Case Study: Cereal Partners Worldwide(CPW)
Executive summary SWOT analysis CPW competitiveness CPW blue ocean strategy CPW strategy for international sales growth
CPW, a breakfast cereal producer formed in 1990 after a 50-50 joint venture between Nestlé and General Mills. CPW is presently facing a big challenge: how to increase market shares in a saturated market characterized by a fierce competition. CEO’s suggestion: Move from a red competition to a blue competition.
How could CPW move from the red ocean to the blue ocean ?
Strengths Cereal marketing expertise and technical expertise of General Mills. Good reputation and brand image of Nestlé. CPW is the 2nd leader on the international market. The market leader in smaller cereal markets. Strongly present at the international scale. Weaknesses CPW continue to suffer from its debt strategy. Drops in CPW sales due to the growing competition in the market.
Threats Market saturation and high competition from rivals. Increasing production costs. Emergence of new lifestyles: On the go solutions (more convenient than cereals) Opportunities Increasing health awareness. Consumer sensibility to packaging (colors, gifts, …) and content (flavors, colors,…) Large possibilities to extend production to new markets (China, Africa, Russia,…) New distribution channels: Cafeterias, hotel restaurants, …
How can General Mills and Nestlé create international competitiveness by joining forces in CPW ?
CPW value chain
Benefit from each company competencies to optimize costs and efficiency at each level of the value chain process Create a successful synergy
Sales & Services
Technical excellence in products and production processes. General Mills has 66 production facilities all over the world.
Deep marketing and distribution knowledge of Nestlé....