Strategic Planning for Kellogg’s

Business strategies aims at achieving the goals and vision of the business by analyzing the external and competitive environment and by comparing the findings with the external environment. Therefore, business strategy helps a business to find appropriate strategy.

In this assignment, strategic planning for Kellogg’s has been presented. A wide range of strategic planning models and theories have been applied. The company has already been selected and the company is Kellogg which is also known as Kellogg Company. This is an USA based multinational the produces cereal and convenience foods such as cookies, crackers, toaster, fruit frozen snacks etc.

Assess how Kellogg’s missions, visions, objectives, goals and core competencies inform strategic planning

Vision is a broad and long-term goal of a company and mission is the strategies to reach the vision, core competencies refer to the capabilities on which a company can capitalize to make progress (Hill and Gareth, 2012).

The vision of Kellogg’s is to enrich and delight the world through foods and brands that matter. The mission is to serve the customers with quality foods and to develop brands. Core competence of Kellogg’s is to innovate hygiene and healthy food for consumers.

These vision, mission, objectives and goals of the company inform the strategic planning of Kellogg because strategic planning is formulated on the basis of vision, mission and core competencies. For example, the core competency of Kellogg is to provide and innovate new food items and marketing strategies and the vision of the company is to enrich the world through Kellogg’s foods and brands.

Accordingly, the company formulated the strategic planning so that it can reach the vision through enriching the world with Kellogg foods and brands. From the above discussion this is seen that Kellogg’s vision, mission, core competencies have impact and informed the strategic planning of Kellogg’s.

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Analyse the factors that have to be considered when formulating strategic planning for Kellogg’s

While formulating the strategic planning, this is very important to consider and analyse the factors that affect the planning, these factors are analysed below:

Resources and competencies of Kellogg: These factors affect the formulation of strategic planning of the company. Resource refers to the assets and capabilities of the company and competence is the core strength of the company (Allison and Kaye, 2005). Resources will help the company to formulate strategic plan and competencies will help it to implement the plans.

Stakeholders’ interest: Stakeholders are the parties that are affected by the decision of the company and thus Kellogg must consider the effect on the strategic plan (Tracy, 2000). Stakeholders will affect the decision of the company and thus the plan of strategic management. Therefore, the company should carefully consider the impact of strategic plan on stakeholders.

Target market: The target market is that market the Kellogg accomplish to reach and do business with and the preferences of the target market affect the effectiveness of strategic planning. Target market may have some preferences and accordingly Kellogg needs to formulate the strategic planning.

Management expertise: Management expertise refers to the capability of the management and basically the expertise of the Kellogg’s management will determine the success of the strategic plans. Therefore, the company must consider if the management has the capability to carry out the plan of the company.

Competitors: Competitors are those parties who affect the Kellogg in gaining market position and share.  Kellogg needs to consider the competitors and their capabilities before determining the plan. Moreover some other factors such as the liability of foreignness, environmental factors and competitive factors, product, legislation at different market etc. also affect the strategic planning of the company.

Evaluate the effectiveness of techniques used when developing strategic business plans that Kellogg’s can use

Kellogg can use varieties types of techniques to make the strategic decision and they can be used for different reasons. Some of the techniques are evaluated below:

SPACE MATRIX

It is a very potential in determining the strategy of a business and this tool help a business to make strategic position about if the company should be competitive, defensive, aggressive or conservative (Medicos, 2015).

Kellogg can make one of the above decisions on the basis of considering financial strength, industry position, competitive advantage and environmental stability. As a result the decision from the matrix help the company to make correct choice on strategic planning. The consideration of different facts include the following:

Therefore, the decision made at this matrix is analysed and thus is correct to cope with the changing and diversified environment of the market position. From the above discussion this is seen that SPACE matrix is very much potential in formulating strategic plan for a company.

BCG Growth Share Matrix

This strategic tool is very much significant in analysing the businesses’ financial and strategic position in a certain time and it also forecast the financial position of a business (Olsen, 2012). In addition to that it suggest the business segment that will be potential in the future and thus Kellogg may understand which business will be potential in the future.

From the above diagram this is seen that the matrix illustrates different ways of positioning the business in the market. This is very significant for Kellogg because at a single diagram it illustrates business position of different business portfolio. And thus the company can take strategic position about the business.

PIMS

PIMS stands for Profit Impact of Marketing Strategy which is a collection of statistically documented experience from a varied sources such as the competitors, collaborators, suppliers, customers etc.

It is designed to help the business organization to make decision from the data of thousands of companies at the PIMS database. The main point of PIMS is to show the relation among the factors of industry related dynamics in the competitive environment. Therefore, PIMS is very much significant for Kellogg because the company can make strategic decision from the information of thousands of companies and suppliers. The relation among the market dynamics at PIMS will help the company to understand the relationship and competitions among the factors.

As a business analyst Identify and apply strategies to find appropriate solutions for Kellogg

To accomplish the targets and vision of Kellogg, it needs to find some strategies and then it needs to find solutions on those issues. The strategies to make the accomplishment of goals are discussed below:

Making the resources available: Kellogg must manage the resources to reach the vision of the company. For this reason it must analyses what types of resources it needs. Generally, to expand the market and make new products, the company will need financial, innovative and creative HR resources.

Making the stakeholders interested: Kellogg should be able to make the stakeholders interested so that it can gain more investment from the investors. It can popularize the good effects of the Kellogg’s business around the world. Thus stakeholders will be positively interested to the company.

Targeting the right market: Kellogg will be able to target the right market, currently the company has operation only in 18 counters, and it needs to expand the market base because it has global reputation. It will expend the market to those countries which have good financial position such as in Europe, Australian and some Asian market.

Management expertise: Kellogg must be able to make the management expert so that it can be able to lead the company. To make the management competent it may recruit expert and experienced people.

Analyzing the competitors extensively: Kellogg must analyses the market extensively to enter a new market to have market competition, consumer preferences etc. From the above discussion this is seen that if Kellogg apply the above strategies it will be able to make a good market background and this will lead to the achievement of the vision.

Apply any appropriate methods/techniques for Kellogg

BCG Growth Share Matrix is a portfolio analysis model in which the business portfolios of a business are divided in four parts:

Stars: Negative cash flow, lower growth.

Question mark: High stable growth and neutral cash flow

Dogs: neutral or negative growth and negative cash flow.Cows: High stable growth and cash flow.

Question Mark: The products that are introduced recently by Kellogg belong to the Question mark quadrant of the above diagram where the market growth is good but share is not very high. Therefore, Kellogg must strive hard to grow the market share of the recently launched products.

Dog: Kellogg have invested in some products that has lower growth and lower share that means the products did not gain market popularity. The company should divest from the market and this is logical to invest the amount in others profitable market.

Stars: These are very potential and with high profit margin products and business portfolios. The products that have gained very popularity soon after introduction and the market share is growing rapidly. Cereal is such a product of Kellogg that gained vast market popularity just after introduction. The company must take care of this market segment and invest more here.

Cow: Traditional products and business of Kellogg such as chips, corns, breakfast items and traditional food items’ business can be considered to have position in Cow quadrant of the above diagram. And thus the margin in this business portfolio is not very high and this segment consumes lot amount of money to operate the business. These businesses should be carefully taken care of to maintain the market leadership position.

Analyse the strategic positioning of Kellogg’s by carrying out an organizational audit

SWOT analysis for Killogg’s

SWOT analysis analyses the strength, weakness of the company and compares that with the external opportunities and threat of the business environment. The analysis with relation to Kellogg is conducted below:

Strength	1. Customer orientation business an services 2. It has global reputation and supply chain management Innovative and creative products 3. Operation in 180 countries with 1600 food items 4. Skilled employees and expert team of management 5. Efficient production system
Weakness	1. Need to be differentiation 2. Does not take considerations from the customers 3. Have not the capacity to grow vast rapidly
Opportunities	1. Opportunity to expand the market 2. To be more efficient and productive 3. To be more creative and innovative
Threat	1. Rules and regulations are different across the countries. 2. Changing preferences of the customers have made problems 3. New and emerging competitors are adding to the problems for Kellogg.

From the analysis this is seen that Kellogg should utilize the strength and opportunities to overcome the problems and to gain more market.

Value chain analysis for Kellogg

Value chain analysis is a tool that is designed to carry out the internal factors of the company to find out if any positive change can be brought. The value chain analysis for Kellogg is conducted below:

From the above diagram this is seen that Kellogg has some primary activities and some supporting activities. Supporting activities aim at the accomplishing and assisting all the activities and supporting activities aim at assisting some specific jobs for which it is designed. For example, firm structure, HRM are used to operate Kellogg but inbound logistics are operated to accomplish a specific job.

The company should investigate the value chain analysis more detail to find if some positive changes can be made to the process to make the company more efficient.

Carry out an environmental audit for Kellogg’s

PESTEL analysis for Kellogg

PESTEL analysis is conducted to analyse the external environment of the business. The analysis is conducted below:

Political environment: UK has a stable political environment and the company must also consider the environment at the country of operation.

Economic environment: Economic environment such as inflation rate, interest rate affect the business of Kellogg and thus Kellogg must consider the economic environment of the business.

Social environment: Culture, society, language etc. factors make the social environment and thus Kellogg must consider social environment.

Technological environment: Technology affect Kellogg’s business and thus the company must be equipped with modern technology, it is already equipped with advanced technologies, but in the future, it should be more concerned.

Ecological environment: UK has very strict rules about environmental protection and thus Kellogg must be very much concerned about environmental protection.

Legal environment: Legal rules, legislations, business law affect the business of Kellogg in UK, therefore, it should be concerned about the legal rules of the market of operation.

Porter’s Five Forces Model for Kellogg

Porter (1979) discussed the model of five forces to analyse the external and competitive environment. In this part the external position of Kellogg will be analysed to find out the external position of Kellogg.

The model analysed the threat from new entrants and substitutes.

Kellogg has substantial competitors in the existing market position and the bargaining power of the customers is very high as there are many competitors. Existing rivalry in the market is very high and the company needs to analyse the competitors to make outstanding marketing position.

Assess the significance of stakeholder analysis when formulating new strategy for the Kellogg’s scenario

Stakeholders are those factors and parties that are affected by the decisions of the business, they are very much significant in the business because they are affected by the decision of the business and in turn, business is affected by their behaviour (Johnson et al, 2007).

Above diagram illustrates the relation and it also shows how the stakeholders are affecting the business of the company.

When the company takes a decision the decision is likely to affect the stakeholders of the company and thus it must assess the possible impact of the decision on its stakeholders. For example, if the management of Kellogg wants to expand the business to a new country, it must assess the possible impact and reactions of the stakeholders and therefore, this is logical that Kellogg will consider the impact of stakeholders before making a decision.

From the above discussion this is seen that analysis of stakeholders is significantly important before making a decision.

Present Kellogg’s strategy and communicate appropriate findings using Porter’s 5 forces analysis

The strategy of the company will be to capitalize on the existing resources, reputation, experience and technologies to expand the market. These are discussed using Porter’s Five Forces Model:

Bargaining power of Suppliers: The company sources the products from the suppliers, and for some cases it has its own production process. The bargaining power of suppliers is not very much strong as there are many suppliers of the product, and thus expanding the market will not be difficult.

Bargaining power of buyers: Buyers have significant impact on the business of Kellogg and thus the company aims at delivering products of premium quality. Therefore, it will be able to expand the market.

Threat of new entrants: Kellogg faces much risk in terms of new entrants because new competitors may emerge anytime and thus the company wants to create such a supply chain and marketing channel around the world that it becomes difficult for new competitors to compete with Kellogg.

Threat of substitutes: There are substitute products to those of Kellogg. The company wants to expand the market bas e and thus average costs per products will decrease and thus it will minimize the threat of substitutes because competitors won’t tend to have this advantage.

Existing rivalry: There is existing rivalry in the food industry and Kellogg will overcome the existing competition by diversifying the production and product category, by making the production process efficient. From the above discussion this is seen that the company will overcome the barriers to expansion of market and it will reach the vision.

Analyse possible alternative strategies relating to substantive growth, limited growth or retrenchment for Kellogg

Kellogg may adopt different strategies relating to growth and the selection of the strategies will depend on the market condition and competitive position of the company. Possible strategies are discussed below:

Vertical Integration: This means integration of business from the same industry. For example, if Kellogg integrates the food grain production then it is called vertical integration. This strategy will make the company more efficient if the production scale is large.

Horizontal integration: This strategy integrates a business from a different industry. For example, is Kellogg integrates the wrapping business this will be called horizontal integration. If this is done it will have control of the assisting industry.

Related diversification: This means expansion of business in the same industry such as if Kellogg expands the business at a new food items, this is called related diversification. Related diversification helps a business to have new portfolios of business. It is helpful if the company has experience in the field of business.

Do nothing: When the company does not have to do, this is called do nothing. In this position the company will observe the market position.

Market penetration: Market penetration refers to entering a new market with new or existing products. Kellogg may use this strategy to expand the business at newer market.

From the above discussion, it is seen that Kellogg may use the above strategies but all the strategies are not applicable for the company, rather it can select some strategies on the basis of experiences and market position.

Based on the theories of strategy and evaluation select and justify an appropriate future strategy for Kellogg

The appropriate strategy for the company will be to penetrate the newer market.

It has already been discussed that the company needs to expand the market base to newer market through direct marketing and supervising at the country of operation rather than exporting. In this case market penetration will be the best strategy for Kellogg because this will help the company to reduce the average costs of production and moreover the company has global reputation for quality. Therefore, the best strategy for Kellogg will be market penetration.

Assess the roles and responsibilities of personnel who are charged with strategy implementation for Kellogg’s business scenario

The project is about penetrating newer market in new countries, therefore Kellogg needs a tem at each market and primarily the company targets one market: Japanese market. Thus the roles and responsibilities of the possible employees are given below:

Category/ Roles	Responsibilities
Market researchers (5 people)	1. Conducting the market research 2. Finding new market opportunities 3. Finding solutions to marketing problems 4. Creating new market opportunities
Marketing executives (20 employees)	1. Communicating with the customers 2. Making profitable relation with customers 3. Having good relation with suppliers 4. Visiting the market
Legal consultants	1. Dealing with the legal issues 2. Solving legal problems 3. Advising the company
Financial analysts	1. Maintaining the financial issues and accounts 2. Controlling the costs
Communication assistants	1. Communicating with the stakeholders 2. Communicating with the head office
Office assistants	1. Supervising the office

Analyse the estimated resource requirements for implementing a new strategy for Kellogg

Without resources Kellogg won’t be able to open the new operation at the new market and thus the following resources will be needed:

1. Offices in the new country.
2. Production capacity (If produced in that market)
3. Vehicles from communication and market visit.
4. Working capital
5. Infrastructure and furniture
6. Communication technologies, laptops, desktops etc.

The above resources will be needed at least to start the operation in the market and more resources will be needed in the future if the business expand farther in the future.

Resources

Hill, Charles W.L., Gareth R. Jones, 2012. Strategic Management Theory: An Integrated Approach, Cengage Learning, 10th edition.

Porter, M. E. (1981). The contributions of industrial organization to strategic management. Academy of management review, 6(4), 609-620.