Cereal Partners Worldwide (CPW)

This was achieved by combing all the organization strength into one. General Mills brought massive manufacturing capabilities, excellence in products and production process, and diversified portfolio of products. Nestle brought feeding the world, selling in all countries and deep understanding of international marketing and distribution. With the upstream value chain, CPW will need to centralize procurement on raw materials for all its manufacturing operations. By using this strategy will receive CPW more of the bargaining power when dealing with suppliers. This will result in lower costs and better opportunities for future suppliers.

With the downstream of the value chain regarding marketing/sales & distribution and having these parts of the organization decentralized, this will give CPW competitive advantage over competitors. This will give CPW the ability to market variety of different product to certain individual consumers.

When one compares both advantages over CPW and Kellogg with the value chain, it can see which has the better-perceived customer value. Kellogg had the better value added chain; this was shown by comparing advantages over CPW.

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By looking at the advantages compared with both companies, this can explain why Kellogg is more of a market lead in international business strategy. The two best blue ocean strategy would be having a stand-alone store and partnering up with a fitness centre to form a private label. With having a stand-alone or a private label, this will give CPW to connect with their health-conscious consumer. Another benefit of doing a private label is a decrease in cost relative brand marketing.

This gives CPW to focus on the quality of the product to increase brand loyalty and confidence.

To increase sales volumes, CPW needs to improve on penetrating into their market using a glocalization strategy. There are five areas that CPW can work on marketing and brand strategy, strengthening core brands, Innovation and new product launch, new global brands, and merger and acquisition. This will give CPW more of a presence in their market and be able to act like an international and local provider to their consumer base.

How can General Mills and Nestlé create international competitiveness by joining forces with CPW?General Mills and Nestle need to leverage the value chain in their joint venture to gain market share. This can be done by centralizing upstream activities and decentralizing downstream activities. Adjusting how these activities are undertaken in the portfolio of international markets will enable the joint partnership to better leverage their core competencies. The CPW Value ChainThe CPW value chain consists of upstream and downstream activities. The CPW partnership divided the upstream and downstream activities to better leverage General mills and Nestle core competencies. With General Mills strengths concentrated in the upstream with their Massive manufacturing capabilities,

Excellence in products and production process, and Diversified portfolio of products.
This combination of core competencies makes them ideal to handle the upstream processes. Nestle is the world’s largest food manufacturer and specialize in making sure the world gets fed.CITATION Har08 l 1033 (Hollensen, 2008) Their core competencies are focused on the downstream and consist of Feeding the world

Selling in all countries
Deep understanding of international marketing and distribution An understanding of the CPW joint venture value chain can help create international competiveness. Centralization of the Upstream Activities.

Upstream actives for the current joint venture are a combination of primary and support activities. Competitive advantage in upstream and support activates often grow more out of the entire system of countries in which a firm competes than from its position in any single country CITATION Har08 l 1033 (Hollensen, 2008). The CPW partnership can start by centralizing procurement of raw materials for all of its manufacturing operations. Doing this will enable them to achieve greater bargain power over suppliers and thus lower their costs. Maybe insert something about production planning and combine it with the creation and tweaking of current products for individual markets. De-centralizing downstream ActivitiesNestle specializes in feeding the world. They are unbelievable at delivering quality products to multiple international markets. The CPW partnership needs to decentralize this part of the operation.

Downstream activities create competitive advantages that are largely out of local activities and create entry/mobility barriers in that country alone. CITATION Har08 l 1033 (Hollensen, 2008) Decentralizing the marketing/sales and distribution of the products will enable the team to target individual tasks in the downstream value chain to gain competitive advantage over the competition. For instance, a product might not be right for a certain market and a de-centralized marketing department would be better equipped to pick up on that and make changes better suited to the local consumer. The CPW partnership was created to leverage the core competencies of the two companies. Carol can use this to her advantage by centralizing the upstream activities and decentralizing the downstream activities. CITATION Har08 l 1033 (Hollensen, 2008) Doing this will enable multiple competitive advantages to be created in the overall value chain.

Evaluate the international competitiveness of CPW compared to the Kellogg Company.Kellogg Background InformationKellogg organization has been able to be the number one manufacturer spot. They have achieved this by adopting an international strategy at beginning of their start up. This led to Kellogg organization, the pathway to developing a strong brand globally and concentrate on their core competence of their business. Also, Kellogg was able to market their products effectively with all region they desired to sell to. Having this effectively marketing plan, Kellogg was able to have a strong presence in all regions. CITATION Har08 l 1033 (Hollensen, 2008)Value ChainTo compare international competitiveness the value chain is the best way to evaluate the advantages, and each organization has over the other.

Kellogg AdvantagesDeveloped their international strategy at an early stage of the business. This has helped Kellogg develop connects in the international business field which helps with relative costs. Perceived Value could be higher than CPW with more presence in the international market. Comparing sales volumes and market share are higher this has led to advantage with Economic of scale. Having production flexibility, better coordination of the whole value chain. Faster implementation of new ideas on products to the market place CPW AdvantagesMore of a market leader in countries other than North America. Well known partner Nestle on collaborating with products to various regions and countries. Has a strong and leading brand with General Mills.

By looking at the advantages compared with both companies, this can explain why Kellogg is more of a market lead in international business strategy. Suggest how CPW can create a blue-ocean strategy.In a fast evolving modern society, consumers begin to step away from traditional breakfast meals. The reasons are the lack of time available in the morning, or the increased popularity of fad diets, and trends. In order to keep up with a saturated market of breakfast options, CPW needs to consider the following blue-ocean strategies. First Strategy: Stand-alone storeThe first strategy is to open stand-alone breakfast cereal stores. The stores would offer a variety of breakfast cereals produced by Nestle and General Mills Inc. for the healthy conscious consumers on the go. A number of options would be offered with the purchase of cereal, such as a variety of dairy and non-dairy products, sugar and sugar substitutes, including cane sugar, brown sugar and liquid sugar. Other add-ons to cereal will include fresh fruit, dried fruit, nuts, and seeds to appeal to the growing health-conscious consumer demographic. CPW will offer a variety of breakfast bars for consumers who still want the quality of breakfast cereal.

This will attract consumers do not possess the time to sit down and to have the traditional morning breakfast, another option exists. In order to entice brand new and returning consumers, a loyalty program will be introduced, such as stamp cards, in order to receive discounts and free products. Second Strategy: Partnership with fitness centresThe second strategy is to join a partnership with fitness centres such as Steve Nash and Club 16, and offer its members the variety of CPW cereals or breakfast bars. Many of the fitness centres are open 24/7 or open early, so a number of consumers who use their services choose to forfeit their breakfast for attending a fitness centre. This is an ideal target market for CPW, because the company is trying to appeal to a health-conscious consumer with the healthier cereals, and breakfast bars, which are becoming increasingly popular.

Where and how can CPW create further international sales growth?General Mills and Nestle have been able to use their international strengths of their organizations to become number two in most of their industry. This has been able to be successful by using the CPW’s 50% stakeholder positon that General Mills owns. CITATION Har08 l 1033 (Hollensen, 2008) For CPW to continue to grow in the international cereal market, there are a few countries that are not being completely penetrated into the cereal market. This can be seen by the chart below comparing the per capita consumption per year (kg) with the following listed regions CITATION Har08 l 1033 (Hollensen, 2008)

CITATION Har08 l 1033 (Hollensen, 2008)For CPW to have further international sales growth, the bottom four regions have a better penetration strategy. This can be done through marketing and brand strategy, strengthening core brands, Innovation and new product launch, new global brands, and merger and acquisition. Marketing and Brand StrategyIn the past, the level of sugar levels in cereals have had a negative impact with the consumers that purchase cereal worldwide. CITATION Har08 l 1033 (Hollensen, 2008) To reverse this impact and to attract more consumers CPW should be using a health marketing and brand strategy. CPW needs to be able to show and tell that CPW has changed their cereals to fit the everyday health-conscious consumer. Strengthening Core BrandingWith exists, brands in regions CPW needs to establish a better brands awareness to their consumers. This can be achieved by continuing using marketing campaigns.

The way that these campaigns will affect the sales growth will be better connecting to CPW consumers. CPW needs to a better understanding of what their consumers want out of breakfast cereal. This can be done through celebrity endorsements with some of their cereal brands. New Global BrandsCPW will be able to increase their sales by using a golocalization strategy for all regions. The way CPW succeed in this is my looking at each of these regions and seeing the local customer needs, culture, and local markets. Doing this CPW will have a better understanding of why South-West Europe, South- East Asia, Russia, and China are considerably lower Per Capita Consumption Per Year (kg) compared to the other regions.

Innovation and New Product Launch

CPW needs to continue using the value-added chain, so CPW continually develops new innovated products that reach a variety of consumers. This will keep CPW ahead of their competition and to keep existing and add new potential consumer. By keeping their existing and new potential consumers, CPW will be able to increase their sales. For example; city dwellers are more on the go and need some that they can just pick up and go. A perfect product for this would be a cereal bar for the on the go worker. Merger and AcquisitionThe growth of cost for branded products has led to private label products which have seen up to a 30% increase. CITATION Har08 l 1033 (Hollensen, 2008) This is a huge opportunity that CPW can do for their international marketing by concentrating on the brand identity. This will increase brand loyalty and confidence that CPW lacks with a few of their regions. CPW has seen success in using this strategy with their Australia. CPW achieved this by partnering up with Uncle Toby’s if CPW does this with South-West Europe, South- East Asia, Russia, and China it will have a huge increase in sales. ConclusionCereal Partners Worldwide (CPW) combined forces with General Mills and Nestle in order to create more international competitiveness.

With the upstream value chain, CPW will need to centralize procurement on raw materials for all its manufacturing operations. This way CPW will have improve their upstream value chain. The downstream of the value chain needs to be decentralized regarding marketing/sales & distribution. This will give CPW more of a competitor advantages when selling products to variety of consumers. When one compares both advantages over CPW and Kellogg with the value chain, it can see which has the better-perceived customer value. Kellogg had the better value added chain; this was shown by comparing advantages over CPW. By looking at the advantages compared with both companies, this can explain why Kellogg is more of a market lead in international business strategy. The two best blue ocean strategy would be having a stand-alone store and partnering up with a fitness centre to form a private label. With having a stand-alone or a private label, this will give CPW to connect with their health-conscious consumer.

Another benefit of doing a private label is a decrease in cost relative brand marketing. This gives CPW to focus on the quality of the product to increase brand loyalty and confidence. To increase sales volumes, CPW needs to improve on penetrating into their market using a glocalization strategy. There are five areas that CPW can work on marketing and brand strategy, strengthening core brands, Innovation and new product launch, new global brands, and merger and acquisition. This will give CPW more of a presence in their market and be able to act like an international and local provider to their consumer base.

Bibliography

BIBLIOGRAPHY Hollensen, S. &. (2008). Essentials of Global Marketing. Harlow, Essex, England: Pearson Education.