Running head: CEREAL PARTNERS WORLDWIDE (CPW) CASE ANALYSIS
Cereal Partners Worldwide (CPW): The No. 2 world player is challenging the No. 1 – Kellogg International Marketing – Assignment 1 Candidate: Emad AbouElgheit ISM - International School of Management Doctor of Philosophy (Ph.D.)
Presented to: Professor Peter Horn 21 November 2011 Word Count: 4,326
CASE ANALYSIS - CEREAL PARTNERS WORLDWIDE (CPW)
Abstract The paper analyzes the case study developed in 2007 of Cereal Partners Worldwide (CPW): The No. 2 world player is challenging the No. 1 – Kellogg. Nearly 17 years after its foundation in the year 1990, Cereal Partner Worldwide or CPW is looking at its current position as the world number two breakfast cereal producer after Kellogg. Aiming to leverage both parent companies’ capabilities; General Mills and Nestlé, CPW plans to take further steps towards stronger global sales and integrated global marketing. In a saturated consumer product industry, the company aims to develop a blue ocean strategy through developing strategic core competencies and an international competitiveness in order to outperform its competitors and achieve further growth. Taking the US and Canadian markets out of the equation, the paper aims to find effective global marketing strategies that empower CPW brands performance in Europe, the Middle and Far East, Africa and Latin America. Through analyzing the macro environment conditions, market and competitive benchmarking and value chain, the paper illustrates two critical success factors for CPW; first its product R&D, innovation and diversification strategies. Second its emerging local markets responsiveness and localization of products and after sales services. In light of this analysis, the paper highlights the potentials and recommendations for CPW to unify efforts into creating core competitiveness and create a blue ocean strategy creating new demand and market space in the global arena. Keywords: Breakfast Cereals, Ready-to-Eat Cereals, International Marketing, Cereal Partner Worldwide, CPW, Kellogg, Competitive Analysis, Case Analysis, Competitive Triangle, Value Chain, Porter Diamond, International Competitiveness, Core Competency Development
CASE ANALYSIS - CEREAL PARTNERS WORLDWIDE (CPW) Case Analysis - Cereal Partners Worldwide (CPW) The No. 2 world player is challenging the No. 1 – Kellogg International Marketing – Assignment 1 Introduction The breakfast cereal market can be divided into two main categories; the ready-to-eat
cereals consisting of staples, and the hot cereals which require preparations prior to eating.1 Cold category is dominating nearly 90 percent of the global cereal consumption.2 The breakfast cereal global market can be described as saturated with a low or even no growth rate in most developed nations. However, considerable amounts of consumption growth is found in many emerging markets in Eastern Europe, the Middle and Far East, Africa and Latin America.3 For example; in the hot cereals category, four out of the top 10 cities in consumption are found to be Asian in the year 2009,4 while in the ready-to-eat or cold category five Asian cities were out of the world top ten,5 The same year when total global industry value grew by 4.2 percent to reach over $25 billion.6 Between 1998 and 2003, the US consumers showed a trend to favor the hot categories over the cold ones due to the perceived healthier choice.7 The $12 billion US industry is concentrated where 80 percent of total sales is dominated by the top four manufacturers.8 General Mills began its internationalization in 1968 looking for homogenous new markets by acquiring Smiths Food Group, Ltd. of England and Belgium, followed by further expansions in France, and then it expanded its integration strategy in Japan and Latin America, until 1990 where the joint venture with Nestlé was established.9 The company also adopted licensing and export in some of it market entries.10 On the...
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