Provide a response to this student's discussion based on the question below:
Question:
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?
Students response to question:
One of Porter's Five Forces is rivalry within the industry. This threat will exist when a there is strong competition with other firms for similar products, and companies are striving to have a competitive advantage (Porter's Five Forces, 2007). Within almost any grocery store there are visible signs of the strong competition for products offered by General Mills. General Mills is forced to complete with store branded products as well as companies like Kraft and Kellogg's. For this reason, there is a high degree of rivalry within the industry.
Another of Porter's Five Forces is the threat of new entrants and entry barriers. This threat will exist when there is a possibility that new firms may enter the industry and impact competition (Porter's Five Forces, 2007). One barrier to entry that a new company would have to face in this industry is the amount of investment and money it would take to compete with General Mills.
However, with technology and a new way for businesses to operate, it does not rule out the possibility of new companies. The internet age allows for lower variable costs and the ability to reach people all over the country, so online companies could pose a risk to General Mills (Karagiannopoulos et al. (2005). If Amazon were to come out with a brand of food and sell it online for a lower price than General Mills, Amazon could quickly impact General Mills market share.
PEST
PEST is a framework used to evaluate the external macro-environment in which a company operates (PEST Analysis, 2009). General Mills is impacted by their political environment in many ways. The company operates globally and must understand the laws and politics of each country in which the company operates. These laws involve several parts of the business from the products being sold to the employees working for the company.
The Social factors that impact General Mills are also important to understand. The company must understand who their market is and evaluate the pricing related to that market. If the economy declines, the company must be ready to react to customers with less disposable income. In addition, lifestyle changes can impact that company as people move toward more healthy solutions. General Mills must understand the products that consumers want in the market. Finally, since the company operates globally, General Mills must understand the social factors as they relate to the country of operation.
General Mills Environment
General Mills operates in an industry where it would be difficult to enter the market and compete with some of the major competitors. However, the company faces strong rivalry and must differentiate their products from competitors. In addition, General Mills must understand and adapt to rivalries in countries across the world, taking into account political and economic changes within their environments. Overall, I would give the environment of General Mills a 7 rating.