Evaluation of Strategy Kellogg’s Presented By: Group 2
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Evaluation of StrategyKellogg’s
Presented By: Group 2
About Kellogg’s
Established in 1906
W.K. Kellogg
Creator of the first-ever breakfast cereal
Multinational food manufacturing company
headquartered in Battle Creek, Michigan, United
States
Manufactured in 18 countries and marketed in more
than 180 countries
42% market share
Vision & Mission
Vision: To enrich and delight through
foods and brands that matter
Mission: Nourishing families so they
can flourish and thrive
Goals
To reinforce the importance of a balanced
lifestyle so its consumers understand how a
balanced diet and exercise can improve their
lives.
To demonstrate Corporate Responsibility &
develop the business responsibly and in a way
that was sensitive to all of Kellogg's
consumers' needs
Vision & Mission
Business Level Strategy
FocusedDifferentiation
Hybrid
Low Price
Low Price / Low Value
Low Value/Standard
Price
Increased Price/ Low
Value
Increased Price/
Standard Product
Price HighLow
Hig
hU
tilit
y o
r V
alu
eL
ow
Bowman’s Strategy
Clock
DifferentiationDifferentiation
Business Level Strategy
Blue Ocean Strategy
Create and capture new demand through product
innovations
Distinct market space: health conscious
consumers
Constantly increasing market share
Make thecompetitionirrelevant
Business Level Strategy
Market
PenetrationProduct
Development
Product
Proliferation
Market
Development
Market
Segment
ProductExisting New
New
Existing Product
Development
Corporate Level Strategy
Related Diversification Horizontal Integration
Cereal
Bars
Crackers
Beverages
ToasterPastrie
s
FruitFlavoredSnacks
Waffles,Pancakes
&Syrups
Global Strategy
Corporate Level Strategy
International
Strategy
Localization
Strategy
Transnational
Strategy
Global
Standardization
Pressure for local Responsiveness
Pressure for cost
reduction
High
High
Low
Low
Localization
Strategy
BCG Matrix Invest in new
product
development
Invest in
promotions
Corporate Level Strategy
Strategy
To widen the consumer base by
encouraging
consumers to adopt a healthy lifestyle by
creating
a balance between nutritious food and
physical
activity thus, capturing a greater market
share
3 Years
Strategy Execution
Tactic I •To encourage and support physical activity among all sectors of the population
Action 1 •Kellogg has supplied a free pedometer through an offer on All-Bran so that individuals can measure their daily steps
Action 2• Promotion for a free
cyclometer
Strategy Execution
During 2006 more than 675,000 pedometers were claimed by consumers
Tactic II •To use resources to sponsor activities and run physical activity focused community programmes for its consumers and the public in general
Action 1 •Became the main sponsor of swimming in Britain
Action 2 •Sponsors the ASA Awards Scheme with more than 1.8 million awards presented to swimmers each year
Strategy Execution
Tactic III• To increase the association
between Kellogg and physical activity
Action 1• Kellogg's Corn Flakes Great
Walk raised more than £1 million pounds for charity
Action 2• In 2004, 630,000 people took
part in the Special K 10,000 Step Challenge
Strategy Execution
Tactic IV
• To use the cereal packs to communicate the 'balance' message to consumers
Action 1
• Uses cartoon characters of Jack & Aimee to emphasise the need to 'Get the Balance Right‘
Action 2• Characters used on the back
of cereal packs
Strategy Execution
Tactic V
• To introduce food labelling that would enable consumers to make decisions about the right balance of food
Action 1
• Introduced the Kellogg's GDAs to its packaging, showing the recommended Guideline Daily Amounts
Strategy Execution
Tactic VI • To run community programs
Action 1
• Kellogg's Active Living Fund encourages voluntary groups to run physical activity projects for their members
Action 2
• Invested more than £500,000 to help national learning charity ContinYou to develop nationwide breakfast clubs
Action 3 •Breakfast Club Plus website, the Kellogg's National Breakfast Club Awards and the Breakfast Movers essential guide
Strategy Execution
• Launched in 1997
• Gained 50% of cereal bar market share in 2 years
Enjoyed steady growth till 2002 – from ‘breakfast cereal’ to ‘all day snack
Competitors launched similar product – slowed sales (2003 – 04)
Mid 2004, sales declined by 15%
Sales were falling, the product was in decline and losing its position.
Extending Product Life Cycle
Nutri Grain
Increased awareness amongst consumers
Consumers switched from other breakfast
options to cereals
Consumers switched brands to Kellogg’s
Kellogg’s perceived as a healthy and
balanced food product
Brand image building: Associated with a
balanced lifestyle choice
The Verdict
Recommendations
Modify strategy to suit local consumers
UK: Cereal consuming population
USA: Prefer food on the go or skip meals
India: Other breakfast substitutes
Promote Kellogg’s
Emphasize importance of breakfast
Promote consumption of cereal as breakfast
Invest more in suppliers and its employees
to support and promote international
expansion
Employ better internal communication
mechanism to enhance strategy execution
Involve employees in strategic decision
making
Recommendations
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