In the "question marks" category were introduced the products of the "Specialty channel," as they appeared in 2004 and tried to conquer a relatively new market for the company, that of the non-traditional products. Therefore, this attempt has not been proved to be a real success because, just as in the case of the natural, organic and frozen products, the market of the specialties had been reached by other companies and, even though the investments were quite high, because the offer of products was diverse, the growth has proved to be quite low.
The QSPM Matrix
Having all these in mind, the main two directions I could identify for the Kellogg Company to follow are represented by a potential enlargement of its company in Europe -where for example, the sugar free chocolate chips cannot be found- or by a diversification of the products line in the North America, the most productive area from its point-of-view. A good advice in this perspective for the Kellogg Company would be to start manufacturing ice-cream based on flakes- just as Nestle and General Mills did with the Nesquik ice cream.
Enlargement
Diversification in Europe in U.S.
Key Factors Weight AS TAS
Opportunities
1. One European currency-Euro.10 4.40 2.20
2. Rising health consciousness in selecting foods.15 4.60 3.45
3. The products are in their greatest part, organic
4. Many parts of the food area which can be conquered.15 3.45 4.60
5. NAFTA.OS?
Threats
1. Food revenues increasing only 1% annually.10 3.30 4.40
2. Unstable economies in Europe.10 4.40 1.10
3. The emergence of substitute products, under the brand
05?
Name of its competitors
5. Low value of the dollar.15 1.30 4.60
Strengths
1. Profits rose.10 4.40 4.40
2. A tradition of more than 100 years.10 2-20 2 20
3. Situated on the 100th position in the Top.10 2.20 4.40 of the Most Developed American Companies
4. Strong brand name.05 4.20 3.15
5. The value of the sales in 2005 were more than $10 billion
05?
Weaknesses
1. The brand is less developed than its main competitors.05 2.20 2.20
2. The unsuccessful attempt in the past to broaden its
Portfolio with a range of snacks and convenience foods
Sum Total Attractiveness Score 1.0-3.85 4.10
AS = Attractiveness Score; TAS = Total Attractiveness Score
Attractiveness Score: 1 = not acceptable; 2 = possibly acceptable; 3 = probably acceptable; 4 = most acceptable.
The QSPM successfully shows that the best solution for the Kellogg Company would be the diversification of its products line in the U.S. rather than an enlargement of the company in Europe.
Recommendations
As it might be obvious, the main recommendations I could make are also those proposed for the QSPM Analysis:
the diversification of its products line for the U.S., since the occurrence of Keebler promoted Kellogg on the 37th place on the advertiser's list; and an enlargement of the company in Europe, as this represents an important point in the competence field, since General Mills and Nesquik are the main providers of cereals in Europe,. In other words the commercializing of all the Kellogg's products throughout Europe would drastically change the force report in this competition.
In, my opinion, a re-orientation of the foods' line would also be welcomed. What it might be easily noticed nowadays is the fact that "people have oriented towards healthier food and, implicitly, towards low-fat food." Similarly, I consider that Kellogg should do the same and improve its fat-free products line. If it was to be taken only the example of sweets, it would be easily to notice that most of the fat persons and women, in generally, prefer those who have written on their labels the magic words "fat-free."
One the other hand, I do not think that the leaders of the company are aware of the fact that the publicity made for the products Kellogg manufactures is enough. For example, few of the peoples of the 180 countries in which its products are commercialized are aware of the strong brand which lies behind the image of the item they consume. Therefore, a broader publicity line will surely improve the sales. In addition, the continuation of the collaboration with the big customers, such as Wall mart, would surely...
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