General Mills Research Paper

Topics: Revenue, Generally Accepted Accounting Principles, Balance sheet Pages: 5 (828 words) Published: December 16, 2014


Summary
General Mills is an American company that specializes in the production, packaging and distribution of food products. The company has managed to acquire a significant share of the market through mergers and acquisition. Currently, the company controls about 31 percent of the market. The industry is characterized by a moderate to low level of competition. The main competitors include Groupe Danone, Kellogg, and Kraft. Each company is able to retain its customer base since consumers tend to consume foods they are used to and hence strong brand loyalty. The company’s competitive advantage lies on its broad range of products and high level of innovation. High level of innovation has enabled the company to meet the changing customers’ need effectively while minimizing the operational costs. By providing a wide range of products, General Mills has managed to minimize risks. General Mills basically targets three groups, which include baby boomers and millennial generations, multicultural communities and the Minneapolis population. This presents a major growth opportunity for the company both now in the future.

General Mills, Inc
General Mills, Inc is an American company that is headquartered in Minneapolis in Minnesota. The history of the four industry traces back to the 1850’s and General Mills was founded in 1928 by James Ford Bell, who facilitated a merger between several milling companies in the region. The company is principally involved with the production and distribution of consumer foods. The company provides a wide range of products including meals and food services (General Mills). Some of the major brands include Progresso Soup, Fruit Roll-Ups, Cheerios, and Hamburger Helper. Based on the recent statistics, General Mills is the second largest cereal maker in the US having approximately 31 percent of the market share (York). Since its incorporation, General Mills has recorded a significant growth. After the World War II, the company expanded at a significantly high rate. This followed the establishment of a popular line of appliances along with creating Betty Crocker cookbook (York). General Mills has been performing well financially in that last one decade. For instance, the company generated total revenue of $14,691 million in 2009 (York). This reflects the expanding market share, which has contributed to increasing revenues. Currently, the company markets its products in more than 100 countries across the world. The main competitors that pose a major challenge to General Mills are Groupe Danone, Kellogg, and Kraft. However, these major players dominate the industry and hence there is low competition. The packaged foods industry is characterized by high switching costs. This is because most customers tend to consume the foods they are familiar with (York). High brand loyalty minimizes the level of competition among the key players. One of the main sources of competitive advantage for General Mills is innovation. The company focuses on new products and packaging, which has enabled the company to maintain a high level of sales throughout the year. In order to achieve this, General Mills has invested about $218 million on research and development (General Mills). Another major source of competitive advantage is broad brands. General Mills has diverse category of products, most of which are premium brands and hence having pricing power (General Mills). One of the major distinguishing factors for the company is its ability to innovate new products and providing a wide range of choice. Also, the company’s products are affordable.

Financial Summary
In 2013, General Mills’ net income increased significantly from 2012 by $287.9 billion or 18.3%. The growth in net sales is the major account contributing to the increase in net income by $1,116.2 billion from 2013 and grew by 7% in 2013. The five-year growth in net sales since 2009 has been steady. The acquisitions of new businesses to...


Cited: General Mills. “General Mills.” 2003. Web. 23 Jan. 2014. .
York, Emily. “General Mills Targets Three Groups to Fuel Growth.” 2010. Web. 23 Jan. 2014. .
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