General Mills Case Analysis - 1454 Words

1. Key Strategic Issues General Mills was one of the Big Three companies that focused on diversification of consumer goods on cereal division, restaurant chains and packaged consumer foods. The cereal industry was profitable and had been one of the most concentrated industries, and the big Three companies had a dominant position in this industry. However, although the high profitability attracted fewer entry company due to the high entry barrier restrained by the joint monopoly of the Big Three, they were facing the threat of private label companies which grew fast in market share of sales and volume. Therefore, what is the General Mills strategy to increase revenue and deal with the threat of private labels? This is a critical issue†¦show more content†¦Therefore, it is necessary for companies to preempt and influence rivals. On the other hand, real option theory also applies. The exogenous factors like customers’ health preference on organic or high-quality cereals could influence the deci sion making of companies. Hence, companies should continue learning and adapting customers’ preferences. Overall, the game theoretic strategy surpasses the real option theory in this industry because the uncertainty in the cereal industry is low and controllable. Furthermore, the industry structural forces of barriers to entry together with rivalry have a strong influence among the competing firms. In the cereal industry, the market structure is oligopoly, there are a few big firms set up significant entry and exit barriers. As consumers become more experienced and price conscious, and the identical production process which makes the products become more standardized, the new sources of differentiation of cereal were required and the pricing competition become intensified. Besides, the cereal industry was attractive and profitable. The top players in cereal industry post strong entry deterrence to the new entry company by offering free toys in the package, discount and specia l promotions for retailers and adopting shelf space plan. However, the private labels still entered the industryShow MoreRelatedGeneral Mills Inc. Understanding Financial Statements Essay1733 Words   |  7 PagesIntroduction The case study General Mills Inc. - Understanding Financial Statements focuses on the most basic idea of finance analysis. This case is a brief look into the language that is used in the finance world and a start to interaction with auditors. In this case, KPMG LLP, the public accounting firm that was auditing their statements, had sent two opinion letters. 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