Current Merger: General Mills to Blue Buffalo There are a lot of current mergers happening in the world. The one that struck my eye the most was everyone’s favorite cereal, buying out all-natural pet food. General Mills, maker of cereals like Cheerios, and Cocoa Puffs is buying Blue Buffalo, an all-natural pet food brand for dogs and cats. General Mills has stayed in the food realm of products for some time now. They have product lines in yogurt, vegetables, spices, soup, snacks, pizza, pasta, meals, organic/natural, ice cream, dough/pastries, and now additionally adding pet food. The reason for such a drastic change in product choice is the highly competitive food industry. Sales have been dropping the past few years. Their overall sales …show more content…
According to Economy Watch, “[A] product extension merger takes place between two business organizations that deal in products that are related to each other and operate in the same market. The product extension merger allows the merging companies to group together their products and get access to a bigger set of consumers. This ensures that they earn higher profits,” (Economy Watch). Going off this definition of a product-extension merger, General Mills merging with Blue Buffalo is a textbook definition. General Mills sells consumable products for humans, whereas Blue Buffalo sells consumable products for pets. They are relatable by them both being consumable but are not interchangeable (humans won’t consume pet food and vice versa). Pet food, and human food are also sold together in many supermarkets, and grocery stores as well therefore relating them in the same market selling point. General Mills is creating a bigger market for themselves when including pet food as well as their typical human consumable food …show more content…
Their food sales may have been decreasing, but they have also bought some more organic/natural types of food to keep up with the current trend of a healthier diet. With Blue Buffalo adding more sales revenue, the company can then expand their branding image even further. They can start to add more organic/natural human food, or even dominate the other main competitive dog food brands and eventually buy those as well. Since General Mills is already a well-established, and now well-rounded competitor for supermarket shelf space, they will have no problem using their newest sales to their own advantage in the ever-growing market. By the end of May, people will start to see General Mill’s logo on the back of the Blue Buffalo pet food products. Although, Blue Buffalo has already made a great name for itself, General Mills backing them will only create a stronger relationship tie to their purchasers. They are a long time stable brand. This will only help consumers make the decision to purchase Blue Buffalo dog/cat food since they already rely on the company so heavily for their own consumption. Now, people can take the high quality of General Mill’s products and associate the company with their pet’s food as
The biggest weakness for Only Natural Pet Food is the limited shelf-life. To tackle this, we offer smaller bags in the existing stores first. Offering smaller bags the company does not have to stock as much on the shelfs, and allow the company to gauge the sales. Furthermore, with the smaller bags it gives the illusion to the customers of smaller price off setting the higher cost of the
§ In addition to salty snack products, the company also markets a line of nuts, peanut butter crackers, processed beef sticks, Grandma's brand cookies and snack bars, and assorted other snacks.
The company merged with Pillsbury in 2001. While many of the Pillsbury-branded products are still manufactured by General Mills, some products had to be sold off to allow the merger since the new company would have held a very strong monopoly position.
Not many companies have the same track record and this proves that Whole Foods is in it not only for
However, because of its demographic it was losing a high customer base because of its prices. The text book Chapter 10 emphasized the importance of pricing and creating profit. The investor Marcus Lemonis showed the owners how to evaluate demand and the price sensitivity of their products. He introduce product that could be brought in with lower price points that would compete with their competitor and still crate the high-end prestige the company wish to create. Taking advantage of the income statues of the company’s customer with in their demographic. One major problem the company had was the price point of a bag of dog food was around $100 per bag that was a high price for the consumers within the area. By bring in a brand that had high quality and prestige at a price point of $20 allowed for a greater customer
The pet food industry as described by IBIS World is an industry in which "Major players compete on price, quality, ingredients and nutrients" (Pet Food Production in the US: Market Research Report, 2015). In this pure competition industry, there are dominant companies such as Mars, Inc. and Nestlé Purina sharing a 24 billion dollar market (Pet Food Production in the US: Market Research Report, 2015).
To most consumers Whole Foods is known as a chain grocery store specializing in organic and natural foods. Some may go as far as say the name is synonymous with quality. This comparison is the result of Whole Foods’ marketing their brand successfully to consumers demanding their specialized foods. As with any organization, Whole Foods may consider evaluating their strategic objectives and decide if necessary course corrections are needed to reach their objectives and goals. Through a fundamental and technical analysis, I will discuss Whole Foods’ mission, vision, and goals, their competitive environment, and some factors within their strength, weakness, opportunity, and threat analysis. With such data and information I will recommend, if needed, and strategic changes in order to sustain a competitive advantage.
Currently, the company lacks of focus as it has a diverse product line with too many varieties of cheese products. With so many products it cannot be sure to decide as to which market segment to target in order to take the advantage of the growing market.
At the time of the proposed merger between Nicholson File and VLN, there were a t...
Kraft Food Group has some areas in which it can grow. The company needs to fix its debt-to-assets and debt-to-equity ratios. The profit margin has been sporadic for the last five years. This is not a good trend for the company. This industry has some very external factors that can devastate the profit margin such as drought and other Asian market trends that can hurt the bottom line for this industry and company. Weather cannot be controlled. This company has a lot of different products which can be good by not putting all of your eggs in one basket approach. This can also lead the company to be stretched and pulled into many directions. The food industry can be a very up and down market because of external forces. Kraft Food Group has some problems with putting chemicals in some of their products that are now prohibited by the government. Kraft Food Group has food scientists, engineers and chemists to combat these chemicals and to develop new products and provide consistent quality of products so they can grow through sales and profits. Kraft Food Group has a high standard of quality and respect from its customers. Kraft Food Group could lose financially by food contamination. This company will continue to grow in the future if they continue to make improvements, make investments, and produce quality
The vertical merger happens when a company moves up or down its own product line. The sensible reason for merging with or acquiring a company is that it makes financial sense.
When two companies decide to combine forces and become one bigger, richer mega company, it is called merging. This process forms a new company, combining the money and ideas of what used to be two different entities into one. This, however, is not the only thing that results from merging two different companies, and since we will be discussing the merging of two companies in the pharmaceutical industry, the impact will be incredible. Of course, the merging of two companies will not only have positive impacts but it will have many negative side effects as well. Furthermore, depending on the size of the merging companies and the goals of the people leading these companies there will always be contradictions according to the long-term goals or short-term goals depending on what both parties’ interests are. Our company, Verduga Inc. is contemplating to merge with Coronado-Salinas Inc., so before we rush into such a merger we must contemplate the positive and negative aspects of such a move. When it comes to mergers there are always many possible positive and negative impacts due to the effects of merging; these effects more widely impact the fields on research and development, on employment and management, stocks and shareholders, monopolization, and ingenuity.
Shoppers were becoming increasingly "savvy" and changing the way they cook and eat in response to the credit crunch. All the supermarkets have seen sales of organic and premium ranges slowing or grinding to a halt, while lower-priced and own-brand goods have proved more popular.
‘Horizontal Merger’ is when two companies with similar products join together. ‘Vertical Merger’ is two companies at different stages in the production process. ‘Conglomerate Merger’ is when two different types of companies join together. ‘Market extension merger’ is between two companies who produce the same product but sell in different markets. ‘Product Extension merger’ is between companies with related production but they do not compe...
...leader in its selected markets through creativity and superior customer service. The Group is continuing to focus many efforts to expand its presence in global food and ingredients markets and its consumer foods businesses in Europe and abroad.