Business Essay

Week 6 Assignment 2

In this essay I will discuss my opinion of General Mills greatest strengths and weaknesses. I will choose a way of strategy that the corporation should take to maximize their strengths along with explaining the steps they should take. Two segments of the general environment that has a high influence within the company will be addressed on how it affects General Mills. This essay will also evaluate two forces of competition that is important to General Mills. You will see my evaluation of the greatest external threats and greatest opportunity and explain how they should address them as well.

General Environment

The political environment is significant to the operations of general mills. New regulations regulating food quality standards is a significant threat to company operations. The high standards required for food products by the USA regulations may lead to the company dropping some of its brands which cannot meet the desired standards. Other political issues include changes in tax policies that may lead to higher taxes and reduction in the company’s operating profits. Such regulations can lead to the closure of firms in the industry as many cannot meet high standards and generate enough profits to offset high taxes at the same time.

The economic environment in which the company operates is characterized by rapid changes majorly on the consumer’s incomes which destabilizes their purchasing power hence the company sales. Inflationary trends in the USA are a cause for worry as they lead to rising input prices that often increase the firms operating costs (Green, 2017. The higher interest rates on borrowed capital also increase the company’s operating expenses hence adversely affecting the firm’s cash flows. This is also the case for other firms in the industry as adverse economic situations lead to low sales, high operation cots and small profits to the firms with some tending to operate on losses.

Five Forces of Competition

Item 1

One significant force of completion threatening the general mill's success and continued existence in the industry is the new entrants into the food industry. There are new upcoming industries interested in food processing which often comes with new brands into the market. The new firm's brands threaten the already existing products in the market as they may have a new feature which may lead to general mills losing customers and a significant market share to the new firms. Existence of many substitutes in the market is a considerable threat to the company (Hill, Schilling, & Jones, 2016). Customers often shift to various alternatives in case there is inflation is selling prices of general mills products. It is, therefore, right to argue that the selling prices of general mills products are dictated by the forces of demand and supply. Firms which set lower prices for their products often threaten the general mill's sales as they compete for customers forcing general mills to operate on low selling prices and hence low-profit margins.

Item 2

Choose another one (1) of the five (5) forces of competition that you estimate is the most significant for the corporation you chose. This should not be the same force assessed in Item 1 above. Provide a thorough assessment of why you think the selected force is significant to your corporation. A thorough assessment is defined as providing a complete response that is not superficial or partial regarding every detail of the concept as described in the course. Do not Google “five forces of competition” or simply provide a definition. You will need to apply and incorporate key concepts from the course material in your assessment. Specifically address the applicable key concepts from the textbook and course material for the selected force. You will need to read the chapters and listen to the lectures to understand the key concepts for each force. Read Chapter 2 in the course textbook and review the Week 2 Learn video Lecture for supporting content . Hint: the five (5) forces of competition is the same as “Porters 5 Forces of Competition”. Cite all sources and limit the use of direct quotes.

Evaluation

I would encourage the company’s management to embrace new technologies and refresher training to its employees to increase the efficiency of its operations. Through modern technology, the company will lower operating costs and incorporate new features that will increase customer satisfaction in their products hence stabilize its sales (Hill, Schilling, & Jones, 2016). General Mills should engage in market research on customers need to ensure their products solve the identified needs of the target customers.

Future Improvements

There is an increase in the general dislike for cooking in many parts of the world and mostly among youths in the United States of America and many parts of the African continent. The few numbers of food processing industries In Africa present an excellent opportunity for the company to tap a new market in the African continent. General Mills should take this as an opportunity to focus on ready to eat foods (Kimmel, Weygandt, & Kieso, 2010). Consumers often view such food products as time-saving and hence are willing to consume them more compared to other foods that would require cooking, general mills should, therefore, increase the number of brands in this areas with the diverse feature to meet these changes in the consumer needs. Opening branches in the new markets such as Africa where processed foods are in supply deficits presents a significant opportunity for the company to maximize its profits.

External Threats and Opportunities

I would encourage the company’s management to embrace new technologies and refresher training to its employees to increase the efficiency of its operations. Through modern technology, the company will lower operating costs and incorporate new features that will increase customer satisfaction in their products hence stabilize its sales (Hill, Schilling, & Jones, 2016). General Mills should engage in market research on customers need to ensure their products solve the identified needs of the target customers.

Threats and Opportunities Strategies

I consider technology to be the greatest threat to the company’s success. General Mills may not be able to cope with the rapid changes in production technology compared to other firms in the industry. For instance, e-commerce possesses a threat to the sales of the firm as it has been much embraced by other firms in the industry (Green, 2017). General Mills should train their employees to equip them with the new upcoming production skills. The firm should ensure that they hire an employee with the right qualifications while selling off obsolete machinery and install and replace them to increase the efficiency of their operations.

Strengths and Weaknesses

According to the SWOT analysis of General Mills. (n.d.), one significant advantage of the General Mills is that they have a more extensive range of products compared to its competitors which increases the customer’s scope of selection. Having a wide range of products enable the customers to use the company’s products interchangeably without shifting to other company’s brands maintaining the firm’s large market share. The company’s products tend to create memories in the minds of consumers to the long existence of the company in the market. Some of the company’s products such as Cheerios, Haagen-Dazs, yogurt, pizza among others have gained more preference among children and homemaker stabilizing the company sales over a long time. The company has embraced automation which enables them to produce large volumes of output. The company has a more stable financial position due to its large pool of assets which guarantees its existence as a going concern and competitiveness in the industry. Other significant strengths of the company are an enjoyment of economies of scale as it purchases inputs in bulk that lowers the overall operational costs and increases the profit margins for the firm.

The company presents several weaknesses that adversely affect its growth. Weak growth in the yogurt segment is a significant weakness. Even though intensive advertising yogurt made by the general mills have remained to be slow moving in the market. The rise of the dollar against foreign currencies also adversely affects the company’s attempts to open new branches in foreign nations. The is a general decline in the business due to the recessions experienced in the USA majorly in the intake of ready to eat foods which poses a significant challenge for the general mills.

Strategy

Choose the strategy or tactic the corporation should select to take maximum advantage of its strengths, and the strategy or tactic the corporation should select to fix its most significant weakness. Justify your choices. You will need to select a strategy/tactic for both the strengths and for the weakness. Do not choose one or the other. Both the strengths and weakness must be addressed. Your justifications should be sound and thoroughly explained. For example, do not simply state that the corporation should choose a selected strategy, but rather explain why the strategy is a good choice for your corporations’ specific strengths or weakness. Read Chapter 2 and 3 in the course textbook as it provides a solid background and clues for this section. Review the Week 2 and Week 3 Learn video/Lecture for supporting content. Cite all sources and limit the use of direct quotes.

Resources, Capabilities, and Core Competencies

There is a general tendency of the general mill's assets to increase in the last five years as is presented in the consolidated statement of financial position of the company. The company has acquired new plant and equipment and lands as fixed assets in the recent past. The company also has various forms of intangible assets such as patents for its products and innovativeness, and goodwill due to its positive image in the market. The company also tends to embrace new technology in its processes which creates makes it more competitive.

Sources

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2013). Strategic management: Concepts and cases: Competiveness and globalization (10th ed.). Mason, OH: South-Western Cengage Learning.

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