Kellogg's Case Study

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Kellogg's Case Study

Company Name

Kellogg’s

Type of Industry

Food processing

Headquarters

Battle Creek, Michigan, United States

Sales/Revenue

 ‎US$ 12.923 billion (2017)

Area Served

Worldwide

Number of Stores

NA

Competition

Conagra Brands, Seneca Foods, General Mills, Kraft Heinz Company

USP

Diversified food products

Target Group

People of all ages

Products

Cornflakes, oats, Happy Inside, Special K., Pop Tarts, Frosted Mini-Wheats etc.

Website

www.kelloggs.com

Kellogg's Introduction

One of the world’s most trusted food brands, the Kellogg Company (Kellogg’s) is an American multinational food manufacturing company that has surpassed geographic and cultural barriers to reach the plates of many across the globe. The Company’s diversified product range and its market reputation have helped it to expand its business worldwide. A SWOT and PESTLE analysis of the Company is essential to strengthen the Kellogg’s case study and to ascertain how Kellogg’s is operating within a given business environment and how the Company is overcoming several different business challenges. It is in order to assess the efficacy of the business strategies of Kellogg’s that the Kellogg’s case study has become essential quite explicitly.

Kellogg's Swot Analysis

The Kellogg’s case study should begin with a Strength, Weakness, Opportunities and Threats (SWOT) analysis of Kellogg’s. This beginning is needed to make sure that a logical flow is followed in the Kellogg’s case study.

Strengths

The primary strength of Kellogg’s is the Company’s brand image and market reputation. Moreover, as the Kellogg’s case study reveals, product diversification is yet another strength of the Company. Another primary strength of Kellogg’s is the Company’s marketing and promotional efforts that have helped its products reach the global population and spread in more than eighty countries. Also, it should be noted that its merchandising strategies coupled with sponsorship of important events has also added to its strength. It should also be noted that different corporate social responsibility (CSR) activities of Kellogg’s on a global basis have enhanced the market reputation of Kellogg’s as a socially responsible Company, and this has added to the Company’s strength.

Weakness

Failure to often overcome nutritional scanning has been identified as a primary weakness of Kellogg’s. The Kellogg’s case study reveals that myriads of quality related controversies in the past have affected Kellogg’s brand image, and this has become a weakness of Kellogg’s. Another weakness of Kellogg’s is the Company’s incapability to penetrate into other product segments apart from its core product segments. Moreover, in this respect it should be noted that Kellogg’s have failed to expand to adjacent product segments owing to its present organization structure that has only been compatible with its core business model. This is a weakness of Kellogg.

Opportunities

Despite having certain weaknesses, there are myriads of opportunities for Kellogg’s to overcome the business challenges and advance in the business growth and development process. In this respect it must be noted, as revealed by the Kellogg’s case study, that there is an opportunity for Kellogg’s to tie-up with restaurants, hotels, and educational institutions to promote its food products on a global basis. Moreover, Kellogg’s has the opportunity to diversity its product range and penetrate into food product segments other than its core food product segments. It should also be taken into account that through the development of distribution channels in different other countries, Kellogg’s can pave the way for boosting its business in partnership with other companies in the respective countries.

Threats

The primary threat to Kellogg’s global business is the rise in the degree of competition within the industry. It should be noted that the stiff competition in the readymade breakfast segment, in specific, has been posing a serious threat to Kellogg’s business worldwide. Moreover, the changing food regulations in different countries have also put serious threat to Kellogg’s business expansion proposition. Also, it should be noted that imitation of Kellogg’s food products by unethical business ventures also has acted as a threat to Kellogg’s market reputation.

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Kellogg's Pestel Analysis

A successful completion of the Kellogg’s case study asks for a careful analysis of the political, economic, social, technological, and legal environments in which Kellogg’s operates. Evaluating the aforesaid factors against the backdrop of some precise environmental factors will provide a deeper insight into Kellogg’s business position in the global market. 

Political Environment

The political environment in which a business operates determines the degree of success or failure of the concerned business. This holds true for Kellogg’s too. The Kellogg’s case study reveals that, in the politicized marketplace of the United States, during the political elections, the different businesses get either negatively or positively impacted, and this influences the domestic business of Kellogg’s in a thorough manner. But it should be noted that the political stability (characterized by stability of governments) in different countries of its operation has acted as an advantage for Kellogg’s global business. It should also be noted that in many different countries of operation, Kellogg’s business has been either negatively or positively impacted by trade and tariffs regulations.

Economic Environment

The economic environment has continued to play a decisive role in determining the nature and success of Kellogg’s business worldwide. The Kellogg’s case study, in this respect, reveals that, in many countries of operation Kellogg’s has experienced a positive economic environment that encourages favored trading partnerships, and this has boosted its business. But unstable pricing strategies in different countries have often created a dilemmatic economic environment that has affected Kellogg’s business to a large extent. A growing tendency of different governments to interfere in market activities has also poses serious threat to Kellogg’s business in different economies. Moreover, in some countries, Kellogg’s has experienced an economic environment which is supportive to quality enhancement of processed and packaged food industry in particular. In such economies, Kellogg’s business has flourished.

Social/Socio-Cultural Environment

The entrepreneurial spirit of the broader society renders a positive impact on the business of any Company, and this holds true for Kellogg’s. But it should be noted that to gain social and socio-cultural support from a community (around which a business takes place) it is essential to emerge as a socially responsible business entity. In this respect, as the Kellogg’s case study reveals, Kellogg’s has succeeded to establish its socially responsible market image through investing in different corporate social responsibility (CSR) activities. Kellogg’s has continued to invest in CSR activities like ensuring the health and well-being of its stakeholders, marketing responsibly, reducing water use and wastage, reducing waste etc, (Mishra, 2017), and all such activities have enhanced its brand image on a global basis.

Technological Environment

Kellogg’s, till date, has been able to utilizes advanced technologies to its benefits and business advantage. In this respect it becomes noteworthy that the Company has used technology to revamp its rewards program and this has motivated its employees to be more productive (Pillay, 2015). Such productiveness on the part of the employees has paved the way for Kellogg’s global business success. Moreover, a higher rate of technological diffusion has helped Kellogg’s in developing its value chain structure in a thorough manner.

Legal Environment

Kellogg’s, in the past, has been subjected to litigations, owing to its non-compliance with different food regulations. It should also be noted that, in the past, Kellogg’s has failed to get FSSAI approval for some of its food products owing to lack of supporting documents (PTI, 2015). This legal scenario has to be improved and Kellogg’s should render effort to ensure that such non-compliance does not occur in the future.

Environmental Factors

Kellogg’s has succeeded to address certain environmental factors that can put hindrances to the emergence of the Company as a socially responsible corporation acting in favor of developing a greener economy. Kellogg’s has strived for achieving sustainable business practices that makes it an environment-friendly business (Kellogg’s, 2019). It should also be noted that Kellogg’s is a member of the FTSE4Good Index Series, which indicates that the Company demonstrates strong environmental practices (Kellogg’s, 20129).

Conclusion

The Kellogg’s case study reveals that the Company has been rendering efforts to sustain its market reputation through investing in social, legal, and environment needs. Both the SWOT and PESTLE analyses conveyed the fact that Kellogg’s has continued to emerge as a leader within its industry, promoting itself as a Company indulging in sustainable business practices. 

References

Kellogg’s (2019). Sustainability. Retrieved August 10, 2019, from https://investor.kelloggs.com/CustomPage/Index?KeyGenPage=1073753433

Mishra, A. (2017). Kellogg releases annual global Corporate Responsibility report. Retrieved August 10, 2019, from https://indiacsr.in/kellogg-releases-annual-global-corporate-responsibility-report/

Pillay, N. (2015). Kellogg’s uses technology to revamp rewards program. Retrieved August 10, 2019, from https://www.thedrum.com/news/2015/06/04/kelloggs-uses-technology-revamp-rewards-program

PTI (2015). Tata Starbucks, Kellogg, McCain fail to get FSSAI approval due to lack of supporting documents. Retrieved August 10, 2019, from https://economictimes.indiatimes.com/industry/cons-products/food/tata-starbucks-kellogg-mccain-fail-to-get-fssai-approval-due-to-lack-of-supporting-documents/articleshow/48284310.cms?from=mdr

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