The Food Information Regulation

Published Date: 02 Nov 2017

The PESTEL method is a key framework which the group used to critically analyse the external Marco-environment of the cereal industry.

Political / Legal

Regulations:

The Food Information Regulation introduced, in 2011, EU (European Union) legislation regarding product labelling of nutritional information. The cereal industry must ensure their products meet these requirements and inform the consumer of relevant information.

All businesses should adhere to advertising regulations within the markets they are present. In order to do this, businesses have to follow the guidelines set out by the Advertising Standards Authority (ASA) within Ireland and UK. For example in August 2012, Weetabix released an advertisement stating that the cereal was a form of "slow release energy". This form of advertisement was seen to be misleading to the consumer. The advertisement had to be amended appropriately to show that the cereal itself had to be combined with milk for this statement to be true as the cereal alone would not be sufficient.

Government:

If businesses associated with the cereal industry, for example Kellogg’s and Nestle, decide to establish a manufacturing plant in Ireland, consideration in relation to tax incentives, for example corporation tax, stable Government system and experienced workforce are some key areas which must be taken into account.

As a result of Government cutbacks since 2012, both in Ireland and UK, businesses may suffer financially. If these cutbacks continue, this could have an impact on customers as their spending power will change dramatically.

Economical

Transport Expenditure:

The fluctuating prices in oil, petrol and diesel could impact the cereal businesses in the areas of transportation and delivery expenditure. These costs are unavoidable and affect the everyday running of the business.

Recession:

With the downturn in the economy, people have less disposable income. They have less money to purchase brand products and this can lead to less sales and profits for many businesses.

Social

Consumer Buying Patterns:

Businesses often analysis these patterns in order to gain information on both the consumers and the businesses marketing strategy. As a result of examining these patterns, businesses can better predict how consumers will respond to their marketing strategies. These businesses could use this to gain potential customers.

Growing Cultures:

For businesses, an understanding of the different products offered to customers is important factor, for example Flahavan’s currently offering microwavable porridge for customers who want a quick and easy meal with the benefits of nutritional content.

Technological

Technological Advances:

With the continuous advances in relation to technology, businesses need to reassess the technology used within the store and ensure they are up to date and operational. Out of date technology affects the running of the business and could cause unnecessary errors.

In order to help reduce the amount of water wasted, for example Weetabix are also working closely with Anglian Water (UK based company) to develop a technological strategic water system. The work will be primarily carried out on weekends so as to minimise disruptions to customer orders.

Environmental

Environmental Regulations:

Businesses must ensure to keep up to date on all the relevant environmental regulations while also continuing to achieve their environmental targets e.g. reducing carbon footprint, packaging and waste, food waste and water conservation.

The following scenario outlines how businesses within the cereal industry have had to make the changes to their manufacturing techniques. In 2010, Weetabix made a pledge to reduce its water usage by 20% by the year 2020. In order to do this they enlisted the services of Anglian water who found a major leak at the main production plant, which would have wasted 50 million litres of water per annum at a cost of £100,000.

PESTEL Analysis & Key Drivers

From the knowledge and information gathered from the PESTEL analysis, the key drivers could have an impact, positively or negatively, on the strategy for the cereal industry.

Political:

The standards from the Advertising Standards Authority are to be strictly adhered to in relation to the large target audiences that the industry targets. The cereal industry uses cartoon characters within their advertising portfolio in which they use these characters to target children. Children would be highly influenced by the actions of the characters rather than the nutritional value of the cereals. This could be viewed in the eyes of the public as being a breach of advertising standards.

Economical:

Due to economic downturn currently affecting countries throughout Europe, the disposable income of people in Ireland and the UK has decreased substantially which affects the customers buying behaviour. This can be reflected by the substitution of own brand cereals made available within supermarkets for example Dunnes Stores, Tesco, Aldi and Lidl. This area would be a key driver for the cereal industry, as product quality and pricing would need to be utilised in order to compete with in the market.

Growing Cultures:

This continuous changing cultural environment in consumers is an important key driver for any business. On a daily basis, consumers are becoming more health conscious in the foods they purchase along with the nutritional benefits. As the cereal industry can be seen to have high sugar and additives contents, this could have a negative impact on this industry. Businesses must ensure to focus on selling their products to consumers in terms of the nutritional value which should be highlighted on the product packaging.

Environmental:

Supply chain management plays a crucial role in companies looking to reduce its carbon footprint, it illustrates positives in relation to increasing efficiency in terms of raw materials getting transported to the manufacturing plants as well as how the distribution of the finished products are transported to numerous supermarkets located throughout the different regions within a country.

For example, Weetabix source the majority of their raw materials within a 50 mile radius of their manufacturing plant in the UK, while Kelloggs use logistical companies to transport their products to the different supermarkets they provide cereals. By outsourcing this part of the operations it allows the organisation to focus on its area of expertise while also been environmentally friendly as it means that trucks are not transporting deliveries which only take up a 60% capacity of the truck.

High bargaining power due price and health conscious customers

High threat of substitutes as there is alternatives to breakfast cereals

Mixed bargaining power due to fluctuation in prices e.g. corn and wheat

High threat of entry due to new product rangesPorter’s Five Forces Model

Porter’s Five Forces Analysis

Power of Suppliers:

In terms of Kellogg’s, Nestle and Weetabix, these businesses maintain a medium level of purchasing power from suppliers. This could be due to the variation of prices, for example wheat and corn, from suppliers as a result of extensive forces. These expenses could be filtered down the supply chain to the end user.

In relation to Weetabix, the business sources 90% of their raw materials within a 50 mile radius of their production plant in the UK. Although this can be viewed as a positive contribution within the local community, it may have a negative impact on production if weather conditions were to impact crop growth.

In regards to Flahavan’s and Odlums, these businesses only retain a certain level of power as a result of the varying prices of the oats. These varying prices could be due to a reduction in supply availability or difficult growing season. Also these businesses purchasing power would not be as high as that of competitor’s which would result in a moderate bargaining power.

Power of Buyers:

Buyers of breakfast cereals consist of grocery stores and supermarkets across Ireland and the UK. These buyers hold the power as the price is set on their terms. The buyers bargaining power would be considerably higher if there were only a small number of dominant buyers and a large number of sellers within the industry.

Supermarkets, for example Asda, Morrisons, Sainsbury's, Tesco and Dunnes Stores all stock cereal products within their stores in the UK and Ireland. Although there are multiple buyers within these two regions, it should be highlighted that these stores also stock competitor’s brands. Supermarkets, such as Tesco, also produce and supply their own brand breakfast cereals.

Based on research conducted, Odlums experience an 80% market share with their flour and baking mixes. However this does not include their porridge range. Due to the production of supermarket own brand cereals, there is high bargaining power for buyers such as Tesco and Dunnes stores.

Threat of Substitutes:

Although cereal consumption within the UK and Ireland is high, there is an increased threat of substitutes from competitors within the cereal industry. Other foods types such as fruits, bread/toast and yoghurts could be considered to be more convenient and less expensive for the average consumer.

For businesses, such as Flahavan’s and Odlums who only produce a certain selection of products, the threat of substitution could be high. This could be due to new, similar and cheaper brands entering the market. The introduction of own brand ranges could have an effect on the cereal industry as a whole, as customer lifestyles and spending habits have changed dramatically.

Threat of Entry:

Irish people are the largest consumers of breakfast cereal in the world. This raises the issue that there is a clear possibility for potential entrants to enter the Irish market and potentially gain market share.

Kellogg’s, Nestle and Weetabix are considered to be powerful market leaders. As a result of this, similar companies such as Flahavan’s and Odlums are continuously competing against each other to gain a wider market share.

The barriers to entry for this particular industry could be classed as high because potential start-up businesses may experience difficulty in entering the market. These new businesses may not have the relevant experience of the market and may lack the supply and distribution channels. Also the retaliation from the existing businesses may prevent the new entrants from achieving success within the market.

Although Kellogg’s is the market leader within the cereal industry, if American owned firms, such as Quakers and General Mills, decide to expand outside of the US it could lead to increased competition within the market.

Competitive Rivalry:

Competition within the cereal industry is high with businesses such as Kellogg’s and Nestle competing to be the overall market leader. The continuous introduction of new products helps to ensure that rivalry between all the companies remains high. In the case of Odlums, the business experiences a high amount of competitive rivalry due to competitors, Flahavan’s and Weetabix, having a wider product range.

Strategic Group Mapping Model

Strategic Group Mapping Analysis

Internal Strategic Capability Analysis

Internal Strengths (S)

World leading producer of cereal

Market orientated

Large product portfolio

Attractive product

Brand extensions

Competitive advt.

Extensive market research

Corporate social responsibility

Mass media advt.

Promo activity

Internal Weaknesses (W)

Costly to develop new products

Customer focus on products that promote inner health

High price

External Opportunities (O)

Internet advertising

Internet selling

Baby boom

Gluten/wheat/dairy free products

People are heath food aware

Changing customer tastes

S - O Strategy

Expand snack catalogue to market to all age groups with dietary needs and wants

Sell favourable nostalgic cereals online

W – O Strategy

Expand product line to satisfy customer demands

Diversify into healthier convenience snacks

External Threats (T)

Home Brand cereals

recession

Healthier substitutes

Main competitor Weetabix

S – T Strategy

Create new promotional activity to engage customers

Extend product portfolio (30)

W – T Strategy

Create new healthier snacks range.

Kellogg’s SWOT & TOWS Analysis

Kellogg’s Cultural Web Model

Kellogg’s Cultural Web Analysis

Stories:

Based on research conducted in relation to the reputation of Kellogg’s amongst its employees, it was found that there was information of a mixed variety. Upon researching employees feedback, negative comments were discovered as one employee stated that the business had "short term focus and little employee development" while another employee stated that Kellogg’s was "a horrible place to work". Positive feedback was also reviewed with one employee stating that Kellogg’s created an "excellent opportunity to learn from brilliant minds and develop as a professional"

The reputation of Kellogg’s would appear to have a high influence on how the employees visualise the business and the leadership style. Employee feedback highlighted the abuse of management positions which can result in the employees being frustrated and unmotivated. Employee research indicated that most were satisfied with their wages but that it came as a result of working long hours.

Research was conducted in order to gain a better understanding of Kellogg’s reputation amongst its customers. The research revealed both negative and positive feedback. The positive feedback was in relation to how the customers enjoy the various products produced by Kellogg’s. The negative feedback highlighted how customers did not enjoy the products and how a number of the customers discovered foreign objects within their cereals. Also some customers revealed they were not satisfied with the level of customer service they experienced. This customer feedback is not good for Kellogg’s and highlights how the business needs to improve their customer service.

Symbols:

As Kellogg’s is a multinational business, the brand image associated with the business is widely recognised and popular amongst customers. The logo identifies the business and its products while also being unique and standing out from its competitors.

The Kellogg’s logo has been modified slightly throughout the years but it has never lost its colour or shapely design. The introduction of the Kellogg’s Special K product range helped to better promote the business and placed better emphasis on the "K" aspect of the logo and business name.

Power Structure:

Kellogg’s has a hierarchical power structure with most of the manufacturing and product decisions being made by management and head office. The decisions are made as a result of discussion held between management. The employees are informed of the decisions and are expected to cooperate with the decision.

Organisational Structure:

Kellogg’s is a global business, located in 18 countries throughout the world. For Kellogg’s to remain successful within the marketplace, the business needs to ensure that each product is manufactured to the specification set out by management. Kellogg’s rely on the employees to work in teams in order to complete certain tasks.

Control Systems:

Kellogg’s has a tightly controlled environment with management and head office controlling the decision making. Kellogg’s also has employees who provide an organised environment and strive to produce quality products. Employees are trained for different aspects of the manufacturing process and a selection of employees are trained to interact with customers and suppliers. Employees also receive employment contracts which contain a specified length of employment. These contracts must be signed by each employee and the employee must adhere to the information set out in the contracts.

Budget and performance reports are controlled by Kellogg’s. The budget reports allow Kellogg’s to see the profits and other monetary information. The performance reports are completed on each employee and displays to Kellogg’s how these employees are performing their outlined duties.

Rituals and Routines:

Kellogg’s reviewed their training procedures in 2011 and developed a more intensive training process. Training is given to all employees in an effort to ensure that each employee has the skill and knowledge required to complete their daily tasks. Kellogg’s also provides employees with development opportunities by allowing these employees to experience learning from managers and from the work itself. These development opportunities are a way to encourage employees to work hard and aim to achieve a promotion. New employees are given induction training to ensure they are introduced to the work which they will be assigned. Also each employee receives training in relation to the safety measures which Kellogg’s have implemented in an effort to ensure the employees are safe within the workplace.

Kellogg’s Ansoff Product / Market Growth Matrix

Market Penetration

By utilising this strategy, this would benefit Kellogg’s in terms of continuing to remain competitive within the market and stabilising their position as a market leader within Ireland and UK. Over the years Kellogg’s have dramatically increased their product range to cater for a wider customer base. Kellogg’s provides cereals for children and adults to accommodate for their different lifestyle requirements.

By continuing to penetration this market at a relatively low risk for the business, Kellogg’s would need to implement a strategy in order to maintain their market share by using their existing products while retaining their current customers. This strategy would need to be developed by increasing brand awareness of their products, for example charity events or competitions, in order to remind customer their products.

Product re-launch could be another penetration for Kellogg’s in terms of retaining their existing customers. Through customer involvement and push marketing strategies, these methods could help Kellogg’s to secure their market share or have the possibility of increasing their customer base.

New Products and Services

As the cereal industry is a competitive market and developing the ability to be distinctive from the existing competitors could be a challenge for Kellogg’s. In order to increase the customer base, Kellogg’s developed products in the areas if toaster pastries and snacks. These developments allowed the business to explore new products while retaining their existing customers.

Market development

Market development is an important aspect for Kellogg’s to grow within the cereal market. Currently Kellogg’s offer a porridge product which is available in South Africa however are not obtainable within Ireland and the UK. Gluten free products from the US are also not available within these countries. These products could have a dramatic effect if Kellogg’s introduced these products into the Irish and UK market, as it could heighten the competition amongst competitors and attract new customers to their products.

Conglomerate Diversification

In order for Kellogg’s to diversify into an unrelated market would be a difficult challenge for the business. A market that Kellogg’s have diversified into is the snack food market. This is evident from the acquisition of Pringles in early 2012. This market could be seen to be difficult to operate as it does not relate to the cereal industry and the business may not have the necessary knowledge of the snack food industry.

Nestle

Internal Strengths (S)

Effective logistics – exports products worldwide

Brand image – easily recognisable and known throughout most countries

Informative website

Large selection of products

Environmentally friendly

Sponsorship

Cash position

Internal Weaknesses (W)

Competitive pricing

Wheat prices

Exporting costs

Criticism about cereal ingredients

Advertisement issues

Poor product display on website

External Opportunities (O)

Ensure continuous availability of products to satisfy customer needs

Effective target marketing

Social media usage

New product range for Ireland & UK

Advertising

S-O Strategy

Introduce gluten free products to broaden product range

Improve usage of appropriate social media tools to maintain brand image – twitterfeed and offers

W-O Strategy

Improve advertising & adhere to guidelines

Design cereal webpage on the Irish website to highlight and display all cereals available

External Threats (T)

Availability of products to buyers

Recession – declining retail market

Demanding environment – people want more for their money

Competitors

Substitute products

Own brand products e.g. Tesco

Health conscious customers

S-T Strategy

Increase brand awareness through sponsorship in order to sustain retail sales

Enhance product selection to customers to prevent switching to substitutes

W-T Strategy

Promote nutritional benefits of products through advertising to health conscious customers

Focus on quality of products than price in order to compete with competitors

Nestle SWOT & TOWS Analysis

Nestle Cultural Web Model

Nestle Cultural Web Analysis

Paradigm

Nestles ethos "Good food, good life" is a clear indicator of where nestles drive originates. This can be clearly defined as Nestles collective experience which is applied to situations in order to make sense of strategy. For example nestles acquisition of Alcon Laboratories Inc. provided an increase of food technology competencies behind their foods thus confirming their initial ethos of "good food, good life".

Stories:

Nestlé’s is regarded as the largest food business company in the world; this has been experienced through the use of mergers and acquisitions and primary food nutrition values. Nestle acquired Crosse & Blackwell in 1950 and Rowntree Mackintosh in 1988 to name a few. It operates in 86 countries and is the largest shareholder of L’Oreal. It has also been ranked at 1 in the fortune global 500.

However, Nestle cereals received bad press in 2011, with the accusations of incorrect nutritional information on their cereal products. This apposed their believes of nutritional value in good food.

Symbols:

Nestle is a Swiss made multinational country which strives in power and direction. It is a professional company, which has used mergers and acquisitions to its advantage in its early years and continues in this fashion today. Nestle receives great admiration publicly.

Power:

Nestles power structure is very hierarchical, many field employees feel like progression is limited and not balanced for all employees. However when we consider their previous paths to this power (mergers and acquisitions) we can interpret their power drive as continuous and dedicated. Also another interesting fact is that Nestle is primarily a Male dominated organisation, which creates the concerns of the "glass ceiling" effect for women, which can be regarded as discouraging and an imbalance on gender equality.

Organisational structure:

Nestles Organisational structure is revolved around innovation and expansion. Innovation through their ethos of "good food, good life", this can also be seen in their portfolio of innovating products such as baby formula and instant coffee. Their constant collaboration makes their company quiet segmented, however this approach has proven to be successful. In addition to this organisational structure, employees felt that quick decision making is not a competency of Nestles senior managers. This could potentially bring up the issue of potential lose in employee involvement, which can in most circumstances be valuable.

Control systems:

Nestle offer attractive pension plans in order to control employee systems. This is a lot more attractive for long term employees who are in the office. However, a majority of employees expressed that there is no work life balance plans to keep employees motivated and balanced in home and work activities. In contrast to their attractive pension plans, it can be assumed that Nestle is clearly monitory focused with employees.

In addition we found that Nestle do not micro manage their employees, although this is more enjoyable for the employee, it can be interpreted that nestle need to grasp control systems in order to keep employee focus in activities.

Routines & Rituals:

On a day to day basis, Nestle offer flexible working schedules for their staff. This communicates a laid back working environment, however due such hierarchical stances, strategy and direction is driven from headquarters. This tells us that on field employees are not driven on performance, as that type of belief is left to the senior managers in the company.

It can be widely assumed of how advantageous it is for all employees to have access to Nestlé’s international training centre in Switzerland. This can be seen as a prestigious opportunity for all Nestle’s employees to excel in. "Creating Shared Value and meeting our commitments" is Nestlé’s view on expansion into different countries and reaching further customer segments globally.

Nestle Ansoff Product / Market Growth Matrix

Market Penetration:

Like all cereal brands, Nestle is no different in wanting to expand further within markets such as the UK and Ireland. In order to do this they face a major obstacle in that they are the second largest behind Kellogg’s who have a 45% market share of the breakfast cereal market. However, as revealed late last year, the company is looking to expand its brand further within the region of Northern Ireland and in order to help achieve its objectives they have enlisted the services of GM marketing to help expand the brand through the use of online technologies and refined marketing strategies. The first phase within the marketing strategy will see the core brands used to help identify the Nestle brand as well as using pre priced cereal boxes which may be cheaper or the same price as their competitors.

Even though this is a low risk strategy the level of success of such a strategy can also be miniscule. If this strategy vastly increases the market share of Nestle it will have an impact on the market share of their competitors but at the same time it may not increase the market share of Nestle sufficiently to have a major impact on their competitors. It may take a considerable amount of time and may cause an impact within other areas that Nestle focus time and resources on. This strategy should be taken with a prudent approach in mind so as not to harm other categories that Nestle positions its brand.

New Product & Services:

Research and development is an integral part within the Nestle company as they look to introduce product development within all of the categories that it positions its brand. This is clearly evident within the company as they employ 4,500 people globally within its R&D departments as well as using external research provided by scientists, doctors who work within world renowned universities. This aspect of building bridges externally allows the company to further innovate within the area such of nutritional and healthy foods as well as numerous other categories.

A core belief that exists within the Nestle group is to "think global – act local". When looking for new ways in which to introduce new products within existing markets they place the customer at the core of the product. This is recognisable in the way that they cater to various customer groups with breakfast cereal brands such as Nestle Multi Grain Cheerios focusing on all members of the family, Nesquik for teenagers and children and Nestle Fitness for people who place a high importance on keeping in shape. Nutrition is a vital element within the Nestle core beliefs and values but they also put a lot of effort into ensuring that good quality taste is never sacrificed in the cereals that they provide.

Product development is a strategy that Nestle have continuously looked to improve upon since it identified that nutrition, health and wellness was to be the core strategy that it developed its products upon. Although it is a costly strategy the financial benefits on a global scale seem to outweigh the costs for Nestle.

Market Development:

"Organisations would ideally like to operate as if the world were one large market, ignoring superficial regional and national differences but still making sure that marketing activities fit to the practices and cultural characteristics of genuinely different markets" (Lee and Carter, 2008)

The Nestle brand is recognised on a global scale and has a vast portfolio as it does not primarily focus on cereals which can be identified due to its large divergence into similar but also unrelated areas such as baby food, chocolate bars, beverages and many other various categories. However, they do not focus each of these categories on a global scale as not all of their products would be successful within each of the segmented markets.

Even though each of the categories are not launched on a global scale it does not mean that they would not be successful within different markets as alterations could be made in relation to;

How the product is packaged and designed

The type of marketing communication strategy adopted to identify the brand within different markets and the people within those markets

What values are important within the different market

Given that Nestle is already a recognised brand name on a global scale and offers different categories of products in most domestic countries it would suggest that logistical structures are already in place which would be a major saving in terms of time, money and risk would be reduced due to existing structures within the global market.

Diversification:

Diversification is a strategy that an organisation can use to help influence the growth of the organisation on a large scale platform. It is a strategy that Nestle has closely adhered to as they have diversified into unrelated markets such as pharmaceuticals, beverages, pet care, health care in order to cover losses sustained within other parts of its portfolio while also growing its market share within these markets.

Nestle has depended heavily on diversification to sustain its market leadership as the world’s largest food company. Another reason for Nestle choosing to diversify throughout different markets is identifying what customers want now as well as in the future. By engaging within markets that are in an introductory stage it allows them to save money from been involved at the start than entering a market when competition is highly competitive. Early entry into unrelated markets also allows them to gain a higher market share now than they would at a later stage.

Within the cereal industry Nestle has had to significantly alter the products which it provides to its customers. This was highly evident in October 2012 when they vowed to reduce the proportion of sugar and sodium content that exists within the cereal category aimed at children and teenagers. Nestle say they are taking into account what their customers are saying and that this is a strategy which they have focused on within the last decade. This is evident in that they have removed 9,000 tonnes of sugar and 900 tonnes of salt that previously existed within its previous cereal formulas.

Weetabix SWOT & TOWS Analysis

Internal Strengths

Positive brand image

High nutritional products

Highly informative website

Successful Brand extension e.g. cereal bars & Oatabix

Best-selling cereal brand in the UK

Readily availability in all supermarkets

Positive customer satisfaction

Internal Weaknesses

Easily substituted for other breakfast items e.g. fruit, toast, yogurts or a traditional fry

High competition within the cereal market e.g. Kellogg’s & Nestle

Unattractive packaging for children

Categorised as a high price product

External Opportunities

Expand the market

Increase revenue

Health conscious consumers

S-O Strategy

Target health conscious consumers domestically and internationally

W- O Strategy

Increase product range in order to expand the market domestically / globally and obtain market leadership.

External Threats

Competitor Kellogg’s is the market leader with 40 % share of the breakfast cereal market

Own brand labels trying to imitate Weetabix cereal

Increase of substitutes for consumers such as toast, fruit, yogurts etc.

Recession - consumers have less spending power

S – T Strategy

Minimise substitution of product by increasing brand extension of the parent product further to obtain larger market share

W – T Strategy

1. Increase customer awareness of the benefits of eating Weetabix compared to competing nutritional brands

Weetabix Cultural Web Model

Weetabix Cultural Web Analysis

Paradigm:

While Weetabix do pride on sourcing locate produce for their product, protecting the environment is a key factor in how the business operates. Through working with professional schemes in meeting targets, for example carbon footprint, water and waste usage, Weetabix strive to achieve these goals with minimal impact on the environment.

Stories:

From the research conducted in relation to Weetabix’s employees, it was evident that the employees have positive experiences from working with the business. Weetabix state that working with the business is "more than just a job". Employees find that working in Weetabix is "rewarding" and a "great place to work". Employees also state they receive "good pay and pride of being a part traditional branded company".

Customer feedback is also an element that affects the culture of Weetabix. Negative feedback could potentially affect how employees operate and preform within the business. However, Weetabix obtained positive feedback from customers online, outlining their satisfaction with the nutritional benefits of the product.

As well as these positive aspects, Weetabix have various manufacturing plants, which attracts current and new employees to work with the company as accessible to these plants are greatly beneficial.

Symbols:

As the logo for Weetabix is a clear indicator of the product the business uses, it also focuses on the aspect of the suppliers. The relationship with the suppliers, for this core product of wheat, is the essence of the businesses operational function. The balance between this relationship is vital for the business to progress and grow for the demanding environment.

The brand image of Weetabix illustrates how the business is primarily family orientated and recognises that nutrition is an important part of the household’s daily dietary requirements.

Power:

The Head Office of Weetabix controls the operations of the departments within the businesses. These departments include sales, marketing, finance, operations and human resources. With the recent acquisition, the power structure between these companies may alternate as both companies will have different operational views for the business.

Structure:

Weetabix is a formal multinational organisational structure. This format focuses on the global coordination in the geographical areas, with the aid of the Latimer Group manufacturing plants, in Canada, South Africa and the US. Distribution of these products is available in eighty countries from South East Asia, South America, Middle East and Europe.

With this structure in place it allows Weetabix to localise their products to suit the relevant cultures and responsible respond to the laws and regulations of that culture.

Team work is another aspect that helps to develop the Weetabix brand. As one line operator employee stated that "working together in a small team in a high pressure environment" was key to success for the company.

Finally, as stated previously, the collaboration of acquisition of Weetabix would have a dramatic effect on how the business would operate on a daily basis, as both companies would have different managerial styles in running the business. The effect could damage the culture of the business if these managerial styles are filtered down the organisational structure.

Control:

In order for Weetabix to meet their target of production, the following are some controls which are in place to facilitate in making this target; audit procedures, performance management, production speed control and risks assessments. These controls are utilised to ensure that the business remains consistent with their production line and that the employees are catered with an efficient work place.

Routines and Rituals

The culture of Weetabix is focused on working hard and achieving goals; however though promotion and advertising helps to diversify the culture in focusing on the community surround the business. Promotions through online, advertisements and events create brand awareness for Weetabix while involving their key target audience of families.

Weetabix also prides itself in providing the best employment opportunities for their employees. Weetabix seeks to understand their employees and their ambitions to develop within the company. Weetabix offer their employees the chance to re-train or obtain a promotion for a specific role. This displays that Weetabix, with their employees, are highly motivated and goal orientated in achieving set targets for the business.

Weetabix Ansoff Product / Market Growth Matrix

Market Penetration:

This strategy would involve Weetabix aiming to retain or increase its existing market share through achieving an increase in sales by continuing to produce and sell its current products. This strategy can be implemented as a way to secure dominance of the business in a growth market. This can be done by removing the competition from the market.

As Weetabix now compete against businesses such as Nestle and Kellogg’s, it must increase its efforts in securing a high market share. Achieving a higher market share may prove difficult for Weetabix as a result of strong competition within the market. An increase in market share will allow Weetabix to have an advantage over its competitors.

Weetabix have increased its product lines in recent years which will assist the market penetration. The wide variety of products offered by Weetabix means the business can target a wider customer base. Weetabix could also specifically attract customers associated with its competitors which would result in Weetabix gaining an increase in market share at the expense of these competitors.

The use of advertising can help Weetabix to attract customers who normally do not purchase its products. Effective advertisement campaigns can target and encourage new customers to purchase the Weetabix products. Advertising can also encourage its current customers to increase the frequency in which they purchase the products.

The risks of implementing this strategy are relatively low but the success level can also be low if Weetabix do not establish a growth increase within the market.

New Product & Services:

Product development would involve Weetabix developing new products for its current market. Weetabix could introduce innovative product ranges which would replace the existing products. Weetabix could make improvements to existing products. The business could also introduce newer products which complement the current products on offer.

As a result of competitors, such as Kellogg’s and Nestle, continuously introducing or changing their products, Weetabix need to partake in product development in an order to have a better selection of products available for customer consumption.

The continuous changes and growth within the breakfast cereal market have resulted in the need for Weetabix to compete against popular branded businesses and to keep up to date with the rapid adjustments associated with the market. All businesses must conduct research and development in relation to their market and customers. Weetabix must ensure to conduct research and development in order to gain valuable customer input regarding the products offered by Weetabix. Valuable customer input could also be gained in relation to competitors and Weetabix could attempt to discover why customers purchase products from competitors.

Based on the research conduct on Weetabix, it was identified that Weetabix do not provide gluten free cereal. Introducing gluten free products would be advantageous to Weetabix ad it would allow the business offer new products to its existing customer base. These products could improve Weetabix competitive advantage and increase the market share.

For Weetabix, product development would involve an element of risk as the business would incur expenses but the information gathered could be beneficial to the business in developing products, competing against popular branded competitors and satisfying customer’s wants and needs.

Market Development:

Market development would involve Weetabix aiming to enter a new foreign market and sell its current products to a new segmentation of potential customers. The purpose of this is to attract potential customers who would like to purchase products from the Weetabix range. This would assist Weetabix in gaining customers and allow the business the opportunity to become dominate within a new market.

As a result of entering a new foreign market, Weetabix will have to amend its current strategy for marketing. The amendments would be in relation to areas such as pricing, distribution channels and promotional campaigns. Weetabix may decide to expand into a previously unexploited market where there is potential for the business to be successful. Also Weetabix may decide to enter a market where the distribution channels are sufficient to ensure the products are available for purchase within the new market.

As a result of Bright Foods, a Chinese business, recently purchasing a share of Weetabix, the business may wish to expand to the Chinese market in an effort to increase its global standing. With Bright Foods now having a significant input in Weetabix and its product ranges, the business might gain access to the appropriate channels required to enter the new market.

For Weetabix, market development would involve an element of risk as the business is unfamiliar with unexploited foreign markets and the customers. However, Weetabix would have exceptional knowledge of their products and could use this knowledge to attract new customers and be a success within the market.

Diversification:

Diversification in regards to Weetabix would entail the business developing innovative products for markets which the business has not entered to date. It would also involve developing these innovative products for new potential customers. If Weetabix were to partake in diversification, it would have to ensure that the products and the intended market are selected with the opportunity of market growth for the business.

Diversification can be either related or unrelated. In relation to Weetabix, related diversification has proven to be a recent development for the business. In January 2013, Weetabix introduced a new range of breakfast biscuits in an attempt to attract customers who do not eat a traditional breakfast daily. The introduction of the biscuits is also a way to remain competitive with Kellogg’s who also released breakfast biscuits within the last year.

For Weetabix, diversification would involve a high level of risk as the business will be operating with unfamiliar aspects of the market.

Flahavan’s SWOT & TOWS Analysis

Internal Strengths (S)

Wide distribution of products [1] 

Supports Irish jobs

Supports local produce

Sixth generation family run business

Market leader & producer in porridge oats

Association with Catherine Fulvio [2] 

Products cater for various types of consumers

Online competitions

Achievement of Awards [3] 

Internal Weaknesses (W)

Exporting costs

Limited product range

Poor website structure

Low market share in cereal industry

Competitive pricing

External Opportunities (O)

Online appearance

Product range

Recession with more value driven customers

Social media usage

S-O Strategy

Effectively highlight the product range on the website and display how it will cater to the customer’s needs

Use social media tools to highlight how Flahavan’s supports Irish jobs and local produce by displaying pictures and stories

Reinforce position of market leader by providing value driven customers with product choice and more product awareness

W-O Strategy

1. Enhance the customer’s experience by updating the website navigation.

2. Expand product range by offering gluten free products.

External Threats (T)

Fluctuating oat / wheat prices

Competitors introducing new porridge lines

Economic climate – rise in manufacturing running costs

Supermarkets introducing own brand ranges

Potential price wars

S-T Strategy

1. Sustain market position of porridge oats producer in order to prevent new competitors entering into the market.

2. Use position of market leader in porridge oats to acquire oats at the appropriate price

W-T Strategy

Increase market share through brand awareness in order to compete against supermarkets own brand products.

Use competitive pricing to compete against supermarket own brand products

Flahavan's Cultural Web Model

Flahavan’s Cultural Web Analysis

Stories:

Flahavans is one of the oldest family owned companies based in Ireland. Members of the Flahavan’ family have worked throughout all different levels of the organisation for the last six generations which spans in excess of 200 years. In 2009 marketing manager John Noonan was nominated and won marketer of the year for successfully repositioning the Flahavan’s brand. This was a major success and helped the brand to be ranked narrowly inside the top 100 checkout list of Ireland in 2009. The company has also grown sizeably both in terms of market share and employees working within the company.

Symbols:

Flahavan’s per say does not have a recognised symbol, however the name Flahavan’s itself is an iconic brand that is highly recognisable within the Irish market. The tag line "Sets you up for life" helps to convey a meaning of nutritional and healthy value that would be of high importance to the health conscious consumer.

Power:

People within the Flahavan structure are clearly identified within the departments they preside over. For example, the sales teams representatives responsible for sales throughout the different regions are clearly stated on the Flahavan website as well as who is responsible for marketing, production and other important departments within the company.

Structure:

Although the structure identified within the Flahavan organisation identify personal who are responsible for the duties that their department are empowered with, the structure within Flahavan’s is functional as the managing director is in touch with all heads of departments and allows for input into the strategy that the company per sues.

Controls:

Due to the small size of the company the hierarchy that exists within the Flahavan company appears to be quiet flat with a lot of departments working closely together in relation to product development, research and innovation. Control within the company has been tightly protected as generation after generation of the Flahavan family have worked throughout all levels of the organisation.

Routines & Rituals:

Flahavan’s is a very traditional yet innovative firm as they look to their past to learn from methods that have been used over the last 200 years and use current technology to help improve on past methods. The milling process that Flahavan’s undertakes when producing their oats ensures that all oats are cooked twice to give a unique taste when compared to competitors.

Flahavan’s Ansoff Product / Market Growth Matrix

Market penetration:

Initially Flahavans, concentrated on its local and regional market in the south east but with the emergence of imported 'cold' cereals, such as Kelloggs cornflakes, in the 1950s, Flahavans had to up its game significantly.By 1962, the company decided to increase its penetration of the Dublin market through small independent retailers,within the year Flahavans had captured 2% of the Dublin market.flahavans continued to promote its cereal brands and despite the intensification of competition from international competitors between the 1970s,to 1990s.The early 1990s was a particularly difficult time for the business , however when health benefits associated with porridge became more main stream in the 1990s, the company capitalised on this healthy eating trend by re-branding and re-packaging its product.

Since the beginning of the recession in five years ago, consumption of 'cold' cereals has decreased and consumption of porridge has increased, driven primarily by its value offering.Today, Flahavans is the fourth largest cereal brand in Ireland and uses sports and celebrities such as Paul O'Connell and Naomi Campbell to promote the health benefits of its product.

New Product & Services:

Initially flahavans consisted of one main product a heavy textured oatmeal which is heavier than the Flahavan's "flaked" oatmeal that can be bought in the shops today. Retention of existing loyal consumers to the brand was the an objective for flahavans. To implement this strategy new product development was undertaken to meet the needs of the loyal customers. Needs of the customer were changing and flahavans had to grow and change with the times in order to retain their existing customer base. Flahavan’s developed porridge products to meet the needs of various customers as well as retaining repeat purchasing consumers. This was achieved by brand extention of the parent product.. Flahavans now have a variety of options available to the consumer, from the Progress, Real Fruit and Organic ranges to the convenient Quick Oats range, including the single serving pots and the microwaveable sachets, which now includes an Organic option.

Market development:

Moving the product with the times is essential for flahavans as consumers are growing time poor and increasingly health conscience. By Highlighting and reinforcing the health benefits of the product as well as offering different products to different customer profiles and also ensuring the product is quick and easy to prepare allows flahavans to develop the hot breakfast cereal market even further.

Diversification:

Recruitment of new consumers to the brand was the main objective for flahavans to grow their market. To implement this strategy successfully new product development was essential to capture different customer profiles. Flahavan’s developed porridge products to meet the needs of various customers in order to capture a larger portion of the market share. Flahavans now have a variety of options available to the consumer, from the Progress, Real Fruit and Organic ranges to the convenient Quick Oats range, including the single serving pots and the microwaveable sachets, which now includes an Organic option. Each option is specifically targeted to new customer profiles but all have an equal trait (the growing health conscience consumer)

Odlums SWOT & TOWS Analysis

Internal Strengths (S)

Successful brand repackaging of products

High quality healthy products

High brand recognition in Ireland

Established since 1845

Partnerships with Irish growers & merchants of wheat

Available in all supermarkets in Ireland

Internal Weaknesses (W)

Closure of production plants in Dublin & Cork

Employee layoffs

Small market share when compared to competitors

Reduction in operations in Portarlington plant

Out of date website

Not recognised internationally

External Opportunities (O)

Health conscious consumers

Website revamp

Expand target market

Export to foreign countries

S – O Strategy

Target health conscious consumers domestically and internationally

Create greater brand awareness through use of social media and in store promotions

W – O Strategy

Guaranteed Irish trademark recognised as a high standard, help enter foreign market

External Threats (T)

Highly dependent on ingredients from UK

Competition

Economic recession

S – T Strategy

Adopt strategy similar to that used by McDonalds tv advert by using suppliers within adverts (this is john, he helps provide oats used by Odlum’s porridge)

W – T Strategy

Use revamped website to differentiate the Odlum’s porridge/hot cereal from that of it’s competitors

Increase customer awareness of the benefits of eating Odlum’s compared to rivals

Odlums Cultural Web Model

Odlums Cultural Web Analysis

Paradigm:

Irish heritage- Odlums has been milling and packing flour in Ireland for over 160 years. The business was originally established by the Odlum family in 1845 when they opened their first flour mill in Portlaoise and then in 1920 Odlums industrial-sized flour mill on Alexandra Road, Dublin was opened, as well as mills in cork and an oatmeal mill in Sallins Kildare

Brand recognition- The Odlums Brand is instantly recognisable amongst Irish consumers and is one of the most recognised Irish brands in Ireland.

In 2009 Odlums obtained a silver Globe award for "Best effective long term marketing campaign". Continuous adverting campaigns and promotions have helped Odlums achieve brand recognition amongst Irish consumers

Stories:

Positive consumer feedback: Odlums reviews on all their products received positive feedback consumers are extremely satisfied with the quality of their products " Good quality products "

History: Odlums has been milling and packing flour in Ireland for over 160 years. The business was originally established by the Odlum family in 1845 when they opened their first flour mill in Portlaoise. Today Odlums continues to produce premium flour products for traditional home bakers, novice cooks and retailers nationwide.

 Odlums we also proudly specialise in producing a delicious, hearty range of porridge which has been well known and loved in Ireland for many years.

Symbols:

Odlums logo consists of an image of an owls face, cleverly and simply consists of four components to offset the owl image there are the two eyes a nose and forehead. With Odlums in large italic font beneath the image.

There are three main colours used for the logo white, orange and brown these colours are warm and homely and reflect the image Odlums is trying to portray.

Origin, its companies and employees are committed to working with local communities and support a wide variety of groups primarily through sponsorship at both an educational and sporting level.

POWER:

TO BE DONE AGAIN BY CAROLINE

Organisational structure:

Formal structure - Valeo foods have a formal structure in place and the structures are created by the CEO , board of directors and senior management to ensure the company reach their stated objectives .The organisation has a formal risk assessment processes in place to identify obstacles the company may face and to overcome them before they become a issue.

Encourages collaboration - Valeo foods (Odlums) encourages all departments to work together to achieve the objectives of the company. This involves the marketing department working closely with new product development to develop a product which meets the needs of the consumer. This gives employees from different sectors a greater understanding of how other department works and therefore helps the organisation achieve their objectives

Control systems:

Risk assessments - Significant time and resources have been invested in identifying specific risks across the Group and in developing a culture of balanced risk, minimisation. To facilitate this, the Group has formal risk assessment processes in place through which risks and mitigating controls are evaluated.

Quality controls - From the time the grain enters the mill until it is distributed to the shop or bakery, it is untouched by hand. It passes automatically from one stage to the next, carefully controlled by skilled workers. Samples of the product are tested in a laboratory at various stages to make sure the flour maintains a high standard of quality. 

Organized work structure - Odlums Carry out laboratory tests accurately and follow strict methodologies to carry out analyses.Maintaining and operating laboratory equipment, for example milling wheat samples using a buhler mill, determination of moisture content of wheat and flour samples using a brabender oven, determination of hagberg falling number using , farinograph testing of flour, extensograph testing of flour, testing samples for damaged starch, near infra red spectroscopy, determination of protein content using leco

Recording and sometimes interpreting results to present to senior colleague.

Routines & rituals:

Ensure quality - quality assurance is a necessity for Odlums to keep its brand name held with the highest regard within the eyes of the consumer.

Customer satisfaction - consumers are extremely satisfied with the odlums product which is evident from the Odlums social media pages " I have coeliac disease and use your Tritamyl flour getting excellent results every time especially sponges."

Odlums Ansoff Product / Market Growth Matrix

Market Penetration:

Odlums have recently closed down two mills in order to reduce cost and stay competitive with U.K. cereal producers. Therefore penetrating the market with may not be a viable direction to take as higher levels of production may not be applicable.

New Product & Services:

In order to stay competitive in a changing market, Odlums could develop products into trending areas such as on-the-go porridge products and porridge cereal bars to further develop the product range. In addition they may consider a sweeter porridge with additional flavourings such as chocolate and banana for the younger audience.

Market Development:

Odlums do not currently export their products overseas. In order to develop a new market, Odlums could potentially export products to the U.K. This would create a new line of distribution which could be used as a potential strategy for Odlums. However this again raises issues about their mill closures and whether they would have capacity do fulfil this type of strategy.

Conglomerate Diversification:

Odlum’s is a traditional company at heart with main focus and priorities on baking, and wholesome goodness in food. Diversifying into additional products and services may be difficult for the company to compete with. This type of strategy would be difficult to forecast and would need the help of an external body, or an external perspective in order for it to be successful.