Kellogg’s is an American global food manufacturing company with its head office in Battle Creek, Michigan. The company manufactures cereals, convenience snacks, as well as vegetarian foods. Kellogg’s has a wide array of brand products including Apple Jacks, Rice Krispies, Corn Flakes, and Cheez-It. Kellogg’s believes in “Nurturing families so they can flourish and prosper” (Kellogg Company, 2017). With, manufacturing factories in eighteen countries globally, Kellogg’s sells its products in over one hundred and eighty countries. The firm’s main factory is located at Trafford Park in the city of Manchester, United Kingdom, and also serves as the headquarters for the European market (Kellogg Company, 2017).
In 1906, Will Keith Kellogg formed a company called Battle Creek Toasted Flake Company. Will Kellogg formed this company as an extension of his work at Battle Creek Sanitarium, where he worked with John Harvey Kellogg, his brother. After successfully producing and marketing the largely popular Kellogg’s Toasted Corn Flakes, the company’s name was changed to Kellogg Company in 1922 (Kellogg Company, 2017). About, ten years into the new company; in 1930, the company declared that most of its manufacturing plants would shift towards a less hour-week for its employees to create room for the employment of an additional shift of workers, in an effort to provide a livelihood for additional people in the depression era. In the same period of the 1930’s, Kellogg’s became the first food production company to display its cereal recipes and nutritional information on the packaging. Additionally, during the period of the Second World War, Kellogg’s manufactured rations for the United States military that was fighting overseas. The company also operates a research center, the W.K. Kellogg Institute for Food and Nutrition Research, which was formed in 1997, where food specialists research and develop new recipes for product development (Kellogg Company, 2017). To date, Kellogg’s continues its commitment to providing nutritious cereals and snacks to its global market.
According to Kellogg’s website, one of their major competitive leads is their global structure. The company started its global expansion in its early years, with the first international market expansion being to Canada in 1914. Internationalization is the process of expanding a company’s presence in the global market. Internationalization’s main purpose is to grow an organization’s profitability through the acquisition of the international market segment (Bartlett & Beamish, 2014). Kellogg’s internationalization strategy has seen the company become a global leader in the provision of cereals. The company currently has production plants in eighteen countries globally, spread over all the continents and serves a market of more than a hundred and eighty countries. Kellogg’s uses advance technology to identify the needs and expectations of potential new markets. In the product development for specific markets, they consider the values, beliefs and culture of customers, and with this information, they develop products that offer high satisfaction levels. Due to the confidence in the quality of their products, Kellogg’s endeavors to make sure its products are available in-store shelves globally. Looking at Kellogg’s South Africa’s website, it is clear what the company has done in the country (Kellogg Company, 2017). While they offer many similar products to what is available in the United States, they offer fewer products in the South African market. Notably, while some of the cereals are the same as those available in the United States market, the packaging is different, and they have different images. From these two observations, the conclusion is that Kellogg’s uses the multi-domestic strategy in their international expansion, as they adapt their products to the market needs of different countries (Bartlett & Beamish, 2014). For example, while the Special K Bars Red Berries are available in South Africa, one cannot find them in South Dakota (Kellogg Company, 2017). Kellogg’s use of this multi-domestic strategy helps the company to attract customers in different international markets, thus increasing their global market share.
Chapters 2 & 3
With manufacturing plants in over 18 countries and a market presence in more than a 180 countries, Kellogg’s Company is a global company. Global companies have a presence and huge investments in many countries. These companies promote their products using a coordinated image in all the markets. Several factors lead to Kellogg’s qualification as a global company. To begin with, for a company to be referred to as a global company, it has to have a market presence and operations in at least fifteen to twenty countries (Corporate Cases, 2017). Currently, Kellogg’s has manufacturing factories in eighteen countries spread all over the world. Additionally, Kellogg’s products are available for sale in over a hundred and eighty countries worldwide. Secondly, most global companies inject foreign direct investments is some or all the countries they operate in (Corporate Cases, 2017). Kellogg’s has invested heavily in several foreign countries to ensure that operations in those markets run smoothly. Kellogg’s has directly invested millions of dollars in the eighteen countries where it operates. Thirdly, global companies have a centralized management strategy that sees the company’s major decisions made from the headquarters of the company (Corporate Cases, 2017). In line with this organizational characteristic of global companies, Kellogg’s headquarters, in Battle Creek, Michigan, United States, acts as the central location, where the company’s top-level managers are located, and where decisions regarding operations and product development are made. Additionally, Kellogg’s has regional offices spread over the globe to oversee operations in the different regional markets. Finally, with global companies, the product development procedures start from the parent company at the head office and are then distributed to the various markets (Corporate Cases, 2017). However, the subsidiary companies in the different markets usually take part in the product idea development based on the needs of the specific market.
Kellogg’s existing administrative structure is the traditional corporate organization with a chairman at the top, a chief executive, the presidents of several divisions, several executive vice-presidents who also hold other titles like Chief Operations Officer and other chief officer positions and several senior vice-presidents. John Bryant, the current chairperson, has held this post since July 2014. Additionally, Bryant doubles as the chairperson of the Executive Committee of the Board. Before his election as Board Chair, Mr. Bryant was the President and Chief Executive Officer, a position he held since January 2011. Other positions on the Board are Vice-Chairman and Chief Legal Officer, three Directors, and eight Independent Directors. The Executive comprises of the Board Members, Presidents, and Vice-presidents of the various divisions. The company supports the growth of current and future managers through an internal mentoring program. Through this program, the members appreciate the impact of multiplicity and inclusion on relationships, business goals, and expertise. Additionally, the program enhances efforts to grow and preserve top talent within the corporation. Besides training and mentoring, the company also offers employees tools to manage their issues. For example, new mothers within the company enjoy flexible working hours, and there are also provisions for individual nursing areas.
Global enterprises cannot acquire excellent knowledge and expertise by focusing only on their domestic environments or modifying their domestic products (Bartlett & Beamish, 2014). Consequently, to remain competitive in the global market, companies need to initiate innovation strategies to meet the ever-increasing demands from consumers. There are two main innovation models used by companies. The first innovation model is the local-for-local model. In this case, subsidiaries create new products based on the local market opportunities and needs (Bartlett & Beamish, 2014). As such, these subsidiaries, utilize their resources in the product development and marketing. The second strategy is the center for global innovation model. In this model, innovation is centralized, and product creation is done from a central point, usually the global headquarters of the company (Bartlett & Beamish, 2014). Once created, the global subsidiaries introduce the product to the local markets. This model is ideal for both global and international markets. Kellogg’s employs the center for global innovation model. Kellogg’s product innovation and development are undertaken at the W.K. Kellogg Institute for Food and Nutrition Research located at the company headquarters in Battle Creek (Kellogg Company, 2009). The research center is the core for all of the company’s global product research, improvements, and innovation and a vital pillar in the success of the company (Kellogg Company, 2009). Once developed, the product recipe and trained personnel are dispatched to the subsidiary units for knowledge transfer. Despite the fact that product development happens in a central location, subsidiary units are allowed to create concepts based on their market needs and forward them to the innovation center, where the products are then developed. The upside of this model is that there is the maintenance of quality and nutritional value of ingredients used in product development or enhancement, which are paramount in Kellogg’s brand value.
For most companies operating in a global market, it is vital that they engage in strategic alliances. Strategic alliances are collaboration arrangements ranging from shared research to joint ventures and equity sharing. Two forms of alliances exist. The first form is the traditional form of alliances. Traditionally, these forms of alliances were between multi-national enterprises and a junior partner in a less developed country. The alliance was meant to give the multi-national company access to a new market for its existing products. The local partner reciprocated by providing market expertise and protection from government intervention. Additionally, the local partner benefitted by gaining access to new products and expertise. The second and more recent type of alliance is between enterprises from developed economies that come together to collaborate on the development of new products and technologies. Interestingly, Kellogg’s employs both traditional and modern forms of alliances. For example, the company employed the traditional alliance strategy when it entered into an agreement with Monde Nissin for product distribution in the Philippines market (Monde Nissin, 2014). Kellogg’s has also entered into an agreement with Multipro, which is a sales and distribution company with over a thousand distributors across six locations in Nigeria (Burton, 2015). Additionally, it applied the modern alliance model in its partnership with Tolaram Africa, which is a leading food company, for the development of snacks and breakfast cereals for the West African market (Burton, 2015). Therefore, Kellogg’s evaluates any joint venture agreement based on the expected benefits it expects to reap.
Managing a global business requires a knowledgeable and experienced manager. The manager should among other things be able to, identify opportunities, risks, and functional specialties across the globe. Additionally, have the expertise to coordinate activities across the different global markets to capitalize on the firms’ international competitive advantage. Kellogg’s Chief Executive Officer, Mr. John A. Bryant, is charged with the responsibility of managing the firm on the global scale (Kellogg Company, 2017). Although the various division and subsidiary managers assist him, he is the executive face of the company globally. As the global leader in the company, the C.E.O is the firms’ lead strategist, and he has an international perspective in order to assess the company’s strategic positions. From his many years’ experience, Mr. Bryant is also responsible for the implementation of an integrative policy, encompassing the different views of regional and unit managers. Additionally, the C.E.O. oversees the global distribution of capital assets and resources, with input from the regional and unit managers. Moreover, as the global leader of the company, he develops and shares with subsidiary managers, a common vision for the company. Another role played by the global leader, is the leveraging of corporate performance through putting in place controls. In addition to controls, the global leader should support other managers by delegating responsibilities and providing rewards to leverage corporate performance. Mr. Bryant has the responsibility of ensuring that Kellogg’s maintains customer focus and reduces internal bureaucracies that may disorient other staff. Most importantly, the C.E.O., Mr. Bryant benchmarks Kellogg’s performance against its competition and develops strategies to ensure that they maximize their revenues and lower operating costs to remain competitive (Kellogg Company, 2017).
In line with Kellogg’s passion for the provision of quality and nutritional food products, and as global market leader in the production of nutritional cereals and snacks, the company engages in community social responsibility by implementing programs to revamp breakfast in the school system. The Kellogg Company Fund (KFC) is one such initiative, supporting breakfast programs across the country (Kellogg Company, 2015). Additionally, the KFC program has been running a mobile disaster relief center that responds to people across the entire country in case of a major catastrophe known as the Breakfast for Better Days. Besides supporting the needy in society, Kellogg’s is also greatly involved in the protection of natural resources and protecting against climate change. This involvement coupled with the need to fight hunger among its contracted farmers, the company is helping farmers improve their livelihoods by availing statistics on climate insolent agronomy to increase harvests and increase resiliency to over fifteen thousand farmers in the company’s direct supply chain. Kellogg’s is also involved in water conservation, especially in areas where they source their ingredients. For example, the company in partnership with several NGOs helped form a collaboration to help deal with local and regional water challenges in the Gulf of Mexico and groundwater cleanliness in the Mississippi River Basin (Kellogg Company, 2015). All these initiatives are in line with the company’s founder’s vision, to “make quality products for a healthier world” (Kellogg Company, 2015). The founder also sought to bring positive impact in the lives of children and established the philanthropic foundation, the W.K. Kellogg Foundation. Mr. Kellogg’s beliefs still motivate the company to date.
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Kellogg Company. (2009). Kellogg Company Dedicates Expansion of Premier Product Development Institute. Kellogg Company News Room. Retrieved 18 August 2017, from http://newsroom.kelloggcompany.com/news-releases?item=76303
Kellogg Company. (2015). Kellogg Company | Corporate Responsibility Report. Kelloggcompany.com. Retrieved 18 August 2017, from http://www.kelloggcompany.com/en_US/corporate-responsibility.html
Kellogg Company. (2017). Our Best Days Are Yours. Kelloggs.com. Retrieved 18 August 2017, from https://www.kelloggs.com/en_US/who-we-are/our-history.html
Monde Nissin. (2014). Monde Nissin Partners with Kellogg’s for the Philippine Market | Monde Nissin. Mondenissin.com. Retrieved 18 August 2017, from http://www.mondenissin.com/news/title/monde-nissin-partners-with-kelloggs-for-the-philippine-market