2. Introduction:
General Mills is an American Fortune 500 company. A Fortune 500 company is a list
of 500 most profitable companies in the United States. General Mills was founded in
Minneapolis, Minnesota in the in 1866. It produces products like cereals, baking
goods, grain snacks and meal products. Some of the notable products made by
General Mills are Cheerios, Reese’s Puffs, Pillsbury, Chex Mix and Hamburger Helper.
Some quick facts about General Mills are that every day General Mills provides 60
million ready to eat cereal worldwide, 14 million Nature Valley Bars, and 5 million
Pillsbury cookies. The Global net sales for Fiscal 2014 were 17.9 Billion dollars.
General Mills first made it’s appearance in Canada in 1954 with the launch of Betty
Crooker and Cheerios..
I will discuss the External Analysis for General Mills which will consist of Economic,
Political/Legal, Social, Competition Demographical, and Technology.
Competition:
General Mills has other competitors in the Cereal Industry such as Kellogg’s, which
Cereals such as Corn Flakes, Corn Pops, Krispies Cereal, All- Bran, and Vector.
Another competitors are Nestle that offers products like Nesquicks and Shreddies.
Other competitors include Quaker Oats Company that offers cereals such as Cap’n
Crunch, Quaker Oatmeal Squares and other products. There are although other
competitors but they aren’t as big as the ones mentioned above. Other competitors
that General Mills might have are from other countries such as China,
India/Pakistan. Canada is a diverse and due to that influx of immigrants retailers
import certain products and brands from other countries to cater towards the
diverse population. That means that consumers from other countries might prefer
cereal brands from their home country rather than the Canadian Brands General
Mills offers. One more problem I found was that all the cereal brands American and
have their headquarters established in the United States and not in Canada. This can
be a major threat for General Mills because anyone can start up a Canadian Cereal
brand company and buy only Canadian raw materials and products and keep their
manufacturing factories in Canada, which will result in sales dropping drastically for
General Mills because Canadians would then want to support a Canadian company
rather than an American.
Action Plan: General Mills should research about cereals from other countries and
try and make similar cereals to attract move diverse consumers. General Mills
should also try and keep their prices as low as possible and offer rebates as
compared to its competitors.
3. Political and Legal:
The political and legal problems that General Mills can face are that the Government
of Canada may decide to restrict the import of American cereals. In order to
encourage Canadian businesses to make their own cereals or to try and make
Canadians buy more Canadian products than the US the Government of Canada may
decide to restrict American imported cereal by 20 or 30%. The other restrictions the
Government of Canada can put into effect is that cereals must reduce the amount of
sugar put into it or the government may ban certain ingredients required to make
certain cereals that General Mills is known for.
Action Plan: General Mills should try and keep their products 100% Canadian, by
that I mean use quality grains grown by Canadian farmers, buy the required
ingredients from Canadian distributors and wholesalers and establish a factory
which produces the cereals in Canada and hire Canadian workers. By doing this it
will show that General Mills cares about Canada and tries to keep it’s product as
Canadian as possible and also that General Mills is helping to contribute to Canada’s
economy and not just America’s economy. It will also help against if the Government
of Canada makes any laws restricting US imports of cereals because they already
have a factory inside Canada. The other recommendation I would give to General
Mills is that they should try and add less sugar to their cereals and try finding other
alternatives to make it healthier.
Economic:
The economic factors are that Canada or the US could be going through any of the
business cycles such as Expansion that means Inflation is stable, businesses have
adjusted inventories to meet consumer demand, corporate profits are rising, new
businesses are starting and job creation is steady and growing, The Peak is when
consumer demand begins to increase more than demand, labor and product
shortage leads to wage increase and inflation to rise, interest rates also rises and
bond prices falls, business sales decline leading to unwanted inventory being stored
and stock market slowly starts declining. The Recession is when people start to lose
their jobs, when the stock market collapses, and real income is minimal and people
aren’t spending as much.
Action plan: General Mills should be prepared to deal with both Expansion and
Rescission of the business cycle I would recommend they keep producing cereals as
the demand requires but once indicators start indicating that the country is about to
go into recession they should decrease their productivities. Also General Mills
should consider investing in High Yield bonds and Stocks.
4. Social/Demographical:
Social factors include, cultural, health, age and career. In Canada consumers are
from different countries, consumers are conscious about what goes into their bodies
and age also plays a factor in this, also consumers have different careers and
because of that wealth.
Action plan: General Mills should try and keep the ingredients in their cereal as
natural as possible and as healthy as possible, by using less sugar. General Mills
should diversify their cereals as much as possible and should keep it at a price
where anyone can afford it be it rich or poor.
Technological:
Technological factors include new machinery to make cereals faster or to harvest
grains for cereals faster. This can help decrease time and cost causing more profit
but at the same time it means cutting jobs which will leave a lot of workers
unemployed.
Action plan: General Mills should invest in new technology so it can rapidly
decrease costs and increase profits as well as productivity but at the same time to be
fair to the employees and to show employer loyalty to the employee General Mills
should try and train the employees who might lose their jobs in other areas which
will benefit General Mills as well as keep the employees employed and only laying
them off General Mills cannot find them a job to train for within the company.
5. Citations:
General Mills Canada. (n.d.). Retrieved November 10, 2014, from
http://www.generalmills.ca/gmi/Level1Page.aspx?PageNumber=171
Company. (n.d.). Retrieved November 10, 2014, from
http://www.generalmills.com/en/Company.aspx
Brands. (n.d.). Retrieved November 10, 2014, from
http://www.generalmills.com/Brands.aspx
Breakfast Cereal Manufacturers | MrBreakfast.com. (n.d.). Retrieved November 10,
2014, from http://www.mrbreakfast.com/cereal_list_by_company.asp
Economics. (2011). In Canadian Securities Course (Vol. 1). Toronto: Canadian
Securities Institute.
