General

#EMBA27 ABP – United Cereal Case Study

Bola Akinsola Written by Bola Akinsola · 1 min read >

Introduction

  • One of the oldest breakfast cereal providers
  • Now a $9 billion business
  • They sell other snack and drink products, but their breakfast cereal is their main seller
  • They are established in the USA, but want to improve their profits in Europe

Product Launch Approaches

  •  Launch Healthy Berry Crunch in France
  • Withhold the launch of Healthy Berry Crunch

Product Approach Analysis

  • Expand the Role of the 3 Vice Presidents
  • Create Euroteams
  • Create a European product structure with a clear leader
  • The country managers have not reacted positively to changes in their role in prior events
  • They must change in order for United Cereal to get making to profit and some sort of stanardization in Europe
  • Teams will allow for more innovation, less confusion of marketing strategy across Europe
  • This can lead to future success
  • France is a country that is responsive to healthy food marketing and products
  • Starting up the product might cost over $20 million
  • After testing, there was a 64% “would buy again” rate
  • There is potential for profit in France and growth that will help the future of a “EuroBrand”

Key Issues

SWOT Analysis

  • Competitors such as Kellogs have already touched on this market
  • Is Healthy Berry Crunch the right brand to launch as a Eurobrand and is France the right place?
  • High cost to launch a new product
  • Country Managers want to maintain their decision making power

Weaknesses

  • Communication between country managers and upper management is weak
  • Attempts to create the EuroTeam idea & change the role of the country managers could create tension
  • Marketing plans for Healthy Berry Crunch could cost upward of $20 Million
  • United Cereal has customized their products in Europe until now
  • The consumers might desire for them to continue this customization and not be responsive to a brand sold the same everywhere

SWOT Analysis

  • Opportunities
  • Market competition is not that muddled and therefore United Cereal has a chance to take a large portion of the market
  • With 20% of their total sales coming from Europe, if they can make profit, it will help the company significantly
  • Cut costs with spending less on customization and innovate more with EuroTeams
  • If the product is successful in France, this EuroBrand could be successful all throughout Europe in the future

SWOT Analysis

  • Threats
  • The market is unstable
  • If they invest over $20 million in a new marketing plan and product, they could find themselves worse off as before
  • Time of getting the product started and having growth
  • The healthy hype seems to be the big thing at the moment. If United Cereal does not work fast, they could miss the window of opportunity to succeed
  • Other competitors who see the idea is working and they might also attempt to join the market

What Should Brill & United Cereal Do?

  • United Cereal should create the EuroTeams that Brill mentions
  • This will cut costs, allow for more innovation and clearer communication, and a more standardized product
  • This model would be the martix model of business where there are multiple bosses to report information to
  • In order to keep the Country Managers happy, they have to be clear that their opinions will still be highly considered in decision making

What Should Brill & United Cereal Do? (Cont.)

  • Brill should go ahead and launch in France
  • The demand for a healthy breakfast snack has been proven through testing

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