SWOT Analysis On Kellogg Nutri-Grain

ENG102, Title and Cohort: ENG-102 Advanced Business Writing (Section 4)

Prepared By: Mohamed S. Al Shantaf 200811027

Prepared for: Dr. Wesley Gray

Wednesday, October 05, 2011

1. Introduction

It is known that the Kellogg Company is a huge organization and a leader in the production of breakfast cereals; infact, it is considered as a 100 years brand that passed through generations. In addition, the Kellogg Company is way notorious to be from beginners in such field of production or business; to the extent, they have gained the trust of so many generations from different ages. Despite they are a huge corporation and they are always looking forward to raise their market and wealth, but they have one single goal, and that is to promote health and healthy food to the community; though it is considered that they have took care of people in the sense of types of customers and food diversification, as a result they are looking forward to continuously increase consumer satisfaction, hence, they have different types of breakfast cereals. The Kellogg Company recognized that there are a type of customers that are called time savers, so they have thought of a new product that have crossed different ages to come up with the Nutri-Grain cereal bars; it is a cereal bar that comes with different flavors that are fun and healthy. The new product was first introduced in 1997 to witness a successful demand and publicity (Extending the product life cycle, n.d.).

Coming up in this analysis, where we can find a minimized overlook on Kellogg products, to put an eye on the specials of Nutri-Grain and the other types of cereals; though a

comparison will exist, recognizing the SWOT points, and recommendations will be available to show.

2. Strengths and weaknesses of the company

Kellogg is promoting healthy living in an era full of diseases and bad habits, in which they have made a strong commitment to corporate social responsibility and their passion for their business; though, they have made their brand so valuable.. The idea of Nutri-Grain as a portable breakfast is a strength to target busy people and kids in schools. Kellogg has increased 50% of shares in 1997 in two years that made people to trust the product more in case of extension. Developments in the product as the flavor instance changed the product to be an all-day snack. The article, titled Extending the product life cycle (n.d.), indicates that In 1997 it was immediately successful, gaining almost 50% share of the growing cereal bar market in just two years (p. 89).

As the product gained popularity and succession Kellogg has continued to move on the same path of promoting and marketing the product to end up with weaknesses in the long run. Kellogg did not put their product under a continuous developing process, for instance, the product Nutri-Grain did not get enough promoting since it was first introduced. In addition, the attention held on the product had faded but drifted away to focus on other products knowing that the product is successful. Nutri-Grain and its likes, such as Elevenses, had showed an 80%

of sales to sum up in small proportions to be spent on promotion budgets; to the extent, sales were gathered in such huge percentage on discounted pricing and not depending on the trusted and wealthy brand of Kellogg as an advantage. The core products of Nutri-Grain Soft Bake and Elevenses between them represented over 80% of sales but received a small proportion of advertising and promotion budgets Those sales that were taking place were being driven by promotional pricing rather than the underlying strength of the brand. (Extending the product life cycle, n.d. p. 91) Moreover, Kellogg didnt hold a strong message to surpass their competitors.

3. Opportunities and threats

Kellogg have witnessed many opportunities during its product life time, that the market have increased by 15% in 2003, though it was a great chance for the Kellogg to emerge and achieve success in bringing the product on its feet again. To the extent, Kellogg have made the final decision to implement an expansion plan by change the product from the side of perceptions, style, and adding more flavors. (Extending the product life cycle, n.d.)

Despite the Nutri-Grain success and uniqueness, though it didnt last for too long in the long run, were surely other competitors have emerged in its way to produce a better quality

with a desirable prices. At the stage of new emerging products, Kellogg had faced threats; such as products that have the same benefits to cause Kellogg decreased sales and enters the saturation stage that made sales to fall down while the market was in a refreshing condition; that made competitors market share to increase. At that time, Kellogg remained with tied hands to reach a stage that had put the successful product in a forgettable status concerning customers, and it had made other competitors to control the market. (Extending the product life
cycle, n.d.)

4. Evaluation of the SWOT analysis

As it is mentioned initially of internal points in the analysis, it is recognized that the main opportunity Kellogg had faced was the market growth to reach 15% and above back in 2003, were Kellogg could have made a great success in refreshing their sales and putting them under a great increment in concern with their product, however, the product had some weaknesses that was caused by the company, and that in core the product made an 80% of sales but no promotional or face-lift decision was made to extend the product life, though, this made it forgotten shortened its life cycle. It is recommended that Kellogg have to emerge whenever the market goes into a Boom stage, in the other hand, emerge is linked with the expanding plan; they have to develop their product from the perspective of characteristics in order to conduct the expansion plan effectively.

Moreover, the product Nutri-Grain got known worldwide, to the extent, customers were holding a great trust in it. However, the product have reached a stage of market saturation in its life cycle, and that made Kelloggs sales to drop and other competitors are enjoying increment in their shares, in which this is recognized as a main threat in the analysis. On the other hand, the product had a core strength, in which Kellogg as a trusted and known brand, was the first one to introduce such product, though, it may be recognized as a patent privately owned by the Kellogg company, matter fact it have flavors and good prices; as a result this will extend the product life and make it endless if this was taken in consideration. An acknowledged advice realized by this analysis, and in concern with the threats and strengths of this product, it is important to set new flavors of the product to target more customers as well as to satisfy the side of diversification that will lead to success, in addition, to put more trust in the value of Kellogg and hold a reasonable price to increase return and raise sales as well.

5. Conclusion

Through the past hundred years the Kellogg Company took a memorable place in the industry of breakfast cereals and healthy food, and it had promoted quality, value, and trust until today; to the extent, it considered to be a leader in its field and the rest are followers. In
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addition, it took a great position to serve in a manner of social corporate responsibility. Kellogg have achieved success in believing in the secret of customer satisfaction, until it had invented the great patent of portable snack meals that are known as cereal bars and named Nutri-Grain; it is a natural product that has many flavors and benefits, in which made sales even better and gained respect to Kellogg and its achievements. However, their product had faced strengths and threats, such as its different flavors and benefits and it satisfies different types of people; on the other hand it faced some threats of market saturation due to lack of product developments. In addition, the product confronted opportunities and weaknesses; and that the market has increased to have a chance in refreshment of the products sales and it had a weakness of the persisted slowed down development that made other competitors conquest Kellogg. Hence, there are some strategies Kellogg can use to implement expansion and extension plan effectively, and that goes as the following: The product Nutri-Grain must be put under a consistent development from the side of flavor, targeted customers, and the brand itself. Kellogg must re-price the product in a way that satisfy sales and customers It is important to consider a special budget for promotion and advertising to refresh the product

Reference:
Extending the product life cycle. (n.d.). Retrieved on September,24 ,2011 from www.times100.co.uk