KENT NYANDIEKA
GENERAL MILLS SWOT ANALYSIS
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GENERAL MILLS HISTORY
Critics criticized Cadwallader C. Washburn idea of starting a milling company. They said demand for flour from Midwestern spring wheat would never match what Washburn’s company could supplies. He didn’t see it that way. Washburn formed the Minneapolis Milling Company in 1856 to lease power rights to mill operators, and 10 years later he built his first flour mill near the falls of St. Anthony on the Mississippi River in Minneapolis. Despite continued criticism, he built a second, even larger facility in 1874. (General Mills)
Within five years Washburn’s mill was destroyed in a floor dust explosion. Undeterred, Washburn immediately began building a better mill containing evolutionary new machinery to enhance both the safety of the operation and the quality of the flour. In 1880, Washburn and Crosby entered their finest flours in competition at the first International Millers’ Exhibition in Cincinnati, Ohio, winning the gold, silver and bronze medals, and establishing the Washburn Crosby Company’s flour as the best in the world. (General Mills). Soon after, the company changed the name of its finest flour to Gold Medal flour, which is still the No. 1 flour brand in America today.
MISSION STATEMENT
Our mission is to nourishing lives- making life healthier, easier and richer. (Company, 2012)
GENERAL MILLS STRENGTHS One of the major strengths of General Mills is that they have established food brands. The company strives to remain focused on its long-term growth model, investing in the strength of its brands in order to drive sales. While speaking at a conference in Florida, General Mills’ management said that the company has weathered the economic storm “due in large part to the strength of our product categories and the strength of our brands”. The group has seen market share gains in grain snacks with Nature Valley, cereal with Cheerios and Fiber One, soup with Progresso, yogurt with Yoplait and hot frozen snacks with the Pillsbury brand, the company revealed (just-food.com, 2009). General Mills is putting more marketing support behind its brands so as to achieve increased volumes. The other strength that General Mills has is that they have financial stability. For instance, the company reported higher-than-expected quarterly earnings on Wednesday, which was helped by recent acquisitions and improving trends in the U.S. market, and the maker of Progresso soups and Cheerios cereal stood by its full-year outlook. The company saw some benefits in the quarter from its acquisitions of Food Should Taste Good, Yoplait Ireland, Parampara Foods and Yoplait International. General Mills, whose shares rose more than 2 percent, said it expected further benefits in fiscal 2013, starting in the current second quarter, from its purchases of Yoplait Canada and Yoki Alimentos in Brazil. Its net income rose to $548.9 million, or 82 cents per share, in the first quarter ended on August 26 from $405.6 million, or 61 cents per share, a year earlier. (Yahoo Finance, 2012)
WEAKNESSES
The fact that they are the market leader in the United States may be hindering them from innovation. They have been producing Yoplait yogurt for many years, and have offered a series of new products in the past few years in the nutrition department. Most of these products however, are very common, and are widely offered in the United States. The health food industry in the United States has been booming and General Mills does not offer enough products in the smaller niche markets. They have not entered into many unknown areas because of their success in the yogurt market. They should introduce new and more products to these smaller niche markets so as to capitalize in profits. General Mills is one of the largest packaged food producers in the world by revenue. The firm owns some of the most recognizable brands in the grocery store, including Cheerios, Progresso Soup, Hamburger Helper, and Fruit Roll-Ups. This results to the company relying on the U.S market for its sales. 70% of the company’s sales are from the U.S market. Like many other food and beverage companies, General Mills faces a market marked by increasing commodities prices. The company is a large purchaser of corn and wheat, and the rise in the price of oil has hurt as well. As the costs of doing business increase, General Mills must either absorb these losses or charge higher prices at the risk of losing market share. In doing so, the company has introduced new products like lower-sodium Progresso soups and Hamburger Helper singles for the microwave, while growing its reach from grocery stores into new channels like supercenters, drug and discount stores, and convenience stores. (General Mills (GIS), 2012)
OPPORTUNITIES
An opportunity General Mills has is that its Yoplait division is so successful. Yoplait is the only division of General Mills that is currently earning a profit. They have a large market share over their main competitors in the yogurt market. Another opportunity that they share with Nestle is that the health-based and nutritional food market is booming. They are continually releasing and marketing new products in these markets and they will continue to do so while the market continues to yield profits. Another opportunity that General Mills has is that that there is a great opportunity for the company to enhance and accelerate its innovation efforts by teaming up with world-class innovators from outside of the company. To facilitate this effort, they created the General Mills Worldwide Innovation Network (G-WIN) to actively seek partners who can help them deliver breakthrough innovation in categories such as new products that fit within a General Mills brand or solve a customer need, novel packaging technologies or new, consumer-friendly formats, Improvements to quality, efficiency and profitability, new ingredients to enhance taste, texture, quality or health benefits and emerging digital marketing technologies.
THREATS
The main threat that challenges General Mills is that there is intense competition amongst the top players in the yogurt and related markets. Nutrition and health is becoming more and more important to consumers in the United States, and worldwide. Along with this comes increased competition to gain market share. Simple supply and demand theories are prevalent in these markets. Smaller companies are now producing similar products with the same or added nutritional benefits. This results in less profit margins from sales of these products since the market is shared. A dip in profits for US cereal giant General Mills highlights the rising threat of private label competition on the cereal market, making branded players work harder to justify higher prices to consumers. This was majorly due to the rising cost of rising raw material and energy cost.
SWOT ANALYSIS SUMMARY A. Strengths * Competitive market share within all competing categories * Practice economies of scale throughout its distribution channels * Brand recognition which equals brand equity
B. Weaknesses * No major organic growth regarding completely new brands
C. Opportunities * Increase market share on both sides of the spectrum by taking a percentage from current store or private label brand consumers and another percentage from high-end, health-oriented brands
C. Threats * Wedged in between store/private label brands and high-end, health oriented brands; therefore, not resonating with enough consumers. * Capitalize on product development and advertisements so as to reach out to more target markets.

References
(n.d.). Retrieved September 20, 2012, from General Mills: http://www.generalmills.com/en/Company/History/Beginnings.aspx
(2012, 09 19). Retrieved 09 20, 2012, from Yahoo Finance: http://finance.yahoo.com/news/general-mills-profit-beats-company-135519967.html
(2012). Retrieved 09 20, 2012, from General Mills (GIS): http://www.wikinvest.com/stock/General_Mills_%28GIS%29
Company. (2012, 09 20). Retrieved 09 20, 2012, from Mission: http://www.generalmills.com/Company/Mission/Nourishing_Lives.aspx just-food.com. (2009, February 19). Juat-Food. Retrieved 09 20, 2012, from http://www.just-food.com/news/general-mills-growth-driven-by-brand-strength_id105495.aspx