A Critical Analysis Articles

Does General Mills need to leave the yogurt industry, according to the article? is authored by Star Tribune staff member Navidi Leila. In order to assess if General Mills should reconsider continuing with its yogurt business, the essay examines the company's financial performance. Target audiences for the author in the food industry include corporate leaders, clients, market analysts, and rivals. According to the article's financial analysis of the business, General Mills' yogurt sales have dropped and its market share has shrunk by 25%. The author concludes by arguing that the business is willing to improve its Yogurt segment since the market share is valued at US$78billion.

The company has grown by exploiting its strengths and core competencies while improving on its weaknesses. The major advantages of General Mills are innovative products, highly skilled workforce, excellent corporate social responsibility initiatives, strong brands, increasing and continuous dividend payouts, low carbon footprints, growing international operations and steady cash flow. Innovative products from the company lead to the development of strong brands that increase sales. The ability of the company to continuously increase its dividend payouts continuous to attract investors and boosts the confidence of its shareholders (General Mills Annual report 5). The core competencies of the company include international expansion, innovation, expanding profit margins, building on its brands and growing customer base (Ding et al. 14). General Mills also has several weaknesses that reduce its competitive advantage and sales revenues. The weaknesses are low demand forecasting for its products, fast expansion into new markets, and over-reliance on income from the US market. The low demand forecasting means that the company is left with higher inventory levels with no revenues coming into the business. The dependency on the US market exposes the company to greater competition from firms such as Kellogg, Kraft foods and Danone (Ding et al. 19).

For any organization to be successful, it must take advantage of business opportunities that emerge while tackling threats that may hinder the growth of the firm. The available opportunities for General Mills are increasing health consciousness, growing demand for frozen yogurt and improved penetration using smaller retail customers based on the US market (Ding et al. 20). The increasing demand for yogurt provides an avenue for the company to increase its customer share of yogurt market and increase sales. Higher penetration of retail stores will enhance the presence of General Mills to improve the convenience of distributing products to their customers. The external environment provides threats that may challenge the success of the company. They include the increase in prices of commodities, competitors such as Kellogg, PepsiCo and Kraft and multiple lawsuits against the business. High commodity prices reduce the purchasing power of customers. Lawsuits against the company decrease the confidence and trust toward the enterprise’s products

Problem Statement

The objective of the critical analysis is to determine how General Mills can compete in the yogurt market by improving its sales revenues. The study will help establish the viability of yogurt business to General Mills.

Solutions

The decline in sales of yogurt threatens to scare away investors of General Mills that may reduce cash flow to the company (Navidi 2). Yogurt sales for Yoplait, General Mills’ top yogurt brand have decreased by 7% last year (Navidi 2). To increase its market share and reduce competition, the company needs to improve its marketing and promotion through pricing policies that will enhance revenues for its yogurt segment (Giammona,). It is recommended that General Mills invests in aggressive marketing strategies to target more consumers. The company can also increase its retail stores in international markets other than the US. Another solution is for the company to come up with new yogurt brands while still strengthening the Yoplait brand. This will help Yoplait compete against Chobani brand of Greek Yogurt (Navidi 2). The recommendations can be achieved using a cost differentiation strategy.

Evaluation of Solutions

General Mills should look for new marketing strategies to sell its Yoplait brand of yogurt to customers worldwide. This solution will be crucial to the success of the organization since the yogurt industry is too viable ($78billion) for any food company to abandon it altogether. Developing new brands is in line with the core competencies of brand building, innovation, and profit margin expansion. The marketing and promotion of Yoplait brand should be based on new product innovations that appeal to clients to grow its market share and experience renewed profitability. Intensive advertising will help General Mills to catch up with the Chobani brand of the Greek yogurt that is attracting more of the company’s customers and reducing its share of the market (Kell 2). Moreover, the firm should do more marketing of Yoplait Greek yogurt by focusing on the advertising message on the label to counter Chobani’s dominance (Navidi 2). The marketing strategy should focus on online advertisements.

Tracking Metrics

The major marketing and promotion sales will be the online presence through the company websites and social media accounts. Therefore, the main tracking metrics for implementation of new marketing strategies will include social sentiments on yogurt brands, web traffic to the company website and incremental sales

Take Away

General Mills is a successful firm with potential for growth. The yogurt business contributes significantly to the company revenues. Despite falls in yogurt sales, the company should stay in the yogurt business.

Grantham, R. Coca-Cola at crossroads with new CEO in charge. Atlanta Journal-Constitution, May 17, 2017.

Background

The article, Coca-Cola at crosses roads with new CEO in charge is written by Russel Grantham of the Atlanta Journal in 2017. The article explores the challenges faced by Mr. Quincey as the chief executive officer of the company. The author seeks to address the leadership challenge at Coca-Cola and demonstrate how strong leadership has been the core of the firm’s growth and success over the years. Moreover, the article explores the changing business environment in the beverage industry and how those changes have affected the performance of Coca-Cola. The author reiterates that the company sales have reduced from $48billion to $41.9billion in the last four years that has sent ripples across the firm. In an attempt to cut costs, the new CEO plans to cut 1200 jobs, reduce the wage bill and increase profit margins. Coca-Cola came up with a turnaround strategy based on the introduction of new products and acquisitions to increase market share, expand customer base and diversify into other fields that will increase revenues.

Coca-Cola takes advantage of its strengths to grow. The strengths of the company are the strong marketing and advertising, high customer loyalty, strong brand equity, great company valuation, extensive distribution network and large market share. Coca-Cola is the world’s most valuable brand despite drops in recent rankings (Grantham 2). The company has managed to achieve strong brand equity through an identity that makes Coke be highly visible in any part of the globe (Grantham 2). The firm enjoys a significant market share of nonalcoholic beverage drinks through its extensive brand portfolio and availability in more than 200 countries. Some of its recognizable brands include diet Coke, Fanta, Coca-Cola, and Sprite. Customer loyalty has been developed over the years through trusted soft drinks that have ensured that people will still buy the company’s products. The high customer loyalty has continued to increase its customer base (Baah & Bohaker 10). The company’s core competencies are strong marketing strategies, significant market share, and strong brand equity and distribution network. The firm’s weakness has seen the business drop in world rankings and fallen revenues. The weaknesses are intense competition from PepsiCo, water management, small product diversification and lack of healthy beverages. The company’s most shortcomings are lack of healthy beverages because most of its products have been known to be sugary with high-calorie content (Grantham 2). Furthermore, PepsiCo develops healthy drinks and has continued to experience the increase in revenues at the expense of Coca-Cola. The company has also been accused of poor water management practices while also mixing pesticides in its water used to bottle different products (Baah & Bohaker 11). The inability of the firm to diversify into other viable segments is hurting the business.

However, all is not lost as there are ample opportunities the company can grab to get back to profitability. These opportunities include packaged water, diversification, and emerging markets. The company can diversify into healthy products to raise more revenues. These products include Coke zero sugar, Gold peak tea, and green tea. Diversification increases profits as evidenced by Gold Peak tea annual income of $1billion (Grantham 3). The company should launch products in new markets in Asia such as China and India (Baah & Bohaker 11). Packaged drinking water through brands such as Kinley and Dasani provides an opportunity to deviate from unhealthy soft drinks. The major threats to the success of Coca are indirect competition from beverage companies such as Starbucks, Red Bull, Suntory beverages, etc. The high cost of raw materials drives up operating costs. The increased health consciousness is a significant threat as more people prefer drinks that promote their health and well-being (Grantham 2).

Problem Statement

The primary purpose of the analysis is to examine how the new leadership of Coca-Cola can help the company to operate in a highly competitive business environment.

Solutions

I don’t think that laying off workers at the corporate headquarters will contribute to increasing revenues as alleged by Mr. Quincey (Grantham 2). The staffs at Coca-Cola are some of the most qualified, better trained and highly skilled. I propose that the new CEO focuses on diversification to reduce competition from PepsiCo and other revenues while maintaining its large market share. The diversification will take advantage of opportunities in emerging markets. The diversification will be aided by the company’s acquisition strategy. Coca-Cola has successfully acquired SmartWater and Glaceau (Grantham 3).Another solution is to strengthen strong coke brands while introducing other products that are low in calories to avoid the threat of health conscious consumer trends in the industry.

Evaluation of Solutions

The best option for the new CEO is to champion the introduction of new Coke products that are health driven to attract more customers. Healthy products will enhance the company’s high customer loyalty. This solution will enable the company produces differentiated products through innovation. Moreover, the firm can strengthen its Coca-Cola Zero sugar brand using its core competencies of innovation, strong marketing strategies, and supply chain network. The organization can make formula changes to its products while also venturing into the sports and energy drinks segment to earn more revenues.

Take Away

Leadership has been at the center of Coca-Cola’s success. The changing lifestyle in favor of healthy foods and drinks threatens the beverage industry. The company should introduce and strengthen its brand of healthy drinks to operate competitively.

D’Innocenzio, A. Can Amazon persuade enough people to buy fresh food online? Associated Press, June 17th, 2017.

Background

The article explores the future of e-commerce about buying groceries. The author examines the strategies used by Amazon to convince customers to buy groceries online. The grocery industry has been slow in embracing selling fresh produce to their clients online. The article examines the perception of clients in buying fresh groceries via Amazon. The company’s acquisition of Whole foods for a reported sum of US$13.7billion is set to revolutionize shopping of groceries. Customers of Whole Foods will be able to order their groceries from Amazon and have it delivered instead of physically visited the company stores. Amazon, on the other hand, will be able to use Whole Food stores as refrigeration and distribution centers for groceries ordered online. The acquisition is part of the company’s strategy to expand its Amazon Fresh delivery business through its subsidiary Amazon Prime. The article states that the online grocery business is lucrative and expected to reach $177billion in 2022.

The main strengths of Amazon are significant market share, successful acquisitions, efficient delivery network, customer service, and GLOCAL strategy and cost leadership. Amazon is the largest online retailer, a pioneer, and leader in e-commerce that has enabled it to get a significant market share (D’Innocenzio 1). Acquisitions have been and continue to be a big part of the company’s growth. Its recent purchase of Whole Foods at $13.7 billion will enable the company to venture into the retail business dominated by Walmart while also using it to grow operations for its Amazon Fresh Delivery (D’Innocenzio 1). The firm also managed to use Customer Relationship Management (CRM) system driven by IT technology customer behavior and trends. GLOCAL strategy helps the company go global while remaining local; hence respond to e-commerce needs of clients in different countries. Cost leadership strategy has enabled Amazon to offer differentiated products at relatively lower prices as compared to their competitors. The primary core competencies for the firm are customer service, cost leadership, and acquisitions. Amazon has several weaknesses that enable it to lose its competitive advantage over rivals. One of the weaknesses of the company is its business model that attracts huge revenues but has low-profit margins. The low profitability reduces the company’s valuation and standing among potential investors. Furthermore, there exists negative publicity due to accusations of tax avoidance that has seen the reduction in customer loyalty. Moreover, increased diversification by Amazon is reducing the strength of the brand and making the brand identity to dwindle (D’Innocenzio 2). The company is still using the model of selling books online on other product such as groceries that may eventually flop since books are homogeneous (D’Innocenzio 1). Another weakness is offering free shipping services to their customers

Problem statement

The purpose of this critical analysis is to determine how Amazon will be able to provide a value proposition to their customers to buy groceries online.

Solutions

To succeed in the grocery business, Amazon has two options. Allow Whole Foods to run as an independent subsidiary selling groceries to their customers but not online. It is evident that Whole Foods has an equally vibrant customer loyalty and market share despite stiff competition from retail giant Walmart (D’Innocenzio 2). Another option is to link Amazon Prime with Whole Foods to allow fewer customers to order groceries online. The company can also choose to completely abandon the grocery business and engage in other product diversifications.

Evaluate Solutions

The solution is to link Amazon Prime with Whole Foods to act complementarily. The future of buying e-commerce is very bright as the business is already valued at $71 billion and is expected to grow even more (D’Innocenzio 1). However, the company will need to address concerns from the consumers about food safety and durability of the fresh produce. Amazon has, therefore, set up refrigeration stores to ensure agricultural products remains fresh at the time of delivery to customers (D’Innocenzio 2). The company can also increase its footprint in the online grocery business by acquiring its competitors like Shipt and InstaCart. This is because Shipt has been able to penetrate the market by offering their services at a subscription rate at the cost of $100 per annum which is less than what Amazon is charging (D’Innocenzio 2). The company also needs to strengthen the Amazon Prime brand while expanding Amazon Fresh Delivery pick up points for convenience. The firm should engage in marketing strategies that inspire the confidence of grocery buyers to alleviate their fears and address concerns related to delivery and durability of produce. The organization should use its CRM to study consumer behaviors related to buying groceries and use that information to target more customers.

Tracking Metrics

The metrics that can be used to track the performance of Amazon’s online grocery business include cart abandonment rate, conversion rates, and value per visit, gross margins and subscriber growth rates. The company should increase its conversion rates to ensure visits to the firm’s websites are converted to potential buyers.

Take Away

Amazon has managed to sell books, electronics, home appliances and clothing online. However, selling grocery online is quite challenging but worth it. The acquisition of Whole Foods by the company is one step ahead of realizing that dream. The firm will need to market itself to convince shoppers to buy groceries online aggressively.

































Works Cited

Baah, S., & Bohaker, L. The Coca-Cola Company.2015. Retrieved from http://sandrabaah.weebly.com/uploads/4/9/9/3/49933149/strategic_analysis_of_coca-cola.pdf

Bhasin, H. SWOT of Coca-Cola. 2017. Retrieved from https://www.marketing91.com/swot-coca-cola/

Bhasin, H.SWOT analysis of Amazon.2017. Retrieved from https://www.marketing91.com/swot-analysis-of-amazon/

Chest notes. Coca-Cola SWOT 2016. Retrieved from https://www.cheshnotes.com/2016/08/coca-cola-swot-2016-strengths-and-weaknesses/

Ding, R., Liu, M., Pan, J., & Sharma, P. General Mills, 30th November 2010. Retrieved from file:///C:/Users/user/Downloads/GIS2010-11.pdf

D’Innocenzio, A. Can Amazon persuade enough people to buy fresh food online? Associated Press, June 17th, 2017.

General Mills Inc. Annual Report. 2010. Retrieved from file:///C:/Users/user/Downloads/MLA_8th_ed.%20(3).pdf

General Mills SWOT analysis/matrix. Accessed on 10th Sept 2017 from http://fernfortuniversity.com/term-papers/swot/1433/161-general-mills.php

Giammona, C. General Mills invest in market to boost yogurt business. Bloomberg News, 2017.Retrieved fromhttps://www.bloomberg.com/news/articles/2017-03-21/general-mills-falls-as-third-quarter-revenue-misses-estimates

Grantham, R. Coca-Cola at crossroads with new CEO in charge. Atlanta Journal-Constitution, May 17, 2017.

Kell, J. General Mills loses culture wars, May 22, 2017. Retrieved from http://fortune.com/2017/05/22/general-mills-yoplait-greek-yogurt/

Navidi, L. Does General Mills need to get out of Yogurt business? The Star Tribune, June 3, 2017.