SWOT Analysis of Kellogg’s (Kellogg Company)
This is a detailed SWOT analysis of Kellogg’s. It aims to provide the readers with thorough insights into the strengths and the weaknesses of Kellogg’s. It also aims to explore some of the opportunities that the company should consider for further growth, and some of the threats that it should build a resilient wall against. The Kellogg Company, known widely as Kellogg’s, is an American multinational food manufacturing company headquartered in Michigan, the USA.
Strengths of Kellogg’s
The Kellogg company was founded by W. K. Kellogg over 100 years ago; hence an immense market experience (Kellogg Company, 2021). It is a strong player in the breakfast food sector and over the years it has become a household name in many countries around the world.
The products of Kellogg’s are manufactured in many countries and marketed in over 180 countries. This is an immense global presence. It has won several awards over the years. For examples, America’s Most Trusted Brands (Morning Consult), Forbes – America’s Best Employers for Diversity (Top 500), and Forbes – World’s Best Employers to name but a few.
In the United Kingdom, Kellogg’s has been supporting school breakfast clubs since 1998. This has helped in increasing attendance and alleviating hunger from many school children who were unable to have breakfast before attending school. Likewise, a program called Better Days is also carried out by the company in order to help the global issues in food security.
Kellogg’s has reduced the salt content of some of its most famous products such as Corn Flakes and Rice Krispies in order to make them healthier to consume. The sugar content in Coco Pops and a few other products has also been reduced.
The Kellogg Company became the second largest savory snack company in the world by acquiring Pringles in 2012. Its market position in many countries is very strong. For instance, it is the market leader in the breakfast cereal market in the USA (Wunsch, 2021). Its Frosted Flakes and Corn Flakes are some of the top breakfast cereals in the country.
Weaknesses of Kellogg’s
Weakness is the next issue to discuss in the SWOT analysis of Kellogg’s. No doubt that the sugar content of Kellogg’s products is always a cause for concern for consumers who are now more health conscious. They are at present opting for less sugar or no sugar options for breakfast as they have become more aware of the consequences of consuming too much sugar. Likewise, many substitutes for breakfast cereals have resulted in a decline in products and loss of market share.
There have been product recalls which have resulted in affecting the brand image of the Kellogg Company. For instance, in 2018, it announced of recalling an estimated 1.3 million cases of its Honey Smacks cereal from more than 30 U.S. states due to the potential for Salmonella contamination (CNBC, 2018)
Opportunities for Kellogg’s
Kellogg’s has the opportunity to move its production to countries with cheaper labour costs. By this it can reduce its costs. Likewise, emerging markets provide it with an opportunity to grow and increase revenue streams.
Developing healthier options and products that accommodate dietary issues of consumers has huge potential. For example, cereals that can be consumed by people with health conditions such as diabetics. Likewise, it can begin home delivery services in countries that have a high demand for its products.
Kellogg’s also has the opportunity to acquire competitors, which will strengthen its market position. It can also increase its product range to include different types of breakfast options.
Threats to Kellogg’s
Threat is the last issue of discussion in the SWOT analysis of Kellogg’s. Threat of food poisoning can result in lawsuits and customers losing their trust in the brand. Likewise, change in government regulations such as higher taxes on sugary products will in turn increase costs and the company may have to charge higher prices which will lead to a reduction in demand. In fact, a petition from two sisters in the UK has made the company to agree to remove “unsustainable” palm oil from its products (BBC, 2020).
Competitors’ marketing similar products at lower prices has led to the loss of demand for some of the Kellogg’s products. Some of the competitors of Kellogg’s are Nestle, Cadbury, General Mills, Mondelez, Kraft Heinz, Smucker’s, Ingredion, Conagra Brands, Tyson Foods, Quaker Oats, and Hershey.
The global lockdowns have resulted in consumers being more cost conscious and purchasing products of lower prices. Likewise, there is an increase in ready to eat breakfast products which can also result in increased competition for Kellogg’s.
Counterfeit products can damage the brand reputation of Kellogg’s and thereby may result in a reduction in revenue. Likewise, there are many healthier low sugar options in the market at present which have also resulted in the reduction in demand of its products.
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Last update: 13 April 2021
BBC (2020) Kellogg’s changes palm oil policy after sisters’ petition, available at: https://www.bbc.co.uk/news/uk-england-beds-bucks-herts-51551431 (accessed 25 March 2021)
CNBC (2021) Kellogg issues massive Honey Smacks cereal recall over Salmonella risk, available at: https://www.cnbc.com/2018/06/15/kellogg-issues-massive-honey-smacks-cereal-recall-over-salmonella-risk.html (accessed 12 April 2021)
Kellogg Company (2021) Better Days, available at: https://www.kelloggs.co.uk/en_GB/our-story/feeding-people-in-need.html (accessed 25 March 2021)
Wunsch, N. (2021) Market share of the top five cereal companies in the United States in 2017, available at: https://www.statista.com/statistics/858562/cereal-company-market-share-us/ (accessed 12 April 2021)
Photo credit: Twitter
Author: Fahim Shah
Fahim Shah has been working in the UK as a visiting lecturer in Business and Tourism for the last 10 years. After completing a Bachelor’s degree in Business and Marketing, he went on to gain an MBA from the University of Bradford, the UK. He is a Fellow of Advance HE (FHEA) and a full member of the Association of Business Executives (ABE).