The Leadership Team of Kellogg Company - Case Study Example

? New Market Opportunities Part I: Executive Summary Overview of the Company Kellogg Company is one of the world’s most famous companies that manufacture snacks and breakfast items for huge number of people throughout the world. The company began its operations during the year 1906 in Michigan with 44 people. Over 100 years of its operations in the industry, the company has enormously expanded its operations and at present has manufacturing units throughout 18 countries of the world and market reach in over 180 countries. The company founded by W. K. Kellogg is historically known to be the leader in innovation, industry and marketing (Kellogg Company, 2011). The revenue of the Kellogg was 12,397 million Dollars during the year 2010. The revenue figures depicted a compound annual growth rate of 4% during the past five years ending at 2010. The figure below depicts the movement of revenue throughout the period from the year 2005 to 2010: Source: (Kellogg Company, 2011). Leadership Team The leadership team of Kellogg is headed by Chairman of the Board, James M. Jennes. John A. Bryant is the President and Chief Executive Officer of the company. Various Senior Vice Presidents and Vice Presidents operate under the Chairman and the President of the company. The various departments of the company are headed by the respective Senior Vice Presidents. Margaret Bath is the Senior Vice President of the Research, Quality and Technology Department. Mark R. Baynes is the Global Chief Marketing Officer and Kris Charles is the Vice President of the Global Communications and Philanthropy Department. An important department dealing with the sustainability issues of the company is headed by Dr. Celeste A. Clark. The Chief Financial Officer of Kellogg Company is Ronald L. Dissinger and the department of global human resource is overseen by Dennis Shuler (Kellogg Company, 2009). Mission Statement The mission statement of the company states that the company strives to bring about sustainable growth through utilizing the capabilities of the employees and the brand power. The company aims to achieve its mission to generate better capabilities of fulfilling the needs and expectations of the communities and the customers. The vision statement of the company is “to be the food company of choice” (Kellogg Company, 2011). The pyramid below depicts the objectives of Kellogg: Source: (Kellogg Company, 2011). Business Ethics and Social Responsibility Kellogg aspires to develop a strong prospect for business and grow on a continuous basis with proper sustenance of business ethics towards the company’s stakeholders and primarily the environment. The company undertakes a number of projects aimed at the betterment of the society every year. For instance, during the year 2010, the company concentrated upon investments on charities in order to depict their objectives as a company dealing with processed food on a global basis (Kellogg Company, 2011). Product Mix The product mix of Kellogg is consisted of a number of varieties of products. By category, the products of the company are consisted of baking products, beverages, cereal, cones, cookies, crackers, fruit flavored snacks, snack bars, snacks, chips and party mixes, toaster pastries, vegetarian and waffles, pancakes and syrup (Kellogg NA Company, 2011). The various products under each of the categories are available in innumerable number of brands offered by the company. Current Financial State The financial health of the company can be considered to be stable as the company has sustained its operating profit, sales and earnings per share throughout the last five years, while investing in various profitable business opportunities. Although the operating profit of the company declined during the year 2010 from that in the year 2009 (from $2001 million to $1990 million), the compounded annual growth rate (CAGR) during the past five years was 3%. Similarly, the earnings per share of the company also depicted a CAGR of 7 % (Kellogg Company, 2011). Part II: Technological Opportunities Technological Opportunities Kellogg is a leader in the breakfast food product category and its business is in growing stage at present point of time. As the company deals more with internationalization processes, technology plays one of the most crucial roles in its business arena. Kellogg Company is a value added manufacturing unit and thus values the customers’ concern a lot. The company offers healthy products to its consumers and the consumers also trust the company with regards to its provision of healthy and nutritious products. From the research about the product categories of Kellogg Company, it has been evaluated that there is scope for the company to diversify into lunch and dinner products along with breakfast items. Technologies mechanized with production of preserved lunch and dinner items (ready-to-eat products) can be observed as an opportunity for Kellogg towards expansion of its business operations. The company should strive for diversifying into this category of business with adoption of the most appropriate technology for manufacturing and preservation of such products. e-Commerce Opportunities Kellogg is such a company that offers not only value added products to its consumers but value is provided in its process of service quality as well. The company implements various effective ways for carrying out its business and maintenance of supplier-relationship through leveraging various technology options that are available in the modern times. The company is thus readily involved in providing e-commerce facilities to its consumers throughout its operating locations. They prefer to conduct their business transaction trough e-commerce activities because this allows them to offer fast and accurate service with low cost and enhanced level of productivity. Electronic Document Interchange (EDI) is the method that is utilized by the company for exchanging orders of purchasing. Sterling Commerce is the name of the company’s EDI partner and the company provides comprehensive assistance to its purchasers for assessing direct contact with their EDI partner (Kellogg Company, 2011). Role of Technology in Hiring Technology provides various assistances to Kellogg Company in its process of hiring diverse group of employees from around the world. It is the foremost advantage that is provided by technology because it helps the company in reaching the various groups at comparatively lower costs than otherwise it would have reached. Proactive hiring is another advantage that is offered by the technology to Kellogg Company. Technology provides the scope and ability to the company for searching databases on a worldwide basis and look out for both active as well as passive seekers of job. Another essential advantage that is provided by technology is with regards to the option of being ‘choosier’ during making decisions related to hiring. This is because through the use of technology, wide data of jobseekers can be accessed that helps in generation of a number of options for selecting employees (Razzack, 2009). Part III Marketing Opportunities Product That Sell Well In Hong Kong and Brazil Kellogg’s cereal products will be appropriate for sell in Hong Kong and Brazil. There are several cereal products of Kellogg such as, Corn Flakes, Special K and Chocolate Crunch among others which are suitable for breakfast meal (Kellogg NA Co, 2011). Processed Food Industry in Hong Kong The processed food industry in Hong Kong is characterized by its dynamic transaction activities. The food processing industry has fascinated considerable foreign investment. The ‘food processing industry’ of Hong Kong is quite small compared to food trade segment. In the year 2008, the total export of processed food and beverage was almost 29.1 billion HKD (Hong Kong Trade Development Council, 2009). The market of cereal in Hong Kong has experienced a growth rate of 3.5% from 2004 to 2009. Thus, Kellogg has great market opportunity to sell their products in Hong Kong (Datamonitor, 2011). Target Customers of Kellogg Company’s Product in Hong Kong The target customer of cereals in Hong Kong will be based on age demographics i.e. the teenage customers and female consumer segment. The major drawing aspects for selling of cereal products in Hong Kong will be its convenience packaging, affordable price, great taste, nutritious elements and refreshment. Growing average revenue is enhancing the demand for cereal meals. The increasing number of female in the labor force and the progression of individual person families have led to possible opportunities for cereal products of Kellogg Company in Hong Kong. The limited time of many females who are engaged in jobs as well as traditional household responsibilities, might provide opportunity for selling of cereal products of Kellogg Company in Hong Kong. Psychographics And Demographics Of Target Customer The target customers of Kellogg’s cereals in Hong Kong are females within the age group of 25 to 40. The reason is that they are very health conscious and the major decision makers for purchasing foods for their families. Majority of females in Hong Kong are single and only few have completed the university level education. With respect to brand and price consciousness, the women customer segment of Hong Kong is ready to pay higher prices for a brand with good image and high familiarity. Price seeking attitude among female customers of Hong Kong can be found while purchasing a brand (Tai & Tam, 1997). Product Fit Hong Kong is a rich economy and is an open market with almost no import tariff and it is also the entryway for China’s food industry. The crucial dynamic force for Hong Kong food propensities are food safety, growing health awareness among people, shifting demographics and busy lifestyles. In Hong Kong, there is growing tendencies among people to consume organic meals, functional meals, chilled and frozen meals, convenience meals, snacks, and nutritional meals. The people of Hong Kong are usually not brand loyal and quite price sensitive with desires for convenient packaging. Quality western meals are also popular amongst younger customer segment. The food consumption tendency of Hong Kong is determined by aspects such as safety, health awareness and busy lifestyle. Now-a-days, customers are gradually preferring healthy, fresh and higher nutritious meal. Thus, the cereals of Kellogg will fit appropriately with the culture and the behavioral pattern of people in Hong Kong because Kellog’s cereals are equipped with healthy ingredients and are affordable and safe (Chung, 2011). Processed Food Industry In Brazil Brazil has strong food processing industry which delivers people with wide approach of processed foods. Almost 50% of food consumed in Brazil is processed (Universidade de Sao Paulo, 2011). The sales value of bakery market in Brazil was almost 19.8 billion USD where only sales of cereal products have increased from 393.5 million USD to 429.3 million USD from 2007 to 2008. Thus, the cereal products are expected to grow rapidly in coming days (Agri-Food Trade Service, 2008). Target Customer Of Kellogg’s Product In Brazil The target customer segment of Kellogg Company’s cereals in Brazil will be developed on the basis of income demographics. The target customers of Kellogg’s products in Brazil are middle and high income group people. According to the study of ‘Instituto target/FGV’, it was estimated in the year 2006-07 that the middle income group people of Brazil would increase by 5.6 points in the subsequent 5 years. The average income of middle income group people of Brazil was almost 2,230 BRL to 3,750 BRL in 2006. The major reason for sales of cereals in Brazil can be its quality, labeling, brand image and nutrition. The cereals of Kellogg will stimulate health advantages with nutritious ingredients and different flavors such as strawberry or chocolate. The labeling of Kellogg’s products is also attractive which can motivate the Brazilian customers to purchase them (PwC, 2007). Psychographics And Demographics Of Target Customer Customers of Brazil are used to differentiate products by brands and relate them with conceptions of quality and position. There are increasing trends of price sensitivity among Brazilians and they are influenced by differentiated products. The rising income of middle class people have resulted in increased consumption of cereal products. It is expected that the growth in income of Brazilians will lead to more spending on foods (PwC, 2007). Product Fit In Brazil, food is regarded as a basis of inclination and family gathering. The globalization has affected the awareness of Brazilian citizens towards food consumption. From the perspective of consumption and demand the customers of Brazil are less passive; more cultured and have high demand for quality meals. They prefer nutritious foods and desire nutrition related information to be given on the label of packaging of products. They also prefer to shop in malls, outlets and supermarkets. The cereals of Kellogg is quite fit for Brazilians as it provides a number of advantages, such as, nutrition, attractive labeling preferred by Brazilian people and its availability in every supermarkets (Agri-Food Trade Service, 2009). Controllable And Uncontrollable Variables In any overseas country, the controllable variables which can impact on the sales are marketing mix i.e. product, price, place and promotion. Product: The first controllable variable is product. It can determine the sales by satisfying the fluctuating needs and requirements of people. Price: Price can also affect the sales of Kellogg’s products in new market. As a premium brand, Kellogg Company can set higher price for its cereals. Place: The place can also regulate the sales, thus the products of Kellogg Company must be available on every supermarkets of Hong Kong and Brazil. Promotion: In order to increase the sales, Kellogg Company can promote its products through television advertisements and sampling. The major uncontrollable variables which can determine the success or failure of product are external environment, such as, political environment, legal environment, economic condition, and competitive environment. Kellogg Company needs to consider the uncontrollable variables prior to launching its products into new market. Promotion In order to attract the potential target customers of one of its cereal products named ‘Kellogg’s Corn Flakes’, the company can use television commercial event. As television is one of the most popular media in Hong Kong and Brazil, it can be used to promote this product, ‘Kellogg’s Corn Flakes’ to entice the young customer segment because they are the major consumers of Corn flakes. References Agri-Food Trade Service. (2008). Packaged Food Sales In Brazil. Retrieved from http://www.ats.agr.gc.ca/lat/5326-eng.pdf Agri-Food Trade Service. (2009). The Brazilian Consumer Behaviour, Attitudes and Perceptions Toward Food Products. Retrieved from http://www.ats.agr.gc.ca/lat/5272-eng.htm Chung, K. (2011). Hong Kong Food Market Trends. Retrieved from http://dpi.vic.gov.au/agriculture/investment-trade/market-access-and-competitiveness/markets/china/hong-kong-food-market-trends Datamonitor. (2011). Cereal Bars Market in Hong Kong to 2014. Retrieved from http://www.companiesandmarkets.com/Market-Report/cereal-bars-market-in-hong-kong-to-2014-(confectionery)-616938.asp Hong Kong Trade Development Council. (2009). Profiles of Hong Kong Major Manufacturing Retrieved from Industries. http://info.hktdc.com/main/industries/t2_2_31.htm Kellogg NA Co. (2011). Find Products. Retrieved from http://www2.kelloggs.com/ProductLanding.aspx Kellogg Company. (2009). Leadership Team. Retrieved from http://investor.kelloggs.com/management.cfm?navSection=BInfo Kellogg Company. (2011). Our History. Retrieved from http://www.kelloggcompany.com/company.aspx?id=39 Kellogg Company. (2011). Kellogg Company Financial Highlights. Retrieved from http://annualreport2010.kelloggcompany.com/financial.htm Kellogg Company. (2011). Vision and Mission. Retrieved from http://www.kelloggcompany.com/company.aspx?id=888 Kellogg Company. (2011). Community. Retrieved from http://www.kelloggcorporateresponsibility.com/community/ Kellogg NA Company. (2011). Find Products. Retrieved from http://www2.kelloggs.com/ProductLanding.aspx Kellogg Company. (2011). Purchase-to-Pay Process. Retrieved from http://www.kelloggcompany.com/company.aspx?id=1417 PwC. (2007). Brazil. Retrieved from http://www.pwc.com/en_GX/gx/retail-consumer/pdf/brazil.pdf Razzack, S. (2009). Hiring Challenges & The Role of Technology. Retrieved from http://www.dnb.co.in/FESConfTool/Uploads%5CPresentations%5C148%5CMr.%20Sohail%20Razzack.pdf Tai, H. C., & Tam, J. L. M. (1997). A Lifestyle Analysis of Female Consumers in Greater China. Retrieved from http://www0.hku.hk/sociodep/bbf/BBF%20Readings%20W11/W11%20A%20Lifestyle%20Analysis%20of%20Female%20Consumers.pdf Universidade de Sao Paulo, (2011). The Brazilian Market for Processed Food. Retrieved from http://www.usp.br/unicetex/geagro/biblioteca/Brazil_agribusiness.pdf Read More