Will Keith (W.K.) Kellogg, was born April 7, 1860. By 1894 W.K. and his brother, Dr. John Harvey Kellogg, accidentally discover the process of creating flaked cereal while experimenting with shredded wheat cereal. In 1906, W.K. Kellogg entered the cereal business, as American eating habits began shifting from heavy, fat-laden breakfasts to lighter, more grain-based meals. Kellogg Company (Kellogg) was founded in 1906 as the Battle Creek Toasted Corn Flakes Company. Kellogg Company of Great Britain Ltd, a subsidiary of the US Kellogg Company of Michigan, remains the dominant brand in the UK breakfast cereals market, with around 40% sales volume in 2000. The Group's principal activities are to manufacture and market ready-to-eat cereal and convenience food products. On this report we will analyse Kellogg’s interior and exterior environment as well as carry out a Swot analysis of the company, to be able to understand the situation of the company in the present.
2. Macro Environment
There are many environmental issues which should be looked at to get the broader picture of Kellogg’s Company. These issues can be grouped into six categories: political, economical, social-demographic, technological, legal and ethical. The acronym for this is a Pestle analysis. All of them looked at in much detail in the next few pages.
The political environment has a major effect on the way financial services industry carries out their business. Parliament passes out legislation to these organisations who then apply it to business in the financial sector which influence the way they go about their business. The three main forces within the political environment are National and Local government, the EU and different regulatory bodies. These regulatory bodies approach to the supervision of those it regulates will be to apply these principles, other rules, codes and guidance flexibly by tailoring the general requirements to fit the circumstances of particular firms. In the United Kingdom, the decisions of local and central government emanate from complex process of discussion and negotiation involving a range of formal and informal institution, including political parties and pressure groups and frequently involving international bodies. Kellogg’s is an international company immerse in the globalisation process as it produces its products in 18 countries around the world and sell them in more than 180. Therefore, Kellogg’s is affected by the political environment in those countries which may have a negative or positive effect on the company. Kellogg’s commercialises its products in Europe too and therefore is subject to the development of the European Union.
Business and economics are inextricably linked as business organisations operate in an economic environment which shapes, and is shaped by, their activities. In market-based economies this environment comprises variables which are dynamic, interactive, and mobile. As a vital component in the macro economy, government exercises a significant degree of influence over the flow of income and hence over the level and pattern of output by the public and private sectors. Macroeconomics recognises the interdependent nature of markets and studies the interaction in the economy as a whole, dealing with such questions as the overall level of employment, the rate of inflation, the percentage growth of output in the economy and many other economy-wide aggregates. The Kellogg’s Company is quoted in the New York Stock Exchange (Symbol K), and its recent performance is better than the industrial index, but follows the oscillations of market index, which can affect the company directly. Moreover, the rise of the price of grains, oil and gas this year is a factor against profitability. Also, the crisis that the global market is expirencing at the moment has caused a lower purchasing power which may force the change of consumers to “white...