Case Study of Kellogg: Analysis of Micro and Macro Environment, Strategic Management Plan

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Strategic Management Plan

Introduction

Every business has some strategies. These strategies influenced by the internal and external environment of the business. Business strategy means the course of action that assists the manager to achieve the goal. (Businessjargons, 2018). This strategy calls the master plan of the business. By this plan, the business is conducted and manage their competitive position in the business area. This is the long term plan of the company. But this plan affected by the internal and external environment of the business. The management faces those challenges and achieves the goal of the company. In this assignment, we discuss the Kellogg’s company which is an American manufacturing company. This company strategy has four pillars and these are the Win in breakfast, global snacks powerhouse, emerging market and win where the shopper’s shop (MOHANTY, 2019).

LO1

P1 Applying appropriate frameworks analyses the impact and influence of the macro-environment on a given organization and its strategies.

The environment is a very complex thing. Environment influence almost every company in the world. No one has any control over the external environment. They have to adopt the external environment. For analyzing the impact of the external environment on the Kellogg’s company we have to discuss the macro environment elements. By this analysis, we can understand the impact and influence the macro environment on the Kellogg’s company.

The political factor that impacts Kellogg’s company: political factor has a great impact on the business organization. The political stability, diplomatic relation with the other country, business relation with union those things influence the business. Government action, public policy affect the organization. As the Kellogg’s doing their business in different countries. Before starting a business in the new country they focus on the publication factor of that country. Those are the risk of military invasion, level of corruption, intellectual property protection, taxation system, industrial safety regulations and so on (fernfortuniversity, 2018). If these factors are in favor of the Kellogg company than they start their business in that country. So if the company decides to increase its sell to the other countries and make new outlets over their this environment create problems to attain the goal.
The economic factors that impact Kellogg’s company: Economic factors such as the inflation rate, saving rate, interest rate, foreign exchange rate, etc. This rate has a great impact on the business. If the business economic condition is very weak no multinational company wants to go, there. We know Zimbabwe in the highest inflation rate country in the world (Aljazeera, 2019). so n company wants to establish their outlet over there. So this is the impact of the economic factor in the business. The main aim of the Kellogg’s is to grow the sale of the business. So the low economic country cannot afford the high price product in that case they have fixed the price low. The profit will untimely low for setting the price low.
Social Factors that Impact Kellogg Company: share, belief, attitude affect the business. Class, the structure of society influence the business. The educational quality of the people in society affects it most. Illiterate society will not receive everything positively. As the morning’s corn flakes for the baby is very healthy. But if society is illiterate they will not purchase this because they haven’t enough knowledge about health.
Technological Factors that Impact Kellogg Company: In recent day technology is a vital factor for the business world. Technology change lots of things in the business area. Technology changes the transportation, communication and so on. For advance, transportation business organizations increase their area and selling more products. Technology changes the packaging sector most. So technology gives fuel to the business and runs so fast.
An environmental factor that Impacts Kellogg company: Environment is a burning issue for the world. different countries have different laws regarding the environment. The business operates its business in the environment. They harm the environment. Like in Europe give tax-free for the organization that uses renewable energy. So for the company, it is must notice the environmental law where they conduct their business. Kellogg work for the environment. They produce their raw materials. They use less water and less energy in the land. Try to reduce the greenhouse gas emission (www.kelloggs.com, 2019)DZ. So the environmental factor has a great influence on the business factor. They have saved the environment and less pollute the environment.
The demographic factor that impact Kellogg company: the population is one of the major factors. The age, gender, family, etc. affect the sale of the Kellogg.

So these are the macro-environment that impacts on the Kellogg company. Every element of the macro-environment influences the company. The company set a goal. They have objectives they attain it in every year. Business strategy means we know the set of actions to achieve the goal. Sometimes those activities were not possible to do due to the macro environment. The company set the objective to achieve 10% more profit this year. Due to the inflation rate and environmental law, they have to withdraw their business from one country. For that reason, they can’t achieve their goals. They can’t do anything as they haven’t any control over those factors.

LO2

P2 Analyses the internal environment and capabilities of a given organization using appropriate frameworks.

Internal analysis

The internal analysis relates to the internal environment of an organization. The factors that have a direct impact on an organization and can be controlled by the management are called the internal environment. The internal environment determines the position of the organization in the marketplace. Supplies, customers, employees, shareholders, etc. are some of the main factors of the internal environment. The internal analysis of the organization’s environment helps to acknowledge the strengths and weaknesses of the organization and to consider objectives and resources to make better plans towards organizational goals. Analyzing the internal environment of an organization determines its capability to use its resources effectively and efficiently which helps the organization to give better service and products to its customers than the competitors. The internal analysis provides important information about the organization. It gives insights to an organization’s internal environment which are considered very useful and important in directing the organization towards the achievement of its goals and targets. The internal analysis helps to understand where and organization can improve itself and where it cannot. It determines the strengths and weaknesses of an organization with the help of correct and efficient internal information.

Value chain

the value chain is a model that analyzes the set of activities that are needed to create a product or service. A value chain analysis is conducted by evaluating all the procedures in every step of the organization’s business in detail. Business activities regarding the value chain can be decided into two categories- a) primary and b) support.

Primary activities have five essential components as below:

Inbound logistics: concerned with warehousing, receiving and managing inventory.
Operations: converts raw material into a finished product.
Outbound logistics: concerned with distributing the final products to the consumers.
Marketing and sales: concerned with increase sales by promoting the product or service through advertising, pricing, etc.
Service: concerned with enhancing customer relationships by giving maintenance, repair services, etc.

Support activities consist of four components. These are as follows:

Procurement: concerned with getting supplies of raw materials.
Technological development: concerned with the organization’s research and development stage.
Human resources (HR) management: concerned with hiring, retaining and training the organization’s employees.
Infrastructure: concerned with planning, accounting, finance, and quality control.

BCG MATRIX

BCG matrix or growth/share matrix is a business tool that is used to evaluate the position of an organization’s brand portfolio by using relative market share and growth rate factors. The analysis helps to understand where the organization should invest in and where it should not. It helps an organization consider growth opportunities by designing long-term strategic planning. The BCG matrix of the Kellogg Company is given below:

Dogs: Dogs show a low market position and generate low cash returns. Asia Pacific segment market call called the Dogs of Kellogg company.
Cash cows: This segment indicates the low sale growth rate high market share embraced of the stars. Kellogg should introduce new products to the market and increase its sales. The US in the low growth market but highly profitable market.
Stars: These operate in industries of high growth and can later become cash cows. US market can call the stars for the Kellogg company. They generate the highest income from the US market. Europe market also is the stars market (BCG, 2018).
Question marks: These hold low market shares, incurs losses and need closer consideration. In the US the Kellogg sells high morning foods but they cannot gain market share in the morning food.

SWOT Analysis

SWOT analysis is a technique that helps to acknowledge the strengths and weaknesses of an organization, identify the opportunities open for it and the threats it faces in the process of operation. It helps to evaluate an organization’s competitive position in the marketplace and develop its planning. The SWOT analysis can guide businesses towards successful strategies with correct and efficient internal and external information.

SWOT analysis of the Kellogg Company is given below:

Strength:

Kellogg product produces almost 18 countries and sells its product more than 118 counties.
The largest acquisition was made by Kellogg’s.
Kellogg is the world’s best cereals maker (Bhasin, 2019).
Kellogg spent 1 billion dollars annually for creating awareness.

Weakness:

Some of Kellogg’s marketing campaigns and methods have been questioned by the customers.
Being unable to capture the developing market made Kellogg’s slow in innovation.

Opportunity:

There are lots of developing the market in different counties they can easily target those markets.
They can make their contract with a new growing agent like food restaurants.

Threats:

Lots of cereal makes created in recent years. This is one of the big threats for Kellogg.

LO3

P3 Applying Porter’s Five Forces model evaluates the competitive forces of a given market sector for an organization.

Porter’s five forces are a powerful tool for evaluating the competitive forces of an organization. when an organization understands the forces that can affect the organization strategy than the organization able to adjust with the environment. This porter’s five forces help the organization to avoid wrong steps in the future.

This model was created by the Harvard business school professor Michael porter. (mindtools, 2018). After the invention of this model, it is recognized as a popular business strategy tool. Porters told to look to the competitor more closely and also told to look more closely to look beyond the actions of their competitions. He told about the five factors that make up the competitive environment. Let’s look over the five factors.

The threat of new entrants: This means the new company enters the market. The level of entry relies highly on the market entry cost. Entry cost means a new company launches their product to the market buys a switch to the new product with a new price. This new entry can create a problem for the business. If the organization does not create its position strong than the new company can make it’s market easily. this will reduce the sale of the organization. As Kellogg has a great market position and brand name-new entrants have a very little thread for the company. Kellogg company invests a huge amount of money into the advertising this could not be afforded by the new entrants.
Competitive rivalry: This factor indicates how powerful the competitors are. How many competitions in the industry? The strength of the competitors. How well they control the market. For the Kellogg in the UK market, there have Weetabix and general mills are great competitors in the same market. (paper, 2018) So these are the competitive rivalry for the Kellogg. Kellogg has to face this competition and maintain the intense price war.
Supplier power: The supplier power depends on the number of the supplier in the market. If there are so many suppliers in the market than the supplier cannot increase the price of the commodity. This thing depends on the type of product also. If the product is rare than the supplier uses this issue. If there are many suppliers than the organization, choose the cheap one. Kellogg is a large company. Their main suppliers are the sugar, food grain and flour. In the market for this kind of material, there are lots of suppliers. Kellogg has great control over their supplier.
Availability of substitute: This product substitute creates a problem for the organization. The price of the substitute product, the taste of the product and the cost of changing the product are the determinates of the substitute product. Some substitute for the Kellogg company is the cereal bars and pop tarts. Which interning to the market of Kellogg. Consumer changes their taste from the cereals. Kellogg reluctant to change its price to compete with competitors.
Buyer bargaining power: Kellogg tries to control the buyer power by adopting a good marketing strategy. Kellogg involves lots of physical education and health maintenance activities to create product awareness. Kellogg sells its product to the big super shop. But the thread is that that super shop has their product. Kellogg told their super shop to make the shelves full by the product of Kellogg. This look so attracting to the customer. The company is very large so the power of buyers is low.

LO4

P4 Applying a range of theories, concepts, and models, interpret and devise strategic planning for a given organization.

Business strategic planning influenced by the business environment. The micro and macro environment create problems to accomplished the business objectives. Kellogg company doing its business with few products. They are reluctant to introduce new products to the market. So they want their business with their existing market. By pestle analysis, we can easily understand the impact that has on the planning of the Kellogg company. The internal environment analysis indicates the strategic planning of the Kellogg company.

Integrity: They have integrity in every aspect. Their employee is so optimistic. Employees are skilled and their speaking quality is very good. So the company wants to make a very skilled team operate their business.

Accountable: All employees are accountable for their responsibilities. They focus on finding a solution to the problem. They support all the employees and keeping commitment and promise.

Simplicity: They control all the things very imply. They break down all the barriers and go forward. The things that make the process slow they just break it. They do their business with the product they have. They are reluctant to introduce new products.

Result: They achieve a result and celebrate them. People give value to other people.

By the porter’s generic strategic analysis, we can easily interpret and device the Kellogg strategic planning. Let’s see the porter’s genetic analysis.

Cost leadership.
Market segmentation.
Product differentiation.

For the healthy strategic business one of the upper generic strategies must be employed. Then the company should call a healthy company. For the Kellogg company, they earn the best marketing strategy for their product. Better product differentiation and brand management added more value to the company. The Kellogg ensures the cost reduction in every aspect. This makes them more successful. According to porter’s generic strategic analysis, Kellogg is the best-case scenario.

Conclusion

By this report, we can learn about the micro and macro environment effect. The company can’t have any control over the macro environment. But they can control the internal environment. We can see the SWOT analysis of the Kellogg company. The business environment influences business strategy. Businesses face lots of challenges but they have to overcome it and accomplished the objective. Porters 5 factors help the student to know about the challenges of the organization.

Bibliography

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BCG, 2018. BCG. [Online]
Available at: https://bcgmatrixanalysis.com/bcg-matrix-analysis-of-kellogs-company/
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Available at: https://www.marketing91.com/swot-analysis-kelloggs-kelloggs-swot-analysis/
Businessjargons, 2018. businessjargons. [Online]
Available at: https://businessjargons.com/business-strategy.html
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Available at: http://fernfortuniversity.com/term-papers/pestel/nyse4/702-kellogg-company.php
mindtools, 2018. mindtools. [Online]
Available at: https://www.mindtools.com/pages/article/newTMC_08.htm
MOHANTY, S., 2019. marketrealist. [Online]
Available at: https://marketrealist.com/2016/04/whats-kelloggs-2020-vision-strategy/
paper, R., 2018. Research paper. [Online]
Available at: https://s3.amazonaws.com/academia.edu.documents/32913782/Strategic_Management_casestudy._Sidney..pdf?response-content-disposition=attachment%3B%20filename%3DANALYSIS_OF_KELLLOGGS_CORPORATE_STRATEGY.pdf&X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=AKI
www.kelloggs.com, 2019. www.kelloggs.com. [Online]
Available at: https://www.kelloggs.com/en_US/who-we-are/environmental-initatives.html

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