Company Strategic Analysis - General Mills Research Paper

Company Strategic Analysis - General Mills - Research Paper Example The company has strong brand equity in the market place. The company’s financial position is strengthening even at the time of recession. The company has a diversified product portfolio. The company’s brands have strong brand identity. The company’s internal processes for acquiring raw materials for its products are very strong. Weaknesses: The scale of companies operations are hiding inefficiencies in its operations. General Mills is not taking enough measures to raise its productivity. Opportunities: Recent social trends have created a market for convenience food items. General Mills can export its product to the Asian Markets. Threats: The environment of recession is creating unprecedented operating challenges for the company. Kraft and Kellogg are formidable competitors of the company, having strong brands of their own. Suppressed consumer demand is threatening company’s revenues. Porter’s Five Forces Analysis: Threat of Substitutes: This dimens ion falls on the higher end of the spectrum because consumers have the option to buy convenience food items from food stalls and cheap hotels. Moreover, consumers can even decide to cook themselves fresh meals. So it can be concluded that there are alternatives available to consumers. Rivalry amongst competitors: This dimension is also ending up on the higher end of the spectrum because as mentioned earlier Kraft Food and Kellogg, both are formidable competitors having strong management and brand portfolio. In addition to this these companies also have strong capital base to support their operations. Suppliers Bargaining Power: This dimension also falls on the higher end of the spectrum because there are few quality suppliers of raw material in the marketplace. Companies who want to gain quality raw materials have to adhere to suppliers’ terms and conditions. Moreover, the price of the raw material is also very elastic, which leads companies to the future markets; in order to protect themselves from price risk and inflationary pressure. Customers Bargaining Power: This dimension again lies on the higher end of the spectrum because recessionary pressure has made consumers to curtail their expenditure. Consumers are demanding higher value at lower price from companies, in order to draw them to spend. Companies therefore have to adhere to the demands of consumers in order to utilize their huge asset base. Threat of New Entrant: This dimension falls on the lower end of the spectrum because the market conditions are not that encouraging for any new entrant to enter this market. Since the industry is engulfed by recession and has strong competitors in it, therefore no new entrant will be able to operate effectively in this marketplace. Firm’s overall Performance: Even at the time of recession the company has managed to perform exceptionally well. Almost all of its financial indicators are on the positive side of the spectrum, reflecting the fact that t he company has been successful in implementing its year start strategy. The company’s 2010 sales figure is up by 1 percent as compared to its 2009 sales figure (General Mills e, 2011). Operating profits have increased substantially, that is by 8 percent. Net income of the come has also increased drastically (17 percent) (General Mills e, 2011). The company’s asset utilization has also increased as reflected by the head of â€Å"Return on Average Total Capital†. This figure is up by 150 basis points, which is very encouraging. For the share