Kellogg’s may be a victim of its standing: as the largest breakfast cereal company with footprint in almost all major markets of the world, it is struggling to increase its market share of its core products. The phenomenon has bearing over its financial performance, which has been stalled over the years.
Drawing from the Chairman’s letter to the shareholders featured in company’s latest annual report of 2014, there are following two suggestions that extend the strategic line of action mentioned in the said letter (Kellogg’s 2-5).
Kellogg’s has achieved a maturation stage in its traditional markets of the developed world. Take South Asia and South East Asia as example: While it has presence in notable emerging markets such as China and India, entry into populous yet still-ignored countries like Bangladesh, Cambodia, Pakistan, etc. present a promising avenue where the company can grow volumes, and may also achieve better margins by capitalizing on its world-class reputation.
Diversify product portfolio by staying true to its ‘healthy food’ mantra
The company management makes a special mention of its corporate social responsibility (CSR) initiatives that are likely to result in positive consumer sentiments and enhanced purchase intent. It can be argued that due to the fact that product offerings of almost all breakfast cereal companies are largely similar, Kellogg’s is hard-pressed to stand out by focusing on its image as a caring entity. However, the realization should not be lost on the management that it was the company’s focus on healthy food that secured it the top position. If it were to overcome the predicament it currently finds itself in, it must innovate and take cognizance of factors such as changing demographics, consumer habits, and consumption patterns.
Kellogg’s. 2014 Annual Report. Battle Creek, MI: Kellogg Company, 2014. Kellogg Company: Investor Relations: Annual Reports. n.d. 26 Jun. 2015 <http://investor.kelloggs.com/files/doc_financials/annual_reports/K_2014-Annual-Report_v001_q725z5.pdf>