Kellogg Case Study
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Kellogg Company
Case Study
Strengths
A Leading maker of grain-based breakfast cereals for over a hundred years
43% market share for “Ready to eat” cereals market share in the US
A leader producer also of convenience foods (i.e. cookies, toaster pastries, ect.)
Products are manufactured in 17 countries and marketed in over 180 countries
First company to use full-color magazine advertising and widespread consumer sampling.
Created consistent icons to represent its brands- this made it easy for people regardless of where they lived to recognize the brand.
W.K. Kellogg Foundation- one of the world’s largest philanthropic organizations.
Carlos Guitterrez became CEO when Kellogg was struggling and helped the company to turn around in 1999.
Kellogg in 2005 was considered a very profitable company that generates more cash each year than it needs to pay dividends and fund capital expenditures.
Has some of the most well known brands on the market
Kellogg acquired Kashi (natural cereal and convenience food maker).
Weaknesses
Closed its original plant in Battle Creek, Michigan (The South Plant) because it was too labor intensive and inefficient. This generated negative press in the public and gave Kellogg’s a bad reputation.
Kellogg acquired Keebler from Flowers Industries for cash, incurring about $6 billion in debt to do so.
Kellogg’s Keebler unit faces strong competition from the world’s largest maker of cookies and crackers- Nabisco division of Kraft Foods and from Frito-Lay division of PepsiCo.
Kellogg’s primary competitor in ready to eat breakfast is General Mills.
When General Mills and Nestle entered the European cereal market as the Cereal Partners of the World.
Kellogg also faces competition from private-label cereals (A&P, Wal-Mart, Stop and Shop, which lowers the cost of the product). They also offer everyday low pricing and free consumers from cutting out coupons.
As the baby boomer generation ages will begin to seek healthier food choices, Kellogg is only now beginning to emphasize healthy products.
Strengths
Weight
Rating
Weighted Score
A Leading maker of grain-based breakfast cereals for over a hundred years
0.21
43% market share for “Ready to eat” cereals market share in the US
0.34
A leader producer also of convenience foods (i.e. cookies, toaster pastries, ect)
0.23
Products are manufactured