Reference no: EM131923542
Provide a response, comment and thoughts from reading the below, please be very detailed in answering.
General Mills has built a sterling reputation over the course of its existence due to its high quality of products and favorable publicity through the practice of Corporate Social Responsibility (CSR). This favorable rating with the public enables the company to successfully charge more money for its products over its generic rivals and thus, maximize its profits.
A Strength that I view to be of major importance is the relatively low bargaining power of General Mills' suppliers. The abundance of grains and raw materials to make cereals, and the amount required by General Mills to make their products means that General Mills can make profits through volume sales.
If they do not get the price they are looking for, or their current supplier cannot meet the quality they are looking for, General Mills has the ability to look elsewhere. Additionally, they are imposing more restrictions on their suppliers to reduce greenhouse gas emissions, another environmentally responsible move that keeps public opinion of them in high regard (Isidore, 2014).
Another Strength is the sheer variety of its product portfolio. General Mills manufactures over 100 different brands in their catalogue (Brand Guide, 2016). Declines in sales of Yoplait, as well as reduced sales of Pillsbury refrigerated dough and Progresso soup, drove the Minneapolis-based food maker's U.S. sales down 9% to $2.52 billion. More consumers did opt for General Mills' organic offerings such as Annie's cereals and snacks, and Lärabar food bars, helping offset the other declines. Sales of Totino's frozen hot snack were up, too (Culliney, 2014).
In terms of its' weaknesses, similar to Coca Cola, General Mills is having a tough time adjusting to Americans' new found desire to stay healthy. This change in lifestyle typically translates into a reduction in the consumption of processed foods. Cereal product sales, and refrigerated dough products, like Pillsbury, have slowed. Additionally, General Mills purchased Yoplait to become a player in the Yogurt market, but the company has failed to capitalize on America's new found love with Greek Yogurt. In the U.S. market, General Mills sales declined by 17% for yogurt.
General Mills is susceptible to undercutting by grocery store generics. It is not hard to walk down the local supermarket aisle and see the name brand "rip offs" of GM's products on the shelves. These generic brands are cheaper and very similar to the products that General Mills produces, and as a result, pose a big risk to the company's profit margins (Brand Guide, 2016). General Mills can combat this by procuring preferable product placement in grocery store aisles as studies have shown that customers tend to buy more products on shelves at eye level.
Overall, the outlook for General Mills is not great. Profits are down across all aspects of their portfolio. However, General Mills has been a staple of the American Way of life since 1928. The company has the money, size, and creativity to overcome the obstacles put in front of them. They should continue to garner positive public support through their CSR, continue to push the boundaries with regards to their health based products. I would put GM's overall outlook at a 6.5 out of 10.