University of South Wales: Strategic Analysis of Weetabix Acquisition

This report offers a comprehensive strategic analysis of the Post Holdings acquisition of Weetabix, examining the company's strategic positioning through frameworks such as Bowman's Strategy Clock, which positions the company within a differentiation strategy. The analysis delves into stakeholder identification, categorizing primary stakeholders like shareholders, the British government, staff, and investors. The report also employs PEST analysis to evaluate the external environment, considering factors such as UK employment laws and economic trends, and assessing the US market's potential to offset declines in the UK cereal market. Furthermore, the industry analysis utilizes Porter's Five Forces to assess competitiveness and profitability within the cereal breakfast industry, considering factors like low entry barriers and the presence of substitutes. The report concludes by highlighting the competitive nature of the cereal industry in the UK and US, the differentiation strategy employed, and the positive implications of product diversification through the acquisition.

Strategic Analysis:
Tools and
Techniques

Introduction
 Weetabix Limited operates in the UK and it specializes in production
of cereals and breakfast rinks since 1932.
 Among the things included in their portfolio include Alpen, Weetabix
Crispy Minis, and Weetos among others.
 Weetabix Limited was purchased in 2017 by Post Holdings, a United
States’ firm at a price of $1.8 billion.
 Post Holding began to operate in 1895 and it is the third largest
cereal company in America.
 The report aims at analysing Weetabix’s strategic positioning,
external and industry analysis, as well as analysing the stakeholders.

Strategic Positioning
 For a company to gain a competitive advantage, it may consider
using strategic frameworks such as Bowman’s Strategy Clock or the
Porters Five Forces (Brenes, Montoya and Ciravegna, 2014, pp.849).
The Bowman’s Clock is used to traverse strategic positioning choices.
 Within the Bowman’s Clock strategy, Weetabix and Post Holdings fall
within the differentiation strategy because they focus on offering
their clients a high-perceived value at average prices.

Stakeholder Analysis
 Stakeholders are either affected or affect the attainment of
organizational goals. they are categorized as primary and secondary
stakeholders.
 The primary stakeholders that were involved during the acquisition of
Weetabix are the shareholders (Dobbs, 2014, pp.37). Their role is to
govern a company’s operations and activities and they posses a high
level of interest and power in a frim.
 Other primary stakeholders that were involved were the British
government, staff, and investors. The government ensured that the
acquisition process was done legally by adhering to all the rules.

External Analysis
 The PEST analysis is an effective tool in analysing the external
environment within which the Weetabix and the Post Holdings
operate.
 Post Holdings is an American company. Having acquired Weetabix, it
will have to abide to the UK’s employment laws such as income
taxes, labour laws, as well as minimum wages.
 To mitigate recession and booms in the economy, Post Holdings has
enhanced growth in other economies such as by acquiring Weetabix.
 As noted by Williams (2015), UK’s cereal breakfast market is
declining, making the US market as a better option of compensating
this decline since it is among the best markets.

Industry Analysis
 Post Holdings could use the Porter Five Forces to determine how the
five forces affect the company’s profitability.
 The cereal breakfast industry in very competitive because it is more
profitable (Foss, Lyngsie and Zahra, 2013, pp.1461). However, this
industry has a low entry barrier since most of these new entrants do
not posses the required expertise.
 There is possibility off reduced demand in cereal products form
Weetabix and Post Holdings due to presence of substitutes from
companies such as Tesco, Sainsbury, or even ASDA.

Conclusion
 Conducting this analysis has indicated that cereals industry is very
competitive mainly in the United Kingdom and the United States.
 The two firms use the differentiation strategy I their activities which
translate to high-medium products and medium prices.
 The acquisition of Weetabix shows that there is a positive outlook in
the diversification of products.

References
 Brenes, E.R., Montoya, D. and Ciravegna, L., 2014. Differentiation
strategies in emerging markets: The case of Latin American
agribusinesses. Journal of Business Research, 67(5), pp.847-855.
 E. Dobbs, M., 2014. Guidelines for applying Porter's five forces
framework: a set of industry analysis templates. Competitiveness
Review, 24(1), pp.32-45.
 Foss, N.J., Lyngsie, J. and Zahra, S.A., 2013. The role of external
knowledge sources and organizational design in the process of
opportunity exploitation. Strategic Management Journal, 34(12),
pp.1453-1471.