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Case Study: Kellogg’s Business Strategy

Kellogg’s is the world’s largest cereal maker since 1906 and is located in the United States. Kellogg’s products has become a part of the delicious mornings for the people around the world since a century. Its business is operated in two segments: Kellogg’s North America and Kellogg’s International. 66% of the revenue to the company comes from North America region which consists of the Canada and the United States. The remaining 34% comes from the Kellogg’s international market which consists of Europe (20%), Latin America (8%) and Asia Pacific (6%). The products vary from ready-to-eat cereals to convenience foods such as cereal bars, cookies, toaster pastries, crackers, frozen waffles, snacks and veggie foods. Obesity and Health & Wellness is the primary concern for people in the world today. Kellogg’s has invested on this trend by introducing many health focused products like Kellogg’s ®, Pop-Tarts ®, Cheez-It ®, Mini-Wheats ®, Nutri-Grain ®, Rice Krispies ®, Keebler ®, Special K ®, Chips Deluxe ®, Famous Amos ®, Morningstar Farm ®, Sandies ®, Eggo ®, Austin ®, Club ®, Murray ®, Kashi ®, Bear Naked ®, Gardenburger ®,All-Bran ®,and Stretch Island ®. The demand for its products came from the continuous advertising since 1906. The main competitors are General foods, Quaker Oats, General Mills and Ralston-Purina. It started out in Battle Creek, Michigan with 44 employees which eventually has grown into a multinational company with 30,000 employees. The manufacturing of its products is taking place in 18 countries and selling them over 180 countries successfully with the implementation of intelligent strategies and leadership .

Kellogg's Business Strategy

Key Success Factors of Kellogg’s

The main key factors for Kellogg’s Success are it perceived to have a healthy image when compared to other daily breakfasts and snacks like chocolates and crisps. They made the products convenient enough so that they can be carried anywhere easily. They offer a range of cereal bars which are quite useful for people on the morning rush. Few Kellogg’s products are really versatile as mom’s can give them as a snack between breakfast and lunch to their kids. Sodium content in the food is a major issue that the company has to deal with. Kellogg’s are trying to develop products with less salt content and including more amount of fruits in the bars and cereals for people with health concerns. They have created a high level of brand awareness in the people which allowed them to win the customer loyalty. They have designed various products since a century for all age groups from children’s to adults. Innovation has influenced Kellogg’s market to a greater extent. Introducing new products according to the changing markets and tastes of people from time to time has made Kellogg’s to win the customers. They offered the products at a lower price which made an average household to afford, hence retaining the customers at large. Kellogg’s market its products itself. It do not manufacture cereals for any other company who sells them under their own brand. All these factors added for the company to run successfully and become the world market leaders in the highly competitive market.

Kellogg’s Business Strategy

Kellogg’s aim was to be the food company of choice and also make customers understand the importance of a balanced lifestyle which can be achieved by their products. The mission is “to drive sustainable growth through the power of the people and brands by better serving the needs of customers, consumers and communities.” Based on their vision and mission they crafted their strategy to achieve aims and objectives with the power of position and brand image. Kellogg’s targeted various groups of people and deigned the products accordingly to attract their mind sets. ‘Balanced Lifestyle’ is the broad strategic objective of the company. It implemented these strategies by some tactical plans like supporting the physical activity among all age groups and to sponsor these activities with the use of companies resources, the communication of the balance diet to consumers using the cereal packs, and also introduction of food labelling which would allow consumers to understand the balanced diet content of their products. Kellogg’s has introduced the recommended Guideline Daily Amounts (GDA) to their packaging labels. This allowed the customer to have a knowledge of the amount of nutrients in take in a serving of Kellogg’s food. Their strategy is to attract customers by encouraging them to take part in the swimming programs organised by the company in relationship with the Amateur Swimming association (ASA). Kellogg’s has sponsored almost 1.8 million awards every year to the swimmers. This idea of teaming up with ASA has helped the company to reinforce its brand image. It also has started many community programs and breakfast clubs to create awareness of their products in people. By all these activities it shows that the company is trying to create a good CSR image in the industry. Kellogg’s believed that if consumers are given proper information about their products, they can retain them. So, they chose various methods to communicate their objectives to the world such as using cartoon characters, and also through effective advertising. It also distributed nutrition magazines for the employees to make them better understand about the objectives.

Market Research

It is seen that Kellogg’s consumers buying behavior is mostly dependent on the company’s focus towards customers and how well they treat them rather than manufacturing, pricing or merchandising of the products. Consumers tend to purchase the products which are more healthy. Hence they want to know all the available information about the products they want to buy or consume. The product’s information, beliefs, intentions and attitudes of the customers influence the decision process . So Kellogg’s has to perform a market research on whether the consumers buy their products based on the label information or not. The visual inspection of the product or the experience of purchasing the product play a major role in the decision making of the consumer. Advertising and promotion of the product might as well have a greater impact on the buying pattern. It is difficult enough to understand the consumer behavior within the borders of a single country. Understanding and serving the needs of consumers from different countries can be daunting. The values, behaviors and attitudes of the consumers vary greatly across the world. Kellogg’s must design the marketing programs and products according to the peoples needs. For example, in the United Kingdom where most people eat cereal regularly for their breakfast, Kellogg’s should try persuading consumers to buy their brand rather than a competitors brand. In France, however where most people prefer croissants and coffee or no breakfast at all, it should advertise to convince people to eat cereal for breakfast and in India, where many consumers eat heavy fried breakfasts and skip meal all together, the company should make attempts to convince the buyers to shift to a lighter, more nutritious breakfast diet.

Customer Focus and Retention Strategy

There is a huge discussion in the EU market about the food nutrition and labeling and the negative media image produced about the products of the company. The Kellogg’s products are criticized by food standard agency (FSA) as red products and junk food. They said that the company is trying to show their products healthier than they actually are. These statements and actions of FSA has not only affected the overall business and its image but also the consumer attitude towards the products.

To cover up the damage caused due to the labeling issue by FSA, Kellogg’s Should determine the customer’s needs and convert them into requirements. In order to fulfill them, it should fully understand the current and future needs of the customers, identify the customers, determine their key product characteristics, identify and assess market competition, identify opportunities and weakness , define financial and future competitive advantages , ensure that it has sufficient knowledge about the regulatory requirements, identify the benefits to be achieved from exceeding compliance and also identify their role in the protection of community interests. Kellogg’s can start launching some new products aimed at the health conscious consumers. They can start selling them for a lowest price in the market and satisfy them with a good value products for every penny they spend. They can concentrate more on three groups of people like individuals, families and supermarkets who wanted to have a healthy diet. They can focus more on health conscious people from age group from 25-50 by promising them healthy diet with their products. By the introduction of these products in the market they can show the customers that Kellogg’s is being paid attention to what they want and how important their health is to the company. They can start collecting information from consumers and people by conducting surveys about what kind of products they are actually looking for and based on that they can prepare them and position them to win the competitive advantage. So the only mantra to attract the customers again and to cover up the loss created by FSA is obsessive customer attention. Even though making health conscious customers happy might affect the short term profits, yet it helps to acquire a loyal customer base which pays off in the future. Making these products available at all consumer stores and super markets at a lower retail price might assist in building up the brand image yet again. Advertisements play a crucial role in winning the brand image and loyalty of the customers. If the company tries to create an awareness about the product and the low price buying strategy, it would encourage the consumers to buy them that results in the greater sales of the product.

Awareness of changing dynamics of the consumer market will definitely help Kellogg’s to gain a competitive edge in the cereal industry. The increasing trend of health consciousness and the changing tastes can be known time to time by extensive market research. The feed back from consumers and the surveys conducted will allow the company to learn about their drawbacks and work up on them. It enables the business to minimize price sensitivity, improve profitability , differentiate itself from the competition , improve its image in the eyes of customer, achieve a maximum number of advocates for the company, increases customer satisfaction and retention, enhance its reputation, improve staff morale , ensure products and services are delivered right ‘first time’, increase employee satisfaction and retention, encourage employee participation, increase productivity and reduce costs, create a reputation for being caring customer-oriented company, foster internal customer / supply relationships and also bring about continuous improvements to the operation of the company.

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How Kellogg's Went From Corn To Multinational Food Manufacturer

Table of contents.

Like most specialty foods, breakfast cereal is the result of a kitchen accident rather than deliberate planning. The brothers, who worked as a superintendent and a bookkeeper at a local sanitarium, were experimenting with various diets and accidentally discovered the process for making delicious and crunchy cereal.

After several name changes, the company that eventually became the Kellogg Company has grown into a multinational organization selling its breakfast treats in 180 countries. Over the decades, both the ingredients and the recipe have changed significantly: Originally intended as diet food, and later with large amounts of sugar added, the company has now refocused on healthy eating.

In this article, we take a look beyond the controversial founders to learn how a small cereal company became a Fortune 500 corporation and what its business looks like today.

A few key facts about Kellogg's:

  • The Kellogg Company was founded in 1906.
  • Kellogg's employs 31,000 people around the world.
  • Kellogg's reported $13.77 billion net sales for 2020 .
  • The gross profit in 2020 was 3% of net sales .
  • In 2020, the company spent $780 million on marketing .
  • Kellogg's is marketed in 180 countries around the world .
  • The company sells 54 different products .
  • The Kellogg Company spends less than 1% of its revenue on Research and Development .

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The Story Of The Kellogg Company

Two brothers, a sanitarium, and a kitchen accident.

The Seventh-day Adventists are a church group founded in the 1860s that preaches strict vegetarianism (and a ban on alcohol, tobacco, and other drugs). The Kellogg brothers, Will Keith Kellogg and John Harvey Kellogg were among the church's most ardent followers and made every effort to live a lifestyle consistent with religious observances. The meat was not part of their diet, so they tried to spice up their otherwise rather monotonous meals with a variety of grains. The monotony stemmed not from the ban on meat, but from the fact that John Harvey liked a hard meal and, along with Seventh-day Adventists, was a staunch follower of Sylvester Graham, the inventor of graham crackers and graham flour. He held that salt, sugar, and various spices should be avoided, in addition to meat, because they cause undesirable passions in the human body.

The Kellogg brothers ran a large and popular resort sanatorium in Battle Creek, Michigan, where patients were required to follow a strict diet in addition to regular enemas and exercise. According to some contemporary accounts, the spa was a transition between a luxury hotel and a military training camp. Methods included ice-cold showers, frequent enemas, and the use of bizarre devices of the spa's own design.

But the severity with which he treated his patients did not stop celebrities of the time from turning to Kellogg for their health. Female aviation legend Amelia Earhart and Hungarian-born Olympian Johnny Weissmuller, who played the first Tarzan, were among the patients who had access to Kellogg's sanatorium, and automobile magnate Henry Ford also willingly submitted to the doctor's will. It was here that cornflakes were born - initially from wheat.

The idea for cereal did not come first from Kellogg's. The idea came from Dr. James Caleb Jackson, who made the first dry granola in 1863, which he called "granola." It was not particularly successful until the Kellogg Company finally made the real breakthrough with sweetened cereals.

The Kelloggs found the recipe for success by accident: they had accidentally left a batch of grain in the soaker, but, short of cash, decided to use the shaken-up raw material. The wet grains were then pressed together to produce the distinctive flakes, which were initially offered to "invalids with digestive problems", constipation or other problems resulting from overly fatty, salty, or spicy American cuisine, and excessive caffeine and alcohol consumption.

How Will took over the family business

Will also realized he could make better quality by using much tastier corn instead of less exciting-tasting grains, and with his excellent business sense, he realized the market was not just people with stomach problems, but almost anyone who wanted a quick and convenient nutritious breakfast. 

As soon as guests left the sanitarium, hundreds of mail-order requests from them were made for flaked wheat. Will was forbidden by Dr. John Harvey to distribute cereal beyond the boundaries of his consumers. Consequently, the brothers fell out, and Will founded Battle Creek Toasted Corn Flake Company on February 19, 1906. He persuaded his brother to give him the rights to the product, which was then developed and produced by his company, and renamed the Kellogg Toasted Corn Flake Company in 1909, later becoming the Kellogg Company in 1922.

Turning the company into a responsible organization

"I'll invest in people," Will declared as the United States plunged into the Depression in 1930. The company split shifts and hired new workers. He also established his own foundation (named after him), which still exists today, to give poor children a start in life. For further commitment to people, Kellogg began displaying cereals' nutritional information on their boxes, so customers knew exactly what they were eating.

The company’s engineers helped manufacture supplies in Kellogg's machine shops during World War II and produced K-rations for the US military overseas. Introducing Kellogg's Raisin Bran helped the company bring new whole-grain cereal to life, helping America get more nutrition.

In 1969, while Neil Armstrong, Buzz Aldrin, and Michael Collins were on the Apollo 11 mission to the moon, the Kellogg Company provided breakfast for them.

From the late 60s, the company invested more (but as later turned out, not enough) in marketing and expanded its advertising activities to television. This has been one of the busiest periods of the company’s history with events including:

  • Sunday morning TV shows used the slogan "Kellogg's puts more into your day" from 1969 to 1970.
  • As of 1977, Kellogg's had acquired Salada Foods, Fearn International, Mrs. Smith's Pies, Eggo, and Pure Packed Foods, among others. The company was later criticized for not diversifying further as its competitors did at that time.

Kellogg's market share in the US dropped to 36.7% in 1983 after it underspent on marketing and product development. Wall Street analysts called it "a fine company that's past its prime".

The overall market reception encouraged Kellogg chairman William LaMothe to improve, which primarily involved marketing cereals to the 80 million baby boomers rather than children. As a result of emphasizing cereal's convenience and nutritional value, Kellogg's helped increase cereal consumption among US consumers aged 25 to 49 by 26% over the last five years.

In 1983, the US ready-to-eat cereal market was worth $3.7 billion, but by 1988, it had grown to $5.4 billion and had expanded three times as fast as average grocery categories. In addition to Crispix, Raisin Squares, and Nutri-Grain Biscuits, Kellogg's introduced Just Right for Australians and Genmai Flakes for Japanese consumers. The company, which marketed largely children's cereals, maintained a competitive edge over its top competitors: General Mills and Post, which faced challenges in the adult cereal market.

Preparing for the future with acquisitions

Kellogg's bought Keebler in 2001 for $3.87 billion, while also cutting 470 jobs at the same time. The company has also acquired Morningstar Farms and Kashi over the years. In addition, the company owns Bear Naked, Natural Touch, Cheez-It, Murray, Austin cookies and crackers, Famous Amos, Gardenburger (acquired in 2007), and Plantation brands.

As part of a cash transaction, Kellogg's acquired Pringles from Procter & Gamble in 2012 for $2.7 billion , becoming the world's second-largest snack food company (after PepsiCo). 5 years later, Rxbar, a simple food company in Chicago, was acquired for $654 million .

kellogg's case study strategic management

Ferrero SpA announced on April 1, 2019, that they would be acquiring Famous Amos, Murray's, Keebler, Mother's, and Little Brownie Bakers from Kellogg’s. The acquisition deal was completed later that year. The Kellogg Company kept the Keebler cracker line but brought it under the Kellogg's brand umbrella.

Key takeaways

The Kellogg brothers were unable to settle their cornflakes dispute until their deaths, and their relationship was forever damaged after they started their own company. But this personal tragedy does not diminish their joint achievement of inventing one of the world's most famous and beloved foods.

From the company's history, it's clear that Will, a skilled accountant, quickly understood what they needed. Kellogg's needed to capture more and more markets. After focusing on specific regions, the company moved on to targeted market segmentation - primarily targeting children and their parents with its products.

Kellogg’s Brands And Flagship Products

Who owns the company today.

Today, Kellogg’s is among the largest food manufacturing and grocery holdings companies traded on the stock exchange. The major shareholders of the company are the following, according to Market Screener .

Kellogg’s brands

The world's largest food and beverage brands are controlled by about ten companies. These companies are:

  • General Mills
  • Associated British Foods

And, of course, Kellogg’s .

The Company’s brands include Kellogg’s, Keebler, Pop-Tarts, Eggo, Cheez-It, All-Bran, Mini-Wheats, Nutri-Grain, Rice Krispies, Special K, Chips Deluxe, Famous Amos, Sandies, Austin, Club, Murray, Kashi, Bear Naked, Morningstar Farms, Gardenburger and Stretch Island.

Kellogg’s flagship products

kellogg's case study strategic management

According to a study by IRI Worldwide in 2017, Kellogg’s had a share of 30.01% in the US breakfast cereals market. This was because the company produced 4 out of the 10 favorite bowls of cereal:

  • Raisin Bran
  • Frosted Mini Wheats
  • Fruit Loops
  • Frosted Flakes

Sunshine Biscuits

The American Biscuit & Manufacturing Company was founded in 1890 by 33 Midwest and western bakers. The goal of consolidation, i.e., the merger of small, local companies, was to oust the two largest U.S. companies from the top of the market. The American Biscuit and New York Biscuit groups tried to eliminate the competition by opening bakeries in each other's areas and lowering prices. The National Biscuit Company (Nabisco) was formed by combining 114 factories in February 1898.

As a member of Nabisco's Board of Directors, Joseph Loose created the Loose-Wiles Biscuit Company in Kansas City in 1902, along with his brother Jacob and John H. Wiles. They imagined a factory that was filled with sunlight, so they called their products SUNSHINE. The company began expanding, opening plants in Boston and then New York.

It took Loose-Wiles forty years to dissuade other companies from using the term "sunshine" or any related term in products or advertising because it did not register its brand name. Sunshine Biscuit, Inc. finally became the official name of the Loose-Wiles Company in 1946.

The company developed new products and acquired established brands from smaller competitors in the early part of its history. There are many products and their names that resemble those of their biggest competitor, the National Biscuit Company.

The company was purchased by the American Tobacco Company in 1966. Following the sale to GF Industries, a privately held California company, the company merged with Keebler in 1996. In 2001, it joined Kellogg's group, already part of Keebler.

Cheez-It snack crackers, as well as Krispy Crackers saltines, are Sunshine's best-known products.

Frank Dorsa developed a process for cooking, freezing, and packaging waffles in San Jose, California. In 1953, similar to Kellogg’s, the Dorsa family came up with Eggo frozen waffles as "Froffles" (putting together the words "frozen" and "waffle"). A waffle iron was not necessary to prepare frozen waffles, which immediately made the product unique to the market.

Customers called them Eggos because of the egg flavor. As more and more people started calling their frozen waffle products Eggos, the owning family realized it was worth taking the opportunity to rename the company.

Eggo potato chips (and Golden Bear potato chips) and Eggo syrup were also produced by the Dorsa brothers, in addition to frozen waffles. In San Jose, CA, a sprawling plant and factory on Eggo Way produced all of the products. As active members of their local community, the Dorsas donated a great deal to local schools and community projects.

Kellogg Company acquired Eggo in 1968 as a means of diversifying. Through their television commercials, their advertising slogan "L'eggo my Eggo" was developed in 1972.

The Eggo brand of breakfast cereals is shaped like waffles and is produced by Kellogg's. It comes in flavors such as maple syrup and cinnamon toast. Originally produced from 2006 to 2012, the brand was reintroduced in 2019 following a successful campaign.

kellogg's case study strategic management

Fredric J. Baur (1918-2008) was tasked by Procter & Gamble in 1956 with creating a new kind of potato chip in response to consumer complaints about broken, greasy, and stale chips, as well as air in the bags. A canister was selected as the container for the saddle-shaped chips that Baur created from fried dough for two years. Pringles chips have a saddle shape known as a hyperbolic paraboloid.

Baur's work was restarted by P&G researchers in the mid-1960s, and they succeeded in improving the taste. The patent name on the Pringles chip is Liepa's, not Baur's, even though Baur designed the chip's shape. The machine that cooks them was developed by Gene Wolfe, an author and mechanical engineer. Pringles were first sold in Indiana in 1968 by P&G. Throughout most of the US, they were available by 1975, and internationally by 1991.

The product was originally called crisps, but due to a competitor's veto, the product was eventually required to include the words crisps made from dried potatoes. However, for understandable reasons, the company could not easily use this name in its advertising, so it was changed to "crisps".

The deal would have more than tripled the size of Diamond Foods' snack business if it were to sell the brand to P&G in April 2011. After a year-long delay, Diamond's accounts caused the deal to collapse in February 2012. As part of its strategy to grow its international snack business, The Kellogg Company acquired Pringles for $2.695 billion on May 31, 2012. As a result of its acquisition of Pringles, Kellogg became now the world's second-largest snack company.

Pringles has five plants worldwide as of 2015: in the US, in Belgium, in Malaysia, in Poland, and China.

GardenBurger

Paul Wenner developed the Gardenburger at his vegetarian restaurant, The Gardenhouse, in Oregon, around the early 1980s. In March 1985, Wholesome & Hearty Foods, Inc., was incorporated. Paul Wenner and Allyn Smaaland received their first funding as part of a venture capital investment program of Louisiana-Pacific Corp. As a result, L-P took a controlling stake in the company immediately. About a year later, the company received a second round of venture capital financing. Despite filing for bankruptcy in 2005, Gardenburger continued to operate by becoming privately owned.

It announced in 2006 that it would remove eggs from all of its products, except for one item sourced privately, which now contains organic, cage-free eggs. In 2006, the company renamed itself Wholesome & Hearty Foods. A year later, Kellogg’s acquired the company to broaden and diversify its portfolio.

The Kellogg's Company has been very involved in product development since its founding. Without it, the breakfast cereal market would not exist - although it should be added that countless studies have shown that these products have contributed greatly to the morbid obesity of American children. However, the company's strategy was clear: drive product development through the creation of new brands and acquisitions.

Today, Kellogg's has developed a complex portfolio of products and brands that includes all types of breakfast and snack foods - from frozen waffles to hamburgers.

The most famous of the acquired brands are undoubtedly Pringles, which reformed the potato chip market with its distinctive shape and flavor. In almost a decade, the group has become one of the strongest brands in the industry.

The Outline Of The Company’s Strategy

The kellogg’s better days program.

‍ Kellogg's Better Days , Kellogg's signature purpose platform, has provided 3 billion servings of food to people in need since 2013. As part of Kellogg's commitment to increase ambition in 2019, the company captured a wider range of goals and aligned with the United Nations Sustainable Development Goals.

Kellogg will address food security and create Better Days for 3 billion people by 2030 through its updated program goals. To drive positive change for people, communities, and the planet, the company focuses on wellbeing, hunger relief, and climate resilience. Kellogg's specifically supports:

  • Delivering nutrients of need to 1 billion people while addressing hidden hunger.
  • Providing food donations and expanded child-feeding programs to 375 million people in need.
  • Achieving science-based targets, sourcing ingredients responsibly, reducing organic waste, and providing sustainable packaging while supporting 1 million farmers and workers across the value chain.
  • Advancing the values of the founder by advocating for children facing hunger, encouraging employee volunteering, ensuring an ethical supply chain, and supporting diversity and inclusion.

Raw materials

As a result of the COVID-19 pandemic, food companies have run into serious difficulties as labor shortages have led to sharp price fluctuations in the commodity market. Kellogg's normally sources its raw materials from local growers but says it is increasingly reliant on imports. To compensate, Kellogg's is gradually extending contracts with its suppliers, tying up capacity in advance to ensure predictability and planning.

The trend in the international market is that the strong fluctuations in raw material prices mainly affect the US market, so Kellogg's other factories can continue to operate smoothly.

Research and Development

At the WK Kellogg Institute for Food and Nutrition Research in Battle Creek, Michigan, and other locations around the world, researchers support and expand the use of existing products and develop new products. Despite having a dedicated research institute dedicated to food quality, safety, and new product development, the company spends surprisingly little: 2020-$135; 2019-$144; 2018-$154.

Food scientists at Kellogg's world-class research facility develop innovative breakfast foods that meet consumers' expectations for taste, nutrition, and convenience.

Nine conference rooms, a boardroom, a 120-seat auditorium, a 3-story atrium, a stainless steel staircase, and state-of-the-art technology are all included in the new building. As a result, the WK Kellogg Institute consolidates the Company's global food research efforts in one location. This enables Kellogg researchers and technical experts to better share knowledge while enabling new products to be introduced to consumers more quickly.

Equity and diversity within human resources

Kellogg established a separate, independent Diversity & Inclusion Office in 2005. A major focus of this internal organization has been to recruit and retain a diverse workforce, create awareness about diversity issues, foster a supportive, inclusive work environment, and embed accountability for diversity across all lines of business. The company strives to reflect the diversity of its consumers. ED&I (Equity, Diversity, and Inclusion) is reported directly to the Board of Directors periodically.

This organization is divided into 8 different Business Employee Resource Groups:

  • KVets and Supporters
  • Kellogg Multinational Employee Resource Group
  • Kellogg’s Young Professionals
  • Kellogg African American Resource Group
  • Women of Kellogg
  • Hola (Latino resource group)
  • KPride & Allies (LBGTQ+ resource group)
  • Kapable (support group for people with disabilities).

Risk assessment with a COVID-19 focus

Kellogg's is being unusually open about the risks that management sees in COVID-19 and the economic difficulties that have followed in its wake, mainly, of course, under pressure from and for the information of its shareholders.

In its annual report, the company cites the negative impact of COVID -19 on the supply chain as the biggest risk. Forced shutdowns due to regulatory quarantine and illnesses within the company (including Kellogg Company subcontractors) make it very difficult to meet order backlog. This applies primarily to the US but could affect any other country if the outbreak worsens.

A decline in national and global economic conditions, as well as volatility in financial markets, could have a variety of effects on the business and operations, including the following:

  • In economic downturns, consumers may opt for cheaper or more generic offerings or may forego certain purchases altogether, which could result in lower sales revenue or a shift in product mix to lower profit offerings, adversely affecting business results.
  • As a result of disruptions or uncertainties related to the COVID-19 pandemic, Kellogg’s could be hindered in efforts to reduce operating costs, both in the supply chain and in overhead, and the ability to implement strategic plans and initiatives.
  • Currency translation losses and currency transaction losses would result if the US dollar strengthened relative to foreign currencies in the countries where the company operates.
  • As a result of illness or government restrictions, a considerable portion of the workforce may not be able to work.
  • Because many of Kellogg's employees work remotely, Kellogg's is increasingly susceptible to cyberattacks due to its reliance on information technology systems.
  • Due to illness, government restrictions, or other workforce disruptions, a manufacturing, warehousing, or distribution facility may close down, or the supply chain may be disrupted.
  • As a result of reduced in-store visits and travel restrictions, it's difficult to modify trade promotion and advertising activities effectively.
  • During the COVID-19 pandemic, unemployment may lead to a decrease in demand for products.
  • A significant increase in commodity and other input prices could have a substantial impact on the results of operations.
  • Volatility in equity markets or interest rates can significantly affect the cost of pensions and the required contribution.

Numerous measures have been taken by the Company to help fulfill key objectives and reduce industry-related risks during the pandemic:

  • Keeping employees healthy and safe.
  • Produce and deliver food safely to consumers and customers.
  • Kellogg's supports the communities in which it operates.
  • Flexibility in financial matters.
  • This process involved close collaboration with medical, regulatory, and other experts.

Among the above measures, maintaining financial flexibility is discussed most openly. According to Kellogg’s, operating activities are expected to generate $1.6 billion in cash for the company in 2021, while capital expenditures will be about $500 million. Additionally, it has access to commercial paper markets and currently has revolving credit agreements totaling $2.9 billion, including $1.5 billion effective through 2023 and $1 billion through 2022.

The Kellogg Company’s operating strategy is multi-faceted and highly diversified. The Better Days program and internal strategy HR demonstrate that the company is socially responsible, to provide food to as many underdeveloped, poor regions as possible and strengthen the equity and inclusion of external and internal human resources (employees and contractors).

At the same time, another important element of the operational strategy is to ensure the stability of the company during the pandemic COVID-19. This involves ensuring that the huge demand for raw materials can be met (especially in the U.S., where shutdowns are most difficult) and providing financial stability, for which Kellogg's considerable liquidity is a great help.

But it is also surprising how little one of the world's largest food conglomerates spends on food safety and innovation. This is especially true given the pressure on the company to produce ever healthier, sugar-free products that are more beneficial to children's development - but so far this is happening more at the level of communication.

Production, Sales, and Marketing

Manufacturing breakfast.

Three nutrients - nitrogen, phosphorus and potassium - are injected into the soil in April to help the seeds grow. Two months later, the corn undergoes a growth spurt, reaching five feet tall and blooming. It is time to harvest the corn between October and November, when it is ready for sifting, cleaning, and rolling at a mill, before it is shipped to Kellogg's. Flakes are formed from corn grits in the factory. Kellogg's Corn Flakes are cooked, dried, and toasted to create these flakes, which are then sold at supermarkets.

As a traditional FMCG company, Kellogg's does not sell directly to customers but is associated with small and large grocery chains such as Walmart and Tesco. About 20% of the group's employees are in sales, mainly account managers who sell products to store networks and make sure they are positioned correctly.

There is also a dedicated team for what is known as sampling, which overlaps with sales and marketing. This involves giving customers the opportunity to try the latest products in a country-specific, localized way. With a category like cereal, the company needs to create multiple touchpoints so consumers can experience the products. Sampling, along with the right pricing architecture, helps achieve this. In this series of innovations launched over the past few years, sampling and other promotional activities have taken center stage as they help consumers experience a product firsthand before they develop an affinity for it.

Kellogg's has focused on its core target group of children - or more specifically, families with children - almost from the beginning. This is a special market segment, because you have to both persuade and engage kids (if they do not like the product, parents will buy it for free) and send the right messages to parents. The company realized early on that the packaging of the products plays an important role in this, and continues to do so today.

kellogg's case study strategic management

To meet parents' expectations, the health benefits of healthy foods must be emphasized in advertising, on packaging, and on all company communication platforms.

Kellygg's invests more than 8% of its sales in brand building , which helps the company build a strong brand in the developing world. One of the current focus areas of the company is India. According to Bakery and Snacks , the 2019 brand value of Kellogg’s was $6.7 billion - the fourth largest globally.

Kellogg's marketing campaigns have changed significantly over the years. With a marketing budget slightly below the market average, the company typically thinks about more thoughtful campaigns. Before the 2000s, it was more typical to sponsor sporting events, advertise on TV (the best time to do this was before children's shows on weekends), but they also provided the fake money for the moon landing.

In developed countries, marketing spend is increasingly shifting to the Internet (the company has over 1 million followers on Facebook in the US alone), but in developing countries, print media and television remain the most effective channels. For the poorest regions of the developing world, not only is information an important goal, but Kellogg's must also educate the market. In India, for example, a significant proportion of children do not eat breakfast at all, so Kellogg's is also raising awareness in its local campaigns.

The Kellogg's group of companies is a traditional FMCG company, meaning that it does not sell its products directly to the consumer, but involves various distributors in the process. These are smaller, local grocery stores, which are visited individually by sales representatives, and large chains and supermarkets, which are in turn contacted by central customer service representatives.

For one of the world's best-known food brands, Kellogg's spends very little on brand building and marketing activities. Much of that spending goes to developing countries, where breakfast and fake foods are not as fashionable as they are in the U.S., for example. Kellogg's is trying to market itself through education.

Final Thoughts And Key Takeaways

Growth by numbers.

Kellogg Company Group sales clearly peaked in the past decade in 2014, followed by a sharp decline and another gradual increase. However, the coronavirus outbreak changed all scenarios - providing an unexpected surge in cereal purchases (only to later lose momentum due to supply chain disruption).

One of the big challenges for Kellogg Company is the growing competition in the market, fueled not only by cereals but also by breakfast offerings from fast-food chains. However, the company does not yet have an overarching global strategy that could differentiate it from the rest of the market.

Key takeaways from Kellogg’s story:

  • Responsible recipes: Kellogg's focused on responsible practices relatively early on, which remains an important communication point today. However, values such as producing healthy food, promoting the trace elements necessary for children's development, and educating people about the importance of breakfast are not just marketing concepts; they play a major role in convincing families with children to buy the products in the long term.
  • Building complementary brands: The company has slowly but steadily developed its numerous sub-brands. These were later complemented by acquisitions of companies already established in the market. The underlying strategy was to be present in the breakfast meal and snack market with all significant product lines.
  • Taking responsibility within the company: Diversity and inclusion are not just buzzwords, they also help Kellogg to remain a world-leading group and provide opportunities for talent to flourish, regardless of background. It has also launched a special program to feed and educate people in poor regions.
  • Brand building at low cost: One of the Kellogg Group's greatest advantages is that the product line it invented is still identified with the company, giving it an advantage in competing for customers even after 100 years. For this reason, brand building is primarily focused on global regions such as certain Asian countries where there is still room for market growth.

But competitors are on a more spectacular trajectory - both Nestlé and Danone are developing much broader product portfolios, giving them the opportunity to capture a larger segment of the food market. Kellogg's is still the market leader in breakfast cereals, but if the company does not increase its pace of innovation, spend more on marketing and overcome the risks associated with the global shortage of raw materials, it could lose its leadership position.

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ANALYSIS OF KELLLOGGS CORPORATE STRATEGY: MARKETING FOCUSED

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How Snap, Crackle, and Pop Helped Kellogg’s Grow

It’s a lazy Sunday afternoon (Sunday mornings do not exist) and you prepare a bowl of cornflakes for your routine breakfast.

You take the first portion in your mouth, and immediately, your friend from the other room reminds you to add one packet of Kellogg’s Cornflakes Original to the weekly grocery list. We haven’t yet upgraded to the fancier Kellogg’s Cornflakes Real Almond and Honey because we are students living on a budget. Also, the crunchy sound is the same.

Do you see what happened here? The crunchy sound of a cornflake snapping into pieces was so distinct and characteristic that my friend from the other room immediately recognized what I was having for breakfast (at one in the afternoon) and even associated a brand to it.

You might say she knows what I have for breakfast every day (yes, we are not big on diversification of our breakfasts), but you get my point. Kellogg’s cornflakes have a distinctive and unique sound and the brand bet big on it early on.

The Power of Sound

Traditionally, brands have focused on catering to consumers’ sense of sight by ensuring optimal visual satisfaction through their products. This includes gorgeous product designs, conspicuous packaging, and even advertisements exhibiting splendor and a little bit of razzle-dazzle to offer a complete visual package to consumers.

We have all been guilty of getting attracted to brightly-colored packaging on grocery shelves, only to repent later that all that glitters is not gold. The other four senses, namely sound, smell, touch, and taste, have conveniently been sidelined and relegated to the background. Especially the sense of sound.

It’s important to note that we perceive the world through the combination of  all  our five senses. They trigger fond memories, transport us to parallel realms, and tap right into our emotions.

The sense of sound has some powerful physiological, psychological, cognitive, and behavioral effects on humans. It enables us to connect the dots and relate objects, people, experiences — you name it. You know bad luck is in store for you when you hear a callous caw on your balcony.

You know you are in store for a major mood uplift when you hear piano rock. Now, imagine a brand leveraging all these effects to dramatically increase its brand recall value and secure a permanent and memorable place in its consumers’ minds. This is what Kellogg’s set out to achieve as it realized the significance of the sense of sound.

Re-Purposing Audio Marketing

Even though audio marketing has been around for ages, the incumbent “sonic brands” repeatedly failed to conjure up a truly unique sound that left an indelible impact. Most of them artificially created the sounds first and then tried to deliberately bring them to people’s attention, cajoling them into associating those sounds with their brands.

Some of them rented pop culture clippings to soundtrack their commercials. Rather than letting the sound naturally blend in with product usage and slowly become ubiquitous, these brands adopt a hurried and mechanical approach and ended up giving rise to “corporate sounds.”

Some brands got it partially right wherein they created a unique sound DNA and armed themselves with a repertoire of sonic assets. But in this clutter, that one distinctive sound was lost.

Then came along Kellogg’s, and it completely changed the paradigm of audio, and to an extent, sensory marketing. In addition to making the snap, crackle, and pop sound as a means of brand recognition, it also made it a criterion to judge the product quality.

Crunchiness Is Everything

Kellogg’s Rice Krispies that do not snap, crackle, and pop are considered to be stale, even though the taste or smell might not have altered much. In essence, the brand places a heavy emphasis on this crunchy sound which is used as an indicator for almost all other product attributes.

Its initial marketing adverts even featured three characters named Snap, Crackle, and Pop, highlighting the importance of the sound of the grain in their overall marketing strategy as well.

Interestingly, several Autonomous Sensory Meridian Response (ASMR) videos have also been created on this iconic crunchy sound. The  videos  — some of them running up to one hour — feature the sounds associated with a person opening a Kellogg’s cereal packet, pouring the grains in a bowl, mixing them with milk, and then finally eating the cereal.

The brand has created a synergy between texture, taste, and sound where sound acts as an anchor. In short, Kellogg’s considers the crunchiness of the grain as having everything to do with the success of the breakfast product.

Taking audio marketing a notch higher

Gradually, the crunchy sound became so well-known, pleasure-inducing (thanks to ASMR videos), and uniquely identifiable that the brand decided to patent it.

Kellogg’s approached a Danish music lab and requested them to recreate the highly exclusive and distinctive crunch associated with their cornflakes so that anyone helping themselves to a bowl of cereal will instantly recognize the anonymous cereal as a Kellogg’s product, by the mere sound of the crunch.

This strategic move also provided the brand with a lot of positive publicity, with 74% of modern consumers now associating the word crunch with the company.

Closing Thoughts

The power of audio marketing is underrated. Before thinking of investing in mind-blowing graphics for brand commercials or out-of-the-box ideas for product packaging, brands could instead ponder what appeals to human beings on an everyday basis and think of integrating the five senses their overall brand strategy to achieve a greater emotional connection with consumers. Kellogg’s mastered it and has set a great example for future brands to emulate.

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kellogg's case study strategic management

Product Strategy: Develop and Manage Successful Products

This program is also offered in Simplified Chinese — 简体中文 and Spanish. View the program page in Simplified Chinese — 简体中文 and view the program page in Spanish.

Every company that sees technology as a competitive differentiator needs a product strategy. And every person who touches a product inside of an organization directly contributes to its success or failure.

In this program, you learn a cradle-to-grave approach for managing and optimizing the life of a product or service. You will be equipped to think like the CEO of your product or service, all in a flexible, online format. Throughout the program's eight weeks, you will have the opportunity to engage in interactive, thoughtful discussions with Kellogg professor and subject matter expert Mohan Sawhney and your peers.

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Professor Mohanbir Sawhney

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Who Should Attend

  • Mid- to senior-level executives and individual contributors who contribute to product strategy.
  • Executives with strategy functions, but also those from marketing, sales, finance, operations; consultants
  • Business managers and leaders who are materially involved at any point in a product's lifecycle
  • Those who may be directly responsible for product or portfolio strategy, or who play a more indirect role such as in sales, marketing, operations, finance, or R&D
  • Professionals at companies who are focused on using technology as a competitive differentiator, even if your vertical market isn't 'tech'
  • Professionals wanting to take on a more formal product management role

Key Benefits

  • Develop a strategic mindset that anchors product strategy as the pathway to growth
  • Manage partner ecosystems and learn how to create win-win partnerships
  • Analyze new product opportunities to arrive at ‘go’ or ‘no-go’ conclusions efficiently
  • Develop a go-to-market strategy using the 7-Elements Framework
  • Create buyer personas, positioning, and messaging based on proprietary tools from the Kellogg School of Management
  • Learn from real-world custom case studies and examples based on the faculty’s own consulting experience with top tech firms such as Microsoft, AT&T, Salesforce.com and Facebook

Program Content

Module 1 – Understanding Product Strategy

Learn why it’s critical to have a product strategy, and how it may vary in different types of organizations.

  • Managing products as a business
  • Product strategy in startups
  • Product strategy in professional services companies

Module 2 – Analyzing Product Opportunities

Evaluate new opportunities based on the ‘jobs-to-be-done’ framework.

  • Defining the opportunity and hypothesis
  • Analyze the 'jobs-to-be-done' approach
  • Evaluating the opportunity

Module 3 – Discovery and Requirements Definition

Apply the discovery hypothesis framework, create user stories, and build a wireframe to outline an opportunity to deliver an urban mobility solution for school kids

  • Discovery as product and consumer
  • Creating the discovery hypothesis
  • Minimum viable product (MVP) framework

Module 4 – Designing the Business Model

Learn which situations are appropriate for each type of business model and analyze the economics of a SaaS pricing model.

  • Business model taxonomy
  • Freemium, Marketplace, and SaaS models
  • Choosing the model and when to pivot

Module 5 – Agile Product Development

Learn the principles of agile development and use these principles to influence a team over whom you have no direct authority, such as an engineering team.

  • Principles of agile development and scrum
  • Transitioning to agile
  • Managing remote teams
  • Influence without authority

Module 6 – Taking Products to Market

Learn how to define and understand your key audiences and choose the most appropriate route(s) to market.

  • Understanding personas, positioning, and messaging
  • Develop and execute the go-to-market plan
  • Best practices for product launches

Week 7 – Managing the Partner Ecosystem

Learn to define the elements of the ‘whole offer’ and how to design and manage partnerships effectively

  • Defining, evolving, and creating the 'whole offer'
  • Diagnosing the capabilities gap
  • Designing partnerships for different company sizes

Module 8 – Managing Product Evolution and Growth

Build on the strengths of your existing strategies and tactics to drive new growth. Conduct a road-mapping exercise for an innovative new product in the medical supplies industry that promotes medication adherence.

  • Increasing share of wallet, share of market, and size of market
  • Growth through partnerships
  • Growth hacking strategies

Mohanbir Sawhney - Associate Dean for Digital Innovation; McCormick Foundation Chair of Technology; Clinical Professor of Marketing; Director of the Center for Research in Technology and Innovation

What is the program about?

Product Strategy offers a cradle-to-grave approach for managing and optimizing the life of a product or service. This program will equip you to think like the CEO of your product or service, all in a flexible, online format. Learn to develop a strategic mindset that anchors product strategy as the pathway to growth.

What is the learning experience?

Your learning experience will consist of frameworks delivered via video lectures, live webinars, real world examples and case studies, application of frameworks through weekly activities, customized assignments and quizzes, discussion boards, and faculty engagement. The program culminates with a capstone project, bringing together all of the key concepts from the program.

What is the program format?

The program consists of 8 modules delivered over 2 months online. Learners can expect to dedicate 4-6 hours per week to watch videos, complete assignments and participate in discussions. Modules are opened at the beginning of each week and have quizzes/assessments at the module’s conclusion. Learners may choose to engage with the program module all in one sitting or in smaller segments of time throughout the week. While the modules do not close, access to assignments is closed each week.

Could a learner choose to opt out of some topics?

No. This is an online program in which a topic module is introduced each week and the learner is expected to watch the video lectures, participate in the live webinars, complete the exercises/activities and take the mastery quiz at the end of each week to progress to the subsequent week’s topic.

Are any of the sessions delivered in real time (live)?

There will be 2-3 live sessions, led by faculty and/or subject matter experts, delivered during the course of the program via a video conferencing platform. These sessions provide learners an opportunity to listen and ask questions, and while they are valuable in enhancing the overall experience, attendance is not mandatory. All live sessions are recorded for later viewing.

What methods will be used for grading and evaluation?

Kellogg program leaders will review assignments, discussions and exercises to determine participants’ understanding of the material.

How much time is allocated to complete assignments?

The due date for submitting assignments is typically within 7 days of the module opening, but can be as long as 14 days, depending on the scope of the assignment. However, learners may request deadline extensions to accommodate for business and personal conflicts that may arise during the program timeframe. Reach out to the program leader to discuss any challenges you may have in completing assignments.

Can participation in this program be counted as credit toward a degree, either at Kellogg, Northwestern University or another academic institution?

No. Executive Education offers only non-degree programs and each participant receives a certificate of completion at the end of the program. This certificate does not count as credit toward a degree. In addition, at this time, our online programs do not count as credit toward a Kellogg Executive Scholar Certificate.

Does the program offer community engagement for learners?

Yes, participants can create a profile, connect and collaborate with peers, and interact with academic/industry experts such as program leaders and teaching assistants. Office hours will be held during the program and all participants are welcome to join in with questions or to discuss assignments.

What are the requirements for accessing the program?

Participants will need the following to access the Product Strategy program:

  • Valid email address
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  • The latest version of your preferred browser to access our learning platform (Chrome and Firefox are preferred for accessing Canvas)
  • Microsoft Office and PDF viewer to access content such as documents, spreadsheets, presentations, PDF files, and transcripts
  • Additional software and resources may be required for certain programs – this will be communicated upon registration and/or at the beginning of the program
  • PLEASE NOTE: Google, Vimeo and YouTube may be utilized in the program delivery

Does the program offer a certificate?

Yes. Participants will receive a digital certificate of completion from Kellogg following a successful conclusion to the program. Since this program is graded as a pass or fail, participants must receive an 80% to pass and obtain the certificate. This digital certificate can be shared with colleagues and posted on LinkedIn. (PLEASE NOTE: We do not provide reports of assessments, or “transcripts,” since this is a non-degree program.)

Who is Emeritus and what is their relationship with Kellogg Executive Education?

Kellogg Executive Education is partnering with Emeritus Institute of Management, an online education provider, to develop and deliver this program. By working with Emeritus, we are able to provide broader access to Executive Education, beyond our on-campus offerings, in a collaborative and engaging format that is consistent with Kellogg’s standard of quality.

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Please contact us by calling 847-467-6018 or email us at [email protected] .

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Kellogg Company’s Strategic Management

Company overview.

According to the annual report 2010 of Kellogg, this Company started its journey in 1906 and was incorporated in Delaware in 1922 and it is now one of the major players in the ready-to-eat cereals and convenience foods industry in the US market. However, human resources are the key assets of Kellogg and it has more than 31,000 dynamic employees around the world to operate the business in 180 countries (Kellogg 4). However, it has many opportunities to develop the customer base, brand awareness, financial strength, acquisition with other companies, increasing demand for health consciousness of the people, and new product development. On the other hand, the external threats are intense market competition, exchange rate, interest rate risk, and agreement between competitors, price of raw materials, global economic downturn, and compensation of the employees, high advertising costs, and several legal claims and many other issues.

The opportunities and threats of Kellogg

Threats and opportunities of Kellogg. 

Opportunities

  • Largest customer base : According to the annual report 2010 of Kellogg, Wal-Mart is the largest customer base of this company as this store contributes to sales more than 21% of net sales of Kellogg products and generates 27% of its US. Receivables balance. Also, Kellogg generated 46.0% of its net sales profits from the US market among them Wal-Mart helps to generate 34.0% of total revenue from this area; as a result, Kellogg has the opportunity to increase its sales in the global market by developing a close relationship with the similar stores like Tesco Corporation, Sainsbury and so on;
  • Brand Awareness : Kellogg has the opportunity to widen its market by using its reputation as it has a business operation in about 180 countries in American, Asian, and European market;
  • Financial strength : Kellogg Company is one of the major players in the ready-to-eat cereals and food industry, which has the economic strength to compete with other multinationals and other local companies by expanding its business operation in the existing market with the new and old product line. However, the annual reports 2009 and 2010 forecasted that –

Table 1: – Financial information of Kellogg.  Source: self-generated from Kellogg (4).

  • Health consciousness : The demand of the market has already increased by 39% as most of the target customers are trying to change their food habit and would like to take healthy nutritious food;
  • Acquisition: this company has acquired many companies to expand its business, increase global market shares, and strengthen the company’s resources and capabilities;
  • New product development: it has the opportunity to develop new products as it has a strong brand image;
  • Strategy: Kellogg is the market leader in the US market, thus, it has the opportunity to capture the largest market share from the European market, and the marketers can adopt similar strategies to increase the customer base of U countries.

Area wise net sales volume.

  • Exchange rate : Fluctuation of US Dollars hurts the cash flow statement of Kellogg while instability in the translation of foreign exchange denominated income to US dollars;
  • Competition : Intense competition is the main threat of Kellogg as it has both direct competitors that offer almost similar products and indirect competitors that offer segmented products. However, the major competitors of Kellogg are PepsiCo’s Quaker Oats and Frito-Lay, Kraft’s Nabisco, and General Mill’s ready-to-eat cereals and other similar companies;
  • Interest rate risk : Kellogg sometimes apply interest rate swaps and forward interest rate contracts to decrease interest rate instability and subsidy costs associated with certain debt concerns;
  • Agreement : merger and acquisition between similar companies, franchises, and joint venture agreement can create a threat for the business;
  • Advertising costs : This company had spent a huge fund for advertising while competitors use new adverting policy taking advantages of new technologies to increase sales;
  • Compensation : Kellogg has to spend comparatively large amounts to provide remuneration to the employees as the company is committed to giving all facilities to the employees. The company aims to reduce staff turnover as the recruitment and training process needs time and efforts
  • Legal claims : Kellogg has to consider the threat of litigation because an increasing number of legal claims can destroy the reputation of the company and boost the operating expenses.

Porter’s Five Forces Analysis for Kellogg

This report concentrates on Porter’s five forces model of competition to analyze the present competitive scenario of Kellogg at home and abroad; however, the following figure shows more specifically the external competitive environment of Kellogg.

Porter 5 forces model of Kellogg Company. 

  • Threats from new entrants : Large stores like Wal-Mart, Tesco, and Sainsbury always eager to offer new products for the customers, so they purchase products from new companies to increase sales, such as Tesco introduced five hundred new products to save the company from the global financial crisis. On the other hand, entering into the market is a matter of huge investment but banks and other investors can show less interest in these sectors because of intense competition in the food industry and the post-recessionary economic environment. However, small investors are trying to capture new market share of different segment, which also create hindrance for the different products of Kellogg Company. As a result, the threat of new entrants comparatively high for Kellogg;
  • Bargaining power of the suppliers : The key suppliers of Kellogg are raw material suppliers including packing materials, corn, wheat, soybean oil, sugar and nuts, meat, and many other products related to the production. However, the rising price of the commodities is one of the main causes of such threats though according to the annual report 2010 of Kellogg, the bargaining power of the suppliers based on the issues like production area, adverse weather, and the actions of certain organizations, political situation, and financial circumstances;
  • Bargaining power of the buyers : This threat is comparatively high in the case of Kellogg because the buyers can change the food brand any time without spending extra funds as the minimal switching off costs incurs in this industry; therefore, the bargaining power of purchasers is high. On the other hand, this risk would escalate if the Kellogg company increased the price of existing products and competitors offer similar items with competitive price;
  • Rivalry among existing competitors : The competition of ready-to-eat cereals of Kellogg company is extremely high, and this company has to face competition from another segment particularly cookies, crackers, breakfast shakes, toaster pastries, cereal bars, Coffee brands, frozen waffles, meat alternatives, and so on.
  • Threats of substitute products : the threats of substitute products are interrelated with many other factors such as the price of substitute products, production costs, cost-benefit ratio analysis, and so on. However, this risk of such substitute products is comparatively low for Kellogg because the product range of Kellogg is widest, so only organic food can be its substitute but the production costs of organic food is too high, which reduces the threat.

Kellogg acquires Quaker Oats or not

Nevo (4) mentioned that in 1992 and 1993 presented the UC-FMC 1 surveyed with about thousand of supermarkets, drug stores, and food outlets and the outcomes of the market share of different RTE 2 companies including Kellogg in the diagram as bellow-

Market Share of Kellogg.

The above diagram demonstrates that Kellogg has a far better position than the Quaker Oats; moreover, Kellogg has the experience to be companied by the US- FTC 3 anticompetitive charge that hampered Kellogg’s brand image. Thus, for Kellogg, there is no emergence to acquire Quaker Oats and it is unlikely to be a good strategy, the RTE market has evidenced huge merger and acquisition proclamation, the regulatory observation may shift the strategic alignment. On the other hand in January 2006, shares of breakfast cereal maker Kellogg Co. climbed to over $50 as earnings climbed while has been gaining market share from competitors with gradual progress and kept its position at the top of RTE companies.

The key issues that Kellogg should focus on to make the acquisition a success

To assess whether the acquisition would be successful, Kellogg’s should undertake several different measures, such as strategic analysis based on internal and external factors, cost and benefit analysis, evaluation and consideration of any other potential opportunity costs involved, and most importantly, carrying out a proper investment appraisal. Inputting the entire assessment into context, a projected estimation of the cash flows and annual rate of return together with a brief idea of the net present values of the merged business is quite essential as well.

The pitfalls in strategic planning

The management of Kellogg should concentrate on the main objectives and the mission statement of the business to avoid any crisis at the time of the strategic implementation process. Also, the management of this company may fail to communicate properly with the staff who are responsible to perform under the guidance of the top management, which will create a severe problem for the company. However, the management of Kellogg should observe the pitfalls to avoid any crisis in strategic implementation, such as they must keep concerned for its vulnerable financial conditions, develop communication with the employees, and follow the regulation to implement the plan.

Five pitfalls

  • Unrealistic goals: As Kellogg is one of the major players in the ready-to-eat food industry, it has enough financial strength to take a new strategic decision but it should not set such an objective, which is not realistic to implement for the management team;
  • Lack of motivation: Kellogg has more than 31000 motivated employees who can serve the company on the right track but some plan may irritate the employees to execute due to lack of motivation;
  • Ignore grassroots support: The top management has the ultimate power to take decisions by ignoring the minority shareholders’ and employees’ view. If the management ignore their opinion, the business may fall into serious crisis as they are the key resources for the company;
  • Ignore alternatives: The management should consider several alternatives to attain ultimate success and if they ignore alternatives and drive to implement a single plan they may fail to get the highest success;
  • Ignore the need for change: Also, the management may need to change their way to implement the strategy due to avoid any risk factor but sometimes they ignore this issue as their confidence level is too high.

Benefits of contingency planning

Kellogg will prepare contingency planning because effective planning allows coping with the crisis such as corporate problems, acquisition-related problems, the crisis of human resources for particular tasks, liquidity risk measurement, product development risks, and so on. Also, this process helps Kellogg to capture a better position by managing unexpected situations and avoiding the shock of absolute surprise. On the other hand, this process also minimizes indecision, vagueness, and unnecessary delays when something unusual occurs, for instance, a natural disaster can affect the entire operation management system. As a result, the management of Kellogg should consider this plan to assess the unusual events to protect the company from those risks by responding rationally.

The seven-step process of effective contingency planning

  • Starting point – Realize importance : The management of Kellogg must recognize both favorable and unfavorable events because liability may extend severe range due to lack of previous preparation (Mitome and Karen 1);
  • Assess Impact : It is important to note that Kellogg has already identified key risks and taken many initiatives to avoid any risks or natural disaster, for instance, the death of CEO, Hurricanes, Serious Earthquakes or Tsunami, credit-risk-related contingent features;
  • Develop Plan : Kellogg should keep a large amount in a contingency fund, such as, may reduce the funds that the business has available for further growth or investment. However, this plan will include human resources management plan, effective communication system at the time of crisis, leadership development program, manufacturing process after a disaster, recognize the duties of key people, recruit suitable people for risk management;
  • Test : In this stage, the management team of Kellogg must test the tools of the plans, and make sure proper people involved to minimize the unusual events. To do so, they will check the entire system and arrange a backup plan considering the pre-test report, such as fire extinguishing audition allows testing the system at the time of the unusual fire;
  • Training: The firms should train the employees to provide knowledge about the risks and implement the contingency plan;
  • Maintaining : The management should always up to date their plan to identify problems in the system and recommend changes;
  • Changed-Plan: – The management team will test all the changed plans to measure the effectiveness of the entire process ensuring the system would function properly at the time of crisis.

Works Cited

Kellogg. Annual Report 2010 of Kellogg . 2010. Web.

Mitome, Yuko, and Karen Speer. Embracing disaster with contingency planning. 2001. Web.

Nevo, Aviv. “Mergers with differentiated products: the case of the ready-to-eat cereal industry” . RAND Journal of Economics . 2000.

  • University of Connecticut, Food Marketing Center.
  • Ready-To-Eat.
  • U.S. Federal Trade Commission.

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Geographic coordinates of Elektrostal, Moscow Oblast, Russia

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Coordinates of Elektrostal in decimal degrees

Coordinates of elektrostal in degrees and decimal minutes, utm coordinates of elektrostal, geographic coordinate systems.

WGS 84 coordinate reference system is the latest revision of the World Geodetic System, which is used in mapping and navigation, including GPS satellite navigation system (the Global Positioning System).

Geographic coordinates (latitude and longitude) define a position on the Earth’s surface. Coordinates are angular units. The canonical form of latitude and longitude representation uses degrees (°), minutes (′), and seconds (″). GPS systems widely use coordinates in degrees and decimal minutes, or in decimal degrees.

Latitude varies from −90° to 90°. The latitude of the Equator is 0°; the latitude of the South Pole is −90°; the latitude of the North Pole is 90°. Positive latitude values correspond to the geographic locations north of the Equator (abbrev. N). Negative latitude values correspond to the geographic locations south of the Equator (abbrev. S).

Longitude is counted from the prime meridian ( IERS Reference Meridian for WGS 84) and varies from −180° to 180°. Positive longitude values correspond to the geographic locations east of the prime meridian (abbrev. E). Negative longitude values correspond to the geographic locations west of the prime meridian (abbrev. W).

UTM or Universal Transverse Mercator coordinate system divides the Earth’s surface into 60 longitudinal zones. The coordinates of a location within each zone are defined as a planar coordinate pair related to the intersection of the equator and the zone’s central meridian, and measured in meters.

Elevation above sea level is a measure of a geographic location’s height. We are using the global digital elevation model GTOPO30 .

Elektrostal , Moscow Oblast, Russia

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Moscow Oblast, Russia

The capital city of Moskovskaya oblast: Moscow .

Moscow Oblast - Overview

Moscow Oblast is a federal subject of Russia located in the Central Federal District. Moscow, the capital city of the country, is the administrative center of Moscow Oblast. At the same time, Moscow is not part of this region, it is a separate federal subject of Russia, a city of federal importance.

The population of Moscow Oblast is about 7,769,000 (2022), the area - 44,379 sq. km.

Moskovskaya oblast flag

Moskovskaya oblast coat of arms.

Moskovskaya oblast coat of arms

Moskovskaya oblast map, Russia

Moskovskaya oblast latest news and posts from our blog:.

23 June, 2022 / Natural Spring Gremyachiy Klyuch in Moscow Oblast .

23 March, 2022 / Main Cathedral of the Russian Armed Forces .

31 January, 2022 / Vasilyevsky (Shcherbatovsky) Castle in Moscow Oblast .

1 August, 2021 / Savvino-Storozhevsky Monastery near Moscow .

4 August, 2020 / Sights of Moscow Oblast - the heart of Russia .

More posts..

History of Moscow Oblast

The territory of the Moscow region was inhabited more than 20 thousand years ago. In the first millennium AD, this land was inhabited mostly by the Finno-Ugric peoples (Meryane and Meshchera). In the 9th-10th centuries, the Slavs began active development of the region. The population was engaged in hunting, fisheries, agriculture, and cattle breeding.

In the middle of the 12th century, the territory of the present Moscow region became part of the Vladimir-Suzdal principality, the first towns were founded (Volokolamsk in 1135, Moscow in 1147, Zvenigorod in 1152, Dmitrov in 1154). In the first half of the 13th century, the Vladimir-Suzdal principality was conquered by the Mongols.

In the 14th-16th centuries, Moscow principality became the center of unification of Russian lands. The history of the Moscow region is inextricably linked to military events of the Time of Troubles - the siege of the Trinity-Sergius Monastery by the troops of False Dmitry II, the first and second militias.

More historical facts…

In 1708, by decree of Peter the Great, Moskovskaya gubernia (province) was established. It included most of the territory of present Moscow oblast. In 1712, St. Petersburg became the capital of the Russian Empire and the significance of the Moscow region as the country’s economic center began to decrease.

In 1812, the Battle of Borodino took place near Moscow. It was the biggest battle of the Russian-French War of 1812. In the second half of the 19th century, especially after the peasant reform of 1861, the Moscow province experienced economic growth. In 1851, the first railway connected Moscow and St. Petersburg; in 1862 - Nizhny Novgorod.

The population of the Moscow region increased significantly (in 1847 - 1.13 million people, in 1905 - 2.65 million). On the eve of the First World War, Moscow was a city with a population of more than one million people.

In November, 1917, the Soviet power was established in the region. In 1918, the country’s capital was moved from St. Petersburg to Moscow that contributed to economic recovery of the province. In the 1920s-1930s, a lot of churches located near Moscow were closed, a large number of cultural monuments were destroyed. On January 14, 1929, Moscow Oblast was formed.

In 1941-1942, one of the most important battles of the Second World War took place on the territory of the region - the Battle for Moscow. In the postwar years, the growth of economic potential of the region continued; several science cities were founded (Dubna, Troitsk, Pushchino, Chernogolovka).

In the 1990s, the economy of Moscow Oblast experienced a deep crisis. Since the 1990s, due to the motorization of the population and commuting, road traffic situation in the Moscow region significantly deteriorated. Traffic jams have become commonplace.

Pictures of Moscow Oblast

Moscow Oblast scenery

Moscow Oblast scenery

Author: Mikhail Grizly

At the airport in the Moscow region

At the airport in the Moscow region

Author: Evgeny Davydov

Nature of Moscow Oblast

Nature of Moscow Oblast

Author: Alexander Khmelkov

Moscow Oblast - Features

Moscow Oblast is located in the central part of the East European Plain, in the basin of the rivers of Volga, Oka, Klyazma, Moskva. The region stretches from north to south for 310 km, from west to east - 340 km. It was named after the city of Moscow, which however is not part of the region. Part of the administrative authorities of the region is located in Krasnogorsk.

On the territory of the Moscow region, there are 77 cities and towns, 19 of them have a population of more than 100 thousand people. The largest cities are Balashikha (518,300), Podolsk (309,600), Mytishchi (262,700), Khimky (256,300), Korolyov (225,300), Lubertsy (209,600), Krasnogorsk (174,900), Elektrostal (149,000), Odintsovo (138,900), Kolomna (136,800), Domodedovo (136,100).

The climate is temperate continental. Summers are warm, winters are moderately cold. The average temperature in January is minus 10 degrees Celsius, in July - plus 19 degrees Celsius.

One of the most important features of the local economy is its proximity to Moscow. Some of the cities (Odintsovo, Krasnogorsk, Mytishchi) have become in fact the “sleeping districts” of Moscow. The region is in second place in terms of industrial production among the regions of Russia (after Moscow).

The leading industries are food processing, engineering, chemical, metallurgy, construction. Moscow oblast has one of the largest in Russia scientific and technological complexes. Handicrafts are well developed (Gzhel ceramics, Zhostov trays, Fedoskino lacquered miniatures, toy-making).

Moscow railway hub is the largest in Russia (11 radial directions, 2,700 km of railways, the density of railways is the highest in Russia). There are two large international airports - Sheremetyevo and Domodedovo. Vnukovo airport is used for the flights within the country.

Attractions of Moscow Oblast

Moscow Oblast has more than 6,400 objects of cultural heritage:

  • famous estate complexes,
  • ancient towns with architectural monuments (Vereya, Volokolamsk, Dmitrov, Zaraysk, Zvenigorod, Istra, Kolomna, Sergiev Posad, Serpukhov),
  • churches and monasteries-museums (the Trinity Lavra of St. Sergius, Joseph-Volokolamsk monastery, Pokrovsky Khotkov monastery, Savvino Storozhevsky monastery, Nikolo Ugresha monastery).

The most famous estate complexes:

  • Arkhangelskoye - a large museum with a rich collection of Western European and Russian art of the 17th-19th centuries,
  • Abramtsevo - a literary and artistic center,
  • Melikhovo - an estate owned by A.P. Chekhov at the end of the 19th century,
  • Zakharovo and Bolshiye Vyazyomy included in the History and Literature Museum-Reserve of Alexander Pushkin,
  • House-Museum of the composer P.I. Tchaikovsky in Klin,
  • Muranovo that belonged to the poet F.I. Tyutchev,
  • Shakhmatovo - the estate of the poet Alexander Blok.

The architectural ensemble of the Trinity Sergius Lavra is a UNESCO World Heritage Site. The largest museum of the Moscow region is located in Serpukhov - Serpukhov Historical and Art Museum.

The places of traditional arts and crafts are the basis of the souvenir industry of Russia:

  • Fedoskino - lacquer miniature painting,
  • Bogorodskoe - traditional manufacture of wooden toys,
  • Gzhel - unique tradition of creating ceramics,
  • Zhostovo - painted metal crafts,
  • Pavlovsky Posad - fabrics with traditional printed pattern.

Some of these settlements have museums dedicated to traditional crafts (for example, a toy museum in Bogorodskoe), as well as centers of learning arts and crafts.

Moskovskaya oblast of Russia photos

Landscapes of moscow oblast.

Nature of the Moscow region

Nature of the Moscow region

Country road in the Moscow region

Country road in the Moscow region

Moscow Oblast landscape

Moscow Oblast landscape

Author: Mikhail Kurtsev

Moscow Oblast views

Moscow Oblast scenery

Author: Asedach Alexander

Country life in Moscow Oblast

Country life in Moscow Oblast

Author: Andrey Zakharov

Church in Moscow Oblast

Church in Moscow Oblast

Author: Groshev Dmitrii

Churches of Moscow Oblast

Church in the Moscow region

Church in the Moscow region

Church in Moscow Oblast

Cathedral in Moscow Oblast

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COMMENTS

  1. Case Study: Kellogg's Business Strategy

    Case Study: Kellogg's Business Strategy. September 7, 2015 Abey Francis. Kellogg's is the world's largest cereal maker since 1906 and is located in the United States. Kellogg's products has become a part of the delicious mornings for the people around the world since a century. Its business is operated in two segments: Kellogg's North ...

  2. Strategy Study: How Kellogg's Went From Corn To Multinational Food

    Kellogg's employs 31,000 people around the world. Kellogg's reported $13.77 billion net sales for 2020. The gross profit in 2020 was 3% of net sales. In 2020, the company spent $780 million on marketing. Kellogg's is marketed in 180 countries around the world. The company sells 54 different products.

  3. Understanding the marketing strategy of Kellogg's

    Kellogg's aligned the marketing strategy with its brand purpose. Research* (as of Jan 2020) shows that 1 in 3 urban Indians claims to skip breakfast. And 3 in 4 have a nutritionally inadequate breakfast. Thus, initiatives aim to emphasize the significance of breakfast, calling it the 'most important meal of the day'.

  4. ANALYSIS OF KELLLOGGS CORPORATE STRATEGY: MARKETING FOCUSED

    The case study, Kellogg, is an ideal choice because it is a multinational company which has used systematic strategic processes to become a market leader. Kellogg has world recognition and has maintained a good public relation. ... Strategic management evolved from five important eras: - Basic financial planning, James Mckinsey (1900s) was a ...

  5. Case Studies

    2023. Disney and the Big Business of Make-Believe: From Silent Movies to the Streaming Wars. Amanda Starc, Craig Garthwaite, Theo Anderson. More Cases. Kellogg School faculty is an esteemed group of scholars and practitioners, and members provide a rich source of international experience in professional management problems and practices.

  6. On the case

    More than 134,000 copies of these studies were purchased last year by academics and corporate trainers via Kellogg Case Publishing, which offers 650 case products written by 80 Kellogg professors. "Our mission is to improve the in-class experience for both faculty and students and to enhance the Kellogg brand," says editorial coordinator ...

  7. Kellogg's Case Studies with downloads and lesson plans

    Learn about Kelloggs with real-life examples within their case studies constructed around the key elements of the business curriculum. Business Case Studies. 18.1 C ... Strategic management. Types of Business. Finance and Accounting. Accountants. Bookkeeping. Budgeting and Cash Flow ... Kellogg's and the marketing mix With annual sales of ...

  8. ESG Case Study: How corporate purpose strengthens Kellogg's ESG

    Kellogg's has seen positive implications by intentionally collaborating with stakeholders to integrate the organization's corporate purpose and social impact into its ESG strategy in a variety of ways, including: Cross-stakeholder ESG initiatives — Honoring World Food Day is a month-long event at Kellogg's. It is an opportunity for the ...

  9. Kellogg's: A case Study in Audio Marketing

    The videos — some of them running up to one hour — feature the sounds associated with a person opening a Kellogg's cereal packet, pouring the grains in a bowl, mixing them with milk, and then finally eating the cereal. The brand has created a synergy between texture, taste, and sound where sound acts as an anchor.

  10. Using Aims and Objectives To Create A Business Strategy

    Using aims and objectives to create a business strategy - A Kellogg's Case Study.pdf - Free download as PDF File (.pdf), Text File (.txt) or read online for free. Kellogg set clear aims and objectives to guide its business strategy and reinforce its brand positioning. Its overarching aim was to promote a balanced lifestyle to consumers. Key objectives included encouraging physical activity ...

  11. Product Strategy: Develop and Manage Successful Products

    Develop a strategic mindset that anchors product strategy as the pathway to growth; ... and messaging based on proprietary tools from the Kellogg School of Management; Learn from real-world custom case studies and examples based on the faculty's own consulting experience with top tech firms such as Microsoft, AT&T, Salesforce.com and Facebook ...

  12. Case Study

    Kellogg Company (also known as Kellogg's) is a multinational food manufacturing company headquartered in Battle Creek, Michigan. The company's brands include Froot Loops, Corn Flakes, Rice Krispies, Special K, Pringles, Pop-Tarts, Nutri-Grain, and Morningstar Farms. Kellogg products are manufactured in 18 countries and marketed in over 180 ...

  13. Kellog-Case-Study (GR.4)

    This document is a case study analysis submitted by Group 4 to Dr. Rosemarie V. Jacalan, CPA at the University of San Jose-Recoletos regarding Kellogg's Rice Krispies in South Africa. It provides background on Kellogg's vision, mission, and strategies. It discusses problems that arose when Kellogg's launched a new Rice Krispies Vanilla product in South Africa. Key issues included customers ...

  14. Kellogg Company's Strategic Management

    Company overview. According to the annual report 2010 of Kellogg, this Company started its journey in 1906 and was incorporated in Delaware in 1922 and it is now one of the major players in the ready-to-eat cereals and convenience foods industry in the US market. However, human resources are the key assets of Kellogg and it has more than 31,000 ...

  15. Product Strategy Online Course at Kellogg

    Apply now to enroll in this Kellogg School of Management 2-month online course. Registration ends soon. ... Learn from real-world custom case studies and examples based on the faculty's own consulting experience with top tech firms such as Microsoft, AT&T, Salesforce.com, and Meta ... Strategic Product Partners; Director of Product Marketing ...

  16. International marketing case study: Kellogg's India

    Kellogg's is no stranger to international marketing: the products are manufactured in 18 countries and sold in over 180. Despite a high-profile launch and a frenzy of marketing activity, the first breakfast cereals it marketed were an initial failure in India. There was little appetite for breakfast cereals in India in the early nineties ...

  17. Kellogg Company Supply Chain| Case Study

    In 1898, W. K. Kellogg and his brother Dr John Harvey Kellogg were trying to make granola. The attempt failed but resulted in them accidentally flaking wheat berry. W.K. kept experimenting until he successfully flaked corn, and created the delicious recipe for Kellogg's Corn Flakes. By 1906, W.K had opened the Battle Creek Toasted Corn Flake ...

  18. SRM aims to underpin growth at Kellogg

    SRM aims to underpin growth at Kellogg. While Kellogg Company had had a supplier relationship management programme for more than 15 years, given marketplace changes and in the spirit of continuous improvement, we decided that we could drive greater end-to-end value through a broader supplier engagement and development approach.

  19. Solved Subject: Strategic Management Read the case study

    Subject: Strategic Management. Read the case study below and answer the question given. Kellogg s': Original Plant Based Wellbeing Company. Kellogg is the original plant-based food company offering an unmatched portfolio of favorite foods to drive holistic wellbeing and also a company dedicated to feeding hungry children, protecting our planet, promoting positive nutrition and driving equity.

  20. Geographic coordinates of Elektrostal, Moscow Oblast, Russia

    Geographic coordinates of Elektrostal, Moscow Oblast, Russia in WGS 84 coordinate system which is a standard in cartography, geodesy, and navigation, including Global Positioning System (GPS). Latitude of Elektrostal, longitude of Elektrostal, elevation above sea level of Elektrostal.

  21. Moscow Oblast, Russia travel guide

    Moscow Oblast is located in the central part of the East European Plain, in the basin of the rivers of Volga, Oka, Klyazma, Moskva. The region stretches from north to south for 310 km, from west to east - 340 km. It was named after the city of Moscow, which however is not part of the region. Part of the administrative authorities of the region ...

  22. Russia: Gazprom Appoints Pavel Oderov as Head of International Business

    March 17, 2011. Pavel Oderov was appointed as Head of the International Business Department pursuant to a Gazprom order. Pavel Oderov was born in June 1979 in the town of Elektrostal, Moscow Oblast. He graduated from Gubkin Russian State University of Oil and Gas with an Economics degree in 2000 and a Management degree in 2002.

  23. PDF Russian Offensive Campaign Assessment

    3 Institute for the Study of War and AEI's Critical Threats Project 2024 migrant workplaces and increase crackdowns at border crossings to temporarily placate emotional cries for retribution following the March 22 attack as the Kremlin continues to develop a cogent and practical response. Key Takeaways: