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Case
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Reference no. IMD-7-2269
Published by: International Institute for Management Development (IMD)
Originally published in: 2021
Version: 09.03.2022
Revision date: 28-Mar-2022
Length: 11 pages
Data source: Published sources

Abstract

For more than 100 years, the Kellogg Company of Battle Creek, Michigan, had sold its breakfast cereals around the globe to consumers. With mounting competition and changing consumer tastes, the company had entered into new segments such as snacks and crackers and other types of convenience foods, including frozen foods. While initially focused exclusively on organic growth via opening sales offices and production facilities, the company changed its approach and began to leverage growth through acquisitions from the 1970s on. By 2021, Kellogg operated a portfolio of 23 brands in 180 countries with 21 production facilities. While North America remained the largest source of revenue, international revenues accounted for 40% and continued to grow, particularly in the Africa, Middle East and Asia (AMEA) region. While Kellogg's expansion led the company to establish a truly global footprint, it faced challenges along the way, especially from the necessity to adapt its market entry strategies to local tastes and habits around the world. Growing internationally and selecting the right entry mode appeared even more crucial to remain competitive in a post-COVID-19 world. Yet, as it had experienced, international expansion was not entirely straightforward. Moreover, Kellogg's global e-Commerce was already on the rise pre-pandemic. By the end of 2020, Kellogg's online sales - which consisted primarily of sales conducted via other retailer websites such as Amazon - accounted for nearly 10% of its global turnover. With about 30% of its global e-Commerce sales coming from outside the US, would international consumers' increasing usage of digital channels reshape Kellogg's global footprint? Where and how should Kellogg expand next?

Time period

The events covered by this case took place in 1922-2021.

Geographical setting

Region:
World/global
Country:
United States

Featured company

Kellogg
Employees:
10000+
Turnover:
USD 13,770 million
Industry:
Food and beverage

About

Abstract

For more than 100 years, the Kellogg Company of Battle Creek, Michigan, had sold its breakfast cereals around the globe to consumers. With mounting competition and changing consumer tastes, the company had entered into new segments such as snacks and crackers and other types of convenience foods, including frozen foods. While initially focused exclusively on organic growth via opening sales offices and production facilities, the company changed its approach and began to leverage growth through acquisitions from the 1970s on. By 2021, Kellogg operated a portfolio of 23 brands in 180 countries with 21 production facilities. While North America remained the largest source of revenue, international revenues accounted for 40% and continued to grow, particularly in the Africa, Middle East and Asia (AMEA) region. While Kellogg's expansion led the company to establish a truly global footprint, it faced challenges along the way, especially from the necessity to adapt its market entry strategies to local tastes and habits around the world. Growing internationally and selecting the right entry mode appeared even more crucial to remain competitive in a post-COVID-19 world. Yet, as it had experienced, international expansion was not entirely straightforward. Moreover, Kellogg's global e-Commerce was already on the rise pre-pandemic. By the end of 2020, Kellogg's online sales - which consisted primarily of sales conducted via other retailer websites such as Amazon - accounted for nearly 10% of its global turnover. With about 30% of its global e-Commerce sales coming from outside the US, would international consumers' increasing usage of digital channels reshape Kellogg's global footprint? Where and how should Kellogg expand next?

Settings

Time period

The events covered by this case took place in 1922-2021.

Geographical setting

Region:
World/global
Country:
United States

Featured company

Kellogg
Employees:
10000+
Turnover:
USD 13,770 million
Industry:
Food and beverage

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