Essay on Cpw Cereal Case Study

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Question 1: How can General Mills (GM) and Nestle create international competitiveness by joining forces in CPW?

The CPW joint venture brings to both of the companies an advantage and increased international competitiveness by profiting from the core competences of each other.

GM is the second-largest cereal manufacturer in North America. It has technological and marketing expertise gained over more than 80 years of breakfast cereal market. GM is globally active with its products but they are very well known and strong in their home market. In 2006 only 16% of total sales came from outside of USA. This shows us that the heavy domestic dependence esp. in cereal market is very problematic for GM.

In this joint venture, GM brings the …show more content…
- Fitness centres: Another strategy could be to make an agreement with fitness centres (preferably a major fitness company chain) to serve cereals in these centres. As health and nutrition is the key for growth, this approach may improve both sales and also the image of the company. 100% whole grain products with low fat and without sugar or brands like Fitness & Yogurt (source: www.nestle.com) would let the company to deliver the right message to consumers. This strategy would also fit fast-paced lifestyle esp. in USA and would be ideal for consumers who go to fitness centres after job and would like to eat a snack or something small skipping a long “real” traditional dinner.

Question 4: Where and how can CPW create further international sales growth?

CPW is very well positioned in emerging markets where the consumption of cereal per capita is still much lower than the North America & UK market. The average consumption in some regions is:

[pic] Source: Nestle investor Seminar 2005

As it is obvious from the graphic, the consumption per capita in emerging countries is still far below the mature markets. CPW’s 5 most populous markets will be the key for further growth. These markets are China, Indonesia, Brazil, Russia and Mexico representing 31% of the whole world’s population but only
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