Table of Contents
Kellogg Company is one of the United States’ leading cereals and nutrition supplier in the region. The company that began in 1906 by William Keith Kellogg has over the century expanded its market through the provision of various goods and services. The company has its headquarters in Battle Creek, Michigan, the United States. The business mainly deals in ready to eat cereals and convenience foodstuffs. Its main brands include the cookies, crackers, toaster pastries, bites, and cereal bars that are mainly traded under various merchandises such as the Keebler Kellogg, Pringles, and Murray among others. The company operates within 21 countries worldwide with its brands sold in over 130 nations (Kellogg, 2018). Under the current CEO, the company has been able to explore new markets and strategies that are aimed at expanding Kellogg. The company has been successful in their store that is yielding great income. The company has also indicated excellent growth through the 30 hours per week of work (Kellogg, 2018).
Over the years, the company thrived in a very demanding and competitive environment from other companies that are in the consumer food industry such as the Quaker Oats and general mills. The company’s mission is to be an international enterprise committed to establishing a long-lasting increase in volume and revenue as well as improving its global leadership position through the provision of nutritious superior value food products (Kellogg, 2018). The company’s mission and vision are deeply sourced in its corporate goals of expanding the growth and its marketing strategies to serve the wants of the target customers.
Therefore, the company operates on the vision ‘To Be the Food Company of Choice’ (Kellogg, 2018). The enterprise has its products as the consumer’s first choice in the market. When we consider about customer perspective, wal mart stress would be our largest and main customer in the united states so that it accounted approximately 20% of total sales from the year of 2017. Normally, the agents of the Kellogg company sell their product through their brokers and distributors and in general, they are sold to eliminate customers from points of sale, restaurants and other host companies. (Last10K, 2019)
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By using the Morningstar website, it can be clearly indicated that the director board of the Kellogg company has been consisted with eleven members. And these eleven directors help to operate the decision of Kellogg company. As of now these people are: Steven A. Cahillane, Chairman of the Board, Chief Executive Officer and President; James M. Jenness, Director; Donald R. Knauss, Lead Independent Director; and rest of the directors served as a independent directors of the Kellogg company as a names of Richard W. Dreiling, Carter A. Cast, Stephanie A. Burns, Carolyn M. Tastad, Cynthia H. Milligan, La June Montgomery Tabron, Mary A. Laschinger, G. Zachary Gund. (Library.morningstar.com.librarydb.northwood.edu, 2019)
The Internal Environment
A company’s internal environment entails the organizational leadership structure, management styles, several marketing brands, information systems, life cycles management, and individual behavior. If we look at Kellogg company employees’ chart, we can be seen that there is some fluctuation over time.
[bookmark: _Hlk1590376]When we consider today’s Kellogg company market, it currently operates in 21 countries and marketed in more than 180 countries in worldwide. And there are more than 33,000 employees working under the Kellogg company by growing relationship with the business. By looking at this chart, we can be clearly seen that there is a dramatic growth of workforce. The year between 2000 and 2002, they have achieved nearly 10,000 employees. And also, according to the chart, it shows that they had approximately 38,000 employees in 2016 but when it comes to 2017, it shows downward up to 33,000 employees. Currently, the company has got 22 senior administrators, 46 immediate level main members. Therefore, the company has got senior management leaders who are given the standard of power in their capacity with the task of managing teamwork, plan for the opportunities and establish their employees to do the tasks as usual.
The company also makes use of the 360-degree scores cared sheet where the workers are ranked by supervisors and employee documents. In fact, 98% of Kellogg’s employees are compensated on the basis of the performance framework (Kellogg, 2018). Through each department’s objective, the business is able to pass across important values and objectives through the departmental goals and job outlines. Kellogg is celebrated for its organizational values or the ‘k- values’ which include integrity, accountability, humility and passion, simplicity and result. Kellogg also began a program for the values award, a yearly award for the employee personally who fully apply the ‘k-‘values to work (Kellogg, 2018). The Kellogg company has done their research and development and research is being conducted at the W.K. Kellogg institute for food and Nutrition research in battle creek, Michigan and around the world. As their last 10K reports indicates, they have spent approximately $148 million in 2017, $182 million in 2016 and $193 million in 2015 for the research and development. (Last10K, 2019)
Kellogg Marketing Strategy
The company’s 4 P’s of the marketing mix involves proper management of the products, promotion, prices, and place that are crucial to its success.
Product
The product marketing mix is crucial to Kellogg since the company battles strongly with other consumer e-commerce organizations. The firm began with two main products but currently deals in various new products. The company has also been expanding in its goods and services offered to its customers. Working towards its vision, Kellogg aims at producing nutritious goods to the consumers.
Price
This component is significant for Kellogg since it acts as a third-party model, where the main supply of revenue is the price charged on the sellers. The company usually reduces the cost of its products through various pacts given to its consumers on its online platform.
Place
This is the core element of Kellogg marketing strategy as the business depends greatly on customer satisfaction. The suppliers of Kellogg have created and established various ones for quick and accurate delivery of goods. The company works directly with the external deliveries and for a long time has partnered with its suppliers such as the DSC-logistics of Chicago.
Promotion
The company uses various media platforms to advertise its online accessible brands. Through its community engagement and sponsorship, the firm is able to market its products and brands via its support for sports and charity. The organization also uses the annual reports, and social media like Facebook and twitter to link to its customers.
The Kellogg Market
The company has the market frontrunner in the American Market as well as the international space such as the United Kingdom’s cereals. It has six segments which were established over the years due to the wide-ranging research and development. Some of the company’s corresponding brands are; the tasty faster for cornflakes and the crunchy nuts, the mum approved such as the Rice Krispies and shredded (Casadesus-Masanell & Ricart, 2010). These branches contain a representation of the market differentiation base under which new brands are developed and innovated. The market research in the United Kingdom and France has demonstrated to be successful leading to the increase in sales in some of its brands such as the Apricot, the United States Kellogg market.
Community Work and Society Partnerships
Kellogg Company is among the greatest sponsor of the community programs such as the swimming programs, physical fitness, and community work both locally and internationally. For instance, in the United Kingdom, through the organizations of several varieties of the community programs, the company has been able to support the physical education and sponsoring the voluntary society groups physical workout; for example, St. Johns center in Old Trafford and the Charity Contain You, that provides breakfast needs of school kids through a breakfast club. Some of the physical body fitness teams such as Sustains are beneficiaries of Kellogg (Kellogg, 2018). Kellogg is as well a major sponsor of the UK swimming through the Armature Swimming Association award program giving out more than 1.8 million awards each year to the swimmers. This has also been one of the most successful branding links since more than 12 million Citizens in the UK are registered into the scheme (Casadesus-Masanell & Ricart, 2010).
Suppliers
One of the top suppliers to the company is the DSC-logistics of Chicago which is a supply chain management firm whose headquarters are in Des Plaines, Illinois. The company appeared in the Battle Creek Michigan, the Kellogg Company Annual Diversity Recognition event and was awarded a ‘diamond club’, a platform that identifies the various supplier companies that Kellogg spends more than 25 million or more per year (Casadesus-Masanell & Ricart, 2010). The partnership which began over 3 decades ago in 1988, DCS has remained a strong partner of Kellogg in the supply chain. The supply chain for the company has also included the Special Kellogg program for over 20 years referred to as the Kellogg special diversity program for women-owned business. The company has also merged with several companies such as the $1 billion mergers with the Diamond Foods, Keebler and Rebar which is a way of gaining popularity and having profit increased margins (Kellogg, 2018).
Growth Strategies and Products Law Suits
The company has over the past year made public some of the important transformations to its business in the North American region. These strategies are believed to help the organization grow in regard to sales. The growth strategies include the restructuring of the regions management structure and exploring the sales of its new cookies and fruits. It also discussed the new strategy to venture into e-commerce and an integrated business capacity planning. The company also planned to begin to abandon the direct store delivery chain in its quarter 2 and quarter 4 of the year (Kellogg, 2018). Suing a company could be bad for the products and market operation. However, the Kellogg Company has in the past year undergone a series of lawsuits from sugar certification accusations to honey smacks and toxic sugar levels in its promotion of cereals.
Business Segments
When we regard about the business segments of the Kellogg company, they have managed with ten operating segments which operational group based on geographic location or product groups. There are some factors into consideration whether to equate, distribute and regulate these business segments together. Those factors are economic sectors, products, manufacturing processes, varieties or customers. Those segments consist of U.S. Morning Foods, U.S. Snacks, U.S. Specialty, North America Other, Europe, Latin America, Asia Pacific.
- · U.S morning foods – it mainly consists of primarily cereal and toaster pastries
- · U.S. snacks – it consists of crackers, wholesome snacks, fruit-flavored snacks, cookies and savory snacks.
- · U.S. specialty – in this segment, the entire Kellogg company product rage is sold to channels such as vending, food service, convenience stores and girl scouts.
- · North America – North America segment is primarily concerned of U.S frozen foods, Kashi company, Canada.
- · Europe – This segment is mainly concerned within the Europe countries.
- · Latin America – The segment of Latin America deals their operation in Caribbean/Central America business and Venezuela
- · Asia Pacific – Asia Pacific segment includes their operation in India, Korea, Australia as a biggest market in the region.
(Last10K, 2019)
Substitutes
According to Williams (1992), under the five Porters strategic analysis, the availability of substitutes is one of the major analyses of the company strategy. The substitutes are determined by the price of a substitute, changing prices and the presence of substitutes as well as the change in preference. In the Kellogg Company, the existence of close substitutes is a threat and, therefore, it has to identify the entrance of new products such as the Cereal bars, the taste of the consumers is also shifting to other new arrivals. Hence due to the slow response to diversification and price competition, it has led to some to the decline of the company sales like in 2017 (Kellogg, 2018).
In summary, the consumer industry in the US is facing a lot of competition from the new entrants into the market. However, Kellogg has managed to remain on top of its operation through various strategies of competition. The company is having various products that are made by branding to ensure value to the customers. The firm over the century has remained competitive in regard to quality and customer satisfaction.
References
- Casadesus-Masanell, R., & Ricart, J. E. (2010). From strategy to business models and onto tactics. Long range planning, 43(2-3), 195-215.
- Bi.galegroup.com.librarydb.northwood.edu. (2019). Blackboard Learn. [online] Available at: http://bi.galegroup.com.librarydb.northwood.edu:2048/global/comparisonTool/company?u=northwoodu&entities=304929&metric=historicalEmployees [Accessed 20 Feb. 2019].
- Kellogg Co (K) 10K Annual Reports & 10Q SEC Filings | Last10K. (2018). Retrieved from https://last10k.com/sec-filings/k
- Last10K. (2019). Kellogg Co (K) 10K Annual Reports & 10Q SEC Filings | Last10K. [online] Available at: https://last10k.com/sec-filings/k#link_fullReport [Accessed 21 Feb. 2019].
- Williams, J. R. (1992). How sustainable is your competitive advantage?. California management review, 34(3), 29-51.
- Library.morningstar.com.librarydb.northwood.edu. (2019). Blackboard Learn. [online] Available at: http://library.morningstar.com.librarydb.northwood.edu:2048/stock/insiders/board-of-directors?t=K®ion=USA&culture=USA [Accessed 21 Feb. 2019].
