POST HOLDINGS BUYING WEETABIX

To withstand position and advantage is the enigma of challenging the competitive threats. Post holdings managed to penetrate the United Kingdom’s market by purchasing Weetabix. Kellogg is one of the UK’s key players in the cereal industry but Post Holdings is likely to increase its market share and acquire a competitive advantage with the acquisition of Weetabix (Barr 2017, p. This paper aims to conduct a critical strategic analysis of Post Holding’s acquisition of Weetabix. The aim of Post Holdings was to expand to foreign markets and obtaining Weetabix was a huge opportunity for them, as it already has a global footprint, which Post Holdings can now leverage. Overview Weetabix was initially made in the UK in 1932 but it is now up for sale by China’s Bright Food, which obtained a 60% stake back in 2012 (Weetabix 2018, p.

Bright’s acquisition of Weetabix might have been the largest then, but it struggled to erect sufficient market share in China. Arguably, Chinese Consumers prefer rice-based breakfast to cereals. Weetabix might have made double sales in China but UK has a majority of the sales. The main Weetabix factory is located in Kettering and it produces about 3 billion biscuits per annum. It all points out to share administrative services, benefits of scale, and infrastructure rationalization and optimization. Strategic position of the company The aim of strategic position of a company is to comprehend the way a firm is organized irrespective of whether they are economic or geographic (Mittal and Jain 2012, p. It comprises of a company trying to erect desirable future positions in light of the current and foreseeable improvement and formulating arrangements on the best way to obtain that position.

Weetabix can win an ideal positioning on certain markets using the Porter Generic Strategy Grid Source, which includes a focus strategy, a differentiation strategy, and mind tools (Dwivedi, Agarwal and Chakraborty 2015, p. The Porter’s generic competitive approach for Weetabix is the Differentiation focus. In 2014, Weetabix launched Breakfast on the Go drinks, as the number of consumers searching for healthy source of proteins had increased and the company wanted to cater for that niche market. Stakeholder analysis Primary Social Stakeholders From the figure above, it is evident that stakeholders are individuals or groups that are interested in a certain business (Bryson 2003, p. Primary social stakeholders include consumers, shareholders or investors, partners and suppliers, employees and Weetabix, and the community. Post Holding’s acquisition of Weetabix involves varying stakeholders, with the main stakeholders being the investors or shareholders of Post Holdings and Weetabix.

Mapping stakeholders and stakeholder analysis has varying levels of interests and power. The UK is in this situation because it has not finalized its exit out of the European Union. Thus, Post Holdings and Weetabix have no choice but to wait and manage the outcome of the exit, as Weetabix will be operating in varying countries. Based on the employment laws, the UK government has proceeded to grow each year but the nation’s political fate is obscure. The wage rates in the UK are accumulative and Weetabix will be hit with larger wage bills due to the transformation of the employment law. To this end, the company must find new ways to cut costs such as utilizing cheaper raw materials, which could have reputable risks (Bryson 2003, p.

Unlike the Chinese who prefer hot rice breakfast, the UK is leading in cold breakfast cereal consumption. Advantageously, the US also prefers cold breakfast cereal, which increases the likelihood of success from the acquisition. However, the growth rate of their economies is different but they can find a solution for the outstanding challenges. Britain’s economic growth for 2017 had already been assessed lower to 7$ in the wake of the country’s vote to withdraw from the European Union, as tax breaks provided by President Trump’s organization are still on the loop (Sampson 2017, p. When Post Holding’s acquires Weetabix, it will be affected by varying economies residing in the United States. To this end, Weetabix has tested positively in idea research and the results of the initial sales are above expectations.

However, it will have to set varying economic approaches for varying countries. Industry Analysis The critical facet is to comprehend the source of competitive forces. For example, a few years ago Weetabix introduced a drinkable cereal referred to as Weetabix on the Go. To add another breakfast alternative, Bob Evans, based in the US, introduced sausages to meet varying consumer tastes and preferences. There is a high cost of substituting suppliers, which provides them with a robust bargaining power and permits them to raise prices to their clients. The failed sales of Weetabix in China, for example, demonstrate a declining market share. Grocery stores and supermarkets are the main distribution and buyer channels. When the number of competitors is high, buyers can easily switch to an alternative brand in the market.

In connection with Weetabix, yogurt and bread are thought to be more affordable and convenient. The breakfast cereal industry’s barrier to entry is high because the potential new firms may lack the desired experience of the market. The potential new companies must be innovative in creating marketing strategies that can flood and maintain sales. If a potential new organization can meet these demands, it can remain competitive in the market. The main challenge Post Holdings has no control over is Brexit. As the weather changes, it will adversely affect production. However, Weetabix’ acquisition illuminates that the organization will have to handle both the UK and the US politics. Advantageously, Post holdings can use the economic factors of the UK such as its growth rate and other economic indicators such as food to predict the growth trajectory the organization.