Cereal Partners Worldwide
Questions For Case Study 1.4
Cereal Partners Worldwide
Brendan McHugh
1. How can general mills and Nestle create international competitiveness by joining forces in CPW?
General Mills and Nestle can create international competitiveness by joining forces in CPW because quite simply they each have unique attributes about themselves. Nestle is the worlds largest food company, is already established as a strong worldwide organization and specializes in downstream competences. On the other hand General Mills specializes in upstream competences, like production processes (a important factor) and has proven cereal-marketing experience. CPW can definitely benefit from the knowledgeable marketing expertise of GM mixed with the already worldwide presence established by Nestle. This is important because GM has mainly had its strong sales in the homeland of the United States. In 2006 only 16% of GM sales came from outside the US, so this will not be a problem once the companies join forces. They can balance the strong suits of each other, and in exchange be very successful in the global market as well as in the US.
2. Evaluate the international competitiveness of CPW compared to the Kellogg Company.
If you just look at the numbers, the Kellogg Company, which was the first American company to enter the foreign market for ready-to-eat breakfast cereals, has the lead with a 30% world market share. However CPW is not too far behind with a 20% world market share. But the competitiveness between the two companies is actually not too far off because CPW has really performed best in developing markets such as Russia and China, where Kellogg has not established a strong presence. These markets are small but are growing rapidly, so it’s important to note this for Kellogg’s. CPW is equally competitive it seems because they already have a strong percentage of China, which is a big advantage. Their campaign for marketing to rural and urban China is genius, and I don’t see
Cereal Partners Worldwide
Brendan McHugh
1. How can general mills and Nestle create international competitiveness by joining forces in CPW?
General Mills and Nestle can create international competitiveness by joining forces in CPW because quite simply they each have unique attributes about themselves. Nestle is the worlds largest food company, is already established as a strong worldwide organization and specializes in downstream competences. On the other hand General Mills specializes in upstream competences, like production processes (a important factor) and has proven cereal-marketing experience. CPW can definitely benefit from the knowledgeable marketing expertise of GM mixed with the already worldwide presence established by Nestle. This is important because GM has mainly had its strong sales in the homeland of the United States. In 2006 only 16% of GM sales came from outside the US, so this will not be a problem once the companies join forces. They can balance the strong suits of each other, and in exchange be very successful in the global market as well as in the US.
2. Evaluate the international competitiveness of CPW compared to the Kellogg Company.
If you just look at the numbers, the Kellogg Company, which was the first American company to enter the foreign market for ready-to-eat breakfast cereals, has the lead with a 30% world market share. However CPW is not too far behind with a 20% world market share. But the competitiveness between the two companies is actually not too far off because CPW has really performed best in developing markets such as Russia and China, where Kellogg has not established a strong presence. These markets are small but are growing rapidly, so it’s important to note this for Kellogg’s. CPW is equally competitive it seems because they already have a strong percentage of China, which is a big advantage. Their campaign for marketing to rural and urban China is genius, and I don’t see