Introduction
Businesses have a common goal of achieving success and uniqueness that helps them to stand a mile ahead of their competitors (Chattopadhyay et al., 2012). However, over the recent years, many companies have embraced the concepts of merger and acquisition in efforts to exploit their business potential fully. Mergers and acquisitions are important drivers of growth for a particular organization. Companies have come up with business and international level strategies that will help them to yield high profits. The Kellogg Company has acquired companies and the Publix Supermarkets, Inc. have not acquired mergers and solely operates within the U.S. It gives a justification for the importance of alliance to both groups that have joined hands. For the Kellogg Company, the paper covers the international business and corporate level strategies used by the enterprise. Additionally, it makes a recommendation for further improvement for the merged company. Finally, for the supermarket industry, the paper proposes a business and corporate level strategy that can be used for the enterprise.
Kellogg Company
Will Keith Kellogg established it around 1906 under the name Battle Creek Toasted Corn Flake Company (Cartwright & Cooper, 2012). Since its establishment, Kellogg has devoted itself to providing customers with nutritional cereal brands. The company’s primary goal is to meet the nutritional needs of all categories of people of all ages across the globe. The company is famous due to its capacity to produce and market ready-to-eat convenient foods and cereals. Its products include frozen waffles, veggie foods, toaster pastries, cookies, cereal bar, crackers, and fruit flavored snacks among others (Cartwright & Cooper, 2012). It also has unique brands such as eggs, corn pops, frosted flakes, famous Amos, rice kipsies, Austin, fruit loops, and pop stars among others. The company has manufacturing facilities in 17 countries and market their goods in more than 180 countries.
Kellogg’s acquisition strategy
The company has merged with both large corporations and small enterprises in efforts to attain growth and productivity. In 2001, it merged with the Keebler Company that was termed as its biggest acquisition. Additionally, in 2012, it joined with Pringles Potato Crisps Company that was purchased for $2.7 billion from Procter and Gamble (Chattopadhyay et al., 2012). The merger led the company becoming the second best and largest snack company across the globe. Kellogg Company used two major acquisition strategies that are increased diversification and market share strategies. The diversification of products has grown due to the merger where the company produces a wide variety of nutritious foods across the globe. The diversification of its products has led to an increase in profits and customer base for the company. The market growth strategy involved expanding the market boundaries for the corporation across the globe. The company has grown its market portion across the world by merging with various companies. For instance, the recent acquisition of a mass group of Egypt has led to improved business in the North Africa, Bisco Misr. It has also acquired a market share in Lagos after merging with Tolaram Africa (Cartwright & Cooper, 2012). Therefore, such mergers have extended its market share to different parts of the world that have helped it to acquire more customers and profits.
Justification
The merger of the largest food companies such as Pringles was a wise decision for Kellogg. The company has established a wider market share for its products and a unique brand due to the diversification of its products. It has produced a broad range of cereals and snacks such as Eggo, corn pops, frosted flakes, famous Amos, rice kipsies, Austin, fruit loops, and pop stars among others that cater for the needs of their customers. Merging with Pringle has led to increasing market share by 5.1% and an increase in overall profits (Chattopadhyay et al., 2012). Pringles operates in 140 countries that imply that the customers will now shift to Kellogg. Therefore, the company has a high potential of increased markets in Europe, Latin America, and Asia. Merging with the other snack companies has led to the elimination of competition for the company.
Publix Supermarkets, Inc.
It is an American supermarket owned by employees and located in Florida. It has various locations across the U.S., which include Georgia, South and North Carolina, Alabama, Florida and Tennessee (Lamichhane et al., 2013). The company deals with grocery, bakery, beauty care, pharmacy, general merchandise, floral services, meat and seafood among others. The main holdings of the company are the reserved label brands, brands known locally and unbranded products such as sea foods and met. The merchandises of the Enterprise are obtained from various distributors across the country.
A profitable candidate for the corporation to merge with successfully
The main aim of the Publix Super Markets, Inc. is to look for the best company to combine with the best suggestion being the BI-LO supermarket. The BI-LO supermarket is located in South and North Carolina and Georgia (Lamichhane et al., 2013).
Justification
The merging of Publix and BI-LO supermarket would be the best choice because the two companies contest in an identical sector. The fusion will help them to achieve customer satisfaction through offering coupons and discounts on goods purchased. Customer satisfaction will also be accomplished through the provision of high-quality services and products. Therefore, the satisfaction will boost the relationship between the customers and the company to ensure that new customers are attracted, and the existing customers are maintained (Gibson et al., 2010). Additionally, the acquisition will help both companies to attain growth and increased profits that justify the need to merge the two targeted companies. International corporate level strategies (Lamichhane et al., 2013).
Three primary international corporate level strategies are multi-domestic, transitional and global (De Wit & Meyer, 2010). Multi-domestic strategies work under the assumption that markets are varied, and require segmentation by national boundaries. They advocate for the decentralization of decisions in every country to ensure that flexibility is maintained. Flexibility allows the firm to produce goods and service that comply with standards and personal preferences of the customers. The strategy leads to the expansion of market share since the emphasis is placed on the local demands. However, the approach causes uncertainty to an organization due to the market validity and is designed to suit such market needs. Lastly, the approach is costly because it does not lead to economies of scale that force the firms into utilizing the strategy to decentralize decisions (De Wit & Meyer, 2010).
Global strategies are based on the assumption that there is real standardization of products in the market (Lamichhane et al., 2013). The strategy focuses primarily on the economies of scale and leveraging of innovation in the market. The decisions are centralized thereby decreasing all risks associated with decentralization. The drawback of the strategy lies in the lack of local demand response making it difficult for a firm to manage.
Transnational strategies are aimed at obtaining a local response and global efficiency. It is hard to implement the strategy because it requires comprehensive and regional coordination, which is cumbersome (De Wit & Meyer, 2010). Therefore, the management needs to create a shared vision and personal commitment through an integrated network. However, if the strategy is implemented successfully, it leads to higher performance compared to global and multi-domestic strategies.
International business level strategies
Focused low-cost leadership strategy makes use of the economies of scale. Low-cost leadership helps the company to eliminate the threats from substitute products. Differentiation helps a company to produce unique brands that assist in the creation of brand loyalty (De Wit & Meyer, 2010). Unique features contained by the products offered help in attracting new customers and maintaining the existing ones. The focus strategy is involved when a company concentrates on being a low-cost leader through different methods.
International corporate level strategy for Kellogg
Kellogg Company uses the international global strategy for its operations (Gibson et al., 2010). The strategy’s primary focus is on the economies of scale and leveraging of innovation in the market. Through the strategy, the company has attained global attention and a significant market share in various continents of the world (Gibson et al., 2010). However, the policy implementation and success has not been successful since it does not gain responsiveness from the local market. It has focused mainly on globalization thereby skipping the need to cater for the requirements of the domestic market (Facts, 2011).
International business level strategy for Kellogg Company
At the business level, Kellogg substantially utilizes the strategy of differentiation for its products and customers. It has led the company into producing a variety of brands and products that suit the needs of their clients. Such diversified products include Eggo, corn pops, frosted flakes, famous Amos, rice kipsies, Austin, fruit loops, and pop stars among others (De Wit & Meyer, 2010). Differentiation has helped the company to achieve the economies of scale as well as reducing the risks and competition for substitute products. Recommendations
Kellogg should come up with a strategy or modify the plan to suit the preferences of the local consumers. The company should invest heavily in suppliers and the employees, in general, to promote and attain support for international expansions. It should come up with a better in-house communication plan to attain better strategy implementation. Inner and external stakeholders should be involved in strategic decision-making.
Business level strategies
Business level strategies include the differentiation strategy, low-cost leadership and focus on a particular market gap (Cartwright, & Cooper, 2012). Low-cost leadership is the principle that requires a firm to become a low-cost producer. Low-cost production can be achieved through wit integration technology, accepting small profit margins, reduction in labor and distribution costs. It allows a firm to gain a competitive advantage over its competitors and reduce the risk of substitute products (Cartwright, & Cooper, 2012). Differentiation is used to create high quality and unique brands for a company. Various strategies such as brand image, warranty, integration with technology, dealer network creation and provisions of quality customer care services can be used to obtain distinction. The focus strategy involves putting a lot of emphasis on a product line, market niche, production and target customers for a firm. Mostly, small companies that have few resources that can be used to advertise or carry out comprehensive national marketing use the strategy. It is also applicable where the target market is considered small or unable to support large-scale operations. It helps a firm to focus on a segment of target market and products.
Corporate level strategies
They include growth strategies, stability and retrenchment strategies (DuBrin, 2012). Growth strategies are aimed at expanding business for an organization, which can be measured using the market share, profits, product mix, and sales among other variables. The stability strategy is implemented when a firm is comfortable and satisfied with the current growth and revenues obtained (Cartwright, & Cooper, 2012). The stability policy is implemented to ensure continuity of the current strategies especially in industries experiencing a stable environment. Retrenchment strategies are involved with the decrease of scope in a company’s activities. The reduction of scope leads to a reduction in the number of employees, the sale of assets that are no longer used, liquidation and restructuring of debt (DuBrin, 2012).
Business level strategies suggested for Publix Supermarket, Inc.
The best business level strategy that can be applied by Publix is the differentiation strategy (Lamichhane et al., 2013). The differentiation strategy aims at creating a unique brand name of a much higher quality than the competitor brands.
Justification
The company can apply differentiation to build high-quality products with unique features and brand names. The supermarket can use differentiation by providing warranty for their goods and creating a brand image by wrapping products with distinct company paper (Gibson et al., 2010). Differentiation can also be achieved by the creation of a good network among all businesses and the integration the operations and activities of the firm with technology.
Corporate level strategies suggested for Publix Supermarket, Inc.
Growth strategies can be recommended for the firm because they will help in expanding market boundaries. Growth strategies are concerned with the expansion of market and business processes at large.
Justification
The company should apply the growth strategies to acquire the global market for their products. The strategy will help the company to extend their services from the U.S. locality to the other countries. It will lead to increased profits, product mix, and market share for the Publix supermarket (Hill & Jones, 2013).
Type of levels and strategies
The primary levels are the business, corporate and functional levels of the firm, each constituting of a group of procedures (DuBrin, 2012). Business-level strategies are concerned with sustaining a competitive advantage of goods and services (DuBrin, 2012). It focuses on positioning a business against the competitors and ways of integrating business operations with technology to obtain a competitive advantage. Strategies for the corporate level include differentiation that refers to the creation of unique and high-quality brand name. The focus strategy involves putting a lot of emphasis on a product line, market niche, and production and target customers for a firm. The low-cost leadership strategy requires a firm to become a low-cost producer to obtain competitive advantage and eliminate the threat of substitute products (Hill & Jones, 2013).
Corporate level strategies involve the selection of business where the company can compete with others (Hill & Jones, 2013). It is concerned with the management and handling of processes in a firm for the common interest. The strategies under this level include growth strategies, retrenchment and stability strategies (Hill & Jones, 2013). Growth strategies are aimed at expanding business for an organization, and measure the market share, profits, product mix, and sales among other variables. The stability strategy is implemented to ensure the continuity of the current policies especially in industries experiencing a stable environment. Retrenchment strategies are associated with the decrease of scope in a company’s activities. Functional level strategies are also referred to as the department operation level policies (Chattopadhyay et al., 2012). The primary focus is on the value chain and the business activities at large. The strategies involve the coordination and development of resources such as finances, human resources, marketing, and operations (Chattopadhyay et al., 2012).
Conclusion
The primary levels are the corporate, business and functional levels. The corporate level strategies are growth strategies, retrenchment and stability strategies (Hill & Jones, 2013). Business level strategies involve cost leadership, differentiation, and focus strategies. The merging of companies is aimed at increasing the customer base, profits, and the creation of a wide range of products. However, for a company that operates internationally, the corporate level strategies include multi-domestic, transitional and global strategies. The best business level strategy that can be applied by Publix is the differentiation strategy. Growth strategies can be recommended for the firm because they will help in expanding market boundaries. Kellogg Company uses the international global strategy for its operations and differentiation at the business level.
References
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