Critical strategic analysis acquisition of Weetabix by Post Holdings

One key strategy to enter and control new markets that are highly pursued by many companies is an acquisition. Recent in the strategy is Post Holdings Inc. that acquired Weetabix Limited in 2017. Post-Holdings Company Inc. is a consumer packaged Food Company based in St. However, price and the perceived value of the product remain as the core dimensions about which all the eight possible positions can take namely: low price and low value, low price, Hybrid, differentiation, Focused Differentiation, Risky High Margins, Monopoly pricing and Loss of Market share. When she began her operations in 2012, Post holdings was neither known in Missouri or in any part of the world. Her main target was to establish a brand name. Because she was still a novice, she operated singly as post holdings Inc.

Her products were not heavily priced and she only produced a single line of items like butter, protein foods, and her snacks. Customer satisfaction shot up from 30% to 70% (Post, 2017). Differentiation was then inadvertently pursued in 2015. Post stopped acquiring small food firms and moved to purchase moguls like MOM brands and Willamette egg farms. While there were many food manufacturers in the United States, products were made to sell by differentiating them. Unique ingredients and packaging was the strategy and still is even today. Evaluation of Key Stakeholders to be impacted This strategic case analysis will impact on various stakeholders who seek to get their needs satisfied by the Post holdings food company: a. Shareholders Under the merger, Post holding and Weetabix’s share prices are likely to shoot up due to the synergy derived from the combination of the two.

There’s likely to be increased profits, reduced operating expenses, a higher EBITDA (estimated at $920-950 each fiscal year) and high credit rating for Post holding after acquiring Weetabix. This transforms into an increased confidence in the company stock that will be demanded more than in the past. This will lead to the share prices shooting up from $80. Due to the increased profitability of the merger, Post holding employees are likely to get salary increments and work under the best technology based on the fact that United States companies are more tech pervasive than those in the United Kingdom. Some Weetabix employees may find it hard to adopt a new business culture and may resign their positions to seek jobs in other companies (Post, 2017).

d. Creditors Due to her large asset base and increased prospects of reduced operational costs and potential for making more profits, the credit rating of the merger is likely to go up. Post holding can now acquire more borrowed capital against its expansive collateral assets. a. Political factors The United Kingdom rather referred to as Britain is a country that is founded on four ancient kingdoms: the Kingdom of Wales, England, Ireland and Britain. Ever since the World war decades, Britain remains a cradle of civilization and one of the most peaceful areas in the world. Britain has a stable government and there has not been reported any political instabilities in the country in the recent centuries. The country thus has an ideal climate that well suit external investors like Post holding coming into the country.

75 pounds is also a strong currency meaning that food products manufactured and exported from Britain will fetch good returns abroad. The strategic location of Britain in Europe and her economic linkages are also likely to open up opportunities for Post holdings to diversify further into other European Markets. United Kingdom’s economic analysis thus reveals an ideal market for Post holdings to venture in (Aristeidis & Kampouri, 2017; 7). c. Social Factors The social factors of the targeted clientele base entail the population demographics and lifestyles. The United Kingdom labor is a labor that pursues research and development and thus very innovative. There is also a strong technological competition among firms that makes businesses pursue innovations so as to be ahead of the others.

Besides, Britain has an internet penetration of 90% the 5th in the European Trade Area. This assures Post that she will get access to one of the most skilled labour force in the world in the United Kingdom. Also, Post should think of entering the United Kingdom by opening online shopping platforms since the nature of the population (aging) and its access to internet would be suited by online shopping (Aristeidis & Kampouri, 2017; 7). In an article, “Five Forces that shape strategy” Michael E. Porter enumerates five factors that he believed shaped a business strategy that has long gone to earn the name Porter’s five forces across the scholarly community. They include the rivalry among existing members, the threat of new entrants, bargaining power of suppliers, the bargaining power of buyers and threat of substitutes.

An early analysis of the United Kingdom food industry using Porter’s five force analysis helps identify trends and strategize in advance to always be ahead of others (Aristeidis & Kampouri, 2017; 10). a. To ensure that new entrants do not make post holding irrelevant, Post ought to pursue research and development so as to be innovative, continuously improve on its quality and promote its products so that it will not be suppressed by new entrants (Dobbs, 2014; 34). c. Bargaining power of suppliers Post holding is a large multinational company having grown tremendously at a fast rate since the company began business operations in 2012. Her large size has made the company enjoy economies of scale including supply economics (Post, 2017). The company has so many suppliers who are sourced from different parts of the world such that the withdrawal of one will not significantly affect business operations.

Post has been changing positions on the Bowman’s clock to reach many customers and satisfy them as much as possible. A critical analysis of the company reveals that she is now at the differentiation stage in the Bowman’s clock. The acquisition strategy brings with it so many changes that affect the customers, shareholders, management, and creditors differently. As the strategy is thus pursued, Post has to put measures to ensure that the new changes that will arise do not affect the business negatively. An external analysis of the United Kingdom market reveals a conducive political, economic, social, technological, environmental and legal analysis reveals friendly external environment for investment. " Competitiveness Review 24. 1: pp32-pp45. Haselwanter, S. , Muskat, B. and Zehrer, A.