Analysis of Kellogg Company

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Analysis of Kellogg Company

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Introduction

• Kellogg Company is an industrial organization
• It deals with manufacture and marketing of ready
  to eat cereal and convenience foods.
• The company specializes in the foodstuffs.
• In Feb,2012 it produced globally across 17
  countries and it sold them in more than 180
  countries.
• It prefers direct sales to its clients to
  generate more profits and to eliminate middlemen.

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Profitability

• It generates more profits on each sale.
• It has marked annual constant growth of 6.1
  percent.
• Increasing input costs have also been cut
  tremendously into gross margins.
• The companys growth in the second quarter
  stagnated.
• This has been as a result of aggressive
  discounting strategies by market competitors

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Management of the Trend

• Increased its advertising strategy.
• Creation of new products.
• Combining its operations with that of Pringles.
• Increase its profit margin by focusing beyond
  cereal sales.
• Invest in other competitive ventures with an aim
  of attracting more clients and fairly competing.

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Liquidity

• Main source of liquidity for Kellogg is the
  operating cash flow.
• It is supplemented by lending.
• Lending is based on major acquisitions as well as
  other major transactions.
• The strength of the company is in its cash
  generation ability.
• This ability enables the company to meet its
  investment needs.
• Company management also has confidence that the
  operating cash flows

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Competitors

• Kraft and General Mills are two major competitors
  for Kellogg Company.
• Kraft is a large company with branches across
  large cities across the globe.
• Kraft makes many of its profits from snacks.
• General Mills and Kellogg on the other received
  most of its profits from cereals.
• Their major threat is prices of oil and plastic.
• Kellogg has also created more cereal product
  lines.

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Debt

• Debt records for Kellogg are worrying.
• It has a debt of 5.5 billion.
• It is trailing a years net income of 1.2
  billion.
• The company should focus on reducing its debts.
• The company is also trying to get back on track
  following outpour of cash in the supply chain
  industry

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Forecast

• Kellogg aims at gaining more profits from its new
  products.
• It has also realized to generate more profits.
• Kellogg has also built a very solid foundation
  and has projected to its present market position.
  
• Introduction of innovative products that are
  custom made to suit client needs.
• Devise of new approaches to remain competitive.

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