 Mohamed Esmat Mohamed Elbana

 Your student ID number

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Table of Contents

1.0 Introduction ...............................................................................................

2.0 Strategic positioning of the company......................................................

2.1 Porter’s Generic Strategic Analysis……………………………………….

2.1.1 The Cost Leadership Strategy ……………………………………………

2.1.2 Cost Focus……………………………………………………………………

2.1.3 The Differentiation Strategy……………………………………………….

2.1.4 The Focus Strategy- Niche Markets………………………………………

3.0 Stakeholders Evaluation……………….........................................................

3.1 Stakeholder Members…………………………………………….…………...

3.2 Stakeholder Influence……………………………………………………….

4.0 External environment………………………………………………………...

4.1 PEST ANALYSIS …………………………………………………………….

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4.1.1 Political Analysis ..................................................................................

4.1.2 Economical Analysis ............................................................................

4.1.3 Social Analysis ......................................................................................

4.1.4 Technological Analysis .........................................................................

5.0 Industry Analysis ......................................................................................

5.1 Porters Five Forces…………………….…………………………………….

5.1.1 Competitive Rivalry within the same Domain………………………….

5.1.2 Threat of new entry………………………………………………………….

5.1.3 Threat of substitution……………………………………………………….

5.1.4 Buyer power………………………………………………………………….

5.1.5 Supplier power……………………………………………………………….

6.0 Conclusion .................................................................................................

REFRENCE ......................................................................................................

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1.0 Introduction

There is no doubt that strategic management very recently become imperative, obviously clear

the market dynamics with huge organizations facing incalculable challenges from rivals, new

technology ,customers, and providers . As stated by Liebowitz, 2006 organizational existence

and continuation to a greater extent has been a inconvenience. Strategic planning gives a picture

of long term goals and carry out mandatory actions to reach them. Based on the company road

map, businesses would be able visualize company’s future and codify a formula to achieve the

required objective. Furthermore, the essential role for strategic leadership shaping the company

personality in comparison to its competitors.

Over the past years Expansion plan has been adopted by a lot of organizations. The rationale

behind the Expansion Strategy by organizations is to tackle significant grow compared to past

achievements. To put it another way, organization used Expansion Strategy when decided to

expand its business domain in one of aspects, for instance customer segment, customer functions

or new technology, either in one or together. One of the common methods in business expansion

is acquisition. It is the swiftest way to mount up your company. Acquisition helps to gain market

share, penetrate new markets, and acquire new technology in addition acquiring intellectual

property. Mergers and acquisitions have used as imperative corporate strategies for quick boost

and improvement (Ramakrishnan 2010). In the opinion of strategic researchers, mergers and

acquisitions are effective in the understanding the hidden intents and convenient for achieving

other objectives (Brouthers et al. 1998; Lahovnik 2000).

Post Holdings, one of top three cereal company in the US and own brands including Great

Grains, Golden Crisp and Cocoa Pebbles. Post is a pioneer among its markets and takes part in a

duty to generate a special tasting nutritious products to serve whole family members. On the

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other hand, the history of this company dates back to more than hundred years, with high level of

commitment to fulfil shareholders, workforce and customers in order to bloom and succeed. To

grasp this vision a strategy must be in place, to work in a global competitive market. One of the

prime strategies utilized by Post Holdings is acquisition to penetrate and expand in new markets.

Since 2008, Post Holdings used to gain multitudinous acquisitions consequently reshape the

organization into a miscellaneous consumer products holding company. To penetrate the UK

market, acquiring UK leading ready-to-eat cereal products was the best scenario, Weetabix.

More and above, about 80 counties used to import Weetabix products, with multiplicity of

factories in Europe, USA, and Africa. As expected, any acquisition followed by changes in

stakeholder in both internally and externally

The main goal of the study is to generate critical strategic review of Weetabix acquisition by Post

Holdings. The study going to check out and examine the strategic position of Weetabix in cereal

industry and stakeholder immersed in along with external factors and industry analysis. To

perform this assay, use of relevant literature and academic principles, paradigm, and theories to

forfend the conclusion and recommendation, just in case .

2.0 Company Strategic position:

Strategic position usually distinguishes the organization from its competitors. It is the mirror of

the organization values which are ended in products. It is the purpose set that required action/

approach in a standpoint.

In reference to Wickham, 2001: 230, Strategic positioning is affected by business atmosphere in

general and how it conceded itself in a distinguished position over its rivals and in what way

provides value to pinpoint customer segments.

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Porter's generic strategic Analysis and Bowman’s Strategy clock are methods allocated to

measure and identifies methods on how to rise interest across competitors’ organizations. Porter

(2008) states,

“That being able to understand the competitive forces and its causes helps

reveal the roots of an industry’s current profitability while providing a framework for

anticipating and influencing competition and profitability over time”

Porter 2012 conveys that strategy describes the company’s unique methodology to rival and the

competitive merits which will be relied upon.

2.1 Porter’s Generic Strategic Analysis

1980 porter categorized competitive strategy in three dimensions A-cost leadership, B-

differentiation, C- focus strategy . These are known as Porter's three generic strategies. Porter’s

competitive strategy paradigm fulfill any type of companies whether it deals with service or

product, regardless organization’s volume.

On the other hand, Porter confirms and advise that organization to use one strategy out of three

otherwise it will cost, and exhaust companies valuable assets as demonstrated in Figure 1.

Porter's competitive strategy designed the alliance among overall cost strategies, differentiation

strategies, and focus strategies.

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Figure-1. A diagram of Michael Porter's Three Generic Strategies based on an image from Porter

M. E., Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York:

Free Press, 1980), page 39.

Porter pointed out four "generic" competitive strategies might potentially adopt

to earn competitive edge. The strategies connect the segments of business' models to narrow

versus broad and which a business model suitable for each product. Porter carries out that

strategy translated organization individual point of view in rivaling and the competitive

advantages in the targeted segment. A competitive privilege may be acquired over rivals, via

offering better benefit, superior cost, distinguished services etc.

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 Figure 2 – Source of Competitive Advantage (From Mindfultool.com)

Porter addressed three major strategies "Cost Leadership”, "Differentiation” and "Focus”. Focus

strategy has been classified into two halves: "Cost Focus" and "Differentiation Focus."

2.1.1 Cost Leadership Strategy

Cost reduction is the major objective for this strategy via reducing production cost. In large scale

production, cost leadership model is appropriate due to economical production rate.

consequently, deliver product with affordable price.

Likewise, Weetabix acquisition by Post Holdings, As a result of this acquisition with post, cost

efficient opportunities took place as a result of taking advantage of each other's production

facilities and supply chains, plus merging procurement ordering worldwide .

2.1.2 Cost Focus

These are usually products like originated brand having competitive price and could relatively

difference in quality to serve specific segment. Worth mentioned that Weetabix does not fall

inside this category.

2.1.3 The Differentiation Strategy

The focus for this strategy is distinguish your product or services from your rivals among the

similar segments. Consequently, require great Research and development with collaboration with

sales and marketing team who can interact with fast market dynamics and customer’s

requirements and expectations. In the case of Weetabix as well-established company and

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endorsed by attached great organization as Post holdings would be a giant player with a huge

product mix plus Post holdings current portfolio.

2.1.4 The Focus Strategy- Niche Markets

Strategic paradigm allowing businesses to identify the niche market to penetrate and operate.

Certain organizations acquired multi-focused strategy. In most cases, any organization operates

its activities to serve a distinct market segment. Owing to the broad spectrum portfolio and the

value boosted by the Post Holdings acquisition by enriching product collections, to be blessed

with protein bars and drinks. Furthermore, Weetabix forefront on the go breakfast drink.

3.0 Stakeholder Evaluation

As per Freeman stakeholder is “any group or individual who can affect or is affected by the

achievement of the organization’s objectives”. likewise, Eden and Ackermann, 1998, 117

expressed stakeholders as “People or small groups with the power to respond to, negotiate with,

and change the strategic future of the organization”. Furthermore, Walker, Bourne, and Shelley

(2008) point out stakeholders as groups and individuals who have interest in a business. Most of

time, Stakeholders interference are fluctuating. Stakeholders classified in two major groups

primary or secondary. Primary stakeholders committed to internal business operation for the

company, just like Ownership shareholders, customer, providers, workforce, shareholders,

investors etc. Secondary Stakeholders have lateral engagement with the organization and don't

have any direct engagement with a company, however can still be persuasive e.g. reference

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group, government, media, rivals etc. In strategic analysis of the acquisition of Post Holdings and

Weetabix, is essential to identify stakeholders’ members.

3.1 Stakeholder Members

Primary Stakeholders

 Employees.

 Customers.

 Suppliers.

 Investors.

 Beneficiaries.

 Lenders.

 Partners.

 Banks.

Secondary Stakeholders

• Trade Bodies

• UK Government and society

• Occupational safety and health

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• Food Safety

• Competitors breakfast cereal e.g., Kellogg’s

• Media

• National Health Service

• National Insurance Fund,

Primary non-social Stakeholders

• Non-human species

• Future Generations

Secondary non-social stakeholders

• Regulators such as customer rights protection

• Awareness campaigns for healthier lifestyle

3.2 Stakeholder Influence

By acknowledging, the stakeholders partner it is the time to draw up the members or

individuals’ impact and the role in decision making. Stakeholder

Influence Diagrams is appropriate for stakeholder analysis. Stakeholder influence

diagrams put up how the stakeholder’s power versus interest framework.

The technique created by Eden and Ackermann (1998, 349-350) and build on two axis power

versus interest framework.

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Figure 4. Power Versus Interest framework

Shareholders of both companies represent Primary stakeholders; they major responsibilities is

to regulate the business through all cross functions. They enjoy prominent power and

interest in the organization and should be pleased at all levels. More and above employees for

both companies considered as primary stakeholders with less power and great interest. In

addition, British government calculated as secondary stakeholders and key player validating that

this acquisition matching the appropriate legal paths and all organization’s rules for employee’s

support. Just recently Customers acquired distinguished influence due to the big role of social

media consequently the buying decision or even sometimes downfall the brand.

Employees grasping huge interest and slighter power in the power / interest

framework accordingly required outstanding satisfaction to confirm continuousness and

resilience in business process.

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In reference to Post holding 2017 statement, worth to mentioned the big challenges faced for this

huge integration for this acquisitions is due to the capabilities to manage the operations and

personnel of the acquired company. More and above, secondary shareholders such as public,

global society etc. which has a straight or indirect impact on the organization and

vice-versa which requires more observation.

4.0 External environment

Environmental analysis is a tool to evaluate business atmosphere. In reference to Davies

2017, t Quality of marketplace environment possibly fluctuated: easy or hard, stable, or unstable

and positive or doubtful. Imperative elements identified these behaviors involved maturity

and research quality. PEST considered one of the reliable methods for environmental assessment.

PEST: P-POLITICAL, E-ECONOMIC, S-SOCIAL & T-TECHNOLOGICAL

4.1 PEST analysis

Pest Analysis is compromises of 4 elements political factors, economic factors, social

factors and technological factors .

4.1.1 Political Elements that affect Weetabix

Political elements contribute Political atmosphere, tariff, legislation, commercial facilities,

employment law, Political stability. Political stability is the basis for attracting investment in

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reference to Vitale CEO of Post holdings published in yearly report 2017, Brexit generate a state

of ambiguity, build up economic unpredictability impacting business workflow. On the other

hand, it can create doubt over our business such as troubling our relationships with existing and

future customers, providers and employees. Brexit could negatively affect

Agreements. Additionally United Kingdom used to keep access to European Union markets

whichever across the transitional stage or forever which can disturb geographical

growth. Furthermore, acquirement of Weetabix by Post holdings possible will generate negative

profit consequences, owing to great expenses to our capable welfare and

retirement program. More as, this Program are financed and fulfillment with appropriate code of

practice to preserve workforce at Weetabix. Last but not least, legal amendments and

governmental elements such as ecological laws and modifications in food safeness may actually

influence business workflow.

4.1.2 Economic Factors that Impact Weetabix

Economic components for example economic growth, percentage of unemployment, inflation,

interest and exchange rates, and commodity (oil, steel, gold, etc.) prices. These elements

extremely identified business plan and operation decisions.

Based on Kan & Massoudi (2017), after – Brexit UK, faced a decline in pound value, which push

the country to be great attractive destination for capitals consequently more M&A. Worth

mentioned that UK economy is suffering subsequent to eight year post global economic

recession. One of the remarkable elements attacking Business performance is fluctuating in raw

material price, More and above, wheat are priced in dollars consequently pieces is increased.

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4.1.3 Social Factors Impacted Weetabix

Socially elements are factors impacting human conditions. For example, wealth, religion, buying

habits, education level, family size and structure and population density. As discussed previously

health mind set last few years have great dramatic changes revisions and moving to new diet

values. subsequently Weetabix healthy products contributing around 97% of its product mix. On

the other hand, we can observe major changes in the shopping trends. Breakfast contributing

28% of consumers shop on-the-go for the forefront meal in the day. 49% of the UK community

came to be protein lover and 5% refused protein foods. Consequently, increase the protein

consumer intake by 40 % cereals rich with protein presented 7.3% growth. This will generate

huge chances for vendors food providers and dealers, On the other hand traditional cereals going

to face huge sales decline as a result.

4.1.4 Technological Factors that Impact Weetabix

Technological factors include production techniques, information and communication resources,

production, logistics, marketing, and e-commerce technologies.  Weetabix, launch a high protein

breakfast cereal. Using new technology techniques going to decrease cost of production and

enhancing product quality.

5.0 Industry Analysis

In the past few years, cereal industry has displayed an aggressive competition together with

many companies.

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No body can ignore the tremendous competition between Weetabix and giants’ companies like

Kellogg’s, Nestle, etc. In such a case there is a huge requirement from the business players to go

deeply through analyzing the business effectiveness and efficiency and factors to be highly

impacting the businesses growth and market share. Data analysis evaluates organizations

weakness and strength consequently the competitive strategy used to acquire distinguished

market position. It is not a straightforward process to discover the source of rivaling powers

fronted by the companies. Porter’s Five Forces framework is adopted to explain ambiguity. It

includes1) Bargaining Power of Suppliers, 2) threat of substitutes, 3) power of buyers, 4) Threat

of entry, and 5) Competitive Rivalry Porter’s Five Forces Analysis.

5.1 Porters Five Forces

The objective of Porter's Five Forces paradigm is to evaluate the overall competitive climate of a

specific business branch. Porters included five strategic pillars to be taken into concern on

exploring and pointing out company strategy. This includes Rivalry Among Existing

Competitors, threat of new entrants, threat of substitute products, bargaining power of supplier

and customer bargaining power.

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Source: (CGMA, 2013)

5.1.1 Competitive Rivalry within the same Domain

Followings Weetabix and Post Holdings acquisition product demarcation is able to attained as

result of new products mix between Post Holding and Weetabix, as a result of new product

range. Additionally, the merge between Post Holdings and Weetabix products by default will

generate cost cutback as by Post Chief Executive “meaningful cost reduction opportunities

through leveraging each other's manufacturing and supply chains where we overlap, as well as

combining our global procurement purchases". This cost deduction will support Weetabix

offering affordable prices. More as, the acquisition give rise to geographical extension in

Europe, Middle East and even more and gain market share. Worth mentioned Weetabix must

track competitors like Kellogg’s, Nestlé etc. With the high level of healthy lifestyles regime,

Weetabix have outstanding opportunities beyond the competitors knowing that 97% products

matching the healthy standard.

5.1.2 Threat of new entry

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New entry could be promising if the entrance cost is low. The cost is relied on numerous aspects

including government regulations , product quality and differentiation of products along with

marketing activities .Weetabix is deep rooted company the drawbacks of new entrants could

have insignificant impact. Furthermore, fresh players will face high advertisement budgets that

can be funded by Weetabix. In addition, Weetabix enjoying massive advertising campaigns, For

instance 2011 Weetabix ‘Weetakid’ by Bartle Bogie Hegarhy and in 2012 Weetabix ‘dad’s day

out’ by Bartle Bogie Hegarhy. Due to cutting cost generated by this acquisition, Profits will take

place accordingly.

5.1.3 Threat of substitution

Price plays key role as substitution force. Any competitor offering high or at least same quality

with less price would lead customer switch. Taste preference could also be a factor that would

link with brand switch.

Previously, new substitutes landed in the market offering the same oat-based products and

cereals such as Quaker and much more. Weetabix revenues could be significantly impacted by

price and taste attraction in comparison to the new players. Therefore, heavy Research and

Development and market research is extremely important to deliver superior products beside the

role of marketing and sales teams in regards of gaining market share and tracking competitors

activities.

5.1.4 Buyer power

Bargaining power of buyers significantly important. Buyers can easily push the

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prices down. Buying power is affected by several aspects such as Brand loyalty and quality

considerations, offers made by suppliers in favor of buyers. Weetabix In need set up clever

marketing plan to full fill customer’s needs and fondness due to the aggressive competition

rivals like Kellogg’s, Quaker etc. More as , chain supermarkets used to adopt in house private

label as a model Asda, Sainsbury's, Tesco stock with highly reasonable prices.

A good marketing strategy must build up customer loyalty Plan. Moreover, attractive pull

strategy like remarkable offers along with product location in well-known supermarket chains

and online stores like Amazon.

Weetabix adopt aggressive expansion strategy coming out with new lines in recent years

subsequently increase market access. The wide range products mix for Weetabix will serve new

customer segments. Weetabix could also attract customers attached to the competitors thereby

gaining more market share at the expense of these competitors.

5.1.5 Supplier power

Weetabix is a giant company, so the effect of supplier power is much low. Weetabix

Owning the potential to control prices of raw materials gotten from suppliers. Suppliers

would not take the risk to monopolized by a giant’s enormous organization like Weetabix which

would cover a substantial portion of its business.

6.0 Conclusion and Recommendations

Bountiful businesses should use all required elements to remain at the top position in the chosen

marketplace. Weetabix should understand the flourishing cognizance due to the demanding of

cereal-based food and healthy regime mind set . Directing attention on a strategic range of

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Weetabix branded portfolio and cooperating with distributors to grasp real evidence feedbacks to

improve quality and customer satisfaction and by using digital marketing tools to improve

customer service consequently create customer loyalty outcomes and brand equity. Value must

include high product quality with affordable price, respectively.

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