Professional Documents
Culture Documents
ST4S38-V1-13686 R1509D1016434 Assignment 1 Onaibe Lawrence (Essay)
ST4S38-V1-13686 R1509D1016434 Assignment 1 Onaibe Lawrence (Essay)
Business School
MBA
Assessment 1
1 R1509D1016434
Table of Contents
4.2 Economical____________________________________________9
4.4 Technological_________________________________________10
4.5 Environmental_________________________________________11
6.0 Conclusion________________________________________________15
References________________________________________________17
2 R1509D1016434
1.0 INTRODUCTION
This paper critically evaluates the strategic evaluation of the Post Holdings buying
Weetabix further investigate the analysis and strategic position of Weetabix which
includes stakeholders that comprise internal and external and the overall industry
analysis. Players like Cheerios, Kellogg, Nestle, Cinnamon toast, Malt-O-Meal and even
Weetabix are the bedrock of the cereal industry with the vying for an enhanced market
share, the stake has never been this high. Through the years, there has been a change
of approach towards the market and these companies evaluate their environment
together with their competitive edge, position in the market and the ability to challenge
the competition and take into consideration the competitive risks involved. It’s safe to
say that the volume of competitive pressure companies is faced with stems from
globalization which has made these companies turn up with tight niche ways to function,
Malik et al. (2014) illustrate acquisition to be a global business strategy that enables
businesses to dive into new markets, which is one of the strategic concepts these
Holdings, a US company acquire it, this gave Post Holdings a door to the UK market
which has been the intention Post and his goods that is in need for a spread to a more
diverse market like that of the UK landscape and the rest of the world due to the global
presence Weetabix has as well. Acquisitions are now seen as one of the master keys in
strategic choices for organizations to grow and achieve their business objectives which
consist not only on competitive advantage but also revenue, longevity, and appreciation
of shareholders’ power.
3 R1509D1016434
2.0 STRATEGIC POSITION OF THE COMPANY
Porter (2008) suggests that the competitive forces and their elemental causes show the
core of an industry’s present profitability while providing a structure for anticipating and
industry is set up is the strategic position of the company. This requires the company to
set up a preferred perspective stand with the present and predicted development and
knowing the best way to execute that stand. The company’s approach to the
competition together with its competitive edge on which it can be based in the
In the light of Weetabix excelling in diverse market space, certain strategies have to be
inculcated in the aligning approach to the company which should secure the competitive
advantage that can withstand the market irrespective of their economic, social and
geographic attributes.
4 R1509D1016434
Porter’s (2012) generic competitive strategies centers on cost leadership, differentiation
strategy and fixate strategy which for Weetabix, it can be based on differentiation focus.
company has to innovate for the new market after the acquisition to engage specific
supposed to accommodate customers that scorn its cereal breakfast. This is to say that
the firm fixates on a specific spot market which Tanwar (2013) calls a Niche Strategy.
differentiation focus strategy in its global markets which enables it to adapt to certain
specific attributes of the market where these said attributes make a greater value of the
proposition.
researches about its existing and potential customers and the market to engage in value
creation for its timing customers. In the bid to achieve such great feat, Weetabix
developed and launched Weetabix protein and protein crunch to challenge the cereal
category which has players like Kellogg competing for market share and this move
made Weetabix a stand out from the rest of its competition (Rogers, 2017).
by Weetabix which is a product of its researches conducted on its customers and the
market saw Weetabix take a step further in the distinction of its brand. The open sales
of this meal drink saw it shot above forecasts which is a result of customers in need of
healthier sources of protein and Weetabix was there to meet that specific niche market.
5 R1509D1016434
This move typifies Bowman’s Clock on how businesses and their products can position
‘’A stakeholder is any group or individual who can affect or is affected by the
From the perspective of stakeholder value, Davies (2017) suggests that companies are
identified.
where internal stakeholders can further be simplified as primary and secondary. Primary
stakeholders are those that define the business and are key to its continuous processes
such as customers, suppliers, and employees while secondary stakeholders are those
who could ruin the relationship with the primary stakeholders such as business partners,
competitors, and regulators (ProAction Dev.,2017). For this paper, we are looking at the
6 R1509D1016434
internal primary stakeholder that are employees mainly top management. The relevant
1. Internal stakeholders
A. Primary Stakeholders
i. Employees of Weetabix
ii. Customers
iii. Suppliers
B. Secondary Stakeholders
i. Business partners
ii. Competitors
iii. Regulators
2. External stakeholders
i. Customers
ii. Suppliers
iii. Banks
v. UK government
7 R1509D1016434
Top management of Post
Customers
Holdings and Shareholders
Power
Government,
Employee of Weetabix Agencies and
Competitors
Interest
Power-interest grid mapping
4.1 POLITICAL
Daneshkhu (2017) suggests that the price of Weetabix breakfast cereal may go up due
to the fact that the UK market has been hit with a weaker pound which Giles Turrell, the
CEO of Weetabix confirmed when he mentioned that the company is battling with the
high cost of dollar-denominated wheat market, and Weetabix is more likely to top up its
products' prices. It’s as a result of the ever-lingering Brexit, UK leaving the European
Union which has caused instability especially to UK businesses with uncertainties. Both
Weetabix and Post Holdings have to manage the circumstances profitably; also,
following the acquisition of Weetabix by Post, the politically frontier is now different,
Weetabix has to accommodate the US political landscape that is quite different from the
conventional one.
8 R1509D1016434
As observed in its employment legislation, the UK government since 2010 is seen to
have risen each year with its rates of wages accumulative which will companies such as
Weetabix incur larger wage bills due to the variance in the employment laws. Weetabix
will have to identify alternatives to cut down costs like biting down on costs like
employing cheaper raw materials which substantially can put its brand at reputational
risk. Weetabix has a global market share, so it has to consider standards and
regulations in other economies and government policies which are unique with every
region.
4.2 ECONOMIC
foreign exchange, and the economic cycle determine the aggregates of demand and
competition norms impact the competitive advantage of a firm. Post Holdings makes
use of a country’s economic factors like growth rate, inflation and industry’s economic
Chance (2017) on economic growth in Britain observed that that same year, 2017, the
in understanding of Britain exiting the EU, saw a 1.7% decrease in her economy growth
while that of US was fix on 2.2% and saw a further increase of 0.1% the following year
due to tax breaks by the current Trump’s administration. This indicates that Post
Holdings acquiring Weetabix will see Post impacted on different fronts of economic
activities in the UK, US and the rest of the world; one way to go about mitigating the
variance is basically the cost of the product which seems to be a major decision in
9 R1509D1016434
consideration of strategic economic approaches as it relates rates such as inflation and
expensive products due to the economic recession which is the peak external economic
factor that Post considered in the process since the growth rates economically are
4.3 SOCIAL
‘Society’s culture and way of doing things impact the culture of an organization in an
which is a major player in how marketing understands the customers and structure the
marketing idea. With that in perspective, the outcome from the survey done by ‘Bakery
and Snack’, a UK based website in 2017, saw that consumers prefer breakfast cereal
as to hot breakfast which is Post’s specialty that signifies a potential huge level of
success from the acquisition. For market penetration and stability as it relates the UK
market, Post was required to come up with new options of breakfast cereal which
according to Dye (2017) led to the acquisition of Bob Evans which is a US-based
preference.
4.4 TECHNOLOGICAL
The disruptive nature of technology in the modern industry is pacey. Let’s consider the
introduction of Artificial intelligence (AI) to the work environment and how the intrusive
nature is has made it be, such as target customer-based advert, relative search, voice
assistant and the rest of them as seen players and practitioners finding it hard to keep
10 R1509D1016434
Technology is doubt creates for everyone great opportunities not only for efficiency and
effectiveness but also for improvement and development. Weetabix drinkable cereal
advancement and the product proved to be a huge success after it outshines the set
4.5 ENVIRONMENT
Before a company goes into a new market, it's expedient that carefully evaluates the
environmental standards that are required to function in that market. The different
market has its environmental standards or what can be referred to as norm differently
and this can impact profitability in such a market. For European countries, UK inclusive,
give healthy tax breaks for the use of renewable energy in operations. Other factors as
they involve the environment are the weather, climate change, laws regulating
environmental pollution (air and water), waste management and recycling, etc.
4.6 LEGAL
Consumer protection and e-commerce, employment law, health, and safety law, anti-
trust law in food are amongst several legal factors that Post Holdings will incorporate
and function with since Weetabix already use these laws as it relates to the UK and
Europe when it comes to consumer products. Employment law in the UK has seen tax
bill in the past years increase when drives several businesses operating in the region to
through the aisle of the needle’, these are one of such regulations that Post Holdings
11 R1509D1016434
5.0 INDUSTRY ANALYSIS
Source: https://www.business-to-you.com/top-5-business-frameworks/
(2005), this can be achieved by non-emphasis on numbers and homogeneity, the flow
show be along the chain on suppliers, rivals, and buyers instead of just supplier and
buyers on the horizontal dimension and finally, on the vertical dimension, accounting for
potential entrants and the substitution of rivals. Porter’s Five Forces Model is the degree
of rivalry, the threat of entry, the threat of substitutes, buyer power, and supplier power
12 R1509D1016434
5.1 Degree of Rivalry
the intensity of rivalry according to Karagiannopoulos et al. (2005) is the ‘most obvious’
of the five forces in an industry, it describes the extent by which value created by an
industry released through the stand-off competition. The cereal industry has seen the
continued introduction of new products to the market which sustains and most times
increase the rivalry between top players of this sector which mostly drives down cost
and reduces the general benefits of the business. Seeing the introduction of Weetabix
Breakfast-On-The-Go has seen them live to the bit of the intense rivalry (Happen, 2018)
and to be considered as one of the big players. Porter (1989,1996) insight of rivalry
Entry barriers are a two-dimensional trait in Porter’s Five Forces, they can be used to
analyze the threat of new entrants and also applied when it's not economically feasible
for an outsider to repeat the position of the existing player. As in this case, Post
Holdings in terms of the cereal industry, it has a vast inside experience from the US
operation and market which could have been a major fall out on their part as it regards
the entry barrier into the UK market, though the rigid competition from existing
businesses may hamper new entrants from market penetration, Weetabix existence
acquiring Weetabix.
For customers to be satisfied in their basic needs, it's dependent on the certain ratio
13 R1509D1016434
products introduces to the industry’s profitability. Breakfast alternatives like fruits, bread
and drink like yogurts which are perceived to be more convenient and affordable and
not only be worth the threat but has also increased the competition and competitors.
Cost such as retraining, retooling and redesigning are incurred when a customer
changes to a different products type which also affects the threat of substitute.
The determinant of buyer power is the size and the concentration of customers which
influences the segmentation of value creation by the industry. Buyer power in the
functionality of one of the two horizontal forces. To sustain this bid of increased value
through the force of buyer power, Drakakis (2017) mentioned how Weetabix executed a
strategy where they will work closely with wholesalers to grown sales and consequently
get bigger shelf space as a reward since supermarkets and grocery stores make up
their main buyers and definite distribution channels, and the competition in the industry
sees buyers seeking alternatives brand in the market due to profit margin and access.
Weetabix has a large customer base in the UK but the UK Essays in 2013 projected the
negative impact the acquisition of Weetabix by Post Holdings will have on its customer
base due to the fact that most customers may see the process as a loss of native
company to a foreign multinational and could further weaken the brand value.
When customers are charged different prices in line with the difference in the value
created for each of those buyers, this then means that the market is a characteristic of
high supplier power and low buyer power at the same time (Porter, 1986). Supplier
power focus on size and concentration of suppliers relative to industry participants and
14 R1509D1016434
also the extent of differentiation in the inputs supplied; in this case as mentioned by
Weetabix in 2017, it can control the quality of its main raw materials being used
because it has a dedicated supplier and its focus on the source of wheat from farmers
6.0 CONCLUSION
not just a global brand but a force in the industry. Post Holdings has a huge market in
the US and Weetabix can still boast of the same huge market share in the UK, that
simply means the coming together of both has open a big platform to seize the
competitive advantage that will enable Post Holdings venture into other markets in
Weetabix has been about innovation in the last few years now and that has created a
niche for them in the market amongst competitions and not just innovations but that
Consolidation and projection in the UK market have seen dimed so far since the
inception of the BREXIT plan from the European Union, these have placed a lot of
restrictions to business operating in the region due to the uncertainties of how policies
and regulation will pan out if the BREXIT plan pulls through or eventually fails.
Therefore, Post Holdings has to be strategic not only in operations but also in the
15 R1509D1016434
In terms of having a dedicated supplier for its raw material is so effective in term of
quality control but the over-dependence on this supplier may affect production is
something were to happen to the farm or the supplier fails to meet up with the
Supply chain in terms of product distribution has mainly been based on wholesalers that
flow from them to supermarket and grocery stores’ shelves which is an efficient process
but this can be further simplified and make it effective through the application of
16 R1509D1016434
REFERENCE
Allchin, J. (2012). Weetabix: Teach a market to love your product - Marketing Week.
at:https://www.marketingweek.com/2012/04/11/weetabix-teach-a-market-to-love-your-
Butler, A., Letza, S.R. and Neale, B., (1997). Linking the balanced scorecard to
Chahal, M. (2016). Weetabix aims to ‘bust the myth that all cereal is created equal’ to
combat sugar fears - Marketing Week. [online] Marketing Week. Available at:
https://www.marketingweek.com/2016/09/06/weetabix-aims-to-bust-the-myth-that-all-
17 R1509D1016434
outlook/world-economic-growth-improving-even-as-u-s-uk-potential-slows-imf-
Chu, B. (2017). The eurozone economy is still growing faster than the UK. [online] The
economic-growth-eurozone-q3-2017-third-quarter-gdp-france-eu-brexit-a8028891.html
Costas Markides, (2001). Strategy as Balance: From ‘Either- Or’ to ‘And. Business
Daneshkhu, S. (2017). Weetabix prices hiked after post-Brexit sterling slump. [online]
Davies, P. (2017). Introduction and Strategic Context, Class Slides. University of South
De Wit, B. and Meyer, R., (2010). Strategy: process, content, context: an international
Research & Advisory. [online] Stylus | Innovation Research & Advisory. Available at:
Drakakis, H. (2017). Rise and shine: Weetabix’s 2017 wholesale strategy - Better
18 R1509D1016434
Dye, J. (2017). Post Holdings gobbles up sausage-maker Bob Evans. [online] Ft.com.
Fern Fort University (2018) Post Holdings, Inc. Porter Five Forces Analysis Available at:
http://fernfortuniversity.com/term-papers/porter5/analysis/795-post-holdings--inc-.php
Fern Fort University (2018) Post Holdings, Inc. PESTEL & Environment Analysis
Happen. (2018). Drink Innovation Case Study: Weetabix On The Go Protein Drink -
Johnson, G., Scholes, K. and Whittington, R., (2008). Exploring corporate strategy: text
Johnson, G., Whittington, R., Scholes, K., Angwin, D. and Regner, P. (2014). Exploring
19 R1509D1016434
Johnson, G., Whittington, R., Scholes, K., Angwin, D. and Regner, P. (2017). Exploring
Malik, M.F., Anuar, M.A., Khan, S. and Khan, F., (2014). Mergers and acquisitions: A
p.520.
Michael E. Porter, (1996) What Is Strategy? Harvard Business Review 74, no. 6, pp.
65–67.
Mintzberg, H. and Lampel, J., (1999). Reflecting on the strategy process. Sloan
Mittal, A. and Jain, P.K., (2012). Mergers and acquisitions performance system:
Integrated framework for strategy formulation and execution using flexible strategy
Monaghan, A. (2017). Weetabix sold to US firm after breakfast cereal fails to catch on in
https://www.theguardian.com/business/2017/apr/18/weetabix-sold-us-firm-cereal-fails-
20 R1509D1016434
Robert S. Kaplan and David P. Norton (2001). The Strategy-Focused Organization.
Robert S. Kaplan and David P. Norton, (1996). The Balanced Scorecard: Translating
2019].
UK Essays. (2013). Businesses Within the Cereal Industry Marketing Essay. [online]
21 R1509D1016434