General Mills Case - 3749 Words

Introduction In the late 1990’s and early 2000’s the food industry was struggling with weak sales and low inflation which caused waves of consolidation among some of the largest firms in the industry. In 1998 General Mills studied areas of potential growth and value creation for their company which lead to small acquisitions of other firms. Looking to further grow their company, in December 2000, management of General Mills made a recommendation to its shareholders that they authorize the creation of more shares of common stock and approve a proposal for the company to acquire Pillsbury Company, a producer of baked goods, from Diageo PLC. Company Information General Mills General Mills is one of the leading food companies in the†¦show more content†¦This results from the fact that it is a mature segment with many well established companies vying for market share. The industry is highly consolidated and very fragmented. To grow their businesses, companies rely heavily on mergers and acquisitions to capture additional market share. Historically, the grocery industry has been characterized by slow growth which results in strong price competition and the development of aggressive marketing campaigns between existing firms. Perceived product quality and strong brand recognition by consumers are the basis of competition among firms in the industry. The source of General Mills’ competitive advantage lies in its ability to develop innovative products and highly reputable brands. As a result, they hold cost leadership positions across a number of grocery categories. Exhibit 1 shows the top US companies according to their sale of packaged foods globally. Market leaders include Kraft Foods, PepsiCo, Nestle, Mars, Kellogg, and General Mills, however, neither company possess an overwhelming share of global sales. This is in part due to the large degree of product diversity throughout the industry and the strong brand rivalry of each competitor’s labels. Threat of Substitutes The threat of customers finding substitute products from other manufacturers in the food industry is high. In the ready-to-eat breakfast cereals segment, General Mills’ primary business focus, there are a variety of similar products beingShow MoreRelatedGeneral Mills Case Analysis1454 Words   |  6 Pages1. Key Strategic Issues General Mills was one of the Big Three companies that focused on diversification of consumer goods on cereal division, restaurant chains and packaged consumer foods. The cereal industry was profitable and had been one of the most concentrated industries, and the big Three companies had a dominant position in this industry. However, although the high profitability attracted fewer entry company due to the high entry barrier restrained by the joint monopoly of the Big Three,Read MoreAccounting Case Study on General Mills1465 Words   |  6 PagesAccounting Case Study on General Mills General Mills, Inc. Financial Accounting Case Study Module 1: A. General Mills Consolidated Statements of Earnings: 1. The recorded sale amount of almost $8 billion is not the actual amount of cash collected. The amount of $8 billion includes cash and credit sales. 2. Sales increased each year from 2000 to 2002. The difference between the year 2000 and 2001 was a 5.35% increase (5,450-5,173/5,173 = .0535). The difference between the year 2001 and 2002Read MoreCase Study-General Mills Inc.3110 Words   |  13 PagesGenera2013 Case Study 1: General Mills Inc. Understanding Financial Statements Group 5 Summary This case overall probes into 3 basic financial statements of the company and management’s view as well as auditors comments on it. It teaches about how business ethics and corporate governance works. Case study encouraged us to closely probe into each statements and line items and make us understand it. Few highlighted learning’s are preparation of common-size financial statements, understandingRead MoreEssay on Principles of Management1038 Words   |  5 Pages2010 Case Application: Mixing It Up In July of 2000, General Mills acquired Pillsbury from London based Diageo for $10.5 billion in stock and assumed debt. (All Business, A Damp;B Company) After the merger, managers from General Mills were now faced with integrating the two Minnesota based companies. A special concern that had been brought up was marketing issues. With such household names such as Pillsbury, Betty Croker, Green Giant, Wheaties, and Cheerios, the managers at General MillsRead MoreGeneral Mills Inc.: Where We Are Now Essay2804 Words   |  12 PagesIntroduction and Where We Are Now General Mills, Inc (GMI). produces and markets branded consumer foods globally. They also supply branded and unbranded food products to the foodservice and commercial banking industries. It offers ready-to-eat cereals, refrigerated yogurt, ready-to-serve soups, dry dinners, shelf stable and frozen vegetables, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza and pizza snacks, grains, and fruit and savory snacks; a range of organic productsRead MoreCompany Acquisition Case Study: General Mills Acquires Yoki1914 Words   |  8 PagesMonetary Fund (IMF). General Mills acquires Brazilian firm, Yoki According to Best (just-food, 24th May 2012) General Mills presence in Brazil has had mixed results. It has stalled in its past production of bread and pasta. However, the statement by the General Mills Chief Operations Officer (COO), Chris OLeary, is full of optimism. He gives their main strategy as strengthening the strong brands held by Yoki, the firm they are in the process of acquiring. Furthermore, General Mills seems poised toRead MoreBSAD 205 Chapter 9 Case Study General Mills Warm Delights741 Words   |  3 Pagesï » ¿Brandi Clifford BSAD 205 – Marketing Jim Moes Video Case 9 – General Mills Warm Delights; Indulgent, Delicious, and Gooey! 1. What is the competitive set of desserts in which Warm Delights is located? The competitive set of desserts that Warm Delights is located in is baking mix products such as cake mixes, brownies, cookie mixes, etc. Indulgence treat desserts would also be a competitive set such as Little Debbie or Hostess snack cakes, ice cream or chocolate. 2. A. Who is the target marketRead MoreGeneral Mills Inc. Understanding Financial Statements Essay1733 Words   |  7 PagesIntroduction The case study General Mills Inc. - Understanding Financial Statements focuses on the most basic idea of finance analysis. This case is a brief look into the language that is used in the finance world and a start to interaction with auditors. In this case, KPMG LLP, the public accounting firm that was auditing their statements, had sent two opinion letters. The first letter was ensuring that both parties were aware that General Mills had internal control over financial reportingRead MoreGeneral Mills Inc. - Understanding Financial Stamens Essay1106 Words   |  5 Pagesa. What is the nature of General Mills business? That is, based on what you know about the company and on the accompanying financial statements, how does General Mills make money? General Mills, Inc. has three segments. U.S. Retail sells ready-to-eat cereals, meals, yogurt, organic foods, etc. The International segment includes retail business in Canada, Europe, Latin America and the Asia/Pacific region. Bakeries and Foodservice sells to retail and wholesale bakeries, and convenience stores. TheRead MoreColombo Soft Yogurt958 Words   |  4 PagesCase 5-2 Colombo Soft-serve Frozen Yogurt 1) Colombo Yogurt Company faces competition in two different channels, namely the independent yogurt shops and impulse shops that sell other products besides yogurt. During the early 90s, Colombo’s competitive environment consists mainly of franchise operations like TCBY and Freshens. The size of these franchise companies that account for most of the independent yogurt stores pose a serious competition to Colombo and by the early 90s, the yogurt stores