Studying the General Mills - Research Paper Example

?STRATEGIC ANALYSIS GENERAL MILLS, INC. INSERT INSERT INSERT GRADE 02ND MAY, General Mills, Inc is an American company that supplies food products to the world market. The company processes several kinds of food products that are found present in the world market. General Mills was initially known as the Minneapolis Milling Company. This company came into existence in 1856. The Minneapolis Milling Company had several problems forcing the company to merge with 26 other mills. The merger among the several companies led to the creation of the General Mills Company. In 1928, the General Mills acquired other companies due to its fast growth. The companies that were involved in the merger included the Wichita Mill and Elevator Company. Between the years 1929 and 2004, the General Mills was involved in several other mergers (Brucato 2012). The main aim of the mergers was to enable the company to produce high quality products that would be acceptable in the market. For example, in the year 1965, the General Mills bought Rainbow Crafts, which was the manufacturer of Play-DOH. This buying of the company benefited General Mills since it played a big role in reducing the costs of production in the company and also the revenue that the company got from it transactions increased drastically. Merging of companies has a great advantage to the companies involved in the merger (Doz and Hamel 1998). The company sells different food products in several brands in the world market. These include brands such as Betty Crocker, Yoplait, Colombo, Trix and Lucky Charms to mention a few. Since the year 2004, the General Mills Company has produced products of high quality but their main market has been the wealthy that are conscious with their health. In 2012, the company was ranked among America’s largest corporations. The company was also ranked as the third-largest consumer products company in the United States of America. The purpose of studying the General Mills was to understand in great depth its current financial situation and also its current position among the words’ food producing companies so that a strategy and action can be taken to improve the quality of the products it produces. This would also help to trigger its rise in the ranking of food producing companies worldwide. During the study, the possible big competitors to the company were also examined. The study looks at the strengths of the company, its weaknesses, opportunities and threats that it might be facing since its foundation. The threats that the General Mills experiences in other words are also the problems that the company faces. The study therefore helped to come up with the solutions to the problems. General Mills, Inc just like several other food producing companies has strengths and weaknesses that must first look at and considered so that the company can be successful and be at par with other food producing companies in the United States and in the world (Brucato 2012). There are also opportunities that have come up in the company recently as a result of its success and production of quality products. Despite all these strengths and opportunities, there exist several threats that are a great problem in the development of the company (Dess, Gregory, Lumpkin and Taylor 2005). The threats have negative impacts such as causing losses in the company. Among the strengths of the company, one is that the company has ready availability of resources that is important in the production of its products. This helps it to be consistent in its production thus having a constant and a wide market for its goods. The other strength of the company is that it has good and fast transportation system for its finished products. General Mills has wide market worldwide and within the US. Therefore it has several aircrafts that are efficient in the exportation of the perishable food products to other countries. The other strength of the company is the availability of a ready market for its products. The company is ranked as the third largest food producing company in the US. Therefore, many people prefer its products since it produces products that are health conscious. This has expanded its markets. The company also has several weaknesses. One of the weaknesses that the company has is the inability to cope up with the fluctuation of prices of food products in the market. World economy changes and this often causes the rising and falling of prices of products. The company experiences losses when the prices of products go down. The other weakness that the company has been inability to cope up with the stiff completion from other food producing companies within the USA and in other countries such as the UK. Stiffer competition at a greater level may result in closing down of the company (Porter 1980). This is because the cost of production will be high yet there is no demand of products. General Mills has several opportunities it can focus on keenly to enhance its expansion and profits it will obtain from its business transactions. One of the available opportunities is the increasing demand of food products in the world market. Presently, the world market has increased the demand it has for food products. This is because of the good world economy. In addition General Mills produces products that do not interfere with the health of the consumers. The other opportunity that the company has is the availability of new management systems. The directors of the company have introduced new management systems in the company that will enhance faster and efficient production of goods. This will enhance the amount of revenue the company receives from its transactions. General Mills has several threats that must be addressed if they are to be a successful food producing company. To begin with, the company faces the threat of business seasonality. This means that business thrives during certain periods for example in summer but declines during other seasons such as winter. This inconsistency in business may result in the company experiencing big losses in seasons when business declines. The other threat that the company faces is very stiff competition from other food producing companies within the USA or from other companies in other countries worldwide. Stiff completion is often the biggest threat to several companies because it results to decreased demand of products of a particular company. Decreased demand at a later stage causes losses in a company forcing the company to close down or merge with another company. Government regulation is another threat faced by General Mills. The government often regulates prices through its acts and legislations. The government can also restrict the company’s business transactions in certain parts of the country. This often leads to frustrations and this may cause the closing down of the company. The other threat that the General Mills faces is overproduction of products. Overproduction of products is only beneficial when there is a high demand for products. This is because at such a time, there is surety that the products produced will all be sold to the market. On the other hand, overproduction is a big loss to the company when there is less demand of products. Through reviewing of the company’s threats and problems, several solutions to the threats should be identified in order to improve the performance of General Mills (Allison and Kaye 2005). This will also help to control the operating revenues in the coming years. When an analysis of the operation revenues was done for the year 2010, the following was found: Operating Revenues by Operating Unit (in Millions) (General Mills, Inc, 2011) 2008 2009 2010 Eastern $3809 $3744 $3620 Midwest 3054 3222 3500 Southern 3079 3884 3600 Western 979 835 820 Other 270 261 220 In order to enhance the revenues in the coming years, one of the solutions that should be sought by the company is to expand existing service to new markets. This will help to expand the markets for the company’s products and this will ensure bigger profits. The other solution to the threats should be to improve the alliances between General Mills and other companies. This will help in signing of business agreements that will prevent the immature competition from other companies. When companies form alliances, they work in harmony and this reduces the stiff competition often experienced in the world markets (Berquist, Betwee and Meuel 1995). The company should also adhere to the government rules and regulations. This will reduce friction between the General Mills Company and the government thus the company will operate freely within the country without disturbances or interference. Finally, the company should avoid overproduction of goods as this might lead to big losses in case there is less demand for the overproduced products. In conclusion, according to the study, General Mills strategy is to produce products of high quality that are unique in the world market. It also aims at reducing the stiff competition it faces from its competitors. The study also found out that the General Mills Company has strengths, weaknesses opportunities and threats just like other companies which have been discussed above in length. However, the company has in place plans to curb the threats that it faces. Ways of curbing the threats that the company faces include expanding its existing service to new markets, improving its alliances with other companies which are its stiff competitors, adhering to the US government rules and regulations concerning business transactions of companies and lastly, avoiding overproduction of products as this causes big losses in periods when the demand for products is very low. References Dess, Gregory G., G.T. Lumpkin and Marilyn L. Taylor (2005). “Strategic Management”. 2 Ed. New York. Brucato, Cyndy (2012). “Why General Mills did not get hammered for speaking out on marriage amendment”. Retrieved August 24, 2012. Michael Allison and Jude Kaye (2005). “Strategic Planning for Nonprofit Organizations”. Second Edition. John Wiley and Sons. Bergquist, W. Betwee, J., & Meuel, D. (1995). Building strategic relationship: How to extend your organization's reach through partnerships, alliances, and joint ventures. San Francisco, CA: Jossey-Bass. Doz, Y. & Hamel, M. (1998). Alliance advantage: The art of creating value through partnering. Cambridge, MA: HBS Press. Porter, M. E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. New York: Free Press. Read More