Provide a response to this student's discussion based on the question below:
During Week 1, you are asked to address the following:
a) Evaluate the operating industry of General Mills using a minimum of two forces included within Porter's Five Forces model.
b) Using PEST, assess General Mills' remote environment using a minimum of two PEST forces.
c) Conclude your assessment about the overall environment. Is it more or less favorable for General Mills? Give your ranking from 1-10 (in which 1 = vast gloom and doom for this company; 10 = huge bonus this year!). Where do you think General Mills fits on this 1-10 scale?
General Mills Operating Industry using Two Porter's Five Forces
Threat of the entrance of new competitors in the market (The risk for this is low)
General mills does not face the threat of other competitors because other businesses that are like it in their same industry are not big enough in order to compete on their level. General Mills possesses too much infrastructure and capital and has too many different brands of food products. Other companies are not able to keep up. Because of their constant supply of all of their products, they have been able to easily gain the trust and loyalty of their customers (University of Illinois, 2010)
-The Threat of substitute products and services (The risk for this is medium)
I have labeled this risk to be medium because there are plenty of other competitors within the cereal industry. Not only are the other businesses in the cereal industry competitors of General Mills, but consumers often choose to eat other breakfast items than cereal, making other markets competitors as well.
There markets consist of pastries, breakfast bars, protein bars, bagels, and any other item that consumers decided to eat in the morning over cereal during breakfast time. People are tending to want to eat food that they can eat on the run, whereas cereal is more of a sit down meal at home.
General Mills- Applying PEST
1. Socio-Cultural
General Mills has been able to develop great relationships in multiple cultures and around the globe with their CSR programs. These programs are a part of the reason that they have brand loyalty from their customers because they have been able to successfully target a market of people who support eco-friendly businesses (Olmstead, 2016).
Also, they have been able to develop and maintain great relationships with different supplier and different farmers around the world, making them a well-liked and well-supported company.
2. Technical Changes and Advances
As stated above, their partnerships and relationships with the people who support their business has been ongoing since the start of their business. These type of relationships are what will increase their chances of being successful because they will be able to produce more product at a quicker rate, making them more efficient.
Once the product that they produce is being make and transported more efficiently, they will eventually gain more income, which will allow them to reduce the costs on their products.
The Current Environment
General Mills is standing in a good place in terms of the environment in which they are in. Technology is continuously changing and many companies are benefitting more and more off of that each year. There is a great population of the world who support healthy food and healthy environments, therefore by General Mills being a very Eco-friendly company, they will be supported more by that particular group of people.
The high amount of income and capital that General Mills brings in makes them a hard company to compete with for the other companies in their market. General Mills being this type of power house in their market is what pushes me to position them as an 8.