Write 12 pages with APA style on Product and Market Development Strategies at Kellogg. Kellogg has its presence in 17 countries and its product is being marketed across the globe. Since the company has established esteemed international operations, it can enjoy the cost and tax incentives of the other countries. In addition, the company also displays distinguished financial credibility and its shares are listed on one of the biggest stock exchanges of the world. A sound financial outlook always attracts investors to invest in the operations of an organization. Kellogg can easily raise capital by issuing new shares in the stock market and it can certainly be expected that the issue would be completely subscribed. Another source through which the company can raise finance for the expansion of its operation is through debt. Banks and financial institutions are likely to sanctions credit facilities to companies having a credible financial outlook.
The only weakness that is apparent from the ongoing operations of the company is that Kellogg has not updated its product line with the passage of time. Its production line still contains items that were originally developed over 50 years ago. Regarding the threats, the company faces fierce competition from several firms in the food industry who possess the volume and potential to outcast the company by introducing more sophisticated products and ingenious production strategies. Apart from that, the company also faces threats from store brand products which are cheaper to sell for the retailers. In addition to the discussed, it appears that the company has placed too much reliance on the discount merchandisers. These giant stores have the potential of exerting pressure on the company’s margin and forcing them to sell their products at lower prices.
In the recent past, the company has started incurring expenditure in making its food items more nutritious and healthy. Kellogg is one of the first ones to use the oil to lower levels of trans fat and unsaturated fats in its products. This venture can prove to be full of opportunities for the company. The company earns 66% of its revenue from North America, and since the recent demographic studies suggest that people are becoming more diet-conscious due to the prevailing obesity-related disease, Kellogg’s investment in modified and nutrition enriched food products is likely to reap positive results.
Porter’s five forces model is an effective tool in exploring the competitive forces of the environment in which the organization operates. It allows the business to critically analyze its current business strategy and formulate one which can allow it to achieve a competitive position in the market.
The first competitive force according to the model is the entry of new competitors into the market. New entrants might be able to capture some of the market shares of Kellogg and will adversely affect profitability. With the implementation of sophisticated data-gathering software, Kellogg can repel this threat to its business. The sales department can maintain a database of the orders which can significantly assist in identifying which product is most popular among the customers. This information can be utilized in building different promotional activities for capturing market share and building brand loyalty.