Reference no: EM132223251

Case Study:

General MillsInc.GIS -0.18% is struggling to revive sales in the U.S. as growth in its new pet-food business slows. The food maker’s sales rose 8.6% to $4.09 billion in the latest quarter, driven by international revenue. General Mills’ sales in its main North American market dropped 2.1% to $2.39 billion, more than analysts expected. Shares, down 19% year to date, were off 7.9% at midday Tuesday.The Minneapolis-based conglomerate has tried to offset stagnant sales with a move into high-end pet food, a business that is expanding rapidly compared with packaged, process food. General Mills completed the acquisition of Blue Buffalo for $8 billion in April and has focused since on getting the pet food into more stores.General Mills’ pet-food sales rose 14% in the latest quarter to $343.4 million on a comparable basis. Sales at retailers increased 9%. That is faster sales growth than for the company’s main packaged foods, but a slowdown from Blue Buffalo’s sales when General Mills agreed to buy it in February. “If all my businesses had decelerated to 9% growth, I’d be in pretty good shape,” Chief Executive Jeff Harmening said in an interview. General Mills executives said new products, stronger marketing and wider distribution will help the company meet the high expectations that investors have for the pricey acquisition. General Mills is expanding Blue Buffalo from distribution primarily at pet stores to supermarkets and mass retailers.“We still only have 3% household penetration among pet parents,” Mr. Harmening said. “We have a lot of room to expand.” The bet on pet food comes after years of pressure on General Mills’ cereal and yogurt businesses, as consumers abandoned those products for newer brands or other breakfast foods that seem fresher and healthier. U.S. snack sales for General Mills fell 4% in the latest quarter, while sales of yogurt such as Yoplait declined 2%, as did sales of meals and baking products such as Betty Crocker cake mix. U.S. sales of cereal brands such as Cheerios and Lucky Charms, rose 1%.“As industry trends improve, we’ve seen our competitiveness improve,” Mr. Harmening said.General Mills’ total organic net sales, which take out impacts from things such as changes in foreign-exchange rates, rose 0.5% in the quarter.General Mills has also raised prices this year to make up for rising transportation and ingredient costs that have hit the industry. Profit declined as net interest climbed more than 80% from the comparable quarter a year earlier because of the Blue Buffalo deal.The company reported earnings of $392.3 million, down 3.1% from the comparable quarter a year earlier. On an adjusted basis, the company reported earnings of 71 cents a share, above analysts’ estimates of 64 cents.

INSTRUCTIONS:

Executive Summary/Problem Statement.

Provide a brief summary (1-2 paragraphs, maximum) of the key points of the case and clearly state the crucial/main problem facing the company in the case.  

You may include more than one problem, but you must clearly state the problem that you feel is most crucial to the management team of the company.  

Bring the situation up to the current time.

Provide a detailed analysis of the company in the case using tools and concepts of strategic management.

Leverage tools explained and provided in your text (from bsg-online.com)

Such tools include SWOT analysis, functional strategies discussion, discussion of the competitive positioning strategy the company is pursuing as well as cooperative strategies the company may engage in. If you include a SWOT, clearly label each category.

Be specific in your analysis and bring the analysis up to the current day.

This will require you to conduct online research about the company.

Provide a quantitative analysis of the company using information provided in the case as well as what you may find through your own research.

Be sure to explain the quantitative data you include – do not just post data without analysis.

Data can be financial and non-financial.

Proposed solutions to the company's crucial problem.

Generate at least three potential strategies that could be implemented that would help remedy the challenges caused by the crucial problem you stated in your Executive Summary/Problem Statement section.

Each alternative must be explained and justified as to how it might help ameliorate the main problem facing the company.

Optimal Solution & Evaluation

Select the optimal solution from the potential strategies from section IV above.

Provide detailed justification as to why this solution is the best for the company and how it will fix the issues presented by the main problem.

Implementation Plan

Include a short plan about how the company should implement your recommended solution. Include specifics about the major factors.