the product at
the low price because its weaknesses is exploited by its competitors. The company has to realize the
potential of decline of cereals industry because of the presence of the close substitute. The great
challenge for the company is to keep up with their brand innovation, development & market
research.
Monitoring
For monitoring the process of the company must establish a special committee which will monitor
all the process and operations conducting in the organization keeping in mind that each department
is conducting the work properly to achieve the companies goal and objectives effectively.

CONCLUSION
This report can be concluded as a set of actions or competitive moves that a business takes to attract
consumers, compete successfully for achieving organization goals & strengthening of the
performances is called business strategy. Thus, the business strategy is the process how the business
must be carried out to achieve the desirable goals of the business. This report also includes
discussion on the impact & influence of the macro environment on Kellogg company, the internal
environment and capabilities of Kellogg company for determining the various strength, weaknesses,
opportunities & threats associated with the company. Moreover, in this report we had applied the
porters five forces model to the Kellogg company to evaluate competitive forces of Kellogg in the
market sector. Lastly, this report includes the detailed strategic management plan for kellogg
company.

REFERENCES
Books and journals
Akter and et.al, 2016. How to improve firm performance using big data analytics capability and
business strategy alignment?. International Journal of Production Economics, 182,
pp.113-131.
Buckley, P.J. and Ghauri, P. eds., 2015. International business strategy: theory and practice.
Routledge.
Higgins, D., Omer, T.C. and Phillips, J.D., 2015. The influence of a firm's business strategy on its
tax aggressiveness. Contemporary Accounting Research, 32(2), pp.674-702.
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Leonidou and et.al, 2015. Environmentally friendly export business strategy: Its determinants and
effects on competitive advantage and performance. International Business Review, 24(5),
pp.798-811.
Razak and et.al, 2016. Theories of knowledge sharing behavior in business strategy. Procedia
Economics and Finance, 37, pp.545-553.
Scholes, M.S., 2015. Taxes and business strategy. Prentice Hall.
Strategy, B., 2017. Business Strategy. MARKETING, 1(2), p.3.
Thompson, A., Strickland, A.J. and Gamble, J., 2015. Crafting and executing strategy: Concepts
and readings. McGraw-Hill Education.
Yuliansyah, Y., Rammal, H.G. and Rose, E., 2016. Business strategy and performance in
Indonesia’s service sector. Journal of Asia Business Studies, 10(2), pp.164-182.