Our Kellogg's SWOT analysis investigates the Strengths, Weaknesses, Opportunities and Threats of the US-based food manufacturing company.
If I ask you to name your favorite cereal brand, I am pretty sure you will say Kellogg's because it is one of the most famous cereal brands across the globe. However, cereal is not the only product that Kellogg's manufactures.
Kellogg's is a US-based food manufacturing company. Besides manufacturing cereals, it produces other convenience foods such as toaster pastries and crackers. Moreover, it also owns several famous brands such as Rice Krispies, Frosted Flakes, and Pringles.
At this point, you would wonder how Kellogg's made it so big. To answer this question, you will have to read this interesting article.
After reading this article, you will have some basic knowledge of Kellogg's history and operations. Moreover, you will be able to tell what SWOT analysis is since we will be conducting Kellogg's SWOT Analysis below.
Before proceeding with the SWOT analysis, let's have a look at the history of Kellogg's. The roots of this brand can be traced back to an accident that led to the formation of this company.
In 1898, the founder of Kellogg's, M.K. Kellogg, was cooking wheat with his brother. He forgot to take the cooked wheat out of the oven and toast it again. As a result of this mistake, the world got blessed with cornflakes.
Following the invention of cornflakes, Kellogg's was established in 1906. With the help of 44 employees, the company began to sell cornflakes. As a result, people started buying cornflakes, which motivated the company to launch the first cereal with high fiber content, All-Bran.
The brand gained popularity within a few years, and in the early 1920s, it started selling its products in the UK. Besides selling food and making money, Kellogg's paid attention to the consumer's health. It hired a nutritionist for the first time who used to tell us the importance of different foods in our lives.
Moreover, Kellogg's also established an institution of nutrition research to encourage the role of R&D in its food manufacturing process. Besides selling good quality food, Kellogg's also marketed itself very well.
In the 1960s, it became popular among the masses that all the members of Apollo 11 ate Kellogg's for breakfast before going to the moon. This marketing tactic increased the sales of Kellogg's significantly.
Over the years, the brand kept launching several new brands and products. All the products and brands were food-related. Besides selling food and expanding its operations, Kellogg's worked to fulfill its corporate social responsibility.
In the 2000s, Kellogg's established breakfast clubs in the UK so that children start their day properly by having breakfast. It also initiated programs to encourage kids to swim.
Kellogg's has always been appreciated by its customers for paying attention to its food content. In 2010, the brand reduced salt in its food so that its customers could consume healthier food. Other than that, it also added vitamin D to children's cereal to combat rickets.
All of these actions have significantly increased Kellogg's customer base, so the brand has spread its operations overseas. Currently, Kellogg's products are manufactured in 18 countries and shipped to 180 countries.
Since Kellogg's products have such high demand all across the globe, this is why the brand manages to generate respectable revenue each year. In 2022, Kellogg's generated $15.3 billion.
Now that we have discussed the operations and history of Kellogg's in detail let me make you aware of what a SWOT analysis is.
A SWOT analysis is a tool businesses use to analyze what internal and external factors would impact their operations. A SWOT template exhibits the strengths, weaknesses, opportunities, and threats that an organization receives from the environment.
Since you now know the purpose of SWOT analysis, let's proceed further and discuss the strengths that Kellogg's possesses.
Strengths of Kellogg's
All the brands possess some strengths that distinguish their operations from the rest. This section of the SWOT analysis will highlight some of the strengths that Kellogg's possesses.
Diverse Revenue Stream
The primary objective of any business is to maximize profits. To do that, businesses need to have a diverse revenue stream. Kellogg's is one of the brands that have a very diverse revenue stream.
Kellogg's owns 38 brands, and all of them sell different products. Since Kellogg's owns many brands, it doesn't rely on a single brand. This helps the brand generate high revenue and ensures smooth cash flows.
Geographical Presence
Once a brand establishes, its next move is to expand abroad to target customers and generate more profit. Kellogg's is one of those few brands that sold its products overseas in less than a decade.
Kellogg's began exporting its products to the UK in the early 1920s; currently, its products are sold in more than 180 countries.
A strong geographical presence ensures that the brand has a large customer base. A large customer base benefits the business financially and helps it generate higher revenue.
Strong Legacy
The time a brand spends in the market matters, especially if it is a food brand. People naturally trust those brands that have been in the market for a long time. For example, Kellogg's has been selling products since 1906.
In all these years, people have tasted and tested the products of Kellogg's. This is why customers now trust Kellogg's. As a result, the food brand has gained customer loyalty which is extremely important and beneficial.
Weaknesses of Kellogg's
Where every organization has some strengths, it also has some weaknesses. Weaknesses are the factors that limit the growth of an organization. So to expand further, businesses need to counter their weaknesses.
Large Workforce
Having a large workforce is often considered a strength of a business. However, if a business has a large workforce, it has to deal with several problems. Kellogg's is a food manufacturing company. Looking at the nature of its operations, it needs a large workforce to carry out the operations.
Kellogg's has a workforce of more than 31,000 employees. Having such a large number of employees creates management problems for the brand. In addition, managing so many employees in different parts of the world is complicated.
Moreover, a large workforce causes operational costs to increase since the company has to pay wages to all employees. Hence, having such a large workforce creates difficulties in the operations of Kellogg's.
High Sugar Content In Products
People have become a lot more health-conscious and aware in today's world. For example, social media has given awareness to people about not consuming foods with high sugar content because it is not good for their health.
On the contrary, research shows that Kellogg's Frosties has 4.26 teaspoons of sugar per 30g bowl, which is equivalent to half a can of Coca-Cola. This has brought a lot of criticism to the brand since children consume Frosties, and giving them something with such a high sugar content is not good for their health.
Dissatisfied Employees
Businesses need to have a satisfied and content workforce. However, that's not the case with Kellogg's. During COVID-19, employees put their health at risk and worked for the company. But, unfortunately, they didn't get compensated enough in terms of pay and perks.
Due to this, the workforce of Kellogg's started to show resentment, which resulted in disputes and strikes. All of this impacted the operations of Kellogg's negatively and damaged its image as an employer.
Opportunities For Kellogg's
A good brand never lets go of opportunities. However, to make the best out of the opportunities, it is important to identify them first. In this section, we will analyze opportunities for Kellogg's.
Manufacturing In Developing Economies
Brands prefer to shift their manufacturing plants overseas to manufacture products at a lower cost. For example, Kellogg's is a US-based brand. However, it has manufacturing plants in 18 other countries.
Kellogg's has an opportunity to further establish its manufacturing plants in the developing economies of Asia and Africa. In these economies, labor is relatively cheaper. Kellogg's can use this to lower its operational costs and maximize profits.
Increase Marketing
Marketing is an essential aspect upon which the success of a business relies. A good marketing strategy can provide an edge to a business over its competitors.
Kellogg's is a very famous brand. However, to ensure that the brand is embedded in people's heads, it is essential to increase the marketing and create effective marketing strategies.
Kellogg's has an opportunity to increase marketing. They can use TV, billboards, and social media to promote their products. This will increase the brand's customer base and make the business even more valueable.
Change In Lifestyle
Over the years, we have seen a change in the lifestyle of people worldwide. World has become fast-paced, and people always complain about their busy lives. In such a scenario, people prefer to consume convenience food.
This provides an opportunity for Kellogg's to increase its sales since Kellogg's is all about convenience food. It has around 38 brands, and all of them produce semi-prepared foods.
Threats Faced By Kellogg's
Every brand faces several threats from the external environment. These threats can negatively impact a brand's operations if they aren't countered timely. In this section, we will look at what threats Kellogg's faces.
Health-Conscious People
As people have become more aware, they have also become health-conscious. They avoid consuming foods that have high sugar content. This social change threatens Kellogg's since most of its products contain high sugar.
Kellogg's is afraid that people might start dumping its products. This would cause its sales to decline, resulting in low profits.
Russia-Ukraine War
Kellogg's is a multinational brand in more than 180 countries. Therefore, it had a significant presence, due to which the brand was able to generate higher revenue from that region.
However, as the war broke out between Russia and Ukraine, Kellogg's first suspended its operations in Russia, then recently, it divested its operations in Russia. This will impact the brand financially since Russia won't contribute to Kellogg's revenue now.
Intense Competition
Businesses avoid competition with other brands because it results in price wars damaging every brand in the market. For example, Kellogg's is one of the biggest convenience food manufacturers. However, there are other brands too that offer similar products.
For example, Nestle is one of the competitors of Kellogg's. It manufactures similar products as Kellogg's, due to which many consumers of Kellogg's are attracted to Nestle.
Such competition always keeps Kellogg's on its toes because Nestle is a potential threat to the brand since it can snatch Kellogg's market share at any time.
Kellogg's SWOT Analysis: Final Word
Kellogg's is one of the most consumed convenience food brands. Its operations are spread worldwide. Due to this, it manages to generate revenue of billions of dollars each year.
The roots of Kellogg's can be traced back to 1906 when a man named Kellogg officially established the company. Its initial product was cornflakes, but as the brand gained popularity, it introduced several products and later brands such as Pringles, Rice Krispies, and Frosted Flakes.
Over the years, Kellogg's evolved; currently, it is one of the biggest convenience foods brands. After looking at how Kellogg's evolved over the years, we decided to conduct a Kellogg's SWOT analysis.
In this SWOT analysis, we highlighted some of the strengths and weaknesses of the brand. Then we analysed the opportunities for the brand to grow and the threats it faces from the external environment. The most efficient way to represent the result of this SWOT analysis is through a SWOT matrix. Therefore, after reading this article, we assume you know how to conduct a SWOT analysis. Still, if you have any queries, you can look at a few examples of SWOT analysis to get a better understanding.
