Introduction

The BITE College Business Strategy assignment report will discuss in detail about the business strategy adopted by Kellogg’s and the future course of action which the company can take for effective results and long term profit and sustainability (Teece, 2010). The report will discuss in detail about the business environment and various methods which are involved in the planning, organizational and environmental audit. The report will also discuss the type of strategies which the company can take along with process and importance of implementation.

Task 1: Analyse how the business environment is considered in strategy formulation

Introduction

This section will discuss about the basic terminologies used in business strategy like mission, vision and goals etc. (Teece, 2010). This section will also discuss in detail about the issue which the Kellogg’s is facing in strategic planning and the appropriate planning techniques which the company can adopt.

1. Explain strategic contexts and terminology – missions, visions, objectives, goals, and core competencies.

Following is the detail discussion of all the terminologies used in strategic management: -

1. Mission: the mission statement is a document which works like a guide for the organization and discuss in detail about the overall goal of the company and the appropriate path which the company must choose to reach the goal (Drucker, 2011). The mission statement also works like a guide for the effective decision making. A mission statement can also be called as a framework which defines the boundaries for the company’s strategies.
2. Vision: a vision statement is the ultimate goal which the company wanted to achieve in future and it can also be state as the position which the company wanted to reach in five or ten years down the line (Drucker, 2011). It is a future state of mind which an owner pictures in its mind and this statement works like a guide or inspiration for the firm.
3. Objectives: objectives are the specific position which an organization aims in future with in a fixed period of time and with the help of available resources. An objective is specific in terms and has the clear path to follow and at the same time, it can be measured and calculated at the same time (Drucker, 2011). Objectives can also be called as tools or equipment which covers all the planning and strategic function undergoing in an organization. Objectives also help in creating the policies and also testing and analysing the performance of the employees. They are basically short term goals which can be reached in short period of time.
4. Goals: goals are broader in approach and they are also termed as general guidelines which the company wanted to achieve in long run (Bryson, & Alston, 2011). Goals are for long term perspective and it also represent the overall vision of the company.
5. Core competencies: as far as core competency of the company is concerned, it is more about one specific factor which works in favour of the product and which gives a competitive edge to the company over competitors (Bryson, & Alston, 2011). This factor is not easy to copy for any other company and it can be widely used from time to time by the company.

 

1. Explain different planning techniques that Kellogg’s can use. You may consider BCG growth-share matrix; directional policy matrices; SPACE, PIMS.

The appropriate planning technique which the company can use and which will help company to establish in the market for long run is BCG growth share matrix:

BCG growth share matrix helps the company in determining the exact position of the company and then to develop strategy according to their position which will take them into in next position(Armstrong & Cunningham, 2012). According to the position the company is, the strategies can also be planned accordingly.

The theory divides the market into four broad categories which can be defined as dogs, cows, stars and question mark. These categories are measured on a scale which decides the market share and market growth rate of the company. Following is the detailed discussion of all the categories: -

1. Dog: - in this category the companies which have low market share and low rate of market growth will be named as dog (Srivastava & Prakash, 2011). In this scenario, many times the company have to sell of the company because the hope too grew in the market is very less and the most likely to incur only losses in long run.
2. Cow: - in this state the company’s market growth is low but the company has large market share is named as cow. This stage means that the company will have to adopt strategies which will help them to milk more cash flow in the company as long as it can be done and the strategies adopted for it must be realistic (Srivastava & Prakash, 2011).
3. Star: in this category the products are in stage where the market growth is also very high and the company also has huge market share is termed as star (Srivastava & Prakash, 2011). The companies which are in this position need to focus on making more investments since the company has a bright future and the company can exploit the situation as far as it is possible.
4. Question mark: if the company comes in this category, then it means the market growth rate is high but market share is in question (Srivastava & Prakash, 2011). The company in this category need to focus more on the research and development and understand the strategies which will increase the market share of the company.

Kellogg’s right now is in cow stage where the market share is huge but the growth of the market is relatively low. The strategies adopted should focus on acquiring high market growth.

Task 2: Understand the process of strategy planning

Introduction

In this task the report will discuss about the organizational audit and environmental audit of Kellogg’s and the section will also understand the significance of the stakeholder scenario in Kellogg’s case.

1. Produce an organizational audit for Kellogg’s. You should consider using SWOT analysis; product positions; value-chain analysis to conduct the audit for Kellogg’s.

SWOT analysis of Kellogg’s

Strength 1)      Large market share 2)      Strong revenue growth 3)      Brand loyalty 4)      Diversification in geographic terms	Weakness 1)      Dependency on one product 2)      Huge Saturation in market 3)      Difficult to have product differentiation.
Opportunities 1)      Mergers and acquisition 2)      Innovation and creativity in the product.	Threats 1)      Fierce competition. 2)      Customer can switch easily to another great discovery in this field. 3)      Price sensitivity

Value chain analysis of Kellogg’s

This method is more about recognising the value which can be added to final product. This may require many support functions and once it is done, a detailed analysis is also conducted which assist in reducing the cost and also help the company in creating the product differentiation (Sweeting, 2013). The functions undergoing in the company are initial one which also further help in transforming input into output. The main focus of this function is to understand the prized possession of the company on the basis of which can be used to achieve the market objective and achieve competitive edge in the market. So the method help in analysing the strength of the company and understanding the areas which can become core competencies of the company (Gereffi & Fernandez-Stark, 2011).

To earn maximum profit there are various methods on the basis of which the company can understand the core competencies and achieve competitive edge in the market. The market for Kellogg’s is saturated right now so the value that can become a point of difference is the market share which the company has (Gereffi & Fernandez-Stark, 2011). So the company should adopt marketing strategy which make them look different from the crowd.

Product positioning techniques

The method is more about positioning the product at the right place and at the right time. The companies try to position the product in the mind of the targeted customer as one of the best product in the industry.  The method also include the method like market segmentation which help the company in recognising the core market and also the main customers which will most attracted towards the product (Gereffi & Fernandez-Stark, 2011). The positioning technique should be on creating a perfect message for the company which will affect the targeted group the most.

The business strategy which Kellogg’s adopted was to establish in the mind of the people as the healthy option in breakfast and since the people are becoming more and more health cautious Kellogg’s has the maximum chance to become an obvious choice.

2. Carry out an environmental audit for Kellogg’s. Should use PESTLE and Porter’s 5 forces analysis for the environmental audit.

Environmental audit can done by discussing in detail about PESTLE and porter’s five forces analysis mentioned below : -

PESTLE

• Political: - every country has different political scenario so to understand the market while entering in new market, the company need to understand the political nature of the country (Hasan, 2013). Kellogg’s has its presence in various countries and the company so far have not faced any protest.
• Economic: - economic factors are very important as they decide the future of the company in the country (Hasan, 2013). It includes factors like interest rate, growth rate, exchange rate and inflation rate.
• Social: - this includes factors which impact the cultural aspects like cautiousness, growth in population, general attitude and distribution of age. Kellogg’s get impacted by these factor the most (Hasan, 2013). Like the company has to struggle a lot in entering in countries like India and other Asian countries since these market has a very strong culture of having local food as breakfast. In many countries the company initially failed to make the mark.
• Technological: - technological factors are more about technology advancement of a company which includes strong research and development functions and shift in technology as and when it changes (Hasan, 2013).
• Legal: - legal aspects are related to laws and regulations like discrimination law, consumer law, labour law and many others (Hasan, 2013). These factors determine how a company should operate in a country.
• Environmental: - it includes features like weather change and it mainly affect the industry like tourism, hospitality industry and insurance (Hasan, 2013).

Porter’s five forces analysis

1. Bargaining power of supplier: the bargaining power of supplier in case of Kellogg’s is highsince the company have very low control on managing resources like wheat (Day & Reynolds, 2011). The power to negotiate with farmers is also relatively low as they are large in number.
2. Bargaining power of customers: the company is almost everywhere and the company has worked on increasing the visibility of the company so the bargaining power of customers is low.
3. Threat of substitute: with so many competitors already in market threat of substitute is obviously very high. In addition to this it can also easily replaced by any other local food (Day & Reynolds, 2011).
4. Threat of new competitors: the new company can easily enter into this market so the threat of new competitors is high since the market is already saturated (Day & Reynolds, 2011).
5. Intensity of existing rivalry: Kellogg’s has reached a mature stage and also facing fierce competition from many companies like General Mills etc.
6. 

3. Explain the significance of stakeholder analysis for the Kellogg’s scenario.

            The significance of stakeholder analysis for Kellogg’s scenario is discussed in detail as follows: -

1. Marketing strategies: the marketing strategies should mainly be developed on the basis of various stakeholder groups (Aaltonen, 2011). The company must make sure that while communicating any marketing message the company should have an honest approach. Kellogg’s conducts so many surveys to understand the customers’ needs and then work on devising the strategies for the business. The company has a strong research and development department.
2. Motivating employees: employees are the most important factor which utilises other resources of the business (Aaltonen, 2011). So it is important that the company formulate strategies keeping them in mind. The role and responsibilities given to them should be analysed properly and should reduce turnover rate.

Task 3: Examine approaches to strategy evaluation and selection

Introduction

This section will understand about substantive, limited and retrenchment strategies. Apart from this, an appropriate future strategy will also be discussed.

1. Analyse possible alternative strategies relating to substantive growth, limited growth or retrenchment for Kellogg’s.

Growth or retrenchment for Kellogg’s

Following are the possible strategies which the company can adapt: -

• Substantive growth strategies: - the main motives of these strategies are achieving a substantive growth in a company which can further help in hiding the shortcoming (Bo, 2010.). For this the company can follow various functions like horizontal or vertical collaboration and type of diversification and innovation because of which results are related and unrelated in this field.
• Limited growth strategies: to sustain in the business for long run it is important that the company often take risk and also at the same time look for option which can be little less costly (Milesi?Ferretti et al, 2011). So basically the method adopted should be smart and intelligent. If the growth is very fast and high then it can be an issue as well. Therefore the companies must try to play it little safe.
• Retrenchment growth strategies: this strategy help in reducing the large diversity, which the firm usually face. The strategy mainly help in reducing the overall cost and help in bringing financial resources  stable in the business (Milesi?Ferretti et al, 2011). This may involve activities like withdrawal from particular markets which is less profitable or discontinue of a service or a product for improved turnaround.

2. Select an appropriate future strategy for Kellogg’s

Kellogg’s must focus on strategies like market penetration, development of product and market development which will help the company to expand even further. The basis for promotion adopted by the company is correct since the awareness related to health is growing day by day(Milesi?Ferretti et al, 2011). What is important now is to diversify in product offering and look for some new avenues in similar field so that the attention can be shifted towards this.

Task 4: Analyse how strategy implementation is realized.

Introduction

The section will discuss about importance of implementation strategies and how it should be done in a business.

1. Compare the roles and responsibilities for strategy implementation for Kellogg’s business scenario.

The last step in business strategy is implementation which is one of the most crucial steps and it requires focus and team efforts from the employees to achieve success (Vincent et al, 2012). Company must make sure that every employee is involved in a process and make their valuable contribution in this stage. Following are the responsibilities of the strategy implementation: -

• As discussed, there should be active involvement from all departments to achieve successful implementation of strategy.
• Before implementation, it is also important to create awareness about the product among the employees so that they can achieve the target as desired also employees can understand the situation and can act accordingly (Vincent et al, 2012).
• Monitoring is also very important as it will help in identifying the loopholes and understand the business in a much better way.
• The process of implementation is the collection of many activities and every stage should be properly analysed and implemented.

2. Evaluate resource requirements to implement a new strategy for Kellogg’s.

To implement new strategy the most crucial factor of production is the people which are also known as human resources. The company must try to get best people for the job because they will ensure that the function is done in a better and effective way(Vincent et al, 2012). Effective resources requirements can also be identified by analysing the gaps where additional people and resources are required so the company can also draw a clear difference between the present availability and future requirement.

3. Discuss targets and timescales for achievement for Kellogg’s business scenario to monitor a given strategy.

The target audience of the company is people who are health cautious or people who look for options to get fit. The target audiences are all those people who wanted to have a fit and healthy lifestyle(Vincent et al, 2012). The company is also working in creating more awareness about health and fitness among people. The company is working with many organizations which are working in this field.

Conclusion

The BITE College Business Strategy Assignment report has discussed all the aspects of business strategy with regards with case study of logg’s. The company is into the business from so many years and expanding like anything because of planned strategies and effective implementation.

References

Aaltonen, K. 2011. Project stakeholder analysis as an environmental interpretation process. International Journal of Project Management, 29(2), 165-183. Armstrong, G., & Cunningham, M. H. 2012. Principles of marketing. Pearson Australia. Bo, L. 2010. On the System Elements of Distance Higher Education's Substantive Growth. Modern Distance Education Research, 1, 007. Bryson, J. M., & Alston, F. K. 2011. Creating your strategic plan: A workbook for public and non-profit organizations (Vol. 3). John Wiley & Sons. Day, J., & Reynolds, P. L. 2011. Exploring the marketing-entrepreneurship interface: bringing an understanding of small business marketing into the curriculum. Drucker, P. F. 2011. The five most important questions you will ever ask about your organization (Vol. 90). John Wiley & Sons. Gereffi, G., & Fernandez-Stark, K. 2011. Global value chain analysis: a primer.Centre on Globalization, Governance & Competitiveness (CGGC), Duke University, North Carolina, USA. Hasan, M. R. 2013. Apple Inc.-An Analysis: PESTEL analysis, Porter’s 5 Forces analysis, SWOT analysis, Comprehensive analysis of financial ratios, and Comprehensive analysis of share performance of Apple Inc. GRIN Verlag.

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