Promising emerging markets

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Congratulations!
KI, a mainly US centered company is interested in expanding in sizeable, promising emerging markets to sustain its growth that has just gone through a major restructuring as per below:
https://www.just-food.com/news/kellogg-to-become-three-separate-companies-in-major-restructuring-plan/
You are now in charge of Kellogg’s International Company (www.kelloggs.com) highly esteemed team of the Strategy & Business Development Department, staffed with the “Best & Brightest Young, “Hip & High Potentials” from the marketing, sales, finance, operations, human resources professionals.
Your task is to provide up a PPT Presentation to its Board and C-suite regarding their upcoming Strategic Consideration of an expansionary/exploratory (Where to Play) & exploitation (How to |Win) investment:
1. Megatrends affecting the Consumer Packaged Goods, especially in Packaged Foods
2. Its current Strategic Style and future change (if needed)
3. Undertake a quick “WHO” analysis with respect to KI
4. Undertake a thorough “Where to Play” analysis for both 2 Countries (Morocco & Saudi Arabia), their 2 Categories (Savory Snacks and Cereals) and most importantly their Segments (within their categories) for:

1. Prioritization of country choices
2. Prioritization of Categories
3. Prioritization of Segments (within the categories)
4. Recommendation of a single Country, Category and a Segment (Morocco OR Saudi Arabia; Savory or Cereal; and segment within the prioritized categories)

5. Undertake a “conventional” (Red Ocean), “How to Win” analysis for the recommended country (Morocco OR Saudi Arabia), Category & a Segment (within categories):
1. Michael Porter’s Angel of Attack: Cost or Uniqueness
2. Clayton Chiristensen’s Innovation: Disruptive, Efficient, or Sustaining
3. Digitization initiatives
6. Undertake a crossover/juncture “WHO, W2P & H2W” analysis for the group for its regional expansion intentions:
1. BCG’s Growth Matrix; and,
2. SWOT analysis (no need for TOWS)

Sample Solution

Kellogg’s International: Bold Steps into Emerging Markets

Executive Summary:

Kellogg’s International (KI) stands at a pivotal moment. Fresh from its restructuring, armed with a “Best & Brightest” team, and fueled by megatrends in the CPG industry, KI seeks to ignite sustainable growth through strategic expansion into promising emerging markets. This presentation examines potential avenues for KI’s foray into two key markets – Morocco and Saudi Arabia – focusing on savory snacks and cereals, analyzing segments, prioritizing choices, and recommending a focused entry point. Additionally, it outlines a robust “How to Win” framework and assesses both companies and markets through a holistic lens for regional expansion success.

1. Megatrends in Consumer Packaged Goods:

  • Health & Wellness: Consumers prioritize wholesome, convenient options, driving healthy snacking and fortified cereals.
  • Rise of Digital: E-commerce and digital marketing reshape consumer journeys and brand interactions.
  • Personalization & Value: Demand for tailored offerings and competitive pricing intensifies.
  • Sustainability: Environmental and ethical sourcing concerns influence purchasing decisions.

2. Strategic Style & Future Evolution:

KI’s current “Global Brand Manager” style, leveraging economies of scale, has served well. However, adapting to regional nuances and diverse consumer preferences requires a shift towards a “Glocal” approach, balancing global brand consistency with local market agility.

3. “WHO” Analysis of KI:

Strengths:

  • Strong brand portfolio (Frosted Flakes, Pop-Tarts)
  • Established manufacturing & distribution networks
  • R&D capabilities for product innovation
  • Deep marketing expertise

Weaknesses:

  • Limited presence in emerging markets
  • Dependence on traditional marketing channels
  • Potential cultural disconnect with local palates

Opportunities:

  • Untapped potential in savory snacks & cereals
  • Growing middle class & disposable incomes in target markets
  • Increasing digital adoption & smartphone penetration

Threats:

  • Intense competition from local & regional players
  • Fluctuations in raw material prices & currency exchange
  • Evolving regulatory landscape in target markets

4. “Where to Play” Analysis:

Country Prioritization:

  • Saudi Arabia: Higher GDP per capita, larger urban population, and established retail infrastructure favor faster market entry and scale-up.
  • Morocco: Lower penetration of multinational brands, increasing health awareness, and potential for “leapfrogging” digital adoption present intriguing long-term growth prospects.

Category Prioritization:

  • Savory Snacks: Higher frequency of consumption, broader consumer base, and existing local snacking traditions offer faster penetration and market share gain potential.
  • Cereals: Growing awareness of health benefits, rising disposable incomes, and potential for premium offerings hold long-term promise, but require brand education and targeted distribution.

Segment Prioritization:

  • Saudi Arabia: Premium Savory Snacks segment offers high margins and caters to the affluent urban population.
  • Morocco: Value-oriented Savory Snacks segment aligns with local price sensitivity and offers a gateway to brand loyalty.

Recommendation: Entering Saudi Arabia’s Premium Savory Snacks segment offers the optimal blend of immediate growth potential, strong margins, and alignment with KI’s existing expertise.

5. “How to Win” Analysis:

Angel of Attack:

  • Uniqueness: Develop innovative premium snack offerings using local ingredients and flavors, catering to refined palates.

Innovation:

  • Sustaining: Introduce healthier snack options within the premium segment, leveraging KI’s R&D capabilities.

Digitization:

  • Direct-to-Consumer platforms: Build seamless online ordering and delivery experiences.
  • Data-driven marketing: Target consumers through personalized offers and social media engagement.

6. “WHO, W2P & H2W” Crossover Analysis:

BCG Growth Matrix:

  • Saudi Arabia Premium Savory Snacks: Star (high market growth, high share)
  • Morocco Value Savory Snacks: Question Mark (high market growth, low share)
  • Saudi Arabia Cereals: Build (low market growth, high share)
  • Morocco Cereals: Dog (low market growth, low share)

SWOT Analysis:

Strengths:

  • Strong brand equity & marketing expertise
  • Innovation capabilities & product development focus
  • Adaptability & willingness to evolve strategic approach

Weaknesses:

  • Limited presence in emerging markets
  • Reliance on traditional distribution channels
  • Potential cultural misalignments in product offerings

Opportunities:

  • Untapped potential in high-growth emerging markets
  • Digital platforms for direct engagement with consumers
  • Growing demand for healthier & premium snacking options

Threats:

  • Intense competition from local & regional players
  • Evolving regulatory landscape in target markets
  • Fluctuations in raw material prices & currency exchange

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