Business Report of Kellogg's

Topics: Economics, United Kingdom, Nutrition Pages: 6 (1726 words) Published: November 13, 2012
The company Kellogg’s Corn Flakes® is the second large company in America began in 1906,which makes breakfast and snacks for millions. The founder, W.K.kellogg, set healthy and high quality as the aim of providing nutritious products with diversify flavor. Their provide products such as cereal, waffle, Bars, and cookies to their consumer all around the world. Today, “Kellogg’s Company manufactures in 18 countries, also sells its products in more than 180 countries” (Kellogg’s, 2011). The following essay will evaluate this company through PEST analysis in the UK, factors include political-legal, economic, social and technological environment (Anon, 2005). It is to be claimed that out of those reasons, the social-culture environment in the UK seems to have more impact. The purpose of using PEST analysis is essential, because it could helps the company to operate by using this four measurements of the external macro-environment.

PEST Analysis
PEST analysis is used as a technique to measure, or to evaluate the factors which has impact to the operate of a company.(Anon,2005) this could also assist the company to make better understanding and right decision in terms to gain a further goal.

Political-legal Environment
Political-legal factors involved government regulations and laws which a company must obey (Anon, 2005). Examples include political stability,laws that affects the company, and any relative changes in legislation.

According to Food Standards Agency, 2011, it point out that the food company provider must have accurate food labeling on the packaging of the product. This will leads to a clear guidance to the consumer to have secure schemes. For example, ingredients, allergy information and nutrition information. In response, Kellogg’s have been strictly following this regulation, and make sure that every package of this product has been labeling, and their consumer felt safe when buying their product(Kellogg’s, 2011).

Furthermore, since cereals with high-sugar products dominate television advertising targeting at children between the ages of 6 to 11 in the UK (Jardine and Wentz, 2005). And overall about 78 per cent of foods in high calories advertised during TV programs are watched by kids (Wise, 2010). And this is now what Kellogg accused of marketing to children by the pressure group (Wise, 2010). Kellogg’s response involved developing a new range of cereals and snacks which are lower in sugar than existing products (BBC news, 2010). However, the company has also taken down some UK websites (Wise, 2010).

Kellogg’s action in some extend is pessimist, although taken down the websites perhaps could clearance the negative news which could have influence the company, but by hidden the truth is not going to assist the company for a better further.

Economic Environment
The factors that Economic environment involved could have affect on the purchasing power of potential customers and the company’s cost of capital (Anon, 2005). Contains points such as the overall economic of the country, their income of target population, and exchange rate.

To begin with, the UK economic current circumstance is that although the economy in the country is growing, however, there still a downturn. The weak situation of British capital is that it is Britain especially vulnerable to the crisis.(BBS news, 2009). The External market for is very difficult to explain. The power of UK buyers are at a very certain level, but at the same time, the power of suppliers and threat of new entrants are both very low (Kilmister, 2008), and this is perhaps related to the competitive market and high rate of the intensity of rivalry in the country.

Although, Kellogg’s as a whole is facing a very healthy finance, and a strong global based brand, with diversity, innovation of new products and explore new market(BBC news 2010). On the other perspective, the weakness for them is that the limitation on the growth of product...
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