In Module 2, we focus on SWOT. In order to complete a SWOT, we are required to identify and analyze the key opportunities and threats in the external environment. Then, we need to identify and analyze the company’s key strengths and weaknesses (internal analysis).

WEEK 1:

Be sure to respond to the conclusions of your classmates.

Be sure to respond to the conclusions of your classmates.

PLEASE Provide “TWO REFERENCES”

RESPONSE 1:

Classmates,

a) Evaluate the operating industry of General Mills using a minimum of two forces included within Porter’s Five Forces model.

General Mills operates in a highly competitive global market and is continuing to expand. The continued success and earnings growth rely on the corporation’s ability to operate in a competitive global market (General Mills, 2018). General Mills corporation have at least nine other corporations that are their competitors such as Kellogg’s, Post, Hershey, and Quaker just to name a few (Owler, n.d.). Two forces that can affect this corporation are the availability of substitutes, and the bargaining power of customers (Mind Tools, n.d.). With there being other competitors that produce alternate products, consumers can easily choose one of the other competitors for a similar brand for a lower price or a better quality (Mind Tools, n.d.). The buying power of customers can make or break a corporation. Although there may be many buyers for this organization, they can choose to shop around with some of the other rivals.

b) Using PEST, assess General Mills’ remote environment using a minimum of two PEST forces.

Two forces that I would like to highlight for General Mills are Social Factors and Economic Factors. General Mills is focused on efforts to making the world better by their social stewardship programs (General Mills, 2018). One thing to consider with the corporation’s social factors is that they strive to produce new and improved products with the consideration of the consumer’s health and how it is impacted by sodium intake, sugar, processed wheat, trans fats, genetically modified organisms, and other product ingredients (General Mills, 2018). During certain periods of uncertainty in the economy may make the difference of a consumer purchasing a product. During lows in the economy, a consumer may look to a generic brand, or prolong buying the product altogether which is a threat for the corporation (General Mills, 2018).

c) Conclude your assessment about the overall environment. Is it more or less favorable for General Mills? Give your ranking from 1-10 (in which 1 = vast gloom and doom for this company; 10 = huge bonus this year!). Where do you think General Mills fits on this 1-10 scale?

In comparison to its competitors, I would rank General Mills Corporation a 9. The company is in the TOP 2 in terms of revenue in it’s TOP 9 competitors. This means that the it is favorable and company is doing very well overall.

Terri Bayne

Reference:

General Mills. (2018). General Mills. Making Food People Love. Fiscal 2018 Annual Report. Retrieved from https://s22.q4cdn.com/584207745/files/doc_financials/2018/annual/FINAL-2018-Annual-Report.pdf

Mind Tools. (n.d.). Mind Tools. Essential skills for an excellent career. Porter’s Five Forces. Understanding Competitive Forces to Maximize Profitability. Retrieved from https://www.mindtools.com/pages/article/newTMC_08.htm

Owler. (n.d.). General Mills. General Mills’ Competitors, Revenue, Number of Employees, Funding and Acquisitions. Retrieved from https://www.owler.com/company/generalmills

Nikki

RESPONSE 2:

Classmates,

a.Operating industry of General Mills

Using Porter’s Five Forces, I would like to focus on threat of substitutes and bargaining power of customers.

Threat of Substitutes

General Mills faces the threat of substitutes in most of its product categories, through generic and private label products. It’s easy to see this as when you go into the cereal aisle, for example, you will see generic brands of Honey Nut Cheerios and other General Mills brands. These generic brands typically sell at lower prices than General Mills brands (“2018 annual report,” 2018). This adds additional alternatives and forces General Mills and the industry to reduce prices, in turn lowering profit margin and revenue (“Porter’s Five Forces,” 2007). Additionally, this puts more pressure on General Mills to build brand loyalty, so that consumers will pay the higher price over these generic substitutes (Recklies, 2015).

As an example, the cereal industry is very competitive, and big players such as General Mills fiercely compete for market share (Smith, 2019). Therefore, this competition puts General Mills in a unique situation in that not only are they competing with other larger, brand names, but they even are competing with their own retailers who put their own, lower priced branded products on the shelves (“2018 annual report,” 2018). Additionally, the cereal industry has the added competition of substitute breakfast products, such as breakfast sandwiches and bagels. As consumer tastes and disposable income changes, it can further reduce demand and prices as consumers choose other products or go with the generic options (Smith, 2019).

Bargaining power of customers

In addition to the threat of substitutes and competition General Mills faces, it also faces increasing bargaining power of customers that the industry overall for its various segments are experiencing. General Mills identifies some of its primary customers as grocery stores, mass merchandisers, and membership stores. In fact, it identifies Walmart as accounting for 21% of its consolidated net sales and 30% of net sales in its North America Retail segment (“2018 annual report,” 2018). This follows an overall industry trend, as for example, Walmart accounts for about 20% of all major players revenue in the cereal industry. This gives Walmart, and other stores such as Costco, high purchasing power from suppliers, such as General Mills. It also can then charge lower prices to consumers. This has led to the grocery store industry consolidating, decreasing competition among General Mills’ customers, and leading to greater bargaining power from the big players (Smith, 2019).

This follows increased bargaining power according to Porter’s Five Forces, as these customers as a result of consolidation can buy large volumes, and the industry is becoming comprised of large operators, and a reduced number of small operators (Recklies, 2015). This combined with the threat of substitutes described above threatens General Mills with further experiencing low margins (Smith, 2019).

b.PEST Analysis

For the PEST analysis, I will focus on Political and Social factors.

Political:

General Mills experiences a change in the cost of their raw materials due changes in governmental, agricultural, and energy policies and regulations. With General Mills being a global company, this can change based on the various countries it operates. Additionally, by virtue of the industry General Mills operates, consumer and pet food are highly regulated, and their activities are subject to regulations of many different government agencies within the United States and around the world (“2018 annual report,” 2018).

This governmental regulation on food companies also changes by consumer demand, as currently, consumers are demanding tightened regulations on the companies. Consumers want more information on food labeling, packaging, and nutritional claims (Smith, 2019). These factors can affect General Mills’ business segments, activities, product development, and strategy (“Carrying out a PEST analysis,” 2005).

Social:

Social factors have a significant influence on General Mills. Lifestyle changes, income distribution, health consciousness, and demographics are some of the most significant social factors (“Pest analysis,” 2009). Consumer trends have changed towards convenient and healthier products. As people have become busier, it has driven higher demand for breakfast items that they eat on the go, or easy to prepare meals to accommodate a busy lifestyle. General Mills has responded to this change, with healthier cereal options and more nutritious breakfast bars. Additionally, as mentioned above, as income distribution changes, consumers will respond with desiring lower cost healthy options or generic brands (Smith, 2019).

c.Overall environment:

I would give General Mills a 7 for the overall ranking, because of the immense competition and threat of generic brands, customer power as a result of consolidation, intense regulation, and constantly changing consumer preferences. This is a lot of external pressure that General Mills must operate in. However, I feel General Mills shows that it can operate in this environment, and makes product changes in order to keep up with changes, while still working to innovate so that it stays a relevant company.

Mark

References:

2018 annual report. (2018). General Mills. Retrieved from https://investors.generalmills.com/financial-infor…

Carrying out a PEST analysis. (2005). The Free Library. Retrieved from http://www.thefreelibrary.com/Carrying+out+a+PEST+…

PEST analysis. (2009). Retrieved from http://www.valuebasedmanagement.net/methods_PEST_a…

Porter’s Five Forces: A model for industry analysis. (2007). Retrieved from http://www.quickmba.com/strategy/porter.shtml

Reckles, D. (2015). Porter’s five forces – content, application, and critique. The Manager. Retrieved from https://www.themanager.org/2015/11/porters-five-fo…

Smith, S. (2019). Cereal production in the US. IBISWorld. Retrieved from Trident Online Library.

RESPOND 3:

Classmates,

a. General Mills Operating Industry using Two Porter’s Five Forces

The supplier power and barriers of entry are the two Michael Porter’s Forces used to analyze General Mills. With regard to the power of suppliers, Michael’s Two Five Forces can be considered to have the higher power as compared to General Mills. In this vein, the company sources raw materials from farms. Since consumers are concerned about where the raw materials for the food products such as cereals are sourced, General Mills is left with only a few suppliers that are acceptable. The competition from other manufacturers means that the suppliers have more power to increase prices when demand increases. The barriers of entry in the food manufacturing market can be considered low (Buckley & Casson, 2016). More companies can enter the market and focus on niche segments. Thus, General Mills has to focus on creating and sustaining brand loyalty.

b. General Mills’ Remote Environment Using Two PEST Forces

The economic and social forces are the aspects used to analyze General Mills. The global economic outcome predicts a slow growth, and this portends a difficult future for the company’s products. The social forces show an increase in connectivity through social media and other forms of communication. These provide new marketing opportunities for the company.

c. Assessment About the Overall Environment

In analyzing the overall environment of the company, General Mills seems favored with a rating of about 8 on a scale of 1 – 10. This indicates that the company has the ability to continue in its operations in the near future. In spite of the slowed economic growth at the global level, the company can leverage the opportunities provided by social connectivity to enhance its marketing.

Douglas Crowley,

Reference:

Buckley, P. & Casson, M. 2015. The Buckley and Casson Prize: Some reflections. AIB Insights, 15(3): 3-5.

RESPONSE 4:

Classmates,

a) Evaluate the operating industry of General Mills using a minimum of two forces included within Porter’s Five Forces model.

General Mills operates in a competitive global market and continues to expand globally. One of the porter’s forces evident is a rivalry between the competitors. The organization is needed to compete favorably in a market full of competition with other firms liken Nestle and Kellogg’s’. These two competitive firms offer similar products and services to General Mills, this has forced General Mills to change its focus on other products like energy bars, for instance, Nature Valley granola bars which have been efficient. Additionally, Greek Yogurt has been the main advantage for the organization overseas as it has expanded in new markets with the organizational Hagen Daze Brand that is implemented in different Asian nations to give a competitive advantage with their well-recognized Ice cream.

The second aspect is the threat of substitute goods. When referencing the buyer’s power, it is clear General Mills can lose their clients easily to their competitors as the customers can change to other firms that sell similar products. Thus, the organization can reduce their prices and place emphasis on innovation and quality of their product, to ensure customer satisfaction and loyalty to their products.

b) Using PEST assess General Mills’ remote environment using a minimum of two PEST forces.

General Mills organization has been efficient in detecting the client’s needs, opinions, and social lifestyle trends linked with the developed demographics of younger consumers. This is the reason why the organization is leading in the energy bar market as it produces products that meet the expectations of young and active consumers who prefer their products to other snacks. This falls under the socio-cultural aspect of pestle analysis. The organization has efficiently dominated this given market and must contort used greatly to the success of the company.

In the evaluation of the economy, General Mills is greatly accustomed to the American economic situation and in their overseas markets and that is why the organization has ventured into Asian nations as nations such as China have become economically empowered and thus citizens in these nations have more purchasing and spending power.

c) Conclude your assessment of the overall environment. Is it more or less favorable for General Mills? Give your ranking from 1-10 (in which 1 = vast gloom and doom for this company; 10 = huge bonus this year!). Where do you think General Mills fits on this 1-10 scale?

The overall environment is estimated to be around 7 in General Mills. This kind of scenario is favorable than unfavorable and thus the organization has been able to expand successfully while undertaking different innovations and adapting to new social trends and economic realities in varied nations.

Brennen

References

Helms, M. M., & Nixon, J. (2010). Exploring SWOT analysis–where are we now? A review of academic research from the last decade. Journal of strategy and management, 3(3), 215- 251.

http://www.mbaskool.com/brandguide/food-and-beverages/5364-general-mills.html

http://www.mindtools.com/pages/article/newTMC_08.htm

Jones, G. R., George, J. M., & Hill, C. W. (2000). Contemporary management. Irwin/McGraw- Hill.

Needham, D., Dransfield, R., & Foundation, E. (2000). Advanced Business. Oxford: Hinemann Educational,

 

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