In the midst of a crisis of declining profit and revenue in 2010, due to competition and change in consumer behavior, Laura brill has just been appointed as the Vice President of United cereal. Her ability to make a good decision on the way forward will be pivotal towards the company’s success and her carrier.
United cereal is a company founded in 1912 by Jed Thomas in Kalamazoo, Michigan, with strong values such as loyalty, commitment and diligence. By 1952, UC spread her tentacles into the European market and so far, 20% of UC revenue is generated from the European market. United Cereal has been able to sustain these values over the years, starting with the managers, inculcating disciplines and pay of line such as;
- Listen to the customer
- Spot the trend make the market (market research and analysis)
- Honor the past while embracing the future.
Since 2008, there has been a slight preference in cereal among the baby boomers, who wanted healthier cereal, hence the introduction of the fruit-based cereal.
United foods strongest competitor was Kellogs who used its scale of production to dominate the market more.
One peculiarity about UC modus operandi was the fact that country managers were given a considerable level of autonomy. Country managers could develop products, brand, launch and markets product, with approval from the central office. This system leverages on the closeness of the country managers to their terrain as to the “ listen to the customer”, “spot the trend, make the market”, “honor the past while embracing the future”. Their entrepreneurial skills were awakened and the end product is usually tailored to meet the specifics of the local consumer. The only shortfall of this system is that over the years, the variations in branding and package across regions widened which affected how certain products were perceived from one region to another. The most recent impact of this system of country manager autonomy after the 2009-2008 recession is that that the cost of advertising and marketing was 10% more that what is spent in America. Sales, general and administration was now costing 25% more than what it cost in the US. The finance analyst spotted that if this operational process is cut off, they would be saving over 20%. Part of the implication meant that some staff would lose their jobs.
Profitability is highly dependent on 3 major factors
- Operating efficiency
- Managing material cost
- Maximizing retail shelf space.
Presently, the country manager of France, Jean-Luc Michel is set to launch a new product which is an extension of the heathy crunch line called the healthy berry crunch. Even though results from the market testing did not fully meet up the Uc way, he was convinced that the earlier they enter the market, they would clinch the early bird market share. On the other hand, laura brill wanted to introduce and Eurobrand system that would ensure that the huge expense incurred by the country managers via product development, advertising and sales is cut down. This had to be done tactically so that the country managers will not feel relegated. This is because Arne Olsen the former European Vice President had tried to do this in the past h called it the Europeanisation but the country managers frustrated the effort.
Laura brill has to decide, should she do it the Eurobrand way? or the country manager way? or the UC WAY?
